BETWEEN : OWNERS OF PEARL BEACH SURVEY­STRATA PLAN 49019

MUTUAL INVESTMENTS AS TRUSTEE FOR THE MITCHELL FAMILY TRUST

Strata title - Breach of by-law - Short term stay and permanent residency in mixed use scheme - How to resolve inconsistency, if any, between by-laws and use restriction on registered strata plan - Should use restriction on strata plan be treated as extrinsic material or should it be read with the by-laws? - Constructing by-laws against a restriction of use - Use of extrinsic material such as town planning scheme and letters from persons employed by the Shire of Broome to interpret the by-laws

Planning and Development Act 2005 (WA), s 68

Residential Tenancies Act 1987 (WA), s 5(2)(e)

Shire of Broome Town Planning Scheme No 4, cl 4.17.2.4

State Administrative Tribunal Act 2004 (WA), s 32(1), s 32(2), s 32(4)

Strata Titles Act 1985 (WA), s 5C(c), s 6, s 35(1)(a), s 68, s 79(2), s 81(1)

Transfer of Land Act 1893 (WA), s 68

Clark v The Owners of Rosneath Farm Strata Plan 35452 and Ors [2007] WASAT 85

Codelfa Construction Pty Ltd v State Land Rail Authority (NSW) (1982) 149 CLR 337

Dainford Ltd v Smith [1985] HCA 23

General Practitioners' Society in Australia v Commonwealth of Australia [1980] HCA 30; (1980) 145 CLR 532

Global Network Services Pty Ltd v Legion Telecall Pty Ltd [2001] NSWCA 279

Lion Nathan Australia Pty Ltd (CAN 008 596 370) v Coopers Brewery Ltd (CAN 007 871 409) and Others [2006] FCAFC 144; (2006) 156 FCR 1

North Wind Pty Ltd v Proprietors - Strata Plan 3143 [1981] 2 NSWLR 809

Re Carey; Ex parte Exclude Holdings Pty Ltd & Ors [2006] WASCA 219

Rowell v Clark & Anor [2006] WASC 159

The Owners of Rosneath Farm - Strata Plan 35452 and Ors v Clark [2007] WASAT 287

1 The applicants sought an order to the effect that the respondents were found to be in breach of a by-law that limits residence in the Strata Scheme to a maximum of 90 days per year. The applicants contended that the respondents were in breach of the by-law by residing in their lots permanently or allowing their lots to be occupied permanently.

2 The applicants said that the Strata Scheme is a holiday resort and that restricted use is reflected in By-law 16. The effect of By-laws 16(1) and (3) is that all of the units in the resort may only be utilised for non permanent, short stay accommodation. None of the lots in the Strata Scheme may be used for permanent residential purposes. By-law 16(1) and By-law 16(3), according to the applicants, are clear and precise and there is no justification to rely on extrinsic material for the interpretation thereof. However, even if the Tribunal were to take into account extrinsic material, the materials provided to the Tribunal were incomplete and based on personal opinions of individuals. No reliance can therefore be placed on the extrinsic material.

3 The respondents contended that By-laws 16(1) and (3), if read with the Use Restriction contained in the registered Survey-Strata Plan, acknowledged that the Strata Scheme was for mixed use and that some lots were reserved for short stay non permanent use, while the remainder were available for permanent residence. The respondents said that the construction of By-laws 16(1) and (3) and the Use Restriction leads to an ambiguous and illogical outcome. The respondents contended therefore that, in light of the dispute over the correct interpretation of By-law 16(1) and (3), extrinsic material should be considered so as to provide the correct interpretation.

4 The Tribunal found that (a) By-law 16(1) and (3) must be constructed in a manner that is consistent with the Use Restriction and as a result only some Lots are restricted to short term accommodation; and (b) even if upon a plain reading of the Use Restriction and the provisions of By-laws 16(1) and (3), the meaning thereof was not clear and precise to a reasonable, objective person, extrinsic material support a construction that limits short term use to some Lots. Upon consideration of extrinsic material, the Tribunal found that the planning and development approvals by the Shire of Broome were of most assistance to support an interpretation of By-Laws 16(1) and (3) and the Use Restriction, namely that the Strata Scheme was a mixed use scheme whereby certain lots were subject to a Use Restriction that allowed only short term non permanent accommodation, while the remainder of lots were available for permanent residency.

5 The application was dismissed since the respondents were found not to be in breach with By-law 16(1) and (3).

6 The applicants are seeking the following orders (as amended on 29 October 2010):

1. The First, Second and Third Respondents (respondents) are not to occupy their respective lots in Pearle of Cable Beach Survey-Strata Plan 49019 (Strata Scheme) for any period exceeding three calendar months during any twelve month period.
2. The respondents are not to allow, 12 months after the making of these orders, the occupation by any occupier of their respective lots in the Strata Scheme for any period exceeding three calendar months during any twelve month period.

1. These orders shall not cease to have an effect upon the expiration of the period of two years that next succeed the making of these orders.

7 Two main issues arise from the application namely:

1. Is the meaning of Schedule 1 By-laws 16(1) and (3), in light of the Use Restriction, sufficiently clear to give effect to it, or should extrinsic material be taken into account to determine the correct and preferable interpretation on By-law 16(1) and (3); and
2. Are the respondents in breach of By-law 16(1) and (3) by occupying or allowing their lots to be occupied on a permanent basis?

8 The application was lodged on 17 June 2010. The first directions hearing took place on 1 July 2010 at which orders were made for persons referred to in s 79(2) of the Strata Titles Act 1985 (WA) (ST Act) to be notified of the proceedings. At the directions hearing that took place on 19 August 2010 several parties were joined to the proceedings as applicants and respondents respectively. At the directions hearing that took place on 9 November 2010, the matter was set down for hearing.

9 The hearing took place on 10 January 2011. At the conclusion of the hearing, orders were made for the respondents to file stamped copies of the contracts for sale relied upon by the respondents in these proceedings or in the alternative, explain why the filing of stamped copies was not possible or necessary. The respondents filed submissions and documents on 28 February 2011. The applicants indicated at the directions hearing on 3 March 2011 that they did not wish to take issue with the documents and submissions filed by the respondents.

11 The Strata Scheme was registered on 17 January 2008. The Strata Scheme is located in the Shire of Broome and specifically within a Tourist Zone under the Shire of Broome Town Planning Scheme No 4 (TPS 4).

12 The Shire of Broome (Shire) provided planning approval for the use of the land parcel on which the Strata Scheme is located on 15 September 2005. The Western Australian Planning Commission (WAPC) approved the subdivision into a survey-strata scheme on 14 November 2005. The Strata Scheme contains 34 lots.

13 The Management Statement for the Strata Scheme was registered on 17 January 2008. The Management Statement's By-laws had, in accordance with s 5C(c) of the ST Act, the effect of the by-laws for the Strata Scheme. By­Laws 16(1) and (3) as provided for in the Management Statement have not been amended or repealed.

14 By-Laws 16(1) and (3) and the registered Survey-Strata Plan 49019 (Strata Plan) contain a restriction of use (Use Restriction). The Strata Plan has a notation entitled 'Use Restrictions'. The notation provides that Lots 2 to 7, 10 to 13, 15, 17 to 19, 23, 24, 26, 29, 30, and 33 of the Strata Scheme are restricted to short stay accommodation. The notation does not make mention of the remainder of the lots of the Strata Scheme being Lots 1, 8, 9, 14, 16, 20, 21, 25, 27, 28, 31, 34 and 35.

15 It is not contested by the respondents that the First Respondent occupies his Lot 28 for up to 10 months in each 12 month period; the Second Respondent has let out Lot 34 to an occupier for a 12 month period; and the Third Respondent has let out part of Lot 1 for 12 month periods.

16 The parties made written and oral submissions, and called witnesses to give evidence in the proceedings. The Tribunal has taken all of the evidence, information and submissions into account in making its determination.

17 The statutory framework within which the application is brought, is as follows:

• Section 83(1) of the ST Act:
• Schedule 1 By-laws 16(1) and (3);
• Section 6 of the ST Act; and
• Survey-Strata Plan 49019.

Section 83(1) of the Strata Titles Act

1. General powers of State Administrative Tribunal to make orders

(1) The State Administrative Tribunal may, pursuant to an application of a strata company, an administrator, a proprietor, a person having an estate or interest in a lot or an occupier or other resident of a lot, in respect of a scheme, make an order for the settlement of a dispute, or the rectification of a complaint, with respect to the exercise or performance of, or the failure to exercise or perform, a power, authority, duty or function conferred or imposed by this Act or the by­laws in connection with that scheme on any person entitled to make an application under this subsection or on the council or the chairman, secretary or treasurer of the strata company.

(1) The scheme shall be used as a tourist resort in accordance with the zoning and ordinances of the Shire of Broome whereby occupiers are to utilise the lots for non permanent, short stay unless otherwise authorised in writing by the Shire of Broome.

(3) A proprietor of a lot shall have the right to occupy his lot for any period of time approved by the council of the strata company and at terms determined by the council but not exceeding three calendar months during any twelve month period.

Section 6 of the Strata Titles Act

1. Strata/survey­strata plan may restrict use of parcel or part of parcel

(1) A strata/survey­strata plan lodged for registration under this Act may, by an appropriate endorsement that delineates the area or space affected and refers to this section, restrict the use to which the parcel or part of the parcel may be put.

(1a) Subject to subsections (3a) and (4), a registered strata/survey­strata plan may be amended, by resolution without dissent (or unanimous resolution, in the case of a two­lot scheme) of the strata company, to restrict the use to which the parcel or part of the parcel may be put.

(1b) A resolution under subsection (1a) shall refer to a plan of the parcel showing the area or space affected.

(2) Where a registered strata/survey­strata plan restricts the use to which the parcel or part of the parcel may be put, a proprietor, occupier or other resident of any lot that is part of the parcel shall not use, or permit to be used, the parcel or part of the parcel in any manner that contravenes the restriction.

(3) Subject to subsections (3a) and (4) a restriction endorsed on a registered strata/survey­strata plan under this section may be varied or removed by resolution without dissent (or unanimous resolution, in the case of a two­lot scheme) of the strata company.

(3a) An addition of a restriction under subsection (1a) or a variation or removal under subsection (3) is effective only if the local government approves the resolution and, if the subdivision in the plan was one to which the consent of the Commission was required under this Act, the Commission approves the resolution.

(4) A resolution adding a restriction to or varying or removing a restriction endorsed on a registered strata/survey­strata plan under this section shall not be effective until notice of the resolution is registered in the prescribed manner with the Registrar of Titles and upon registration the Registrar of Titles shall amend the strata/survey­strata plan accordingly.

Pursuant to section 6(1) of the Strata Titles Act 1985, Lots 2 to 7, 10 to 13, 15, 17 to 19, 23, 24, 26, 29, 30, and 33 are short stay accommodation lots. No person shall occupy any short stay accommodation units for more than a total of 3 months in any one 12 month period, or for any residential purposes.

18 The contentions of the applicants can be summarised as follows:

1. The respondents breach By-laws 16(1) and (3) by occupying their lots or allowing their lots to be occupied for periods exceeding three months at a time and thereby using the lots for purposes other than that of a tourist or holiday resort.
2. By­law 16(1) applies to 'occupiers' other than proprietors and restricts the use of lots for 'non-permanent, short stay' only, unless otherwise authorised in writing by the Shire. By-law 16(3) specifically applies only to proprietors and it is clear and unambiguous that proprietors are not to occupy their lots within any 12 month period for more than three months.

1. The restriction of use as per By-laws 16(1) and (3) applies irrespective of any condition imposed or approval given by a local authority, or contract of sale or advertising material. The By-laws are a contract between the strata company, proprietors, occupiers and other residents and there is no limitation on the powers of the strata company to impose restrictions above those provided for by virtue of a planning authority, local government town planning scheme or other applicable government determination.

1. If the statutory arrangements within which the scheme operates are compared to the provisions of the Residential Tenancies Act 1987 (WA) (RT Act), the provisions of the RT Act do not apply to the provision of accommodation of premises for purpose of a holiday (s 5(2)(e) of the RT Act). Various decisions have been handed down which confirm that periods of less than three months occupation have been considered as consistent with holiday or tourist accommodation.
2. The meaning and intent of By-laws 16(1) and (3) are sufficiently clear and unambiguous that there is no reason to rely on extrinsic material for the interpretation of the By-laws. There is also no need to rely on the s 6 Use Restriction as registered on the Strata Plan as extrinsic material.
3. Even if the Tribunal were to find that extrinsic material can be relied on, the material provided to the Tribunal are speculative, incomplete, based on personal opinions and should not erode the basic provisions of the By­Laws 16(1) and (3) namely that the entire Strata Scheme is to be used for purposes of a holiday resort with all lots only available to non permanent short stay accommodation and no lots being available for residential accommodation.
4. The applicant is obliged pursuant to s 35(1)(a) of the ST Act to enforce the by-laws of the Strata Scheme and as a result the applicants need not demonstrate any prejudice other than that By-Laws 16(1) and (3) are not adhered to.

19 The contentions of the respondents can be summarised as follows:

1. The respondents do not occupy their lots in breach of By­Laws 16(1) and (3) or the Use Restriction since it is a mixed use Strata Scheme and the By-laws 16(1) and (3); Use Restriction; and planning approvals by the Shire envisaged that some lots will be available for permanent residency.
2. The development application and approval process of the Strata Scheme envisaged a mixed use strata scheme whereby a maximum of 40% of the lots would be available for permanent residential purposes and a minimum of 60% of all the lots would be available for non permanent short term tourism accommodation. This is consistent with the zoning of the land on which the Strata Scheme is located; with policies of the Shire; and with policies of the State of Western Australia to allow mixed use tourism and permanent accommodation in selected tourism areas.

1. The respondents purchased their lots with the knowledge that the Strata Scheme was a mixed development allowing for short and permanent accommodation depending on which lot was purchased. This understanding of the respondents is consistent with the By-Laws 16(1) and (3), the Use Restriction noted on the Strata Plan; Contracts for Sale, correspondence from the Shire, the evidence of Mr Angus who drafted the Management Statement and the advertising material used for marketing the Strata Scheme. The status of some lots as 'residential' was also factored into the purchase price and the valuation of the lots.

1. The By-Laws 16(1) and (3) and the Use Restriction on the Strata Plan must be read together. The Use Restriction does not stand in isolation from By­Laws 16(1) and (3). If the construction of the By­laws and Use Restriction gives rise to an ambiguous or vague outcome, extrinsic material should be used so as to assist the Tribunal to give a correct interpretation to By­Law 16(1) and (3). In essence, those lots that are the subject of the Use Restriction are for non permanent short term accommodation, while the remainder of lots are for permanent accommodation. The construction of By­laws 16(1) and (3) must be read so as to give effect to the Use Restriction.
2. The intention of By-laws 16(1) and 16(3) as well as the Strata Plan was to provide for a mixed use scheme. This is confirmed by the TPS 4 at cl 4.17.2.4 which has the force of law pursuant to s 68 of the Planning and Development Act 2005 (WA). This is also consistent with the policy of the Shire entitled 'Tourist Accommodation Developments (excluding Caravan Park) within the Tourist Zone' which envisages as a development principle a split in tourist/residential accommodation with minimum 60% short stay and maximum 40% permanent accommodation. In light of the Use Restriction on the Strata Plan, no further approval for permanent accommodation as mentioned in By­Law 16(1) from the Shire is required for the remainder of lots to be used for residential purposes since the Use Restriction reflects the approval given by the Shire.
3. There appears to be an ambiguity between By-laws 16(1) and (3), which, if read by a reasonable, objective person, may give rise to inconsistency or uncertainty. In light of this ambiguity, consideration could and should be given to extrinsic material so as to determine the correct meaning and effect of By-laws 16(1) and (3).
4. No prejudice has been established by the applicants by reason of some of the lots being used for permanent residence.

20 Several persons were called to give evidence during the proceedings. The following is a brief summary of their evidence.

21 Mr Angus said that although he is not a qualified lawyer, he is a specialist in the field of strata title, and has given extensive advice on strata title and the drafting of by-laws across the State. Mr Angus says he was appointed by Mr John Hays, the original proprietor and developer of the Strata Scheme, to draft the Management Statement which contained the proposed by-laws for the Strata Scheme. Mr Angus told the Tribunal that By-laws 16(1) and (3) are consistent with the instructions he received from Mr Hays and in accordance with his understanding of the approval granted by the Shire of Broome and the s 6 ST Act Use Restriction registered on the Strata Plan. Mr Angus says his instructions were that the Management Statement had to provide for the short stay and permanent residency of lots. In drafting By-law 16(3), his intention was to ensure that the proprietors of the short stay lots could not use their lots for purposes of permanent residency. According to Mr Angus, By­law 16(1) must be read with the approval by way of the s 6 ST Act Use Restriction that has been given by the Shire for certain lots to be occupied on a permanent basis. Mr Angus says he expected the draft Management Statement to be finalised and settled by Mr Hays' lawyer.

22 The Contract for Sale of Land or Strata Title by Offer and Acceptance signed by Mr Peter Murray Green for Lot 34 includes the following Special Condition:

1. This property is being sold with a 'Residential Usage' under the current short stay tourist zoning by the Shire of Broome.

23 Ms Thea Wale gave evidence that the Contract for Sale of Land or Strata Title by Offer and Acceptance signed by herself and her husband for Lot 16 and Lot 31 included the following Special Condition: '9. This offer is subject to the villa having Residential status under current zoning'. Mrs Wale explained during evidence to the Tribunal that she and her husband bought Lot 16 and Lot 31 on the unequivocal understanding that the lots were available for residential purposes. According to Mrs Wale, the funding approval they received from BankWest was also predicated upon the two lots being available for residential purposes. Mrs Wale enclosed to her statement of evidence an email from BankWest's Mr David Godfrey in which he emphasises that funding is subject to there not being any restrictions on the length of time an individual can occupy the property. Mrs Wale also enclosed a copy of an email which was purportedly sent by Mr Hays, the original proprietor, in which Mr Hays confirms that 'under the town plan up to 30% of the residences may be used as permanent residential properties' and that 'the two residences Mr and Mrs Wale are purchasing are being sold on the basis of them being in the 30% area meaning they can be bought and sold as residential homes for permanent occupation if the owners so wish'.

24 Mr John Stedman, director of Mansted Holding the owner of Lot 1, said in evidence that prior to acquiring Lot 1 he sought assurances from Mr Hays that Lot 1 would be available for permanent residency. In the Contract for Sale (Annexure B to the Contract), the vendor warrants that Lot 1 has 'permanent/residential usage'. The valuation report prepared for Lot 1 confirmed that it was 'approved for permanent residential use' and that this has been taken into consideration in the assessment. Mr Stedman also sought and received a letter from Mr Hays dated 25 August 2010 in which Mr Angus confirms that Lot 1 has permanency residency status.

25 Ms Green, on behalf of Green Focus the proprietor of Lot 29, gave evidence that there was no use restriction of the strata plan when they signed the contract for their lot. Their understanding was that the entire scheme would be operated as a holiday resort with no permanent residency allowed. Their understanding was consistent with the advice they received from the original proprietor, Mr Hays and the marketing brochure provided to them. It was only after settlement that they became aware of the dispute regarding permanent residency. They were surprised since the use of lots for permanent residence was not consistent with their understanding of the Strata Scheme.

26 The Tribunal will first consider whether the meaning of By­laws 16(1) and (3) is sufficiently clear to give effect to it. Secondly, if the answer to the first question is in the negative, the Tribunal will consider what extrinsic material is available and determine if such material may assist in the correct construction of the said by-laws.

27 The parties took divergent views as to the proper classification of by­laws in a strata scheme as 'delegated legislation' or 'statutory contracts' and the impact of such classification on the construction of the by-laws.

28 Mr Atkinson contended that the High Court in the matter of Dainford Ltd v Smith [1985] HCA 23 (Dainford), Gibb CJ ([9]) 'appear to proceed upon the basis that strata by-laws are delegated legislation'. Mr Atkinson relies on the following quotation of the judgment to substantiate the conclusion:

1. It is implicit in what I have already said that by-law 40 does not effect an unauthorized delegation of legislative power. I am not convinced that recourse to the maxim delegatus non potest delegare is of much assistance in deciding upon the validity of an exercise of statutory powers. It is simpler to ask directly whether the power has been exercised by the person upon whom it has been conferred and whether it has been exercised in the manner and within the limits laid down by the statute conferring the power. However, by­law 40 does not delegate to anyone else the power which s.30(7) of the Act gives to the body corporate to make a by­law conferring on the proprietor of a lot the exclusive use and enjoyment of part of the common property. Under by-law 40 the vendor cannot make a by-law, but may give a notice upon which the provisions of the by-law operate. The by-law itself confers (as s.30(7) requires) the right to exclusive use and enjoyment, although it allows the vendor by notice to fix the car space in respect of which the right is conferred on the proprietor of an individual lot.

29 The Tribunal is not in agreement with Mr Atkinson that his Honour Justice Gibb gave preference to a construction that by-laws in a strata scheme are to be treated as delegated legislation. The question whether by-laws were delegated legislation or statutory contracts was not of primary dispute in the Dainford matter. Mason J, in the same proceeding, summarised the question before the Court as follows:

1. The crucial question is whether s.30(7) of the Building Units and Group Titles Act 1980 (Q.) ('the Act'), on its true construction, requires that a by-law made by a body corporate conferring on the proprietor of a lot the exclusive use and enjoyment of a car space, being part of the common property, should itself designate the car space, either directly or by reference to an identification otherwise made before or at the time of the making of the by-law.

30 His Honour Justice Gibb did not address the classification of by-laws as being delegated legislation or a statutory contract in a manner that is of assistance in these proceedings.

31 According to Mr Park, a clear classification of by-laws in a strata scheme as being a 'statutory contract' arose in the matter of Re Carey; Ex parte Exclude Holdings Pty Ltd & Ors [2006] WASCA 219 (Re Carey) at [41] where his Honour Chief Justice Martin held as follows:

It is, however, pertinent to observe that in the circumstances of this case, the jurisdiction of the Tribunal which was invoked pursuant to s 83(1), was a jurisdiction to enforce the performance of duties imposed by the By-laws made by the relevant strata company, which by virtue of s 42 of the Strata Titles Act, took effect as if covenants in a deed under seal executed by all relevant parties. The jurisdiction invoked was therefore an alternative means of enforcing the statutory contract created by the making of By­laws and the provisions of s 42 of the Strata Titles Act, which obligations could otherwise have been enforced in any Court with jurisdiction over contractual disputes. (Tribunal emphasis)

32 The Tribunal is satisfied that in the proceedings before it, to the extent that the classification of by-laws as delegated legislation or a statutory contract is relevant, the observation by his Honour Chief Justice Martin in the Re Carey matter should be followed namely that the enforcement of a by-law is akin to enforcing a 'statutory contract'.

33 The outcome of these proceedings do not, however, in the assessment of the Tribunal, depend on the outcome of the debate whether a by-law in a strata scheme is properly categorised as delegated legislation or a statutory contract.

34 An analysis of the respective submissions by Mr Atkinson and Mr Park in regard to the proper method of construction of By-laws 16(1) and (3) and the Use Restrictions show that they may not in principle be as far removed from each other as it may seem at first glance.

35 As is correctly pointed out by Mr Atkinson, '(t)here has been some convergence between the proper method of construction of statutory contracts and delegated legislation' (para 24 exhibit D). Mr Atkinson refers, in coming to this conclusion, to the observation of McColl JA in North Wind Pty Ltd v Proprietors - Strata Plan 3143 [1981] 2 NSWLR 809. Mr Atkinson concludes that whether by-laws are characterised as delegated legislation or statutory contracts, by-laws 'should be interpreted objectively by what they would convey to the reasonable person' (para 25.4 exhibit D).

36 The suggested approach by Mr Atkinson is consistent with the approach adopted by Mr Park who agrees that '[b]y-laws should be interpreted objectively by what they convey to a reasonable person' (para 19(d) exhibit E). In this regard, Mr Park refers to the matter of Lion Nathan Australia Pty Ltd (CAN 008 596 370) v Coopers Brewery Ltd (CAN 007 871 409) and Others [2006] FCAFC 144; (2006) 156 FCR 1 at [53].

37 It would appear to the Tribunal that Mr Atkinson and Mr Parker agree that, as a matter of principle, by-laws should be interpreted objectively by what they convey to a reasonable person and if such interpretation is not feasible or if it gives rise to ambiguity, then the Tribunal may take into account extrinsic material so as to assist to ascertain the meaning of a by-law.

38 The issue that separates Mr Atkinson and Mr Park in these proceedings is when the threshold is met for extrinsic material to be taken into account.

39 Mr Atkinson cautions that a 'tight rein should be kept on having recourse to surrounding circumstances' (para 25.7 exhibit D). Mr Park says that if the by­law is 'ambiguous it is permissible for the Tribunal to have regard to extrinsic evidence in interpreting that By-law' (para 19(f) exhibit E). Mr Atkinson and Mr Park again do not seem to be far apart. In fact, both accept the observation of Senior Member Raymond in the matter of The Owners of Rosneath Farm - Strata Plan 35452 and Ors v Clark [2007] WASAT 287 at [39] (Rosneath):

The decision of Templeman J [in Rowell v Clark & Anor [2006] WASC 159] made plain that his Honour considered that by-law 19 was ambiguous and that therefore it was permissible to have regard to extrinsic evidence.

40 When it comes to the application of the general approach as set out by Mr Atkinson and Mr Park to the construction of by-laws, to the particulars of these proceedings, their disagreement becomes marked.

41 Mr Atkinson says that the meaning of By-laws 16(1) and (3) is clear and there is no need to rely on extrinsic evidence, including the Use Restriction. Mr Atkinson further says that even if the Tribunal were to decide that extrinsic material can be taken into account, the material before the Tribunal should be given little weight since it depends on personal views, subjective analysis by employees of the Shire and marketing documents.

42 Mr Park contends the opposite, namely that if there are ambiguities in the interpretation of By-laws 16(1) and (3) and the Use Restriction, those can be resolved by taking into account extrinsic material. Mr Park emphasises that his clients do not propose a re-writing of By-laws 16(1) and (3), but rather that the interpretation thereof be clarified, if necessary. The extrinsic material upon which Mr Park seeks to rely includes the planning and development approvals of the Shire, the evidence of Mr Angus who drafted the Management Plan and the Contracts for Sale of the respondents and some marketing material.

Guiding principles to interpret By-Laws 16(1) and (3)

43 The Tribunal will use the following guiding principles to assist it in its construction of By-laws 16(1) and (3):

1. The foremost principle is that s6 of the ST Act sets out the requirements for a restriction of use to be registered against a strata/survey strata plan. Such a restriction of use may be amended by way of a resolution without dissent (s 6(1a) and s 6(3) of the ST Act), provided that such a resolution refers to the strata plan showing the area of space affected. Where a registered strata/survey strata plan restricts the use of a lot, the lot may not be used in any manner that contravenes the restriction (s 6(2) of the ST Act). The consequence of this provision is that any other by-laws, including those enacted pursuant to s 42(1) of the ST Act or contained in the Management Statement, cannot restrict the use of a lot in any way other than is provided for by s 6 of the ST Act and any purported restriction of use that does not comply with s 6 is void. If the by-law is ambiguous when reading it in the context of a s 6 Use Restriction, then an interpretation should be favoured which gives the by-law lawful effect. This principle applies equally the interpretation of contracts: see Global Network Services Pty Ltd v Legion Telecall Pty Ltd [2001] NSWCA 279 (by Mason P, a dissenting judgment - but that does not affect the principle stated) referred to in K Lewison, The Interpretation of Contracts (3rd ed, 2004) at para 7.10, and in relation to statutory interpretation: see General Practitioners' Society in Australia v Commonwealth of Australia [1980] HCA 30; (1980) 145 CLR 532 at 562, referred to in DJ Gifford, Statutory Interpretation (1st ed, 1990) at page 69.
2. The meaning of By-laws 16(1) and (3) should be gained from their context and language. The by-laws should therefore be interpreted so as to be given their grammatical and ordinary meaning (Codelfa Construction Pty Ltd v State Land Rail Authority (NSW) (1982) 149 CLR 337), unless an interpretation leads to some absurdity, repugnance, ambiguity or inconsistency with other by­laws or the Use Restriction (Clark v The Owners of Rosneath Farm Strata Plan 35452 and Ors [2007] WASAT 85, at [47]). This principle, be it in the context of statutory or contractual construction, remains the same.

(c) The By-laws 16(1) and (3) and the Use Restriction must not be considered in isolation from each other or from the other by-laws in the Strata Scheme. The construction of By­laws 16(1) and (3) the Use Restriction takes place in an holistic, integrated manner against the backdrop of all the by-laws of the Strata Scheme so as to allow the respective By-laws to have full meaning and practical effect. The Strata Plan and Use Restriction noted thereon, forms an integral part of the Scheme and the By­laws that regulate it.

(d) By-laws 16(1) and (3) and the Use Restriction should be interpreted objectively by what meaning they would convey to a reasonable person. Members of the public rely on the registered by-laws and use restrictions on the strata plan, if any, to gain insight into the rights and responsibilities of proprietors, residents and visitors in a strata scheme. Section 68 of the Transfer of Land Act 1893 (WA) provides that a strata title is taken subject to any encumbrances registered against it on the certificate of title. The registered by-laws, including the strata plan and s 6 ST Act use restriction thereon, are lawful encumbrances registered against the title and any proprietor is therefore deemed to have knowledge thereof.

(e) Caution should be exercised before taking into account extrinsic material or surrounding circumstances when constructing By-laws 16(1) and (3) and the Use Restriction since members of the public may not have access to such extrinsic material to enable them to discern the proper meaning of the By-laws. The intent of Parliament to require registration of a by-law and the benefit of the certainty and clarity that registration of by­laws bring, may be eroded if the Tribunal too readily relies on extrinsic material for the interpretation of a by­law or a use restriction on a strata plan. The Tribunal may, however, give consideration to extrinsic material if it is necessary to clarify the meaning and intent of a by­law or use restriction in circumstances where the by­laws or use restrictions are ambiguous, vague, confusing or contradictory. It was accepted in Rowell v Clark & Anor [2006] WASC 159 (Tempelman J at [39] and [40]) that the Tribunal may have regard to extrinsic evidence when interpreting an ambiguous by-law.

(e) Although the Tribunal is not a court and its procedures are more informal than what is expected in court proceedings, it must adhere to general accepted principles when constructing statutes and contracts, for example, evidence should not be permitted which contradicts or varies the written agreement or in this case, a by-law or use restriction (Rosneath at [42]).

(f) The statutory context within which the Tribunal operates provides that the Tribunal is not bound by the rules of evidence (s 32(2) SAT Act) but that it must adhere to the rules of natural justice (s 32(1) SAT Act). The Tribunal must determine the matter on the substantial merits without regard to technicalities and legal forms (s 32(2) SAT Act); and the Tribunal may inform itself on any matter as it sees it (s 32(4) SAT Act).

44 The Tribunal will now turn to the construction of By-laws 16(1) and (3) and the Use Restriction on the Strata Plan.

The scheme shall be used as a tourist resort in accordance with the zoning and ordinances of the Shire of Broome whereby occupiers are to utilise the lots for non permanent, short stay unless otherwise authorised in writing by the Shire of Broome.

46 The following observations can be made in regard to a plain reading of By-law 16(1):

1. The use of the scheme as a tourist resort is, pursuant to By-Law 16(1), in accordance with the 'zoning and ordinances of the Shire of Broome'. In order to fully understand the conditions of use under which the Strata Scheme operates from time to time, it may therefore be necessary for the objective and reasonable person to take into account the current 'zoning and ordinances' of the Shire of Broome since those zoning and ordinances may change from time to time.
2. 'Occupiers' refer to those persons in actual occupation of lots. 'Occupiers' may include proprietors, but only if a proprietor is also an 'occupier'. 'Occupiers' may also refer to short term visitors such as holiday makers. As a consequence, proprietors as occupiers may have different residential rights under By-law 16(1) than the rights proprietors have under By-law 16(3): for example, according to By-law 16(3), residency by a proprietor is absolutely limited to a maximum of 90 days per year, but according to By-Law 16(1) the Shire may authorise in writing for occupiers to use lots for other purposes than non permanent or short stay.

1. The Shire may authorise in writing residential or tenancy arrangements other than for purposes of 'non permanent short stay'. In order to establish whether the Shire has authorised other residential or tenancy arrangements, an objective reasonable person would have to consider whether any such authorisations have been given and if so, whether such authorisations are consistent with the Strata Scheme By-laws and Use Restrictions in order to properly understand their rights and responsibilities.

A proprietor of a lot shall have the right to occupy his lot for any period of time approved by the council of the strata company and at terms determined by the council but not exceeding three calendar months during any twelve month period.

48 The following observations can be made in regard to a plain reading of By-law 16(3):

1. In order to find out what conditions have been imposed on a proprietor for the occupancy of his lot, regard must be had to any approvals and terms that may have been given by the strata council.
2. Where an 'occupier' in By-law 16(1) may be authorised by the Shire of Broome to occupy a lot in a manner other than for non permanent, short stay, a 'proprietor' who is not an occupier may have other conditions imposed by the strata council but such conditions may not include the right to reside for a period longer than three months. An 'occupier' who is not a 'proprietor' may, however, escape conditions imposed pursuant to By-Law 16(3) since those conditions apply only to 'proprietors'. As a consequence, the rights and obligations of a proprietor-occupier may be different from the rights and obligations of a non proprietor-occupier.

1. The approval process for the use of a lot under By­Law 16(1) is different for an 'occupier' compared to the approval process for use of a lot by a 'proprietor' under By-law 16(3). An 'occupier' may obtain approval from the Shire to utilise a lot for non permanent, short stay purposes, while a proprietor who is not an occupier cannot obtain approval from the council of owners to occupy his lot for a period of exceeding three months during any 12 month period. A proprietor who is not an occupier can not obtain approval from the Shire, and conversely the council of owners cannot impose on an occupier any of the conditions that it imposes on a proprietor under By­Law 16(3).

1. If By-Law 16(3) is interpreted as a broad restriction on the use of their Lots of all proprietors, it contrasts with By­law 16 (1) which affords certain rights to occupiers who are also proprietors.

49 The following use restriction is registered on Survey Strata Plan 49019:

Pursuant to section 6(1) of the Strata Titles Act 1985, Lots 2 to 7, 10 to 13, 15, 17 to 19, 23, 24, 26, 29, 30, and 33 are short stay accommodation lots. No person shall occupy any short stay accommodation units for more than a total of 3 months in any one 12 month period, or for any residential purposes.

50 The following observations can be made in regard to a plain reading of the Use Restriction.

51 The wording of the Use Restriction is not the same as the wording of By­law 16(1) or By-law 16(3) and this may in itself give rise to confusion.

• the Use Restriction refers to specific lots while By­law 16(1) and By-law 16 (3) refer to all lots;
• the Use Restriction refers to 'no person' while the By-law 16(1) and By-law 16(3) refer to 'occupier' and 'proprietor' respectively;
• the Use Restriction is unqualified in regard to the lots allocated for short stay accommodation, while By­Law 16(1) envisages that the Shire may authorise arrangements other than for non permanent, short stay purposes and By-Law 16(3) does not allow at all for residency longer than three months; and
• the Use Restriction does not define what is meant by 'residential purposes'.

Inconsistencies between By-Laws 16(1) and (3) and Use Restriction

53 In addition to the inconsistencies between By-laws 16(1) and (3), a plain reading of By-Laws 16(1) and (3) together with the Use Restriction also gives rise to ambiguity and inconsistency, for example:

• By-Law 16(1) envisages that written approval may be granted by the Shire for an occupier to utilise any of the lots for a purpose other than non permanent short stay, while the Use Restriction does not mention that such approval can be obtained from the Shire.
• By-Law 16(1) applies to all lots in the Strata Scheme, while the Use Restriction only applies to certain lots in the Strata Scheme.
• By-law 16(1) is limited to 'occupiers' of lots, while the Use Restrictions is directed to any 'person'.
• By-law 16(1) envisages that reference may be made to extrinsic material such as the zoning and ordinances of the Shire of Broome as well as written authorisation that the Shire of Broome may have given in writing about occupancy arrangements, while the Use Restriction does not refer to extrinsic material.
• By-law 16(3) applies to all lots, while the Use Restriction only applies to certain lots in the Strata Scheme.
• Bylaw 16(3) is limited to a 'proprietor' of a lot, while the Use Restriction refers to any 'person'.

54 The Tribunal finds that By-laws 16(1) and (3) must be given their true and correct meaning within the context of the Use Restriction on the Strata Plan. The Tribunal finds that By-laws 16(1) and (3) are ambiguous when reading it in the context of the s6-Use Restriction, and that an interpretation should be favoured which gives the By-laws lawful effect. The Use Restriction noted on the Strata Plan is clear and unambiguous and must be used to construct By­laws 16(1) and (3). The Use Restriction on the Strata Plan only relates to Lots 2 to 7, 10 to 13, 15, 17 to 19, 23, 24, 26, 29, 30, and 33. The remainder of the lots are not encumbered by any s 6 ST Act Use Restriction and can therefore be used for purposes of permanent residency. The correct interpretation of By-laws 16(1) and (3) and the Use Restriction is therefore that Lots 2 to 7, 10 to 13, 15, 17 to 19, 23, 24, 26, 29, 30, and 33 are restricted to short stay accommodation. The Use Restriction does not apply to Lots 1, 8, 9, 14, 16, 20, 21, 25, 27, 28, 31, 34 and 35.

55 The Tribunal finds in the alternative that in light of the analysis and assessment above, that on a plain reading, the meaning of By-laws 16(1) and (3) and the Use Restriction is not sufficiently clear to give effect to it and that extrinsic material should be taken into account in an effort to determine their proper and true construction.

1. By-laws 16(1) and (3) and the Use Restriction, if read within their grammatical and ordinary meaning, give rise to ambiguity, uncertainty, inconsistencies and an illogical outcome.
2. A reasonable person reading By-laws 16(1) and (3) and the Use Restriction would not be able to discern the proper meaning thereof without referring to extrinsic material.

1. It is necessary that, in order to give practical, logical and consistent meaning to By-laws 16(1) and (3) and the Use Restriction, extrinsic material be taken into account.

Extrinsic material of potential relevance to assist in constructing By­law 16(1) and (3) and the Use Restriction

57 In order to achieve the correct and true construction of By-laws 16(1) and (3) and the Use Restriction, the Tribunal will now reflect on extrinsic material before it. The Tribunal will divide and summarise the materials presented to it into categories and then consider the weight that ought to be attached at the respective categories. The categories are:

• Shire of Broome town planning and development scheme and related material;
• Evidence of Mr John Angus, drafter of the Management Statement;
• Correspondence from officials employed by the Shire of Broome;
• Contracts for Sale of Land or Strata Title by Offer and Acceptance; and
• Public relations material.

58 By-law 16(1) envisages that the Strata Scheme shall be used as a tourist resort 'in accordance with the zoning and ordinances of the Shire of Broome ... '. As reasoned above, this implies that in order to establish the scope, meaning and application of By-Law 16(1), regard must be had to the zoning and ordinances of the Shire and possible authorisations it may have given.

59 Section 6 of the ST Act allows that lots in a strata scheme may be made subject to a use restriction. It may not be common for use restrictions to be limited to certain lots, but the imposition of a restriction on some lots it is allowable and lawful.

60 The Strata Scheme is located in a Tourist Zone under the TPS 4. The Scheme has, by virtue of s 68 of the PD Act, the force of law and it should, in the view of the Tribunal, be given priority weighting above other extrinsic material such as contracts for sale and marketing material.

61 The Shire envisages as a policy the development of mixed strata schemes where tourism/holiday and residential accommodation are provided within the same Scheme. This planning and development philosophy is reflected is the TPS 4 as well as its policies.

Council may approve a combination of tourist accommodation and permanent residential accommodation on the same site provided that it complies with the following:

(a) The predominant use of the site remains for short stay tourist and holiday accommodation.

(b) In determining the predominant use of the site, Council will have regard to:

(c) Where tourist development and permanent residential accommodation are developed on the same site, the protection of residential amenity through careful design of both facilities and accommodation on site shall occur in order to minimise disturbance between land uses.

63 The Scheme provides that the Shire Council must have regard to the planning policies of the Shire.

64 A key planning policy document of the Shire is entitled 'Tourist Accommodation Developments (excluding caravan Park) within the Tourist Zone' (adopted 17 December 1996) (Policy Document).

65 Several important principles of policy of relevance to these proceedings are identified in this Policy Document, namely:

• Provision of an adequate supply of short­term (less than three months) and long­term (more than three months) accommodation (Objective: Policy Document);
• To ensure needs of holidaymakers and permanent residents are met (Objective: Policy Document);
• To encourage tourist accommodation and limited permanent accommodation in the Tourist Zone (Aim: Policy Document);
• The split tourist and residential accommodation shall be 60% short stay (minimum) and 40% long stay and permanent accommodation (maximum) (Guidelines: Policy Document); and
• Where strata title accommodation is to occur, the above objectives and guidelines shall apply (para 4(a): Policy Document).

66 The developer of the Strata Scheme submitted to the Shire a town planning report dated August 2005 which contains details of the Proposed Tourist Resort Lot 993 Millington Road, Cable Beach, Shire of Broome (Town Planning Report). The Introduction of the Town Planning Report states as follows:

This town planning report is prepared in support of a planning application to the Shire of Broome for the development of a Tourist Resort comprising 34 self-contained short stay/permanent occupation units, and associated facilities at Lot 993 Millington Road, Cable Beach.

67 The Town Planning Report continues to make several references to the proposed mixed use scheme and under the compliance of the proposed scheme with the Shire's Policy 4.1.10 entitled Tourist Accommodation Developments within the Tourist Zone (Tourist Planning Policy), the following is said:

The Tourist Planning Policy - Development Principles, provides for tourist resorts with a minimum 60% short stay and a maximum of 40% permanent accommodation. The proposed Tourist Resort will adhere to this requirement, which will be implemented via its management statement.

68 The Town Planning Report finally states under the heading Survey Strata Subdivision and Management Statement the following:

A management statement will be prepared for the Tourist Resort to ensure its function a single business entity. The management statement will control the occupation of the units in accordance with the 60/40 short stay/permanent requirements of the Shire of Broome's Scheme No. 4 and Tourist Planning Policy.

69 The Shire issued a Development Approval for the Scheme on 15 September 2005.

70 By letter of 14 November 2005, the WAPC endorsed the survey strata plan subject to certain conditions.

71 The Management Statement for Survey-Strata Plan No 49019 was lodged with the Shire and stamped on 25 October 2007. Draft By­Laws 16(1) and (3) are identical to those that were submitted to the Shire.

72 On 18 January 2008, the WAPC confirmed that it had considered the application and endorsed the Survey-Strata Plan 49019.

73 The Shire and the WAPC based their respective approvals process on the understanding that the Survey Scheme will be of mixed use in a manner that is consistent with the policy objectives of the Shire.

Contract for Sale of Land or Strata Title by Offer and Acceptance

74 The Contracts for Sale tendered by the respondents each contains a Special Condition in which the status of the lot the subject of the contract is confirmed to be for residential purposes. It has also been contended that the cost of residential lots was higher than those of short­term lots and that, in once instance, BankWest granted finance on the clear understanding that the lot would be available for residential purposes. No expert evidence was given to substantiate that the costs of a residential lot was higher than that of a short­term accommodation lot. Although the Management Statement enclosed to the contracts contained what is now referred to as By-Laws 16(1) and (3), the draft Strata Plan enclosed did not contain what is now referred to as the Use Restriction.

75 Ms Green's evidence was that their contract for sale did not make any reference to permanent residence of some lots.

76 By-law 16(1) envisages that the Strata Scheme shall be used as a tourist resort and that occupiers must utilise lots for non permanent short stay 'unless otherwise authorised in writing by the Shire of Broome'. It is therefore appropriate for the Tribunal to also reflect on correspondence of officials employed by the Shire in regard to the Strata Scheme to the extent that such correspondence may be of relevance to the construction of By-Laws 16(1) and (3).

77 In the Shire's Order and Requisitions dated 21 July 2009, the current zoning of the property is described as 'Tourist Zone - Long Stay' and signed off by the Shire's Town Planning; Environmental Health Officer; and Building Surveyor.

78 In a letter dated 22 July 2009, Ms Michelle Teoh, Manager Planning Services for the Shire, said the following to Mr and Mrs Wale:

I refer to your email and conversation with Neels Pretorius and would like to confirm that your two units i.e. No. 16 and No. 31, 14 Millington Road (The Pearl) are zoned 'Tourist Zone' which permits tourist accommodation, long stay. Your two units are in terms of the survey strata plan 49019 for long stay purposes.

79 In an email dated 28 July 2009, Ms Rene Human, Planning Officer of the Shire, says as follows in reply to a query directed to her by Ms Katherine Newell, a settlement agent:

'This is to confirm that Lot 993 No.14 Millington Road (The Pearl) is zoned 'Tourist Zone' which permits tourist accommodation, short stay and long stay. The Shire policy makes provision for 40 - 60% split between short stay and long stay. The survey Strata Plan (attached) indicates the notifications of short stay accommodation (60-40% split). See notifications on sheet 2 at the right hand bottom of the page. Your unit no.27 is earmarked for 'long stay' accommodation and therefore not burdened in terms of the certificate of title.'

80 In her letter of 26 August 2010, Ms Teoh says the following to Mr Peter Green about the position of the Shire in regard to the provision of permanent accommodation in the Strata Scheme:

I refer to your conservation with Rene Human on 26 August 2010 and would like to confirm that Lot 993 No. 14 Millington Road (The Pearle) is zoned 'Tourist Zone' which permits tourist accommodation, short stay and long stay. The Shires policy makes provision for 40 - 60% split between short and long stay. The strata Survey Plan (attached) indicates the notifications of short stay accommodation (60 - 40% split) ...

Lots 2 to 7, 10 to 13, 15, 17 to 19, 23, 24, 26, 29, 30, and 33 are noted as short stay accommodation and this would therefore mean that Lots 1, 8, 9, 14, 16, 20, 21, 25, 27, 28, 31, 34, 35 are long stay (permanent) accommodation.

81 In her letter to Mr John Stedman dated 23 November 2010, Ms Teoh provides a similar explanation as she gave in the letter referred to above to Mr Green.

82 The respondents included in their bundle of documents a brochure entitled Pearles of Wisdom (2nd edition, Winter 2008) in which it is said that '[t]he Pearle is a perfect lifestyle investment choice ... Buy a freehold residence within our gated, secure complex. Live in it as you wish and/or place it in The Pearle's rental pool to gain valuable income for the remainder of the year'.

83 The applicants included in their bundle of documents an article in the West Australian newspaper, dated 16 July 2008, suggests that the Strata Scheme will be operated on the basis that 'owners can live in their residences for up to three months but for the remaining nine months the units are put in the rental pool and they derive income from them'.

84 The Tribunal finds as follows in regard to the above summarised extrinsic material presented to it:

1. The Tribunal does not accept the contention of the applicants that the extrinsic material is of 'no use' to the Tribunal. The extrinsic material is of assistance to provide clarity and certainty and to remove ambiguity as to the correct and proper construction of By-laws 16(1) and (3) and the Use Restriction.
2. The Tribunal accepts that some of the extrinsic material is of greater relevance and use than others. The weight attached to some material is therefore greater than the weight attached to other material. In this regard, the development, planning and approval processes and decisions of the Shire should be afforded much more weight than for example an article that appears in the West Australian newspaper or the assurance that a selling agent may give to a potential buyer.

1. The development, planning and approval processes and decisions of the Shire supported by the WAPC are particularly relevant for the correct and proper construction of By-laws 16(1) and (3) and the Use Restriction.

1. The Tribunal notes the contentions of Mr Atkinson that all the necessary approvals for the Strata Scheme may not have been given by the Shire. This is not a question for the Tribunal to determine. If the applicants take issue with the question whether the Shire acted properly in accordance with its statutory mandate, this is not the forum for such a dispute to be determined. The Tribunal is, however, satisfied that the documents that are available in regard to the approvals processes of the Shire, can be relied upon for the construction of the By­laws 16(1) and (3) and the Use Restriction.
2. Mr Atkinson also refers to the arrangements in regard to the number of parking bays per lot and the alleged problems that are experienced with parking in the Strata Scheme to substantiate the contention of the applicant that residential use is not permitted. There was evidence before the Tribunal indicating that cars were parked on areas that were not demarcated parking bays. While the dispute regarding unauthorised parking may be a contentions issue within the Strata Scheme, it has little or no relevance to these proceedings. There was no expert evidence before the Tribunal to support the contention of Mr Atkinson regarding the relevance of the number of parking bays per lot to determine the questions in these proceedings.
3. The evidence of Mr John Angus is consistent with the development, planning and approval processes of the Shire of Broome. Mr Angus is an expert witness with high credibility in the strata title arena in Western Australia. The Tribunal accepts that Mr Angus gave his personal views of what his instructions were at the time when the Management Statement was drafted, but it must also be noted that Mr Angus had intimate dealings with the development of the Management Statement for the Original Proprietor and to the extent that his assessment mirrors the development, planning and approval processes of the Shire and the By­laws 16(1) and (3) and the Use Restriction, it is of assistance to demonstrate the consistency in the development of the Scheme as a mixed use resort with provision for short­term and permanent accommodation. Mr Angus drafted By-laws 16(1) and (3) and his understanding is that the Use Restriction gives effect to the provision in Bylaw 16(1) for the Shire to give approval for permanent residence. Mr Angus says that By-laws 16(1) and (3) and the Use Restriction should therefore be read together so as to understand the intention of providing for a mixed use whereby certain lots are restricted only for non permanent short stay, while other lots are not subject to the use restriction.
4. The weight placed on other extrinsic material such as the contracts for sale; assurances that were given by the Original Proprietor, letters from the Shire, valuer report and marking and advertising material, is less that than of the development, planning and approval processes of the Shire. These other materials, assurances and contracts are subject to personal interpretation and subjective understandings of persons and may in some instances have been designed for purposes of promotion and marketing. The Tribunal notes, however, that these materials were generally consistent with the assertion of the respondents, namely that By-laws 16(1) and (3) and the Use Restriction provide for a mixed use Strata Scheme whereby certain lots are restricted only for non permanent short stay, while the remainder of lots are not subject to the use restriction.

1. By-laws 16(1) and (3) and the Use Restriction on the Strata Plan provide for a mixed use Strata Scheme whereby a short­term non permanent Use Restriction applies to certain lots. The remainder of the lots are not encumbered by the Use Restriction.
2. The Use Restriction noted on the Strata Plan is clear and unambiguous and must be used to construct By­laws 16(1) and (3).
3. The Use Restriction on the Strata Plan only relates to Lots 2 to 7, 10 to 13, 15, 17 to 19, 23, 24, 26, 29, 30, and 33. The remainder of the lots are not encumbered by any s 6 ST Act Use Restriction and can therefore be used for purposes of permanent residency.
4. The correct interpretation of By-laws 16(1) and (3) and the Use Restriction is therefore that Lots 2 to 7, 10 to 13, 15, 17 to 19, 23, 24, 26, 29, 30, and 33 are restricted to short stay accommodation. The Use Restriction does not apply to Lots 1, 8, 9, 14, 16, 20, 21, 25, 27, 28, 31, 34 and 35.
5. The respondents have therefore not occupied their lots or caused their lots to be occupied in a manner that is in breach of By-Laws 16(1) and (3).
6. The application must therefore be dismissed.
7. The proprietors of the Strata Scheme are encouraged to amend in due course the by-laws of the Scheme so as to provide certainty on the basis of these findings.

I certify that this and the preceding [85] paragraphs comprise the reasons for decision of the State Administrative Tribunal.

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