//
[2007] WASC 250
General information, not legal advice.
Supreme Court of WA
2007-10-26
Mr J, Simmonds J
Original judgment source is linked above.
JURISDICTION : SUPREME COURT OF WESTERN AUSTRALIA
CITATION : RADFORD -v- THE OWNERS OF MIAMI APARTMENTS, KINGS PARK STRATA PLAN 45236 [2007] WASC 250
THE OWNERS OF MIAMI APARTMENTS, KINGS PARK STRATA PLAN 45236
Appeal from decision of member of State Administrative Tribunal - Application for leave to appeal - Test to be applied - Disposition of appeal
Resolutions passed without dissent at first annual general meeting of strata company - Unanimous resolutions - Amendment to by-laws of strata company to authorise lot holders to exchange rights of exclusive occupancy of portions of common property for ownership of such portions - Claims by purchasers of other lots for relief from State Administrative Tribunal under Strata Titles Act 1985 (WA) s 93 - Claims denied - Whether matters of a contractual or equitable character fell within ambit of s 93 - Whether State Administrative Tribunal required under s 93 to have regard to interests of persons in positions of claimants
Doctrine of fraud on the minority - Whether the minority includes persons who have agreed to buy a member's interest
Interpretation Act 1984 (WA), s 18, s 19
1 This is an application for leave to appeal, heard with the appeal, from a decision of a Member of the State Administrative Tribunal (SAT). By that decision, Radford and The Owners of Miami Apartments Strata Plan 45326 [2006] WASAT 293, the Member, Dr Bertus De Villiers, dismissed an application under the Strata Titles Act 1985 (WA) (ST Act) in respect of certain amendments to the by-laws of the strata company. Those amendments were to the by-laws as provided for by ST Act sch 1. They were agreed to without dissent at the first Annual General Meeting of the strata company. That AGM was held after the plaintiffs had agreed to purchase a lot in the five-lot strata-title scheme but before the settlement of the sale to the plaintiffs. That settlement occurred after the lodgement of notice of the amendments with the Registrar of Titles.
2 At the hearing before me, the plaintiffs put up a minute of proposed amended grounds of appeal and minute of orders sought. I will consider the amendments sought below.
3 This application for leave to appeal, and appeal, raises the question of whether or not questions of law, as identified in the proposed grounds for appeal, and involving the construction of certain provisions in the ST Act, arise out of the decision made by the non-judicial member of the SAT in Radford.
4 As will be seen, certain other questions of law were also put to me as arising out of that decision, and were addressed by both counsel in the appeal.
5 It would appear that there is no authority on the construction of the provisions in the ST Act in question in this appeal.
6 I will first provide some factual background to the proceedings before me. I will then outline the proceedings in the SAT before Member De Villiers. I will then outline the proceedings before me, and provide certain additional factual and legal detail. I will then consider each of the two grounds of appeal put forward by the plaintiffs.
7 The following account appears to be common ground.
8 On 9 July 2002, under a contract of sale (the Contract of Sale), the plaintiffs purchased a lot (strictly, at that stage a 'proposed lot': see ST Act, s 4(1)) 'off the plan' for a five lot residential 'strata scheme', as defined by ST Act, s 3(1). That strata scheme was called 'Miami Apartments', to be situated at No 2, Bellevue Terrace, West Perth (the Strata Scheme). A 'strata plan' (as defined by ST Act s 4(1a)) to which the Strata Scheme related was subsequently registered as Strata Plan 45336 (the Strata Plan). The lot the subject of the Contract of Sale became Lot 2 in the Strata Plan. The land the subject of the Strata Plan was the whole of the land comprised in Certificate of Title Volume 1258 Folio 530 (the Land).
9 The vendor under the plaintiffs' purchase was Bellevue Apartments Pty Ltd (Bellevue) and Miami Gold Pty Ltd (Miami Gold). However, only Bellevue was at any material time the registered proprietor of or had any other interest in the Land, or of or in a lot or lots under the Strata Scheme. It appears that Miami Gold's position throughout was that it held all of the shares in Bellevue.
10 There are certain provisions in the Contract of Sale to which it will be necessary for me to return, in the context of the AGM in question in this case.
11 On 3 October 2002 Bellevue transferred the Land into the names of the following persons, as tenants in common:
12 The Contract of Sale bears what it appears to have been accepted before me were the signatures of Day and Smith, as directors of Bellevue. I further understood the parties to accept that those individuals were directors of Bellevue at all times material to me.
13 On 2 October 2004, the Strata Plan was registered under the ST Act. This carried with it, among others, the effects described in ST Act s 4(1) - (6). On that date, Bellevue, Day and Smith were the persons by whom the Land was held in fee simple, and thus each was an 'original proprietor' as defined by ST Act s 3(1). Titles to Lots 1 to 3 were issued to Bellevue, title to Lot 4 was issued to Smith and title to Lot 5 was issued to Day.
14 It will be noted that the registration came almost two years after the transfer from Bellevue to Day, Smith and itself. During that period, it appears that at least the bulk of the construction of the building the subject of the Strata Scheme took place. It is apparent that Bellevue, Day and Smith were developers of the project represented by the Strata Scheme, and I did not understand there to be any contest before me of this conclusion. The possible significance of this conclusion will emerge later in these reasons.
15 Another effect of the registration of the Strata Plan was the incorporation of the proprietors of the Lots from time to time as a body corporate in the form of a strata company: ST Act s 32. That strata company is the defendant.
16 On 8 November 2004 the first AGM of the defendant was held. Bellevue, Day and Smith were all represented by the holder of a proxy for them. It appears to be common ground that there was no other person present entitled to vote at that AGM. The holder of the proxy in each case was David Bertram, the project manager who was overseeing the development of the Strata Scheme (Bertram). The AGM was chaired by a Ms E Loguidice, who prepared and circulated the agenda and attachments. She circulated those documents to Bellevue, Day and Smith. She did not circulate them to the plaintiffs. Nor did Bellevue pass on the documents to the plaintiffs for their instructions or otherwise.
17 At that first AGM resolutions were passed by resolution on the votes cast by Bertram as proxy for Bellevue, Day and Smith to amend the by-laws of the defendant. Those by-laws prior to any amendments were those provided for by ST Act sch 1 and sch 2: s 42(2). No amendment to the by-laws could take effect, however, until, within 3 months of the passing of the resolution for the amendment, a notice of it in the prescribed form had been lodged with the Registrar of Titles, and the Registrar had made reference to it on the registered strata plan: ST Act s 42(4). As I will indicate, it is common ground for my purposes at least that such lodgement and reference were made in this case.
18 The amendments included three of relevance to the present appeal.
19 One amendment, by new by-law 25, granted to the proprietors of Lots 4 and 5 rights of exclusive use of certain common property for which no consideration was payable. This common property included certain car parking bays as well as other common property.
20 A pair of amendments, by new by-laws 26 and 27, provided for the proprietors of Lots 4 and 5, or in certain circumstances the proprietor of Lot 5 alone, to exchange their occupancy rights, including the part of the common property which was the subject of the right of exclusive use referred to, for ownership which included that part. No consideration was to be payable on this exchange.
21 I will consider the terms of the three new by-laws in more detail below.
22 The Contract of Sale provided for certain amendments to be made to the by-laws of the strata company. However, while the Contract of Sale provided for the amendment relating to exclusive use of certain common property, it did not provide for exclusive use of common property car parking bays, or for the right to acquire ownership in any common property.
23 I will return to that contractual context below.
24 On 23 November 2004, following the lodgement of a notice of the amendments, the Registrar of Titles made reference to the amendments so notified on the Strata Plan as Notification J94143. It is common ground for my purposes at least that this was compliance with ST Act s 42(4).
25 On 3 December 2004 settlement of the Contract of Sale occurred.
26 It is common ground, for my purposes at least, that it was only subsequently to settlement that the plaintiffs became aware of the amendments.
27 By an application dated 24 March 2006, under ST Act s 83(1), the plaintiffs sought relief in respect of the changes made to the by-laws of the defendant. I will return to s 83(1) below. For my purposes, the principal order sought was as follows:
28 By letter dated 15 June 2006 from the solicitors for the plaintiffs to the SAT, referring to 'leave given by the Tribunal', the application dated 24 March 2006 was amended by the addition of a request for further orders as follows:
1A. That if requested Order 1 is not granted, then the Tribunal:
Invalidates, pursuant to section 97 of the Strata Titles Act 1985 (Act) the resolution, voted on at the first annual general meeting of the [defendant], held on 8 November 2004, which recorded the adoption of the by-laws recorded on Strata Plan 45236 in Notification J94143.
1B. Declares, pursuant to section 93(2)(a) of the Strata Titles Act 1985 (Act) that, to the extent that the by-laws comprised in Notification J94143 do not constitute by-laws made or deemed to be made under section 42(8) of the Act, those by-laws are invalid and pursuant to section 93(2)(b) of the Act they be repealed
29 I return to ST Act s 93(2)(a) and (b), and s 42(8), below.
30 Following hearings before Member De Villiers of the SAT in which evidence from a number of witnesses was presented, and by decision delivered on 25 September 2006, being Radford, Member De Villiers dismissed the application for order 1 and for amended orders 1A and 1B, as well as the application for all of the remaining orders sought, except for the application for order 4, which succeeded in part. There is no appeal taken in respect of the dismissal of the application for the remaining orders.
31 It is necessary I now review in some detail the reasons for decision in Radford, as well as certain statutory provisions which are relevant to those reasons and of significance to me, so that the grounds for the appeal before me can be properly understood.
32 Member De Villiers first concluded that the plaintiffs had standing before him to seek relief under ST Act s 83, s 93 and s 97, as they were each a 'proprietor' within s 83(1), s 93(1) and s 97(1), respectively, as at the date of the plaintiffs' applications to the SAT under those provisions: Radford, at [84]. This was notwithstanding they were not 'proprietors' as at the date of the 'registration of the by-law': [83].
33 The definition of 'proprietor' is in ST Act, s 3(1), as follows:
In this Act unless the contrary intention appears -
...
"proprietor" means the person who is for the time being registered under the Transfer of Land Act 1893 as proprietor of an estate in fee simple or an estate for life in a lot[.]
34 It is common ground that as at the date of their applications to the SAT, the plaintiffs were 'proprietors', although they were not 'proprietors' as at the date of the first AGM, or as at the date of compliance with s 42(4) in respect of the amendments to the by-laws.
35 As will shortly appear, no cross-appeal against the determination as to standing has been made by the defendant. As will also shortly become apparent, however, there is matter within that section of the reasons of Member De Villiers with respect to which argument was directed to me.
36 Member De Villiers then concluded that no relief could be ordered under ST Act s 83. That provision, s 83(1), empowers the SAT, on the application of, inter alios, a strata company, a proprietor or 'a person having an estate or interest in a lot', to
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 by-laws in connection with that scheme on any person entitled to make an application under this subsection.
37 Member De Villiers appears to have identified the subject of the dispute or complaint in question as two-fold.
38 He appears to have identified one subject of the dispute as the conferral of a right of exclusive use of common property for no consideration: see Radford, at [89] read with [88]. He appears to have noted in this context that ST Act s 35 required the Strata Company 'to control and manage the common property for the benefit of all proprietors'.
39 Member De Villiers appears to have identified the other subject of the dispute or complaint as the disposal of common property for no consideration, and clearly referred in this context to ST Act s 35: see Radford [88].
40 He concluded that relief was unavailable under ST Act, s 83 in respect of the first subject-matter identified because of s 83(4), which is as follows:
Nothing in subsection (1) empowers the State Administrative Tribunal to make an order under that subsection 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 on the strata company by this Act where that power, authority, duty or function may, in accordance with any provision of this Act, only be exercised or performed pursuant to a unanimous resolution, resolution without dissent or a special resolution.
41 Member De Villiers noted that by-law 25(1), concerning exclusive use of the car parking areas in the basement of the building comprised in the Strata Scheme, was 'enacted or is deemed to have been enacted' under ST Act s 42(8), which I set out in full below. That provision requires the power of the strata company to make a by-law respecting the conferral of exclusive use and enjoyment of common property on a proprietor to be exercised by 'a resolution without dissent'. I return below to the meaning of the quoted phrase. Member De Villiers concluded that by virtue of s 83(4) 'the by-law 25 also falls outside the relief offered by s 83(1)'.
42 It is not clear to me why he made no reference to the application of by-law 25(1) to the exclusive use of other parts of the common property, nor how his conclusion related to by-laws 26 and 27, which as I will indicate he concluded had not and could not be taken to have been passed under ST Act, s 42(8). However, as will become apparent, there is no error of law laid in respect of his conclusions in respect of s 83(1).
43 Member De Villiers also concluded that relief was unavailable under s 93(2). ST Act s 93(1), empowers the SAT, on the application of '[a]ny person entitled to vote at a meeting of a strata company (including both a first mortgagee and a proprietor who is a mortgagor of a lot)', to make an order declaring a by-law invalid (s 93(2)(a)) or repealing a by-law (s 93(2)(b)). SAT may make such an order (s 93(3)) if it is 'satisfied' the by-law:
(a) was made without power;
(b) was not made in accordance with this Act or the regulations or any other requirement that ought to have been observed; or
(c) should not have been made having regard to the interests of all proprietors in the use and enjoyment of their lots or the common property.
44 Member De Villiers noted ST Act s 93(5), which stated that s 93 'does not apply with respect to a by-law made or deemed to be made under section 42(8)'. He concluded that no relief could therefore be given under s 93 with respect to by-law 25(1) in relation to the exclusive use of common property parking bays by virtue of s 42(8). He made no mention of by-law 25(1)'s application to other common property in this connection. I will return to this matter below.
45 Member De Villiers noted that ST Act, s 93(5), had no application to by-laws 26 and 27, however. With respect to those by-laws, he concluded (Radford [121], [122], which I quote in full later in these reasons) ST Act, s 93(3)(c), had no application to this case. This was because the original proprietors had received a copy of the proposed amendments that became by-laws 25, 26 and 27, they had all instructed Bertram to vote in favour of those amendments on their behalf, Bertram had in evidence explained he understood what he had voted for, and none of the original proprietors had lodged writing signifying that proprietor disagreed with any of the resolutions as provided for by s 3AC. Further, none of the original proprietors had attempted subsequently to have the by-laws amended, repealed, or replaced through a subsequent meeting of the Strata Company as provided for by the ST Act.
46 Member De Villiers also noted (at [130]) the argument of counsel for the plaintiffs before him that the making of the by-laws 26 and 27 was a form of 'fraud on the minority' within the doctrine from the law of companies referred to as applicable in connection with strata companies under the NSW legislation corresponding to the ST Act in Houghton v Immer (No 155) Pty Ltd (1997) 44 NSWLR 46, CA, leave to appeal refused, [1998] 15 Leg Rep SL1b (Gleeson CJ and Gaudron J). Member De Villiers rejected that argument, on two distinct grounds.
47 Firstly, the plaintiffs were not proprietors at the time of the resolution; in Houghton the members were registered as such at the corresponding time: Radford, at [130].
48 Secondly, there was 'no evidence to suggest fraudulent action by the proprietors at the time of the AGM': Radford at [131].
49 Member De Villiers also appeared (in [131]) to determine that the doctrine of 'fraud on the minority' was irrelevant to the SAT, because it was a basis for a 'remedy in equitable principles' or 'equitable relief'. The SA was 'constrained to grant relief as set out in the ST Act'.
50 Member De Villiers added what he appears to have seen as a related point. It was that the plaintiffs might have had available to them 'the right to withdraw' from the Contract of Sale, or had an 'alternative remedy', in either case 'had they noted the new by-laws were not consistent with the draft by-laws they had agreed to': Radford at [132]. That inconsistency appears to be a reference to provisions of the Contract of Sale as to amendments to the by-laws of the Strata Company, provisions to which I return below.
51 I note in that last respect that he had earlier (Radford, at [85]) said, in that section of his reasons to do with the plaintiffs' standing to seek relief under ST Act s 83, s 93 or s 97, at [85]:
Several other issues were raised during the hearing in regard to the terms of contract for sale and the power of attorney between the applicants and the vendor. These matters fall outside the jurisdiction of the Tribunal and there is no need for the Tribunal to make further findings in that regard. Section 69A and s 69B of the ST Act do not apply to this matter as far as the Tribunal's jurisdiction is concerned. Section 69A deals with notifiable information to be given by a vendor to a purchaser. The remedy, if the information is not provided, is voidance of the contract pursuant to s 69D of the ST Act. It is not within the jurisdiction of the Tribunal to resolve a dispute that arises under the alleged failure to disclose information to a purchaser. The time for this remedy had passed when settlement in the name of the applicants occurred. Section 69B applies to notifiable information to be given by the original proprietor to the applicants, but this section does not apply if the strata plan has been registered or if the first AGM has occurred (s 69B(1)(a) and s 69B(1)(b) of the ST Act). In this matter, the strata plan had been registered and the first AGM had taken place prior to settlement of Lot 2 in the name of the applicants. The Tribunal is also not the appropriate forum, as acknowledged by the parties, to determine contractual issues that may arise from the alleged inconsistency between the power of attorney and the proxy issued to Mr Bertram.
52 I will return in rather more detail to the parts of the decision in Radford referred to, as to fraud on the minority, relief for non-disclosure and relief in respect of other contractual issues, including but not limited to the proxy issues just referred to, as it was put to me they go to both of the grounds of the appeal before me.
53 Finally, Member De Villiers concluded that no relief was available under ST Act s 97. That provision, in s 97(1), is as follows:
(1) Where, pursuant to an application by a proprietor or first mortgagee of a lot for an order under this section, the State Administrative Tribunal considers that the provisions of this Act have not been complied with in relation to a meeting of the strata company, the State Administrative Tribunal may, by order -
(a) invalidate any resolution of, or election held by, the persons present at the meeting; or
(b) refuse to invalidate any such resolution or election.
54 Member De Villiers concluded that none of the matters put forward to him for the plaintiffs represented non-compliance within that provision. He noted, among other things, that there was no statutory obligation to notify the plaintiffs of the first AGM or its agenda, as they were not proprietors. As will become apparent below, there is no appeal in respect of the conclusions of Member De Villiers in relation to ST Act s 97.
55 Finally, Member De Villiers concluded that none of the other claims for relief succeeded, with one partial exception. As none of those other claims appears to have any bearing on the proceedings before me, I will not go any further into the remaining parts of Radford.
56 By notice of originating motion filed 23 October 2006 the plaintiffs sought leave to appeal to a single judge of this Court against the dismissal of the application for orders 1, 1A and 1B in Radford.
57 It was common ground that that application was brought under the relatively new arrangements under State Administrative Tribunal Act 2004 (WA) (SAT Act), s 105. The relevant parts of that provision are as follow:
(1) A party to a proceeding may appeal from a decision of the Tribunal in the proceeding, but only if the court to which the appeal lies gives leave to appeal.
(2) The appeal can only be brought on a question of law.
(3) The appeal lies to -
(a) the Court of Appeal, if the decision was made by -
(i) a judicial member; or
(ii) the Tribunal constituted by members who include a judicial member;
(b) the Supreme Court exercising its other jurisdiction, in any other case.
58 It was common ground before me that, in determining whether leave to appeal should be granted, the principles are as described in Christopher Kendall and Jeremy Curthoys, Civil Procedure in Western Australia, at [65.0.2], as follows:
Because appeals from a determination of the State Administrative Tribunal lie only on a question of law with the leave of the court appealed to, the applicant for leave must at least identify a question of law which is attended by sufficient doubt to justify the grant of leave and which is important to the success or failure of the appeal. Furthermore, it must be just to grant leave. Sometimes the public importance of the question of law may be a relevant consideration. The court dealing with the application for leave might in some circumstances require persuasion that there would be prejudice if a final order below were allowed to stand though attended by error, but normally leave to appeal will be granted if the order below is final. When the order is interlocutory there are strong considerations against the fragmentation of proceedings and the applicant must additionally show that there would be substantial injustice in leaving that interlocutory order unreversed: Secretary to the Dept of Premier and Cabinet v Hulls [1999] VSCA 117; [1999] 3 VR 331 at 335-7, 353; [1999] VSCA 117; BC9905287 at [1], [9], [14], [16], [63].
59 However, it appears to have been put to me, by counsel for the defendant, that the plaintiffs had to show 'substantial injustice' in this case. I do not agree. It does not seem to me that that requirement is applicable in this case. The orders in Radford were final, not interlocutory, orders.
60 At the same time, I note the following, from Secretary to the Department of Premier and Cabinet v Hulls [1999] VSCA 117; [1999] 3 VR 331, Phillips JA, Tadgell and Batt JJA agreeing 337 ([16]):
There is an obvious danger in seeking to summarise the considerations which bear upon the granting of leave to appeal. Ultimately what must govern is the justice of the case as it appears to the court from which leave to appeal is sought, and that means justice to all parties, not just the applicant. As I said at the outset, it is not appropriate for us to do any more than lay down guidelines and any guidelines will sometimes be found inadequate; but with that rider, the foregoing might be summarised along the following lines. When leave is sought to appeal under s 148 [of the Victorian Civil and Administrative Tribunal Act 1998 (Vic)], it will be necessary for the applicant to identify a question of law which is relevant to the granting of the relief sought on appeal. The importance of the question, either generally or to the would-be appellant in the particular case, will probably be relevant. The applicant must show that there is a real or significant argument to be put on that question of law at least to this extent: that there is sufficient doubt about it to justify the grant of leave. Moreover, it may have to be shown that to allow the error to go uncorrected would impose substantial injustice, although, where the order below is final, that injustice will often be more readily discernible.
61 I further note that the portion of this paragraph from 'When leave is sought' to the end was quoted in Paridis v Settlement Agents Supervisory Board [2007] WASCA 97, per Buss JA, Wheeler and Pullin JJA agreeing (at [17]), after which the following appears (at [18]):
In my opinion, the guidelines articulated in Secretary to the Department of Premier and Cabinet v Hulls should be taken into account in considering whether to grant leave under s 105(1) of the State Administrative Tribunal Act. It must be emphasised, however, that those guidelines are not rigid or exhaustive, and leave should be granted if, in all the circumstances, a grant of leave is in the interests of justice.
62 It seems to me, as I will explain below, that both of the questions of law the subjects of the grounds of appeal are 'relevant' to the granting of the relief sought on appeal. At the same time, as I will indicate, it does not follow that any error identified with respect to those questions would necessarily lead to the grant of such relief.
63 It also seems to me, as will emerge from my discussion below, that there is 'sufficient doubt' about each question to justify the grant of leave.
64 Finally, it seems to me that it is sufficient, in a case involving a final order, as is this case, that the correction contended for of the error claimed in relation to that question of law would lead to the making of an order to overturn the decision appealed from, where that decision can be seen to impose an injustice on the party appealing. As I will indicate, the implications of the by-laws 26 and 27, at least if the re-subdivision they allow for goes ahead, include ones that will be significant for the plaintiffs. As will emerge from my discussion below, if the nature of the error as to each of the questions of law is as contended for by the plaintiffs in the relevant ground of appeal, the decision rejecting the application to set aside the by-laws would be set aside.
65 Thus, it appears to me that in the present case the guidelines from the quoted passage in Hulls, approaching those guidelines as I have just indicated, are met.
66 I return below to the grounds of the application, which were the subject of amendments made at the hearing before me.
67 On 31 October 2006 Master Sanderson of this court ordered, among other things, that the question of leave be heard together with the appeal, and that the provision of Rules of the Supreme Court 1971 (WA) O 65, apply to the proceeding.
68 At the hearing before me on 8 August 2007, the plaintiffs put before me a minute of proposed amended grounds of appeal and minute of orders sought. The plaintiffs sought at the hearing to further amend the grounds. The defendant neither opposed nor consented to both sets of amendments. At the hearing I determined to grant the leave sought, in respect of the minute as to be further so amended.
69 The minute of proposed amended grounds of appeal as further so amended, for which leave was granted, and as presented, was as follows, showing by strike out which parts of the original grounds are deleted, and by underline which parts are added, to the original application:
The grounds of this application are that the Senior Member erred in law in finding that:
1.3 By-laws 25, 26 and 27 contained in Notification J94143 recorded on the Strata Plan could not be declared invalid on the basis of section 93(3)(b) of the Act on the ground that matters of a contractual or equitable nature do not fall within the ambit of the Act (paragraphs 85 and 130-131 of decision of the Member).
70 It will be noted that the application as so amended does not refer to any error of law in relation to the disposition of the application to the SAT under ST Act, s 83 or s 97, or under s 93, except as to s 93(3)(b) and s 93(3)(c), and then only in relation to by-laws 26 and 27. However, as I will indicate, some aspects of the decision in Radford in relation to those other provisions of the ST Act, and by-law 25, are relevant for my purposes.
71 I now describe by-laws 25, 26 and 27 in greater detail, in their statutory and contractual contexts. It will become apparent that the description is necessary to an understanding of the submissions of the parties in the appeal.
The amended by-laws and their statutory and contractual contexts
72 By-law 25 gives the proprietors of Lots 4 and 5, 'for no consideration', the exclusive use of part of the common property, including 'the car bays' (which it appears to have been common ground before me was a reference to basement car bays: the Basement Car Bays), that part of the common property forming 'the roof deck and terrace that is located on the top level of the building' (the Roof Deck and Terrace), as further described in 'Annexure 'A''. The exclusive use referred to is to apply with respect to the proprietor of Lot 4 only while the original proprietor remained the proprietor of Lot 4. Upon him transferring Lot 4, the exclusive use is to be with respect to Lot 5 only.
73 The full text of by-law 25 is set out in Radford [39].
74 By-law 26 provides that, while the proprietors of Lots 4 and 5 are the original proprietors, they should have the right to 'exchange occupancy rights for ownership of the parts of the common property specified in schedule 1 by-law 25'. It appears to have been common ground, for my purposes at least, that the reference to those 'parts' included reference to the Basement Car Bays and the Roof Deck and Terrace. The proprietors of Lots 4 and 5 should have such ownership 'for no consideration to the strata company, the other proprietors, or each other'.
75 By-law 26 further provides, '[a]t the discretion of the proprietors of lots 4 and 5', for the preparation of a strata plan of re-subdivision of Lots 4 and 5 and part of the common property to create lots 6, 7 and 8 in accordance with ST Act, s 8A. By-law 26 also refers to the possibility that certain government authorities, including the Western Australian Planning Commission (the WAPC), may not approve, or may require changes before approving, the proposed re-subdivision. ST Act s 8A(g), specifically refers to WAPC involvement in a proposed re-subdivision. I will say more about s 8A below.
76 The full text of by-law 26 is set out in Radford [39].
77 By-law 27 complements by-law 26. By-law 27 provides for the case where the proprietor of Lot 4 is no longer an original proprietor. In that case, the proprietor of Lot 5 has the right to exchange the occupancy rights referred to in by-law 26 for the ownership there referred to, again 'for no consideration to the strata company, the other proprietors, or each other [sic]'.
78 By-law 27 further provides, at the discretion of the proprietor of Lot 5, for a strata plan of re-subdivision of Lot 5 and part of the common property to create lots 6 and 7, in the same way as by-law 26 provides for a strata plan of re-subdivision of Lots 4 and 5 to create Lots 6, 7 and 8, and with the same reference to the possibility of involvement of government authorities.
79 The full text of by-law 27 is set out in Radford [39].
80 It will be apparent that, until the exchange provided for by by-law 26 or 27, as applicable, by-law 25 operates to give the proprietors of Lots 4 and 5, or the proprietor of Lot 5, as the case may be, the exclusive rights by-law 25 describes. I was informed at the hearing that such exchanges or such an exchange was yet to occur.
81 It is convenient at this point I make reference to the statutory provisions which appear to be directly relevant to by-laws 25, 26 and 27, as well as to the provisions of the Contract of Sale that on the submissions before me directly bear on them.
82 By ST Act s 42(2), a Strata Company may make by-laws, not inconsistent with the ST Act, for
(a) its corporate affairs;
(b) any matter specified in Schedule 2A; and
(c) other matters relating to the management, control, use and enjoyment of the lots and any common property.
83 ST Act sch 2A, item 8, concerns '[p]rovisions relating to any proposed re-subdivision in [a strata scheme] being provisions' that answer the description in the item. The description refers to, among other things, the requirements of s 8A(b) and s (c). It appears to be common ground that the by-laws in this case met that description in that and all other relevant respects. ST Act s 8 permits lots or common property to be re-subdivided by registration of a plan of subdivision as otherwise provided for in the ST Act. ST Act s 42(2b), read with s 42(2)(a), provides that a strata company may, among other things, add to the by-laws a by-law of the kind in sch 2A, item 8, but only by a 'resolution without dissent', unless the by-law was included in a 'management statement' as there referred to. It is common ground no such management statement was involved in this case.
84 By ST Act s 3AC, a 'resolution without dissent' is described as follows:
(1) For the purposes of this Act a resolution without dissent is a resolution -
(a) passed at a duly convened general meeting of the strata company of which sufficient notice (as defined by section 3C) has been given and at which a sufficient quorum (as so defined) is present; and
(b) against which no vote is cast by a person entitled to exercise the powers of voting on the resolution conferred under this Act -
(i) voting at the meeting either personally or by proxy; or
(ii) voting in accordance with subsection (2).
(2) A person entitled to exercise the powers of voting conferred under this Act is also to be taken to vote -
(a) in support of a resolution if he signifies in writing served in accordance with subsection (3) that he agrees to the resolution; or
(b) against the resolution if he signifies in writing served in accordance with subsection (3) that he disagrees with the resolution,
within 28 days after the day of the meeting, whether that writing is signed by the person or by another person who at the time of the signing is entitled to exercise the power of voting in place of that person.
(3) The writing referred to in subsection (2) is not effective unless it is served
(a) on the strata company; or
(b) where under section 36A or 36B a roll is not maintained by the strata company, on the other proprietors.
85 The relevant part of ST Act s 3AC for the purposes of these proceedings appears to be s 3AC(1)(a) and (b)(i). It is not in contest that each of the resolutions in favour of the amended by-laws 25, 26 and 27 was a 'resolution without dissent'.
Without limiting the generality of any other provision of this section other than subsection (1), a strata company may, with the consent in writing of the proprietor of a lot, pursuant to a resolution without dissent (or unanimous resolution, in the case of a two-lot scheme) make, under this subsection only and not otherwise, a by-law in respect of that lot conferring on that proprietor the exclusive use and enjoyment of, or special privileges in respect of, the common property or any part of it upon such terms and conditions (including the proper maintaining and keeping in a state of good and serviceable repair of the common property or that part of the common property, as the case may be, and the payment of money by that proprietor to the strata company) as may be specified in the by-law and may, pursuant to a resolution without dissent (or unanimous resolution, in the case of a two-lot scheme), make a by-law amending or repealing any by-law made under this subsection.
87 Certain provisions of the Contract of Sale related to some but not others of the amendments to the by-laws of the defendant passed at the first AGM.
88 As Radford indicates, under the Contract of Sale (Special Conditions 14.1 and 14.3, as quoted at [37]):
14.1 The by-laws will be the Schedule 1 and Schedule 2 bylaws contained in the Strata Titles Act and set out in Annexure 4, as amended repealed and added to in the manner set out in Annexure 7.
...
14.3 The Purchaser unconditionally:
(a) approves the By-laws; and
(b) consents to the Strata Company adopting the By-laws.
89 As Radford also indicates, Annexure 7 includes a proposed additional by-law 27 which is in the same terms as to the Roof Deck and Terrace as by-law 25. However, it is common ground before me that, unlike by-law 25, and as Member De Villiers determined, proposed additional by-law 27 does not provide for the exclusive use of any other common property.
90 Further, as Radford also indicates, also under the Contract of Sale (Special Condition 35.1.3, quoted at [37]) the plaintiffs as purchaser
Acknowledges and makes no objection that the title of the Land and/or the proposed Lot/s may be affected or amended by any on[e] or more of the following:
...
35.1.3 the granting of rights of exclusive occupancy in respect of any part of the Common Property.
91 However, it was common ground before me that neither the Contract of Sale nor any other instrument to which the plaintiffs acceded provides for by-laws 26 and 27. Nor, as a result of the amendment of the grounds of appeal, by the removal of the references to by-law 25, was there any issue taken by the plaintiffs with the conclusion of Member De Villiers that ST Act s 93(5) precluded any relief being given under s 93 in respect of that by-law. I have already described that conclusion, and set out s 93(5).
92 It was also common ground before me that there was no non-compliance with the provisions of the ST Act in the notice for, conduct of or decisions at the first AGM. I have already referred to the absence of any ground of appeal relating to the disposition of the plaintiffs' application before Member De Villiers under ST Act s 97, which raised such non-compliance directly.
93 Rather, on the basis of the amended grounds for appeal, viewed in the light of the foregoing description of the amended by-laws and their statutory and contractual context, there are two issues before me:
94 I deal with those issues under the headings of the grounds referred to.
Ground 1: ST Act s 93(3)(b) and matters of a contractual or equitable nature
95 Before considering this ground and the issue it raises, on the submissions of counsel for the defendant as I understood them I need to consider the matter of whether or not Member De Villiers in fact made the determinations of law attributed to him. Counsel for the defendant appeared to put to me that Member De Villiers made no determination as to the scope of s 93(3)(b), or, if he did, that determination went only to whether or not the paragraph allowed for the application of the doctrine of 'fraud on the minority' from Houghton. The 'question of law', as framed by the grounds of appeal for the purposes of SAT Act, s 105(2), did not arise in this case.
96 I should first note that it appears to me that the 'question of law' is raised if its resolution was entailed by the decision for which leave to appeal is sought. It does not seem to me that the 'question of law' must be one dealt with in terms by that decision.
97 True it is that nowhere in the decision in Radford did Member De Villiers refer to ST Act s 93(3)(b).
98 The only matter of equitable principle Member De Villiers referred to was in relation to the doctrine of 'fraud on the minority', in the context of his reference to a submission put to him for the plaintiffs concerning the application of ST Act s 93(3)(a) (see [101]), and in the context of his conclusions on the application of s 93(3)(c) (see [130] to [132], referred to above).
99 Member De Villiers refers to contractual matters only the context of his conclusions as to standing under s 93(1) (see [85], referred to above), and in the context of his conclusions as to the application of s 93(3)(c) (see [132], above).
100 In the former connection Member De Villiers ([85]) referred to 'contractual issues that may arise from the alleged inconsistency between the power of attorney and the proxy issued to Mr Bertram'. This appears to be a reference to the provision of the Contract of Sale (Special Condition, cl 14.2(a), quoted at [37]) whereby the applicants 'irrevocably' appointed Bellevue and Miami Gold and each officer of them 'as defined by the Corporations Law' jointly and severally from the date of the Contract of Sale up to and including the date of registration of the Strata Plan or the settlement of the sale, whichever came last, to be 'the true and lawful attorney and proxy' of the applicants, 'in the name and for and on behalf of' the applicants, to convene, attend and vote at the first AGM of the strata company:
For the purposes of dealing with any matter arising at such meeting in accordance with the provisions of this contract.
101 As has been seen, the matters so referred to included some within by-Law 25, but none within by-laws 26 and 27.
102 In the context of his conclusions as to the application of ST Act, s 93(3)(c), Member De Villiers said this ([132])
The applicants could have taken legal recourse to withdraw from the contract for sale or seek an alternative remedy had they noted the new by-laws were not consistent with the draft by-laws they had agreed to.
103 When this paragraph of Radford is read with [85] above, it seems Member De Villiers was referring to remedies for breach of the Contract of Sale.
104 However, I consider that Member De Villiers should be taken to have determined upon the application of ST Act s 93(3)(b), and that I should take that determination to rest on a conclusion to the effect described in ground 1.
105 I note that the written submissions made by counsel for the plaintiffs to Member De Villiers, written submissions forming part of the papers before the SAT provided to this Court by the SAT for the purposes of this appeal under SAT Act s 94(3), clearly raised the matter of the application of ST Act s 93(3)(a), (b) and (c). Counsel for the defendant did not put to me that the submission was withdrawn in the hearing before Member De Villiers.
106 It is true that the only issue, apart from standing, that Member De Villiers framed (at [12]) in relation to s 93 was with respect to s 93(3)(c): see Radford [12], '3)'. Further, at [94], under the heading 'Section 93(1) of the ST Act', Member De Villiers began his discussion of relief under that provision by referring to the submission for the plaintiffs as to s 93(3)(c).
107 However, under the same heading Member De Villiers also referred ([101]) to the submission for the plaintiffs that the 'strata company acted outside its powers, and pursuant to s 93(3)(a) of the ST Act, the by-laws should be repealed'.
108 I conclude that the matter of the application of s 93(3)(b) was before Member De Villiers, and that his decision should be taken to have included a determination whether or not it applied to the case before him.
109 As to the basis on which that determination of Member De Villiers should be taken to have been made, I note again, with respect to contractual matters, the closing sentence in Radford [85]. That sentence reads as follows:
The Tribunal is also not the appropriate forum, as acknowledged by the parties, to determine contractual issues that may arise from the alleged inconsistency between the power of attorney and the proxy issued to Mr Bertram.
110 It seems to me that that sentence should be taken to be the basis for a determination that ST Act s 93(3)(b) had no application to the present case. It is true that, even so taken, that sentence goes only to 'contractual issues that may arise from the alleged inconsistency' referred to, and not contractual issues otherwise arising. However, the contractual issues so arising go to the only ones, as I understood the submissions for the counsel for the plaintiffs, intended to be subsumed by ground 1 in this case.
111 As to the basis on which the determination of Member De Villiers should be taken to have made whether or not ST Act s 93(3)(b) applied in relation to matters of an equitable nature, I note again Radford [131], which should be read both with [101] and [130].
112 Radford [101] was a paragraph following a reference to the submission for the plaintiffs before Member De Villiers that the duty of the defendant to control and manage the common property in ST Act s 35(1)(b) 'for the benefit of all the proprietors' did not authorise the defendant to dispose of the common property in the manner allowed for by by-laws 26 and 27.
113 In Radford Member De Villiers [101], [130] and [131] said this:
It is therefore patently clear, according to Mr Kronberger, that the bylaws should not have been enacted having regard to the interests of all proprietors in the use and enjoyment of their lots or the common property. The strata company acted outside its powers, and pursuant to s 93(3)(a) of the ST Act, the by-laws should be repealed. The conclusion, according to Mr Kronberger, is consistent with the finding of the New South Wales Full Court decision in [Houghton] in which the court held that the doctrine of fraud on a minority is of general application and applies to a strata company. A resolution of a strata company is voidable if the company acts outside its powers or if it defrauds a minority.
...
The Tribunal does not agree with Mr Kronberger that the enactment of the by-laws is an example of fraud on the minority as per the Houghton case. The facts are different to that in Houghton since the aggrieved persons in that matter were proprietors at the time of the decision, while in this matter the applicants became owners after the AGM at which the by-laws were approved and after registration thereof. There is no evidence to suggest a fraudulent action by the proprietors at the time of the AGM.
In Houghton, the court found the remedy in equitable principles. If equitable relief is available to the applicants, the application should, however, not be before the Tribunal since it is constrained to grant relief as set out in the ST Act.
114 In my view, the last paragraph quoted, [131], should be taken to be one of the bases for the determination that I consider Member De Villiers should be taken to have made that equitable principles had no bearing on the relief the SAT could give under s 93, including s 93(3)(b). The basis so described was that the SAT was not given power under the ST Act to give relief in respect of equitable principles.
115 It is true that Member De Villiers, in [130], also indicated his disagreement, on the two bases I have already referred to, with any proposition that by-laws 26 and 27 were 'fraud on the minority' in terms of the doctrine in Houghton. However, I consider those were alternative bases for his determination that the doctrine in that case had no application to the case before him. I will have occasion to return to those alternative bases below.
116 I turn then to the issue of whether or not the bases for determination I have indicated the decision of Member De Villiers should be taken to have employed in the terms of ground 1 represented an error in law.
117 It appears to have been common ground between counsel before me that the resolution of that issue turns on the true construction of the words in s 93(3)(b) 'any other requirement that ought to have been observed'.
118 In my view that issue goes to whether or not contractual provisions like those in the Contract of Sale in relation to what the Vendor might and might not do in meetings of the Strata Company are capable of being such a 'requirement'.
119 In connection with what the Vendor might and might not do in meetings of the Strata Company, in addition to the Special Conditions I have already referred to, I was referred to cl 12(11) in the Joint Form of the General Conditions for the Sale of Land 2000 Revision, which were incorporated into the Contract of Sale, subject to the Special Conditions. Those General Conditions, forming part of the papers before Member De Villiers which were provided to this court pursuant to SAT Act s 94, provided in cl 12(11) as follows:
Subject to the rights of any mortgagee of the Strata Lot the Vendor will not after the Date of Contract without the prior written approval of the Purchaser propose or vote in favour of any special resolution, unanimous resolution or resolution without dissent of the Strata Company.
120 That provision in my view serves to reinforce the conclusion that the matter of whether or not there were provisions in the Contract of Sale capable of being a 'requirement' within ST Act s 93(3)(b), was before Member De Villiers.
121 I was not referred to any extrinsic material that would assist with my task of construing s 93(3)(b). Counsel for the defendant did refer me to Western Australia, Parliamentary Debates, Legislative Assembly, 6 December 1995, 12559 - 12577. This provided the record of part of the Second Reading debate in the Legislative Assembly of the Strata Titles Amendment Bill. That Bill became the Strata Titles Amendment Act 1995 (WA), No 58 of 1995 (STA Act), which introduced Pt VI into the ST Act. However, the record so referred to does not contain the Second Reading Speech referred to in Interpretation Act 1984 (WA) s 19(2)(f). Counsel referred me in particular to a member of the Legislative Assembly, Mr D I Smith, at 12568, in which he addressed the protection apparently provided by the Bill through disclosure to persons purchasing interests in strata schemes. This appears to be a reference to the provisions that are now ST Act, Pt V, to which I will return. It is not clear to me what relevance Mr Smith's remarks have to construing s 93(3)(b), which as I have said is in Pt VI.
122 Accordingly, I must approach my task by reference to the literal meaning of the words used in ST Act s 93(3)(b), read in their context, with any indications of the mischief that provision was meant to remedy I can glean from that context: CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384, per Brennan CJ, Dawson, Toohey and Gummow JJ, at 408; and Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355, per McHugh, Gummow, Kirby and Hayne JJ at 381. However, in doing this I must prefer a construction that would promote the 'object or purpose underlying the written law' over a construction that would not do so: Interpretation Act s 18. I did not understand the parties to the appeal to contest any elements of this statement of the approach I must follow. Nor did I understand them to contest the further propositions that there is no material showing the mischief that the STA Act, which introduced Pt VI of the ST Act including s 93(3)(b), was meant to remedy through that provision that would assist me in my task, and that there was no material, contextual or otherwise, that would show the object or purpose underlying s 93(3)(b), other than the language of the remainder of s 93 itself.
123 Counsel for the plaintiffs pressed on me what he said was the 'ordinary and natural meaning' of the words in question in ST Act s 93(3)(b). He added that that meaning was needed to give the words 'substantive content'. That natural and ordinary meaning included contractual matters which answered the description of a 'requirement that ought to have been observed'. As I understood his submission, that included the matters of the limitations on voting by Bellevue, in person or by proxy, in the provisions of the Contract of Sale to which I have referred. That natural and ordinary meaning also included matters of equitable principle which answered that description. That included matters arising under the doctrine of 'fraud on the minority'.
124 I consider that contractual matters are indeed capable of answering the description in s 93(3)(b). However, in my view such contractual matters must be ones in contracts which determine how the strata company is to make, repeal or amend by-laws. This in my view would require that the strata company be a party to the relevant contract. There was no such contract put to Member De Villiers in this case.
125 I also consider that equitable principles are capable of answering that description. However, the only such equitable principle put to Member De Villiers in this case, fraud on the minority, had no application to a case involving by-law amendments agreed to by all of the proprietors.
126 I now explain how I arrived at those determinations.
127 It seems to me that the 'any other requirement that ought to have been observed' to which s 93(3)(b) refers is one which was like a provision in the '[ST] Act or the regulations' concerning how the strata company ought to make, repeal or amend the by-law in question. See Greenberg D, Strouds Judicial Dictionary of Words and Phrases, (7th ed, 2006) 1900:
Where a statute uses the expression "an other [whatever]", the potential breadth of whatever word falls within the square brackets when taken out of context will be restricted by reference to what went before.
This is the most common application of the eiusdem generis rule ...
128 A contract might require a party to it, such as one with a controlling interest in an entity not a party to the contract, to take steps to ensure it complied with a particular process for making, repealing or amending by-laws. However, such a contract would not be one that would impose a requirement for the entity through the process prescribed by ST Act s 42 (and particularly s 42(2) and s (2b), above) to observe the process in question. By contrast, the ST Act or the regulations concerning how a strata company is to make, repeal or amend a by-law might impose a requirement in that regard. It is only to requirements of that sort that s 93(3)(b) speaks, in respect of the Act or Regulations, in my view. Such a requirement would only arise under a contract, it seems to me, if the entity were a party to the contract and bound by the requirement.
129 Counsel for the defendant appeared to put to me that contractual matters could not answer the description in s 93(3)(b) as those matters were ones in which of which the SAT had no jurisdiction to offer contractual remedies. I disagree. It seems to me that a distinction can be drawn between a 'requirement', however arising, and relief for a failure to observe it. Indeed, s 93(3) itself so indicates.
130 Counsel for the defendant further put to me that contractual obligations were incapable of answering the description in s 93(3)(b) because of ST Act, Pt V, 'Protection of Purchasers'. That Part represented a code of the provisions in the ST Act concerning relief in respect of contractual matters.
131 For this purpose, I was referred to the provisions in Pt V concerning avoidance of a contract for the purchase of a lot or of a proposed lot for certain kinds of non-disclosure by the vendor. I took this to be a reference to the following provisions in particular:
132 Where a vendor has failed to give the purchaser information that 'substantially complies' with ST Act, s 69 or s 69C, and at the time required by relevant provision, the purchaser has a right to avoid the contract before its settlement (s 69D(1): subject to s 69D(3)).
133 Although it is not strictly necessary for me to reach a conclusion on this point, I should indicate, in deference to the argument put to me, that I do not agree with that argument. There is no provision in Pt V to which my attention was drawn so indicating. Part V does not appear to be concerned with any relief the SAT can offer, as Member De Villiers in Radford [85], appears to me to have correctly stated.
134 I am taken then to matters of equitable principle, and in particular the doctrine of fraud on the minority.
135 In my view not every equitable doctrine or principle with application to the making, repealing or amending of by-laws is capable of answering the description in s 93(3)(b). On the same analysis as that I undertook for contractual matters, an example of an equitable principle not answering the description would appear to be the application to voting on such a resolution of the fiduciary duty owed by the holder of a proxy for a proprietor to the latter not without the consent required by the law of fiduciary duties to put itself in a position where the holder's duty to the proprietor and the holder's loyalty to another interest would conflict. I return to the application of fiduciary duties in relation to voting in a different context, below.
136 On the same analysis, however, an equitable doctrine or principle with application to the making, repealing or amending of by-laws which might be capable of answering the description in s 93(3)(b) would be that often described as fraud on the minority.
137 That doctrine has been applied to voting by proprietors at general meetings of strata companies, in Houghton which as I have indicated was acknowledged by Member De Villiers in Radford [101] and [130]. The nature of the doctrine and its application to strata companies under the Strata Titles Act 1973 (NSW) was described in Houghton Handley JA, Mason P and Beazley JA agreeing, at 53, as follows:
The relevant principles were explained in Peters' American Delicacy Co Ltd v Heath [1939] HCA 2; (1939) 61 CLR 457, by Dixon J in the following passage (at 511):
'If no restraint were laid upon the power of altering articles of association, it would be possible for a shareholder controlling the necessary voting power so to mould the regulations of a company that its operations would be conducted or its property used so that he would profit either in some other capacity than that of member ... or, if as member, in a special and peculiar way inconsistent with conceptions of honesty so widely held or professed that departure from them is described, without further analysis, as fraud ....
The chief reason for denying an unlimited effect to widely express powers such as that of altering a company's articles is the fear or knowledge that an apparently regular exercise of a power may in truth be but a means of securing some personal or particular gain, whether pecuniary or otherwise, which does not fairly arise out of the subjects dealt with by the power and is outside and even inconsistent with the contemplated objects of the power.'
See also Gambotto v WCP Ltd [1995] HCA 12; (1995) 182 CLR 432 at 444-445. In my judgment these principles apply to bodies corporate formed under the Act, and to the powers of the proprietors exercisable at general meetings.
138 The doctrine might be capable of being described in the terms of a s 93(3)(b) 'requirement'. The doctrine applies so as to qualify or define the power of the strata company acting through the process relevant to making, repealing or amending the by-law in question (see ST Act s 42, particularly s 42(2) and s 42(2b), above).
139 The doctrine would have no application if the minority in question had given its consent to the action in question: see Young v Owners Strata Plan No 3529 [2001] NSWSC 1135; (2001) 54 NSWLR 60, Santow J [52].
140 It might be, however, that the doctrine should be seen not as setting a 'requirement' for the passage of a resolution, but a proscription, which is negated by the consent just referred to. I note this feature of the fiduciary duties in their application to voting, indicated by the authority I return to below. However, I do not need to reach a conclusion as to this matter, as I will indicate.
141 Further, I note that the doctrine of fraud on the minority has as its 'juridical basis' the doctrine of fraud on a power: see Austin R P and Ramsay I M Ford's Principles of Corporations Law, (13th ed, 2007), at [11.030]; and see [11.150], on the effect of a resolution passed by a majority in abuse of their power. This might suggest that, as counsel for the plaintiffs before Member De Villiers (who was not their counsel before me) may have been putting to him (see Radford [101], above), that the doctrine has application to ST Act s 93(3)(a). As I have already noted, no question of law is raised in this appeal in respect of the disposition by Member De Villiers of the application before him so far as it involved s 93(3)(a).
142 However, it might be argued that, if the doctrine of fraud on the minority is subsumed under s 93(3)(a), this indicates or supports the view that the doctrine has no application under s 93(3)(b).
143 Whether or not the doctrine of fraud on the minority has no application to ST Act s 93(3)(b) because it is a proscription, not a requirement, or because it is subsumed by s 93(3)(a), it seems to me that in any event the doctrine has no application in the facts of this case.
144 As has been seen, in this case all of the proprietors at the first AGM through their proxy, Bertram, had voted in favour of by-laws 26 and 27. It was not put to me that there was a defect in the appointment of the proxy, any action by him contrary to the terms of his appointment, any subsequent objection to his voting by his appointors or any defect in the process of calling, running or recording the meeting.
145 It is true that by the time of the first AGM the proprietor of Lots 1 to 3 (Bellevue) had agreed (by the Contract of Sale) to sell Lot 2 to the plaintiffs. It was not in contest before me that the effect of that state of affairs was that the plaintiffs had an equitable interest in Lot 2. Indeed, the ST Act appears to recognise the existence of such interests: see s 83(1), above, conferring standing on a 'person having an estate or interest in a lot'.
146 Further, it would seem to me to be at least arguable that the effect of by-laws 26 and 27 is to authorise the expropriation by the proprietors of Lots 4 and 5, or in certain circumstances the proprietor of Lot 5 alone, of valuable proprietary rights associated with Lot 2 when the registration of the Strata Plan gave rise to Lot 2. A resolution authorising the expropriation of valuable proprietary rights associated with a lot in a strata scheme, where there was no consent by the holder of the rights, was recognised as a form of fraud on the minority in Young Santow J [52]. The by-law in that case purported to give rights of use of certain property to one set of lot owners for whom the property was common property to the exclusion of the plaintiffs for whom the property was also common property.
147 As counsel for the defendant reminded me, the analysis just described appears not to have been the principal ground for Santow J's decision. However, it appears to me to be an alternative ground for the decision. Further, if the analysis in that part of the decision was obiter, it was fully considered. The analysis also appears to me to be correct, and has been cited with apparent approval in Austin & Ramsay at [11.080].
148 In this case, the by-laws in question, by-laws 26 and 27, would appear even more clearly than the by-law in Young to be an authorisation of an expropriation. The by-laws in this case give the right to certain Lot holders or one of them to convert their rights of exclusive use of certain common property into ownership of that property as part of a re-subdivision. The exercise of that right would extinguish the interest of the other proprietors as 'tenants in common in shares proportional to the unit entitlements of their respective lots' in the common property in question, an interest that is provided for by ST Act s 17.
149 Further, that interest might have value, notwithstanding that the common property concerned is subject to exclusive use by the holders of the right in question. Whether or not that interest had value would appear to be dependent at least on evidence as to the value of the airspace represented by the Roof Deck and Terrace, if that airspace was unimproved at the time of the resolution, as to which value, however, I was not directed to any evidence or findings before Member De Villiers: see Houghton Handley JA, Mason P and Beazley JA agreeing, at 55.
150 It is true, as counsel for the defendant emphasised, that the right had not yet been, and might never be, exercised, and in any event its exercise was subject (as by-laws 26 and 27 themselves indicate, as above) to certain approvals, including that of the WAPC, which might not be forthcoming. However, it seems clear that the resolution in question falls within the branch of the doctrine of fraud on the minority of concern in this analysis notwithstanding that it merely authorises an expropriation: see the form of the resolution in Gambotto v WCP Ltd [1995] HCA 12; (1995) 182 CLR 432.
151 There may be other bases for arguing that by-laws 26 and 27 are a fraud on the minority, as put to me by counsel for the plaintiffs. Those other bases include the potential under those by-laws, if the rights of exchange they confer is exercised, for a decrease in the voting power of the proprietor of Lot 2 (see ST Act sch 1 cl 14), because of the decrease in their proportional unit entitlement (from 1/5 to 1/7). However, I do not consider I need to go further into such bases.
152 In particular, I do not need to address the question whether or not a question of law arises in this case of the correct approach to 'fraud' within the doctrine.
153 In that last respect, I note that in the doctrine fraud is not used in the doctrine in the sense of actual dishonesty or immorality: see the frequently cited passage from Vatcher v Paull [1915] AC 372, per Lord Parker, 378, set out in Houghton Handley JA, Mason P and Beazley JA agreeing, at 53, as follows:
The term fraud in connection with frauds on a power does not necessarily denote any conduct on the part of the appointor amounting to fraud in the common law meaning of the term or any conduct which could be properly termed dishonest or immoral. It merely means that the power has been exercised for a purpose, or with an intention, beyond the scope of or not justified by the instrument creating the power.
154 There is some language in Radford [10] (referring to the argument put to SAT by counsel for the plaintiffs, who as I have said was not the counsel appearing for them before me, and using 'defrauds a minority'), and [130] (referring to the finding that '[t]here is no evidence to suggest a fraudulent action'), which might be taken to indicate Member De Villiers used an approach in accordance with the 'common law meaning' referred to in Paull Lord Parker, at 378, above, rather than the approach that ought to be taken to the doctrine. At the same time, Member De Villiers would have had that passage from Paull before him, by reason of the apparent heavy reliance on Houghton in the argument for the plaintiffs before him. I should not readily conclude he failed to follow the lessons set out in that passage.
155 However, I do not need to go further into this matter because it would seem, on the authorities on the doctrine of fraud on the minority to which I have referred, Gambotto, Houghton and Young, that the 'minority' whose interests qualify the power of alteration of the by-laws are the members of the strata company, that is, the proprietors. The juridical basis for the doctrine, fraud on the power, is not evidently so limited, however. It appears to be a general approach to the construction of powers. Further, the application of the doctrine to resolutions authorising the expropriation of valuable proprietary rights associated with shares would seem capable of separate application to equitable interests. However, neither point is made on those authorities, nor in the discussion of the doctrine in Austin & Ramsay [11.030] to [11.150]. This may be because the doctrine is concerned with a general limitation on the powers of companies in general meeting, by reference to those who are members of the company.
156 However, that may be, I consider I must take the law to be as I stated it at the start of the last paragraph.
157 There appears, however, to be a further matter of equitable principle to which counsel for the plaintiffs made reference before me, although my attention was not drawn to any reference to it in the proceedings before Member De Villiers. This is the matter of the fiduciary duty owed by developers of a strata scheme to the strata company. The doctrine was held to be applicable to developers of a community scheme under the Community Land Development Act 1989 (NSW) in Community Association DP No 270180 v Arrow Asset Management Pty Ltd [2007] NSWSC 527, McDougal J [208] and [225], drawing on the authority of Re Steel and the Conveyancing (Strata Titles) Act 1961 (1968) 88 WN (Pt 1) (NSW) 467, Else-Mitchell J, and on the analogy of the fiduciary duty owed by the promoters of a company to that company. I consider those two authorities establish that persons in the position of developers of a strata scheme owe such a duty to the strata company. Further, as I have explained, it appears to be common ground that Bellevue, Day and Smith were developers of the strata scheme in this case, and thus owed a fiduciary duty to the defendant.
158 However, it does not appear to me that the law concerning that duty is capable of meeting the description in ST Act s 93(3)(b).
159 I do not doubt that the making of a by-law through the voting power of developers as original proprietors might in suitable circumstances be capable of breaching the duty. It might be argued in this case that the developers have placed themselves in a position of conflict. See Arrow Asset Management [221] and [226]. The conflict that might be argued to have existed here was one between their self-interest and their duty to advise the defendant as to the appropriate management of the common property, with respect to which the defendant was under the statutory duty in ST Act s 35, already noted, to 'control and manage' it 'for the benefit of all proprietors'. I should note, however, that a question would arise as to the meaning of 'proprietors' in s 35, where in this case all of the original proprietors had after disclosure (with respect to the adequacy of which no issue is taken) agreed to the by-laws in question.
160 Further, disclosure to and consent by the company may 'negate what otherwise was a breach of duty': see Arrow [241], quoting from Maguire v Makaronis [1997] HCA 23; (1997) 188 CLR 449, Brennan CJ, Gaudron, McHugh and Gummow JJ 467. Such disclosure must be to 'an entirely independent board or to the existing or potential members as a whole': Arrow,[238], referring to and quoting from Aequitas v Sparad No 100 Pty Ltd (formerly Australian European Finance Corp Ltd) [2001] NSWSC 14; (2001) 19 ACLC 1006, NSW SC, Austin J [293].
161 However, on that basis it is at least arguable that this law does not set out a 'requirement that ought to have been observed' as I have construed those words. The fiduciary duty has been described as 'proscriptive', not 'prescriptive', which is explained in Arrow Asset Management [216], as follows:
It is, and for many years has been, accepted that a fiduciary relationship exists between the promoter of a company and the company promoted. See (by way of example only) Tracy and Others v Mandalay Proprietary Limited [1953] HCA 9; (1953) 88 CLR 215. However, to say that one person stands in a fiduciary position vis-à-vis another is to begin, not to end, the enquiry: see the observation of Frankfurter J in Securities and Exchange Commission v Chenery Corporation [1943] USSC 32; (1943) 318 US 80 at 85, 86, cited with approval by the majority (McHugh, Gummow, Hayne and Callinan JJ) in Pilmer and Others v Duke Group Limited (In Liquidation) and Others [2001] HCA 31; (2001) 207 CLR 165 at 198-199 [77]. Their Honours earlier at 197-198 [74] had referred with approval to the observation of Gaudron and McHugh JJ in Breen v Williams (1996) 186 CLR 71 at 113, that the obligations of a fiduciary are proscriptive - 'not to obtain any unauthorised benefit from the relationship and not to be in a position of conflict' - and not positive (or prescriptive): 'positive legal duties on the fiduciary to act in the interests of the person to whom the duty is owed'.
162 In any event, I consider that the fiduciary duty owed by developers to the strata company in its application to voting on amendments to the strata company's by-laws is not a 'requirement that ought to have been observed' as it is not a requirement that ought to have been observed by the strata company. In this respect the fiduciary duty described differs from the doctrine of fraud on the minority. The latter sets limitations on the powers of the strata company acting through the relevant process for making the by-law in question which are (subject to the reservations made earlier) capable of meeting the description in s 93(3)(b). The original proprietors voting do not owe duties to the company or one another in respect of their votes: see Austin & Ramsay [11.040]. The fiduciary duty proscribes conduct by others in their actions, which might include voting on resolutions to make by-laws.
163 I should not leave my consideration of the scope of ST Act s 93(3)(b) without noting three arguments put to me by counsel for the defendant against the conclusion that the equitable doctrine of fraud on the minority had any application to that paragraph. As I have indicated, my conclusion is that that doctrine might have application to that paragraph; but that doctrine is not of assistance to the plaintiffs in this case.
164 I should indicate I was not attracted to any of those arguments for the defendant.
165 Counsel for the defendant put to me that the doctrine could not apply as it was one entailing the provision of equitable remedies. SAT had no power to grant equitable remedies.
166 I would reject this argument for the same reason I rejected the corresponding argument in relation to contractual matters. It seems to me a distinction can and should be drawn between the basis for the equitable remedies that may be granted, and the remedies themselves. It seems to me that the drafting of ST Act s 93(3) itself supports the drawing of such a distinction.
167 Counsel for the defendant put to me that the authorities applying the doctrine of fraud on the minority in the context of resolutions amending the constitutions of strata companies, such as Houghton and Young, were decisions of courts, exercising their equitable jurisdiction. SAT was not capable of making such a decision.
168 I consider this argument is simply a variation on the previous argument. I would reject it for the same reasons.
169 Counsel for the defendant put to me that the construction of ST Act s 93(3)(b) should be informed by a wider context than the terms of s 93 itself. He referred me to s 98, which reads as follows, with the words particularly commended to me emphasised:
Where, pursuant to an application by a proprietor for an order under this section, the State Administrative Tribunal considers that the failure of a strata company to authorise by special resolution an application by that proprietor under section 16 is inequitable, the State Administrative Tribunal may, by order, exercise the function conferred on the strata company under section 16(2)(a).
170 Counsel for the defendant put to me that the emphasised words indicated that where the legislature had intended SAT to enter into consideration of equitable or similar principles it had spelt the matter out. I note, for this purpose, that ST Act s 98 is the only place in the Act where there is reference to the use by SAT of matters of equity, although there are references to considerations of whether or not a matter is 'just and equitable' in relation to the considerations the District Court is to weigh in consideration of variations of a strata scheme on damage to or the destruction of the building shown on the strata plan: see s 28.
171 Considerations of the context of the ST Act beyond s 93(3) are undoubtedly capable of having a bearing on the construction of that subsection, including s 93(3)(b): see K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd [1985] HCA 48; (1985) 60 ALR 509, per Mason J, 514, quoted in Pearce D C & Geddes R S, Statutory Interpretation in Australia, (6th ed, 2006), [4.2], as a 'frequently cited passage'.
172 However, I do not consider that there is any useful guidance that can be derived from the provisions in ST Act s 98, read with s 28, as I have referred to them. They are altogether too slight a basis upon which to found the conclusion counsel for the defendant would have me draw. At the least, there is a distinction to be drawn between considerations of what is 'inequitable' or 'equitable' and doctrines in equity.
173 I should not leave my consideration of ground 1 of the appeal without noting a further argument for the defendant, against any construction of s 93(3)(b) that would have that paragraph encompass either contractual matters or equitable principles. That argument rested on the undoubted additional complexity such a construction would bring to the deliberations of SAT on applications for relief based on that paragraph that invoked such matters or principles.
174 In this connection, I was referred to the Second Reading speech of the Minister on the Bill that resulted in the SAT Act. In that Speech, in Western Australia, Parliamentary Debates, Legislative Assembly, 24 June 2003, 9102 (Mr J A McGinty), the Minister said this:
The objectives set out in the SAT Bill are to achieve the resolution of questions, complaints or disputes and make or review decisions in matters within its jurisdiction fairly and according to the substantial merits of the case; to facilitate access to its services throughout the State; to act speedily and with as little formality and technicality as practicable, and minimise the costs to parties; to perform its functions under enabling Acts; and to make use, for the performance of its functions, of members whose knowledge and experience are appropriate to the matters with which it deals.
175 I have emphasised the words which I took to be particularly germane to the argument of counsel for the defendant.
176 I do not consider the words emphasised, when read in their context, and the context of the SAT Act itself, carry the argument.
177 I further note the argument is better rested on SAT Act s 9, which sets out the 'main objectives of the Tribunal in dealing with matters within its jurisdiction' as follows:
The main objectives of the Tribunal in dealing with matters within its jurisdiction are -
(a) to achieve the resolution of questions, complaints or disputes, and make or review decisions, fairly and according to the substantial merits of the case;
(b) to act as speedily and with as little formality and technicality as is practicable, and minimise the costs to parties; and
(c) to make appropriate use of the knowledge and experience of Tribunal members.
178 It seems to me the quotation from Hansard adds nothing of significance to me to SAT Act s 9. Both indicate that a variety of interests or concerns were intended to be of significance to SAT. Some of those interests or concerns might be in tension with one another. Thus speediness, and minimisation of formality, technicality and cost, might be in tension with a proper address of the 'substantial merits of the case'.
If there is any inconsistency between this Act and an enabling Act, the enabling Act prevails.
180 I take from the material I have just referred to that I must consider the construction of the ST Act provisions in respect of which SAT has jurisdiction in accordance with the usual principles of statutory construction. To the extent those principles allow me to take account of the context represented by the fact that it is the power of SAT with which that provision is concerned, and that SAT has the character referred to in SAT Act s 9, I have just quoted, I should do so. However, considering that character, and SAT Act s 5, I do not consider that the argument of counsel for the defendant is made out.
Ground 2: ST Act s 93(3)(c) and the interests of proprietors who became such after the first AGM
182 Before considering this ground, I should note the written submissions for the defendant in which it is put that the orders sought by the plaintiffs, as set out in Radford [35], included no reference to ST Act s 93(3)(c). In his oral submissions, I did not understand counsel for the defendant to press this submission, in my view rightly so. The orders referred to at [35] were referenced to s 93(2)(a) and (b). As s 93(2) indicates, it is the source of the authority of SAT to order relief. The provisions in s 93(3), including s 93(3)(c), set out the bases upon which SAT's authority may be exercised. All three of the possible bases set out in s 93(3), being s 93(3)(a), (b) and (c), were put forward in the written submissions for the plaintiffs made to Member De Villiers, as I have previously indicated. It was not put to me by counsel for the defendant that the plaintiffs had withdrawn any of those bases in oral argument before him. I do not consider that any such submission could be successfully made, in view of the terms of Radford [94] and following, indicating that Member De Villiers was dealing with s 93(3)(c) under the heading of the relief sought under s 93(2)(a) and (b).
183 I begin my consideration of ground 2 by noting that Member De Villiers appeared to approach the evaluation of the case for relief under ST Act s 93(2)(a) and s (b), resting on s 93(3)(c), as requiring him to consider whether or not 'the [first] AGM had regard for the interests of all proprietors': Radford [119]; see also [116], and his conclusion, at [123]. In that respect, it is clear he did not employ the approach attributed to him by ground 2. As ground 2 indicates, a question of statutory construction of the phrase 'all proprietors' is posed for my purposes by s 93(3)(c). However that question is approached and resolved, it does not seem to me that the approach adopted by Member De Villiers was correct. It appears to me that s 93 clearly requires SAT to determine whether or not it is 'satisfied' that the by-law, or the repeal or amendment of the by-law, 'should not have been made having regard to the interests of all proprietors in the use and enjoyment of their lots or the common property'.
184 At the same time, it appears to me that the question of statutory construction described by ground 2 is raised and determined by the decision of Member De Villiers. One of the grounds of his decision in Radford with respect to the basis for relief laid in s 93(3)(c) was described by him as follows ([129]):
Section 42 clothes the strata company with the power to make bylaws, and the Tribunal is satisfied that on proper construction, regard must be had to the interests of existing proprietors at the time of the decision.
185 I approach that question of statutory construction as I did the corresponding one under s 93(3)(b). Again, I was not referred to any extrinsic material that would assist me in my task of answering that question.
186 That is, I must approach my task by reference to the literal meaning of the words used in ST Act s 93(3)(c), read in their context, with any indications of the mischief that provision was meant to remedy I can glean from that context: see the authorities to which I earlier referred in this connection.
187 In undertaking my task I must prefer a construction that would promote the 'object or purpose underlying the written law' over a construction that would not do so: Interpretation Act 1984 (WA) s 18. I did not understand the parties to the appeal to contest any elements of this statement of the approach I must follow in the present context. Nor did I understand them to contest in that context the further propositions that there is no material showing the mischief the STA Act, which introduced Pt VI of the ST Act containing s 93(3(c), was meant to remedy through that provision that would assist me in my task, and that there was no material, contextual or otherwise, that would show the object or purpose underlying s 93(3)(c), other than the language of the remainder of s 93 itself.
188 Counsel for the plaintiffs put to me that 'proprietors' in ST Act, s 93(3)(c), must be read to include future 'proprietors'. That is because otherwise it would be possible for persons in the position of original proprietors, who would likely be the developers of the project the subject of a strata scheme, to transform the scheme or allocate special benefits to themselves or some of them without any question of review by SAT under s 93. In any event it would mean that a vote in favour of a by-law or its repeal or amendment by all of the proprietors, personally or by proxy, would mean that s 93(3)(c) would have no possible application. Either conclusion was inconsistent with the character of s 93, which was 'remedial'.
189 In any event, as I understood the oral argument of counsel for the plaintiffs, even if 'proprietors' was restricted to the proprietors at the time of the decision complained of, Member De Villiers had not considered, or had not properly considered, whether or not the decision to introduce by-laws 26 and 27 was in the interests of all of the proprietors at that time, including in particular Bellevue, which held neither Lot 4 nor Lot 5. Those were the two Lots which, as I have indicated, were given the right to acquire common property for nominal consideration under those by-laws.
190 The latter argument was not in accordance with the question of law stated in ground 2. However, I did not understand counsel for the defendant to take issue with the question of law, as to what might constitute a proper basis for a determination under s 93(3)(c), so stated by that argument on that ground. Further, it seems to me that the question of law so stated by that argument was raised by the decision in Radford.
191 I disagree that the construction of 'proprietor' proffered for the plaintiffs is the correct construction to give 'proprietors' in ST Act s 93(3)(c). It seems to me that term, read in its context in the other language of s 93(3)(c), and in the context of s 93(3)(a) and s (b), should be read to refer only to those who were proprietors at the time of the decision in question.
192 Further, although I conclude that that conclusion does not necessarily mean that s 93(3)(c) would have no application where all of the proprietors had voted, personally or by proxy, in favour of the resolution, I also conclude that it has not been shown to me that there was material before Member De Villiers which if considered, or properly considered, might provide a basis for SAT to be satisfied that by-laws 26 and 27 should not have been made having regard to the interests of all of the original proprietors. This is notwithstanding that he approached that question incorrectly, as I have indicated, by considering whether or not the first AGM had regard to those interests.
193 I now explain how I arrived at those determinations.
194 I begin by indicating that I accept a characterisation of the STA Act as remedial legislation, at least in respect of Pts V and VI of the ST Act that they introduced. That characterisation is for the purpose of the approach to the construction of remedial legislation associated with the following (edited) passage from Bull v Attorney-General (NSW) [1913] HCA 60; (1913) 17 CLR 370, Isaacs J, 384:
In the first place, this is a remedial Act, and therefore, if any ambiguity existed, like all such Acts should be construed beneficially ... This means, of course, not that the true signification of the provision should be strained or exceeded, but that it should be construed so as to give the fullest relief which the fair meaning of its language will allow.
195 See the reproduction of that passage so edited in Pearce & Geddes [9.2].
196 The characterisation of s 93 as remedial legislation for that purpose would seem to me to be strongly suggested by the nature of that provision, and its context, in Pt VI of the ST Act, including s 83 and s 97, as I have already indicated, and introduced, with Pt V, by Act No 58 of 1995.
197 I have previously referred to a number of the provisions in Pt V which confer on a purchaser the right to avoid a contract to purchase a lot or proposed lot in certain circumstances. Part VI contains s 93, which it is accepted for the purposes of this appeal confers standing on persons in the position of the plaintiffs to seek, now from SAT, the relief for which s 93(2) provides. That section confers a right on such persons to obtain relief by way of a declaration that a by-law is invalid, or by way of an order for its repeal, in either case in the circumstances that section describes.
198 Finally, I note the approach to what represents remedial legislation, discussed in Pearce & Geddes [9.2] and [9.3].
199 However, this does not mean that the results of the application of the approach to statutory construction that I previously described are to be ignored in favour of a beneficial construction. Rather, as stated in Khoury v Government Insurance Office (NSW) [1984] HCA 55; (1984) 165 CLR 622, Mason, Brennan, Deane and Dawson JJ, 638 (my emphasis):
the rule that remedial provisions are to be beneficially construed so as to provide the most complete remedy of the situation with which they are intended to deal must ... be restrained within the confines of 'the actual language employed' and what is 'fairly open' on the words used.
200 See the quotation of the emphasised portion of that passage, and the reference to other authority, in Pearce & Geddes [9.2].
201 It seems to me that when regard is had to the complete phrase in ST Act s 93(3)(c), 'should not have been made having regard to the interests of all proprietors in the use and enjoyment of their lots or the common property', a reading that would restrict 'proprietors' to those at the time of the decision is strongly suggested if not compelled. When regard is also had to s 93(3)(a) and (b), however, that reading is strengthened, in my view irresistibly. That is, when regard is had to s 93(3) as a whole, it seems to me SAT is required to consider the position for each of the bases as at the time the by-law was made, repealed or amended.
202 The alternative conclusion, that 'proprietor' includes future proprietors, would seem to me to be capable of producing some odd results. For example, it would require account to be taken of the interests of persons who became proprietors, but not of persons who were purchasers under contracts to purchase a lot but who had not yet become proprietors. Such persons might or might not have a remedy under ST Act Pt V, depending on the operation of the provisions in that Part to which I previously referred. Such a distinction is in my view difficult to see as one supported by the remedial character of s 93.
203 Nor do I consider that the construction which I consider to be the correct one makes s 93 inapplicable to cases where the decision in question was by a resolution without dissent, such as a unanimous resolution, by the proprietors in person or by proxy, and is to be disfavoured on that account.
204 It seems to me it would be impossible to show that a unanimous resolution was one that should not have been assented to having regard to the interests of the proprietors, as described in ST Act s 93(3)(c), who assented to it, without further evidence. However, such a showing might be made where the process by which the assent of a proprietor or proprietors was obtained was shown to be defective. Such defects would include ones where the information provided for the meeting was defective, the meeting was not properly conducted so as to prevent proper understanding of what was being considered, or the proprietors were represented by a proxy who did not follow the instructions issued to them.
205 However, it was not suggested to me that there were any such defects in this case, or that there any other defects that would have prevented the original proprietors being the best judges of their 'interests ... in the use and enjoyment of their lots or the common property'. I note in this regard the statement of Member De Villiers, in Radford [121] and [122], the effect of which I have previously described, and which I now quote in full:
The proprietors were all represented at the AGM by Mr Bertram; they had each received a copy of the proposed amendments to the by-laws prior to the AGM; they had instructed Mr Bertram to vote in favour of the by-laws on their behalf, and Mr Bertram, in evidence, explained that he understood exactly what he voted for in regard to the proposed resubdivision. Subsequently, the by-laws were enacted by resolution without dissent. None of the proprietors lodged a complaint or objection after the AGM under s 3AC of the ST Act.
It is also noted that none of the proprietors at the time of the AGM or new proprietors have attempted for the by-laws to be repealed, amended or replaced through a democratic process as provided for by the ST Act.
206 While it might be the case that the nature of the subject-matter of the resolutions might in a suitable case be a basis for an inference of a defect of the sort described, it does not seem to me that in this case the nature of by-laws 26 and 27 itself should taken to be such a basis, as to Bellevue, although the contrary was put to me in oral argument by the plaintiffs. It is not evident to me, as a matter of law, that, in view of the matters just referred to in the quoted passages, those by-laws should have been seen as giving rise to that inference.
207 True it is that the consideration for the loss of its interest in the Roof Deck and Terrace as common property, albeit subject to the right of exclusive use described in by-law 25, was nominal. Further, that loss was to persons who on the evidence before me, as I have indicated, were directors of the company. However, I was not taken to any evidence put before the SAT which would have qualified what would otherwise be inferred, that the best interests of Bellevue had been properly addressed by it, from the facts found by Member De Villiers the subject of the quotation.
208 It is of course possible for 'the matter' to be sent back by this court 'with ... the hearing of further evidence, in accordance with any directions or recommendations that the court considers appropriate': SAT Act s 105(9)(c). The 'matter' in this case is whether, notwithstanding the circumstances just described, SAT is satisfied that the decision should not have been made, in the language of ST Act s 93(3)(c), 'having regard to the interests of all proprietors in the use and enjoyment of their lots or the common property'. As I have indicated, Member De Villiers did not address the question of whether or not SAT was so satisfied. However, on the evidence before him it seems to me no such satisfaction could properly be reached; and no further evidence to qualify that conclusion has been foreshadowed in this case. Nor, in view of the findings of Member De Villiers, does it appear to me likely there is such evidence to be found.
209 I have concluded that leave to appeal the decision of Member De Villiers in Radford should be granted. Further, he made a number of errors of law in respects subsumed by the questions of law before me.
210 However, in my view, for the reasons I have set out, I consider that the errors he did make do not entail that I should send the matter back to the SAT for reconsideration, as the minute of orders put up by the plaintiffs calls for. Such an order would only be appropriate, it seems to me, if the decision below were such that, in view of the errors this decision (as distinct from the contentions of the plaintiffs) has identified, it was attended with sufficient doubt that the matter should be reheard, with or without new evidence. I do not consider such doubt has been shown in this case. It follows I would affirm the decision below, without endorsing all of the reasons given in it.
211 The plaintiffs' minute of orders also calls for declarations in the terms I have previously quoted. I consider that the first declaration sought, concerning matters of a contractual or equitable nature, is in accordance with these reasons, while I consider that the second declaration sought is not. I assume without deciding that SAT Act s 105(9), concluding words, would enable me to make a declaration even in the absence of relief by way of other order in respect of the decision appealed against. However, it seems to me that my reasons provide a sufficient account of the matters the subject of the declarations sought. It does not seem to me that it would serve a useful purpose to make one, but not the other, of the declarations sought.
212 The conclusions I have just reached do not necessarily leave persons in the position of the plaintiffs without the possibility of a right or remedy, direct or derivative.
213 It was not in contest before me that ST Act s 122, has the effect that the rights and remedies in the Act, with their limitations, have no effect on the rights and remedies of the persons listed in s 122(1), including a 'proprietor' as well as a 'person having an estate or interest in a lot', except as provided in s 122(2). On my conclusion thus far, s 122(2) would have no application to the pursuit of any such other rights and remedies. Whether or not there were such other rights or remedies would of course depend on other law.
214 Further, such rights or remedies are not limited to those available to the plaintiffs for breaches of duties owed to them. I have previously indicated that the original proprietors, as developers, owed fiduciary duties to the defendant. It may be that in the circumstances of this case there was a breach of those duties for which relief might be obtained that would enure to the benefit of the plaintiffs.
215 I will hear from the parties as to the orders I should make on my conclusions.
(1997) 44 NSWLR 46
(1997) 187 CLR 384
(1998) 194 CLR 355
(1939) 61 CLR 457
(1995) 182 CLR 432
(2001) 54 NSWLR 60
(1997) 188 CLR 449
(1953) 88 CLR 215
(2001) 207 CLR 165
(1996) 186 CLR 71
(1985) 60 ALR 509
(1913) 17 CLR 370
(1984) 165 CLR 622