Strata titles - Appeal against decision of State Administrative Tribunal that 'Form 20' application be executed - Scope of appeal - Whether 'question of law' - Whether leave should be granted - Turns on own facts

State Administrative Tribunal Act 2004 (WA) s 105

Strata Titles Act 1985 (WA) s 8, s 8A

1 BEECH J: By notice of appeal dated 20 June 2007, the appellants seek leave to appeal against an order made by Senior Member Raymond in the State Administrative Tribunal (the Tribunal) on 12 June 2007. The appellants require leave to appeal by virtue of s 105(1) of the State Administrative Tribunal Act 2004 (WA) (the SAT Act).

2 On 24 August 2007, I ordered that the application for leave to appeal be heard together with the appeal.

3 I will begin by outlining the factual background to the proceedings before the Tribunal. After summarising the Tribunal's reason for decision I will focus upon the appellants' ground of appeal. Although the ground is expressed as a single ground, as the argument emerged, it appeared that there are three distinct complaints which can be discerned from what the appellants submit.

4 The first inquiry will be as to whether each or any of those grounds is an appeal on a question of law as required by s 105 of the SAT Act. The jurisdiction of this court is significantly confined by s 105 of the SAT Act. I will return to that topic. Having dealt with that, I will then deal with the merits of the complaints made by the appellants.

5 The facts were not substantially in dispute before the Tribunal. Many of the facts were conveniently set out in the statement of issues, facts and contentions filed in the Tribunal by the applicant in those proceedings and admitted by the respondent in those proceedings.

6 There is a survey strata scheme registered under the Strata Titles Act 1985 (WA). The scheme is known as Rosneath Farm. It is situated at McLachlan Road, Dunsborough. The scheme comprises of 14 individual lots; namely, lots 1 to 7, 17, 18 and 20 to 24, one lot which will be subdivided from time to time, generally known as the super lot or lot 25; and eight common property lots known as CP9 to CP16.

7 Strata plan 35452 was registered on 11 February 1999 pursuant to the Strata Titles Act. Pursuant to s 32 of the Strata Titles Act, the strata company known as the Owners of Rosneath Farm Strata Plan 35452 (the Strata Company) was constituted. The documents initially registered by the Registrar of Titles included a plan entitled, 'Rosneath Farm' showing the whole development. That plan provides that the land the subject of the strata plan will be ultimately subdivided into 70 residential survey strata title lots in addition to the eight common property lots. The unit entitlement of each of the lots was set out in a notice as to unit entitlement, a copy of which was among the papers before the Tribunal.

8 In the Tribunal the applicant was Mr Clark, who is the first respondent in this appeal. Mr Clark is the registered proprietor of the super lot, lot 25.

9 On 22 July 2006, an annual general meeting of the Strata Company was held.

10 At that meeting Mr Clark proposed a motion, designated as motion 48 (the Resolution), proposing that the Resolution be passed as a unanimous resolution. The Resolution was in the following terms:

That lot 25 on Certificate of Title Volume 2195 folio 469 be further subdivided by the creation therefrom of:

(a) Lots 9, 10, 11, 12, 21, 22, 23, 26, 28, 33, 34, 35, 36 and 37, as designated on the plan of subdivision attached to the Agreement for Staged Development with each Proprietor and to be designated lots 41, 42, 43, 44, 45, 46, 47, 48, 49, 50, 51, 52, 53 and 54;

(b) a new Super Lot designated Lot 55,

with the following unit entitlements as prescribed by the management statement lodged with the Registrar of Titles on 13 January.

There was then set out a table as to the unit entitlements associated with each lot. I will not repeat that here.

11 The appellants emphasise that another motion was also proposed at the meeting as motion 49. Motion 49 was in terms that, upon the passing of the Resolution to subdivide lot 25, the Strata Company immediately execute under seal a Form 20 as prescribed by sch 3 to the Strata Titles General Regulations 1996 (WA) (the Regulations).

12 At the meeting of 22 July 2006, the Resolution was not passed as a unanimous resolution. Mr Warwick Rowell, proxy for the owner of lot 23 on the strata plan, voted against the Resolution. The Resolution was, the chairman determined, supported to the extent necessary for a special resolution. That determination by the chairman is not now in issue.

13 The minutes of the meeting record that as the previous motion; that is, the Resolution had failed, motion 49 was by agreement withdrawn.

14 Sometime after the meeting of July 2006, the applicant made an application to the District Court for a declaration, pursuant to s 51 of the Strata Titles Act, that the Resolution be deemed to be a unanimous resolution.

15 Section 51 of the Strata Titles Act provides:

1. Relief where unanimous resolution or resolution without dissent required

(1) In any case where under this Act a unanimous resolution or a resolution without dissent is necessary before any act may be done and that resolution is not obtained but the resolution is supported to the extent necessary for a special resolution, a person included in the majority in favour of the resolution may apply to the District Court to have the resolution as so supported declared sufficient to authorise the particular act proposed and if the District Court so orders, the resolution shall be deemed to have been passed as a unanimous resolution or a resolution without dissent, as the case may be.

(1a) This section does not apply to a two-lot scheme.

(2) Notice of an application under subsection (1) shall be served on -

(a) every person who was entitled to exercise the power of voting conferred under this Act and did not, either in person or by proxy, vote in favour of the resolution; and

(b) every person whom the District Court declares to have a sufficient interest in the proceedings to require that he should be served with notice of the application,

and the District Court may direct that any person served with notice of proceedings under this subsection shall be joined as a party to the proceedings.

(3) The District Court shall not order a party who opposes an application under this section to pay the costs of a successful applicant unless the District Court considers the actions of that party in relation to the application to have been unreasonable.

16 On 5 February 2007, his Honour, Muller DCJ, made an order under s 51 declaring the Resolution sufficient to authorise the subdivision proposed by the Resolution and ordering that the resolution be deemed to have been passed as a unanimous resolution.

17 On 15 February 2007, Churchlands Holdings Pty Ltd wrote on behalf of Mr Clark requesting the Strata Company to execute a document entitled, 'Form 20 Application for Re-subdivision by Strata Company'. The Form 20 is the form of application prescribed under the Regulations made pursuant to s 8A of the Strata Titles Act.

19 Mr Clark then applied to the Tribunal for orders that the office bearers of the Council of the Strata Company resolve to execute under seal the Form 20 and that the relevant officers of the Strata Company cause it to be executed under common seal and deliver it to Mr Clark's solicitors. That application was successful.

20 The appellants seek leave to appeal from the Tribunal's decision. I turn to the Tribunal's reasons.

21 In his reasons for decision, Senior Member Raymond expressed the view that the determinative issue was what was meant by the Resolution as passed. I would mention in passing that the Senior Member also dealt with an issue then before him as to his jurisdiction, but that issue has not been ventilated before me.

22 It had been argued by the respondents before the Tribunal (now the appellants before me) that the Resolution did no more than give the unanimous approval to the subdivision and did not direct the Strata Council formally to make the application and otherwise do those things necessary to comply with the requirements of the Strata Titles Act.

23 In the course of his reasons, the learned Senior Member also made reference to an earlier resolution of the Strata Company which had been made on 14 January 2006, to which reference had been made by those opposing the application before the Tribunal.

24 It is not necessary to go into detail in respect of that resolution. The learned Senior Member found that that resolution did not give rise to any separate or distinct issue because the question of whether that resolution made any difference to the position itself turned on the question of the meaning of the Resolution (of 22 July 2006) which was, as the Senior Member saw it, the crucial question before him. The appellants do not rely upon the resolution of 14 January 2006 in support of their appeal.

25 The Tribunal concluded that it would make no sense for the Resolution to be passed in terms that 'lot 25 be further subdivided' but then for nothing to be done to carry it into effect. Rather, the Tribunal concluded that the Resolution indicated an intent to subdivide and that that necessarily carried with it, or implied that, all necessary steps would be undertaken for that purpose. Execution and lodgement of the Form 20 application was a necessary step.

26 The Tribunal concluded that it would give no sensible or practical meaning to the Resolution if it were read without reading it as including words to the effect that all necessary steps should now occur to effect the subdivision. It was for those reasons that on 12 June 2007 the Tribunal made orders substantially to the effect sought by Mr Clark, against which this appeal and application for leave is instituted.

The scope of an appeal under s 105 of the SAT Act

27 It is, I think, important to turn to the provisions of s 105 of the SAT Act so as to identify the scope and content of an appeal under that section. By s 105, an appeal from a decision of the Tribunal can be brought only on a question of law. That provides significant limits upon the scope of an appeal against a decision of the Tribunal.

28 The distinction between a question of law and a question of fact arises in many contexts and the line is not to be drawn in the same way in all of those contexts. Authoritative guidance as to the distinction in the present context, namely s 105 of the SAT Act, has recently been provided by the Court of Appeal.

29 In Paridis v Settlement Agents Supervisory Board [2007] WASCA 97; (2007) 33 WAR 361 [53] - [56], Buss JA, with whom the other members of the court agreed, made observations on the meaning of an appeal 'on a question of law'. In my opinion many of those observations are directly opposite to this matter. At [53], his Honour said as follows:

An appeal 'on a question of law' is narrower than an appeal that merely 'involves a question a law'. Where an appeal lies 'on a question of law' the subject matter of the appeal is the question or questions of law. If a question raised by a litigant, properly analysed, is not a question of law, linguistic gymnastics in the formulation of the grounds of appeal cannot convert it into a question of law. A question of mixed law and fact is not a question of law within s 105(2).

30 His Honour then referred to several decisions of the Full Federal Court which dealt with s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth). His Honour stated that that provision is not materially different from the provisions of s 105 of the Western Australian Act.

31 Further, at [55] his Honour observed that a tribunal does not commit an error of law merely because it finds facts wrongly or upon a doubtful basis.

32 A ground of appeal that a tribunal made a finding that was manifestly unreasonable, in the sense that no reasonable tribunal could have made that finding, alleges an error of law: Paridis [56].

33 With those principles in mind, I turn to the appellants' ground of appeal. As I have mentioned, there is before the court a single ground of appeal. It is in terms that:

(a) in reaching the conclusion he did that the Strata Company had made a decision to make an application in the prescribed form requesting the Registrar of Titles to register a plan of subdivision; and

(b) in reaching the conclusion that the resolution ordered by the District Court on 5 February 2007, pursuant to section 50(1) of the Strata Titles Act 1985, to be deemed to have been passed as a unanimous resolution was capable of comprising a decision to make an application in the prescribed form requesting the Registrar of Titles to register a plan of subdivision.

34 The ground is particularised by the contention that the Senior Member misinterpreted and misapplied s 8A of the Strata Titles Act in failing to distinguish between a unanimous resolution consenting to a proposed subdivision in the proposed allocation of unit entitlements (on the one hand) and the doing of the act of making an application in the prescribed form (on the other).

35 However, as I have observed, as the argument developed, the appellant relied upon three contentions. Some of those contentions may be seen as interpretations of the ground of appeal, but that could not, I think, be said of all of them. Nonetheless, argument has been advanced in respect of the following three propositions.

36 First, it is said that the Tribunal erred in law in that it failed to recognise the existence (at all) of the distinction between the two matters referred to in the particulars to the ground of appeal. Secondly, it is said that the Tribunal erred in law because, unless and until unanimous consent has first been obtained, a resolution to file a Form 20 cannot validly be passed. Thirdly, it is said that the Tribunal erred in its interpretation or construction of the Resolution. That is, it erred in finding that the Resolution covered both the two required matters.

37 If and insofar as it was found that the Senior Member erred in interpreting s 8A, that would be an error of law. For a discussion of the distinction between questions of law and fact in the context of the application of a statute, see the decision of the Full Court in Re Monger; Ex parte Dutch [2001] WASCA 220; (2001) 25 WAR 96 [11] - [13]. Propositions 1 and 2, as I have sought to summarise the appellants' case, seem to me to allege errors of law.

38 I move then to consider the merits of those propositions. In my opinion, the first proposition must be rejected on a plain reading of the reasons of the Tribunal. The first proposition contends that the Tribunal failed to recognise that there existed two different matters, each of which needed to be the subject matter of a resolution.

39 In my opinion, it is plain from pages 29 and 30 of the Tribunal's reasons that the Tribunal recognised that there were two matters that needed to be the subject of a resolution. The question, as the learned Senior Member saw it, was whether or not the Resolution did or did not cover those two matters. He would not have engaged in the process of construction and interpretation that he did, had he not appreciated that there were two matters and that the question for him was whether the Resolution did or did not cover those two matters.

40 I move to the second proposition. In the end I am unsure as to whether senior counsel for the appellants continued to advance the second proposition at the conclusion of the oral argument in the matter.

41 Senior counsel did argue that a strata company could not pass, in unconditional terms, a resolution authorising the making of a Form 20 application given the need for unanimous consent to be expressed within a Form 20 application.

42 However, counsel accepted that, provided the Resolution as to the making of the application were expressed so as to be contingent upon there first being unanimous consent prior to the making of the application, such a resolution could be valid and effective. In any event, if I have misunderstood counsel in that regard, I am of the view that, as a matter of construction of s 8, that would be permissible.

43 Thereafter, there appeared to be an argument on behalf of the appellants that while such may be open as a matter of law, that was not the proper construction of the Resolution. That contention does not seem to me fairly to have been raised by the ground of appeal, nor by the attempt that emerged, after discussion between counsel for the appellants and the court to elucidate the contentions of the appellants.

44 But in any case, even if I were wrong in that, questions of the proper construction of the Resolution are not, in my opinion, matters which raise an error of law. I will express that more fully in a moment as I turn to the third proposition.

45 The third proposition is, in effect, that the Tribunal erred in its construction of the Resolution. The question invited by that proposition is whether the proper construction of the Resolution is a question of law within the meaning of s 105 of the SAT Act.

46 In considering that question, it is relevant to recall that a question of mixed law and fact is not a question of law within s 105(2) of the SAT Act; see Paridis [53]. Indeed the appellants' written submissions contend - and the respondent accepted - that the question of what the resolutions mean, or the effect they were intended to have, is a question of fact.

47 An allegation that the finding was not reasonably open would amount to an allegation of an error of law. No allegation of that kind was to be found in the ground of appeal, nor in the reformulation by way of three propositions. I would note that there may have been something of that flavour in some part of what Mr McIntyre said to me this morning. However, that matter was not squarely raised by the ground of appeal, but in any event, for reasons to which I will shortly come, an argument that the interpretation was not reasonably open would, in my opinion, fail.

48 In my opinion, the question of whether the Resolution, when properly construed, authorised the lodging of a Form 20 is not a question of law within the meaning of s 105. That being so, leave to appeal on a ground that seeks to raise that question must be refused. Insofar as the ground of appeal, as elucidated, raises a question of law respecting the construction of s 8A, in my opinion the ground lacks sufficient merit to warrant the grant of leave: Paridis [18], [19]. Alternatively, if I were wrong in relation to whether the merit of the ground reached that threshold, I would in any event dismiss the appeal on that ground because I am not persuaded that the Tribunal made the error of construction in s 8A of the Strata Titles Act that was alleged.

49 I move finally to consider the position on the assumption that I were wrong in my conclusion that the construction of the Resolution is a question of law.

50 Thus, I turn to consider the merits of a complaint that the Tribunal was wrong in construing the Resolution as covering both matters. The appellants have argued that the Resolution should be understood as being intended to satisfy the requirement for unanimous consent and doing nothing more than that.

51 In support of their argument, the appellants point to the presence of proposed resolution 49. They argue that the presence of that proposed resolution supports the conclusion that the Resolution was not intended to authorise the lodging of a Form 20.

52 The question is one of construction of the Resolution. In submissions, reference has been made to the search for the intention behind the Resolution.

53 But in this context, intention is used in a particular sense. The process of construction involves the ascertainment of the intention of the parties as embodied in the words they have used; see, in the context of construction of contracts, the observations of Owen J in Permanent Building Society (in liq) v Wheeler (1992) 10 WAR 109, 119.

54 Intention is to be ascertained, not subjectively, but objectively, by reference to what was expressed in the context in which it occurred. In the context of contracts, see the recent observations of the High Court in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 [35], [36] and [40]; and Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 [22].

55 In this respect the process is no different when one is construing other instruments, including unilateral instruments such as a will or a deed. I refer to the observations of Gleeson CJ in Wilson v Anderson [2002] HCA 29; (2002) 213 CLR 401 [8].

56 In the process of construction, matters such as purpose and object and surrounding circumstances can throw light on the meaning of unclear language.

57 The starting point for consideration of the merits of the appellants' central contention is, I think, the language of the Resolution. It should be noticed at once that the language of the Resolution is not in terms of consent. That fact seems to me to detract significantly from the force of the appellants' argument.

58 The appellants argue that a resolution of the Strata Company is needed in respect of two matters: firstly, consent (and in that respect, unanimity is required); and secondly, the making of the Form 20 application. The appellants contend that the Resolution should be construed as being directed only to the first of those matters. However, the language of the Resolution does not directly support such a singular characterisation. The language of the Resolution is that lot 25 'be further subdivided'.

59 That language resonates with the language of s 8(1) of the Strata Titles Act, not s 8A. That supports a reading of the Resolution as reflecting an intention to do what is required so as to effect the subdivision. It is to be recalled that s 8(1) provides that:

Lots in common property ... may be re-subdivided by the registration of a plan under and in the manner provided by this Act as a plan of re-subdivision.

60 Section 8A then sets out the mechanics for a plan of re-subdivision. It relevantly provides that:

A plan of subdivision shall -

(a) be accompanied by an application in the prescribed form.

(The prescribed form referred to is a Form 20). Certain requirements of the application are then set out in the rest of s 8A.

61 In construing the Resolution, the search is for the ascertainment of the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract. That knowledge can include matters of law: Maggbury Pty Ltd v Hafele Australia Pty Ltd [2001] HCA 70; (2001) 210 CLR 181 [11].

62 The Resolution directed that something occur; namely, that lot 25 be subdivided. By force of s 8A, there was only one way of achieving that outcome; by lodging an application in the prescribed form. The presence of motion 49 does not, to my mind, overcome the reading of the Resolution adopted by the Tribunal.

63 For those reasons there is, in my opinion, no error in the conclusion of the Tribunal as to how the Resolution should be construed. These reasons also mean that any ground of appeal to the effect that the Tribunal construed the Resolution in a way which was not reasonably open to it would have failed. Thus, if, contrary to my view, leave were to be granted, I would have dismissed the appeal.

64 For the reasons given, leave to appeal is refused.