Application for interim order - Relief sought in nature of mandatory injunction for access to permit connection of essential services

State Administrative Tribunal Act 2004 (WA), s 95(1)

Strata Titles Act 1985 (WA), s 11(2), s 82

1 The application was for an urgent interim order to permit access to a Telstra MDF facility located within the parcel comprised in Strata Plan No 36239 and to permit connection of additional telephone services to the existing facilities and for the re-connection of all essential services including water, gas and electricity.

2 The Tribunal was satisfied that the applicant's substantive application raised serious issues for determination at a final hearing, that the balance of convenience favoured the applicant strongly and that, subject to the provision of a suitable undertaking as to damages, the grant of interim relief carried a lower risk of injustice, in the event that the applicant failed to establish its entitlement at a final hearing. The Tribunal was satisfied with the undertaking provided by the responding parties and consequently granted the interim relief sought.

3 The application is for interim relief in the nature of a mandatory injunction requiring the respondent to grant the applicant access to the Telstra MDF facility located within lot 20 of Strata Plan No 36239 to enable the connection of telephone facilities to be provided to lot 26, for the re-connection and maintenance of all essential services to the lots including water, gas and electricity and other incidental relief.

4 The application is made pursuant to s 82 of the Strata Titles Act 1985 (WA) (the Act).

5 The dispute relates to the management of a resort business known as Mandurah Gates Resort situated on a parcel of land comprised in Strata Plan 36239.

6 The lots in the scheme were previously leased under separate leases to Mandurah Resorts Pty Ltd. During or about July 2004 the various leases were assigned to Mandurah Gates Pty Ltd.

7 Until a dispute resulted in the proprietors of 44 of the 56 lots in the scheme terminating the above leases, the resort business was managed as a whole by Mandurah Gates Pty Ltd. All 44 lot owners have responded to the application and supported it.

8 The majority of the 44 lot owners subsequently, entered into separate leases with the applicant with the intent that the applicant would operate a resort business on their behalf. In order to do so the applicant intends to use lot 26, being one of the lots leased to it, as a reception facility and centre from which to manage the provision of short-term accommodation on behalf of its lessor lot owners.

9 In order to do so it is necessary for telephone lines to be connected to the existing facilities at the Telstra MDF junction situated within lot 20.

10 On or about 18 February 2005 Walter Holdings Pty Ltd, as proprietor of lot 20, Mandurah Gates Pty Ltd as the then lessee of lot 20 and J & L Property Group Pty Ltd entered into a Deed of Assignment of lease of lot 20 in terms of which the lease was assigned to J & L Property Group Pty Ltd.

11 Mandurah Gates Pty Ltd and J & L Property Group Pty Ltd have common share-holders and directors.

12 J & L Property Group Pty Ltd has endeavoured to persuade all lot owners to lease their lots to it. The 44 lot owners have resisted the J & L Property Group Pty Ltd proposal, and have aligned themselves with the applicant.

13 The dispute has resulted in related proceedings being commenced. In CC 2999 of 2005, J Mitra, L Jacobs and the respondents herein have commenced proceedings against Craig Brian Green, the applicant and Mr Alan Ardley challenging their right to store goods in lot 26. In CC 2486 of 2005, J Mitra and L Jacobs have commenced proceedings against the strata company, the Owners of Mandurah Gates Resort Strata Plan 36239 seeking the appointment of an administrator. These proceedings are opposed.

14 On the day prior to the hearing of the interim injunction ie 12 July 2005, the above-mentioned 44 lot owners (the responding parties) filed a joint response statement supporting the application for interim relief. That response incorporated by reference a response which had been filed on behalf of the same lot owners opposing the application to appoint an administrator. The responding parties further raised in par 9 of the response that the occupier of lot 20 had interfered with the provision of water, gas and electricity to all lots owned by them and leased to the applicant.

15 The respondent's counsel challenged the standing of Mr Craig Green to bring the application. This was dealt with by Mr Green seeking to amend to substitute his company Bonnie-vale Pty Ltd as the applicant, which application was granted.

16 An issue was also raised as to whether the applicant had entered into a lease in respect of lot 26. Mr Green assured the Tribunal that while a lease had not been signed that there had been a verbal agreement that the lease would be executed.

17 It was not disputed that water, gas and electricity had been cut off to the responding parties' lots and that access for connection of the telephone services had not been permitted.

18 The Tribunal was referred to and has given consideration to all of the documentation filed in support of and opposing the application.

19 One of the issues raised by the respondent J & L Property Group Pty Ltd, was that it had not received reimbursement from the strata company in respect of some accounts for essential services for which there were no separate meters and that it would be left out of pocket by incurring further costs. The answer to this is that as set out in par 12 of the responding parties submission the strata company had agreed that from the time that all essential services were re-connected to every unit, the strata company would, as a temporary measure until such time as sub-metering could occur, agree to transfer the billing address for the master meters and assume the responsibility for those costs.

20 An issue was raised concerning the second-named respondent's right to the quiet enjoyment of lot 20. However, it was conceded that cl 5.9 of the Assigned Lease reserved the landlords right to enter for the purposes of the provision of the provision of, inter alia, water, drainage, gas and electricity supply and telephonic and electronic communication services and that the lease was deemed to be subject to any right of easement.

21 Issues are raised about the effect of the restrictive use endorsement on the strata plan and whether lot 26 can be used for the purpose intended by the applicant and the responding parties.

22 The responding parties indicated, in response to the issue being raised by the Tribunal, that they were prepared to provide an undertaking as to damages in a suitable form.

23 Section 11 of the Act creates a right of easement in favour of the proprietor of each lot in respect of inter alia, the passage or provision of services including telephone services, through or by means of any pipes, wires, cables or ducts for the time-being existing in the land comprising the parcel.

24 By s 11(2) of the Act a proprietor, mortgagee in possession or occupier shall not do anything or permit anything to be done that interferes with the provision of such services.

25 The applicant seeks to connect to the existing services and in the Tribunal's view is entitled to do so. The provision of telephone lines to a MDF facility is for that very purpose.

26 The responding parties submissions reflect the strata company's agreement to accept responsibility for the costs of the essential services from the time re-connection occurs. In the Tribunal's view, the existing liability is matter to be resolved with the strata company in the normal course.

27 The indications given during the hearing were that there would be no difficulty in making the necessary arrangements to ensure that J & L Property Group Pty Ltd was not left out of pocket in respect of costs incurred after re-connection of services. If that occurred, it would be a basis upon which to seek a variation, or to set aside any order made as sought.

28 There are serious issues to be determined at final hearing in relation to the applicant's entry into a lease in respect of lot 26 and in relation to that lot being used as intended.

29 Once the responding parties undertook to provide an undertaking as to damages in a form acceptable to the Tribunal, the balance of convenience, in the Tribunal's view favoured strongly the grant of relief.

30 It is recognised that is not common for relief in the nature of a mandatory injunction to be granted. The authorities show the same criteria are applied to the grant of mandatory relief applications but the over-riding principle is that the course should be followed which carries the lower risk of injustice in the event that the party who claims the injunctive relief fails to establish its rights at trial.

31 To decline relief would be to place the responding parties in an untenable position. Those of them who had entered into leases with the applicant would have to seek to break those leases. The responding parties would be placed under an economic pressure which would compel them to enter into lease arrangements with J & L Property Group Pty Ltd or suffer a complete loss of income. On the other hand, the status quo is that J & L Property Group Pty Ltd has lease arrangements with or has a prospect of entering into lease arrangements with the remaining 12 lot owners, there being a total of 56 lots in the scheme and to derive income there from.

32 It is clear that unless and until the applicant's ability to operate as it has intended using lot 26 is finally determined, that the 44 responding parties prefer to have no dealings with those parties associated with the previous operators of the resort business. It is alleged that there are substantial amounts of rent which have not been paid and that the terms now offered by J & L Property Group Pty Ltd are not acceptable to these lot owners.

33 In weighing the balance of convenience it has not been possible to place weight on the application for an administrator to be appointed. These proceedings were not resisted by relying on the merits of that application and the responding parties made plain that they considered that there was no proper basis for that application.

34 In these circumstances, the Tribunal reserved its decision at the conclusion of the hearing to afford the responding parties an opportunity to provide the Tribunal with a written undertaking as to damages in a suitable form. The Tribunal indicated that once such an undertaking had been provided, together with a draft order capable of being settled by the Tribunal, it would issue the appropriate order and provide its reasons for doing so thereafter.

35 Upon receipt of the undertaking as to damages, with which the Tribunal was satisfied, together with a draft order which the Tribunal settled, an order was issued in the following terms:

1. The Tribunal orders that Bonnie-Vale Pty Ltd be and is hereby substituted as Applicant in this matter in place of Craig Green

2. The Tribunal makes the following interim orders upon the undertaking as to damages provided by John Paul Krokosz for himself and on behalf of the proprietors of lots 2 to 9 inclusive, 12, 15 to 17 inclusive, 19, 21 to 26 inclusive, 28 to 30 inclusive, 32 to 36 inclusive, 38 to 48 inclusive, 50 to 54 inclusive and 56 in Strata Plan 36239 ("the lots"):

(a) J & L Property Group Pty Ltd and its officers, servants or agents:

(i) must permit access to the MDF facility located within lot 20 during reasonable hours by such technicians and contractors as may be engaged by the applicant to enable such work to be carried out as may be necessary to the existing telephone services to allow additional telephone services to be provided to lot 26, within the parcel of which lot 20 is part;

(ii) must reconnect and keep connected all essential services to the lots within the said parcel including, but not limited to, water, gas electricity;

(iii) must not interfere with any switches, valves or other controls regulating the passage or provision of such essential services to the lots or in any other manner prevent the passage or provision of such essential services to the said lots;

(b) Walter Holdings Pty Ltd as lessor of lot 20, its officers, servants or agents must do all things necessary within its power to cause its lessee J & L Property Group Pty Ltd to comply with orders 2(a)(i) to (iii) inclusive.

3. It is declared the s 95(1) of the State Administrative Tribunal Act 2004 (WA) applies.

I certify that this and the preceding [35] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

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MR C RAYMOND, SENIOR MEMBER