TIPENE -v- THE OWNERS OF STRATA PLAN 9485 [2015] WASC 30 (29 January 2015)

4 In early 2011, the then registered proprietors of lots 6 9 (the Applicants) proposed to demolish Building B and to construct new townhouses. They applied to the Strata Company for approval for the proposed redevelopment (the Application for Approval). The registered proprietors of lots 1 5 (the respondents) objected to the application.

5 The Applicants applied to the State Administrative Tribunal (SAT) for an order under s 103F of the Strata Titles Act 1985 (WA) (STA) that approval for the purpose of s 7(2) STA be deemed to have been given by the Strata Company (the SAT Application). The Tribunal dismissed the application. It held that it did not have jurisdiction to make the order sought under s 103F as the Applicants' redevelopment proposal required Building B to be demolished. The jurisdiction conferred by s 103F was confined to proposals to erect structures or to undertake alterations or extensions to existing structures. The demolition of Building B did not constitute an alteration of a structural kind to a structure within the meaning and for the purpose of s 7(2)(b): Tipene and The Owners of Strata Plan No 9495 [2013] WASAT 186.

6 The appellants appeal from that decision. I have concluded that the appeal should be not allowed. The issues raised in the appeal would ordinarily justify the grant of leave. However, I have decided that leave should not to be given in the particular circumstances of this matter for reasons that will be later explained.

7 Section 7(2) STA provides that:

The proprietor of a lot shall not cause or permit -

(a) any structure to be erected; or

(b) any alteration of a structural kind to, or extension of, a structure,

on his lot except -

(c) with the prior approval of the proprietor of the other lot in the case of a strata scheme in which there are not more than 2 lots; and

(d) in any other case with the prior approval, expressed by resolution without dissent, of the strata company.

8 Section 7B STA provides that a proprietor who wishes to obtain approval of a proposal that comes within s 7(2) shall serve an application on the strata company setting out the details of the proposal. The application must be submitted to a general meeting of the company. The Application for Approval was made pursuant to s 7B.

9 Section 7(4) STA provides that, where an application is made to a strata company under s 7B, a proprietor may vote against a resolution to approve the application on any ground that is permitted by s 7(5) but not otherwise. Further, a proprietor voting against the application must disclose, as a ground for the vote, one or more of the grounds permitted by s 7(5). That section provides that:

The grounds on which approval may be refused are -

(a) that the carrying out of the proposal will breach the plot ratio restrictions or open space requirements for the lot ascertained in accordance with section 7A(3); or

(b) in the case of a lot that is not a vacant lot, that the carrying out of the proposal -

(i) will result in a structure that is visible from outside the lot and that is not in keeping with the rest of the development; or

(ii) may affect the structural soundness of a building; or

(iii) may interfere with any easement created by section 11 or 12; or

10 Section 103F STA provides that the proprietor of a lot who has applied for, but not obtained, an approval under s 7B may apply to SAT for an order declaring that the approval required under s 7 is deemed to have been given by the strata company. Section 103F(3) provides that SAT may make an order under s 103F(1) if satisfied that approval should have been given under s 7 but that it had been unreasonably withheld by the strata company.

11 The Tribunal also referred in its reasons to pt III STA, in particular s 28 and s 31. Part III is entitled, 'variation, termination and conversion of schemes'. Section 28(1) provides that:

Where a building shown on a registered strata plan is damaged or destroyed, the District Court may, on an application by the strata company or a proprietor or a registered mortgagee of a lot within the strata scheme, make an order for or with respect to the variation of the existing strata scheme or the substitution for the existing strata scheme of a new strata scheme.

12 Section 31 enables the District Court to terminate a strata scheme on the application of a strata company or a proprietor or registered mortgagee of a lot. The court is then required to give directions for the winding up of the scheme. The Tribunal concluded that s 28, read with s 31, conferred jurisdiction on the District Court to make orders in relation to the proposed redevelopment of a lot, including where the redevelopment involved the demolition of a building that was shown on a registered strata plan.

13 The Applicants were the appellants and Inertia Holdings Pty Ltd (Inertia). Inertia, Mr Ezcaray, Ms Nixon and Mr Graham Nixon entered into a contract for the sale and purchase of lot 8 in the period between the hearing of the SAT Application and SAT's decision. Mr Ezcaray, Ms Nixon and Mr Nixon became the registered proprietors of lot 8 after the Tribunal's decision but before the appeal was heard.

14 Mr Nixon applied for leave to be joined as a party to the appeal. That application was opposed. It has not been necessary to finally determine the application. However, some observations are made about the application later in these reasons.

15 The Application for Approval comprised a bundle of documents that were separately described as the application; the proposal; plan and finishes; 'The Strata Titles "2 Step"' (a booklet) and 'A Guide to Strata Titles' (another booklet).

16 The application document stated that the Applicants, as the registered proprietors of lots 6 9, 'hereby apply to the strata company for approval for the proposed buildings to be erected on lots 6, 7, 8, and 9 as shown on the attached building plans'.

17 The application then referred to various 'requirements' specified by reg 34(2) and reg 34(3) of the Strata Titles General Regulations 1996 (WA). Those regulations appear in pt 6 of the General Regulations. That part is entitled, 'Approval of erection, alteration or extension of structure'. Regulation 34 prescribes information that must be provided for the purpose of an application under s 7B STA. Regulations 34(2)(a) (2)(f) require information to be provided about matters such as plot ratio restrictions and open space requirements, the area of the structure for the purpose of calculating those restrictions and requirements and the location and dimensions of the proposed structure in relation to any existing structure on the lot or to the boundaries of the lot. The application document forming part of the Application for Approval stated in relation to those matters that 'the proposed building does not impact on the open space requirements and is within the entitlement of lots 6, 7, 8 and 9'; that the dimensions and location of buildings on the lots were set out in the accompanying plans and that the existing buildings would be demolished.

18 Finally, the application document set out the resolution that was proposed by the Applicants: that 'the strata company by a resolution without dissent to agree to the attached application submitted by the proprietors of Lot 6, 7, 8 and 9'.

19 The proposal provided for the redevelopment of Building B in two stages: first, the demolition of the existing townhouses (stage 1) and second, the construction of four townhouses according to the plans and finishes that formed part of the Application for Approval (stage 2).

20 The Application for Approval was considered at the annual general meeting of the Strata Company held on 22 February 2011. The respondents voted against the motion to approve the application. The minutes of the meeting recorded that the 'motion failed ... not in keeping with the development' (see s 7(5)(b)(i)).

21 The Applicants applied to SAT under s 103F STA (the SAT Application) for the following orders:

(a) an order under s 103F(3) declaring that the Strata Company had 'unreasonably withheld its approval of the Applicants' Application dated 7 February 2011 to the Strata Company for Strata Plan 9465 made in accordance with s 7B of the Act (Application)';

(b) an order under s 103F(2) 'declaring that the approval required under s 7(2) of the Act for the Application be deemed to have been given by the Strata Company'.

22 The Application for Approval sought the Strata Company's approval for the entire redevelopment project - stage 1 (the demolition of Building B) and stage 2 (the construction of new townhouses). It is apparent that the Applicants considered that s 7 STA required approval to be given for both stages. That appears from the terms of the Application for Approval and the SAT Application. Paragraph 1 of the grounds on which the SAT Application was made stated that the Applicants had applied to the Strata Company 'for approval to demolish the structures on their respective Lots and construct new structures on those Lots'. Paragraphs 3 and 4 of the grounds also referred to both the demolition of the existing structures and the erection of new structures.

23 The Applicants subsequently amended par 1 of the grounds for the SAT Application to read:

The applicants applied to the Strata Company for Strata Plan 9465 on or about 7 February 2011 for approval to alterations to demolish the structures on their respective lots and construct new structures on those lots.

24 The amendment was said to reflect the motion that was actually put to the Strata Company at its annual general meeting on 22 February 2011. However, the amendment better identified the principal argument made by the Applicants at the hearing of the SAT Application: that the expression 'any alteration of a structural kind' in s 7(2)(b) STA included the demolition of a structure.

25 The respondents contended that SAT lacked jurisdiction to hear and determine the SAT Application. They identified two issues that were said to be relevant to SAT's jurisdiction and which they submitted should be determined as preliminary issues:

(a) could the Application for Approval have been made under s 7(2) STA;

(b) was it possible to conclude that approval of the Application for Approval could have been unreasonably withheld by the respondents (as the development proposal would create, so it was alleged, an 'untenable commercial situation')?

(Respondents' statement of preliminary issues in respect of jurisdiction, facts and contentions, par 1 and par 9.)

26 The respondents further contended that the SAT Application should, in any event, be refused as it failed to comply with s 7(5)(b)(i) and/or s 7(5)(c) STA and further or alternatively, because implementation of the development would result in a 'commercially untenable situation for all of the parties to this matter' (respondents' statement of preliminary issues, par 10).

27 The preliminary issues identified by the respondents were subsequently restated as a single contention:

The ... respondents ... contend that the State Administrative Tribunal (the Tribunal) does not have jurisdiction to entertain or determine the application by the applicants brought in terms of ss 103F(1), (2) and (3) of the Strata Titles Act 1985 (WA) (the Act) read with s 7 of that Act.

28 The Tribunal, constituted by Senior Member Spillane, accepted that the respondents' restated contention should be decided as a preliminary issue. The Tribunal in its reasons subsequently characterised the issue to be decided:

When the respondent's contentions outlining the jurisdiction issue... is read in conjunction with the parties' submissions, the issue to be determined by the Tribunal can be stated simply as follows:

Can the Tribunal make an order under s 103F of the Strata Titles Act dispensing with approval under s 7(2) of that Act if the alteration proposed involves the demolition of the structure [24]?

29 The Tribunal concluded that SAT did not have jurisdiction to make an order under s 103F STA granting an approval for the purpose of s 7(2) where the proposed 'alteration' involved the demolition of a building, at least where the demolition might affect the proprietary interests of the owners of the lots comprising the strata scheme [68]. Accordingly, the SAT Application was dismissed.

The Tribunal's reasons for dismissing the SAT Application

30 The Tribunal referred to various authorities in which the meaning of the words 'alter' and 'alteration' had been considered. It concluded that there was a 'clear distinction between alteration of a structure and demolition of a structure' [38]. That distinction was said to have been encapsulated in the judgment of Wilson JA in R v Parkway Chrysler Plymouth Ltd (1976) 32 CCC (2d) 116 (Ont CA):

On the basis of a number of dictionary definitions of the word 'alter', he [the trial judge] found that 'alter' comprehended a change or variation in something, a modification, a change in some elements or ingredients of a thing, but not a change in the whole, a total replacement ...

The dictionary definitions to which he resorted amply support his conclusion that to replace or substitute one thing for another is not to alter the original. The original is gone and a new thing has taken its place ... (117 - 118).

31 Accordingly, the Tribunal found that 'a plain reading of the word "alteration" in s 7(2) of the Strata Titles Act does not include "demolition" when the structure in question is an entire building which is part of a strata plan' [66].

32 That finding was sufficient to dispose of the preliminary issue according to par 1 of the grounds on which the application to SAT had been made. However, the Tribunal went on to explain that, in its view, jurisdiction over redevelopment proposals such as that contained in the Application for Approval was conferred on the District Court by a combination of s 28 and s 31 STA. The respondents had referred to s 28 in support of their argument that s 7(2) did not apply where it was proposed to demolish a structure. The Tribunal noted that:

The respondents referred to s 28 ..., which deals with circumstances where a building shown on a registered plan is damaged or destroyed, and pointed out that in such circumstances only the District Court has jurisdiction.

The applicants, on the other hand, submitted that s 28 ... is only intended to relate to 'damage or destruction' of buildings that are accidentally 'damaged or destroyed' by such things as fire, which make an application a practical necessity, which is the case here [44] [45].

[W]hen looked at in the context of the provisions of the Strata Titles Act as a whole, where a building is to be demolished and the proprietary interests of owners in respect of their lots or their share of the common property may be affected, jurisdiction to deal with or interfere with those interests resides solely in the District Court [67].

(a) A 'lot', as defined by s 3 STA, was 'measured by way of cubic space which is calculated by applying the formula set out in s 3(2) of the Strata Titles Act to the relevant floor plan'. It was, therefore, necessary that a structure be in place for a lot to be measured [47].

(b) The unit entitlements of each lot owner determined their voting rights and the quantum of their undivided share in the common property. The unit entitlements of the parties to a registered strata plan are calculated according to the provisions of s 5 STA. Further:

A strata plan is in place for the current development which relies on the specific measurements of the current structures to calculate the parties' lot ownership, and together with relevant valuation as per s 14(2) of the Strata Titles Act, their entitlement to an undivided share of the common property [55].

If a building which is part of a strata plan is destroyed, and the basis upon which the extent of a person's lot is measured or their entitlement to an undivided share in the common property is calculated, is no longer available, it is important that some body or authority have the necessary powers to deal with the issues that would arise. In Western Australia, Parliament has seen fit to vest that jurisdiction solely in the District Court as set out in s 28 to s 31 of the Strata Titles Act [56].

(d) Section 28(3)(b) and s 28(3)(c) STA conferred power on the District Court to make directions for the transfer or conveyance of a proprietor's interests where a building was 'unexpectedly' damaged or destroyed [58].

(e) Section 31 STA enabled the District Court to terminate a strata plan on the application of a strata company, proprietor or registered mortgagee. Professor Butt had noted that a similar provision in the Strata Schemes (Freehold Development) Act 1973 (NSW) empowered the Supreme Court to terminate a scheme and that the provision may be useful 'for example, where a building has reached the end of its life, or the site is to be redeveloped' (Land Law, 2009, 6th ed). Section 28 s 31 STA conferred 'similarly wide powers to deal with matters that may arise' so that 'an application for an order terminating a scheme under s 31 of the Strata Titles Act can be made by an individual proprietor or group of proprietors who may for any reason need to terminate the current scheme, including for example, to redevelop the property' [61].

(f) An application under s 31 STA may be treated by the District Court as an application under s 28. Section 31(3)(g) STA imposed a duty on the court to make orders in respect of any matter 'in respect of which it is, in the opinion of the District Court just and equitable, in the circumstances of the case, to make provision' [62] [63].

[B]y the insertion of s 28 to s 31 of the Strata Titles Act, Parliament recognised that damage or destruction to the whole or part of a building, or the variation or termination of a strata scheme, may affect the proprietary interests of owners in a strata scheme, both in respect of their lots and their share of the common property, and vested the power to deal with those matters exclusively in the District Court [65].

35 The extent of the jurisdiction that the Tribunal contemplated was conferred by pt III STA was, perhaps, uncertain. Did the Tribunal consider that the District Court had power to authorise the demolition of a building where that was opposed by some lot owners and, in that context, to make provision for the consequences of the proposed demolition on the strata scheme? Alternatively, did the Tribunal consider that the District Court could only deal with the consequences of a proposed destruction by demolition of a building for the proprietary interests of the parties to the affected scheme? On that alternative, a lot owner would not require the approval of other owners or the court to the demolition of the building; the owner would only require orders from the District Court making provision for the effect of the demolition on the strata scheme.

36 In my view, the Tribunal intended the first of those alternatives. Indeed, the Tribunal went further - it interpreted s 28 and s 31, read together, as providing a statutory mechanism for facilitating the redevelopment of strata titled lots. The District Court could approve the termination of an existing strata scheme and make provision for the consequences of the termination on the proprietary interests of the lot owners. The proposed redevelopment of a lot or lots by the demolition of a structure and the construction of a new structure could provide the basis for an application to terminate an existing scheme. A combination of the powers conferred by s 28 and s 31 would enable the District Court to approve the demolition of the existing structure and the erection of a new structure and to deal with the consequences for lot owners and third parties such as registered mortgagees.

The ground of appeal and the parties' submissions The ground of appeal

37 The notice of appeal alleged one ground of appeal:

[T]hat the Learned Senior Member erred in law when construing sections 7 and 103F of the Strata Title Act 1985 ... and that he ought to have determined that those sections confer jurisdiction on the State Administrative Tribunal to make an order under s 103F of the Strata Titles Act 1985 to dispense with approval of an alteration under s 7(2) of the Strata Titles Act 1985, notwithstanding that the proposed alteration involved the demolition of a building. (emphasis added)

38 The Tribunal focused in its reasons on s 7(2)(b) STA - the prohibition on any alteration of a structural kind without the prior approval of the strata company. It was not suggested that the Tribunal had misconceived the Applicants' case in its reasons. The ground of appeal raised the question of the Tribunal's finding on its jurisdiction under s 7(2)(b); that is, according to how the matter had been argued in the Tribunal.

39 However, the appellants stated in written submissions filed in advance of the hearing of the appeal that the word 'alteration', when used in s 7(2)(b), did not include the demolition of a structure 'when the structure in question is an entire building which is part of a [strata plan]' (appellants' chronology and outline of submissions, par 4.2). The appellants further submitted that:

4.3 However, s 7(2) ... prohibits specified conduct. It follows from the learned member's finding that 'alteration' does not include demolition that s 7(b):

(a) does not prohibit the demolition of Building B; and

(b) does not prohibit the alteration of Building B, where the alteration proposed involves the demolition of Building B.

4.4 However, s 7(2)(a) ... when speaking of 'any structure to be erected' prohibits the erection of a replacement for Building B except 'with the prior approval, expressed by resolution without dissent, of the strata company'.

4.5 From this it follows that:

(a) the appellants were obliged to make an application to the strata company pursuant to s 7B ... as they wished to obtain approval for the Proposal which fell within s 7(2)(a); and

(b) pursuant to s 103F ... the Tribunal had jurisdiction to determine that application.

40 The effect of those submissions was twofold. First, the appellants conceded that, properly construed, the expression 'an alteration of a structural kind to a structure' did not apply to the proposed demolition of a structure. That meant that s 7(2) did not prohibit the demolition of an entire structure. Second, the appellants now sought to argue that the Tribunal had jurisdiction under s 103F STA to consider that part of the Application for Approval that concerned the erection of new structures (stage 2 of the proposed redevelopment).

41 The appellants also made submissions on the Tribunal's findings on the application of pt III STA to the redevelopment proposal. Those submissions are reproduced later but they were to the effect that s 28 and s 31 could not deprive the appellants of their right to seek an approval for the construction of the new townhouses under s 103F.

42 The respondents contended in their written submissions that the appeal was incompetent or lacked utility as a party to the Application for Approval and the SAT Application, Inertia, was no longer an owner of one of the lots forming part of the proposed redevelopment. They also contended that the court lacked jurisdiction as there was no question of law raised once it was conceded that the Tribunal had not erred in construing the expression 'any alteration of a structural kind to a structure':

An appeal to the Supreme Court ... is not a re-hearing de novo but analogous to judicial review proceedings directed at SAT for error of law - see the Carey case at [72]. So what was before SAT and what it decided, is foundational in any purported appeal to the Supreme Court (respondents' submissions opposing appeal, par 12).

(a) The effect of s 103F was that the SAT Application had to be the same application as that which was voted on by the Strata Company. Accordingly, the matter which s 103F gave SAT jurisdiction to deal with involved the review of a decision and so came with the Tribunal's review jurisdiction: see s 17(1) of the State Administrative Tribunals Act 2004 (WA) (SAT Act). SAT was obliged to consider only the decision that had been made by the Strata Company. That decision concerned whether approval should be given to the entire redevelopment proposal - that is, stage 1 and stage 2.

(b) Consequently, it was not open to the appellants to contend that the Tribunal had jurisdiction in relation to part of the redevelopment proposal - whether an order should be made dispensing with the requirement for approval to stage 2. Further, it was not open to the appellants to 'hive off only part of a decision for review while accepting another part of it'.

(c) The proposition that the appellants could demolish Building B without the approval of the Strata Company 'would have startling and absurd consequences, not in line with evident purpose of the Act to regulate and control what individual strata lot owners can do with buildings on their strata lots, notably in the case of a "lot that is not a vacant lot: s 7(5)(b)"'.

44 The appellants accepted at the hearing of the appeal that the proposed ground of appeal as pleaded did not identify the error that they contended had been made by the Tribunal once it was conceded that an alteration of a structural kind did not include the demolition of a structure. Accordingly, they sought leave to amend the ground of appeal to delete the reference to the approval of an 'alteration' of a structure and to substitute the words 'the erection' of a structure under s 7(2). The amendment was intended to clarify that the appellants now contended that SAT had jurisdiction to consider whether stage 2 of the proposed redevelopment should be approved under s 7(2)(a).

The appellants' submissions in support of the proposed amendment

45 The appellants maintained that the question of SAT's jurisdiction under s 7(2)(a) STA had been raised in the hearing before the Tribunal. They noted that the Application for Approval expressly referred to the erection of new buildings on lots 6 9 and that the SAT Application had sought approval for the construction of new structures. However, they also argued that the amendment should be allowed applying the principles that ordinarily govern whether a new point may be taken on appeal: see, for example, Rizhao Steel Holding Group Co Ltd v Koolan Iron Ore Pty Ltd [2012] WASCA 50; (2012) 43 WAR 91. The appellants identified a number of matters that they submitted favoured the grant of leave according to those principles.

46 The appellants also advised that if the matter was remitted to the Tribunal and approval to erect the new structures was given, they would seek local authority and planning approval to demolish Building B and would undertake not to demolish the building in the interim to 'ameliorate the Respondents' expressed concerns as to the implications of s 7(5) of the STA' (appellants' submissions in support of application for leave to amend grounds of appeal, par 3.1 and par 3.2).

The respondents' objections to the proposed amendment

47 The respondents opposed the appellants' application for leave to amend and directions were made for further written and oral submissions. In their further submissions, the respondents repeated several arguments that they had made in opposition to the appeal. In particular, the respondents stressed that the SAT Application concerned, and could only have concerned, the entire Application for Approval. They also emphasised that the proposed amendment represented a significant departure from the way in which the case for approval had been put in the Tribunal and contended that:

(a) The concession that the Tribunal had not erred in its interpretation of s 7(2)(b) ought to have been the end of the appeal.

(b) The appellants were bound to but had not explained their late application to amend, reference being made to Aon Risk Services Australia Ltd v Australian National University [2009] HCA 27; (2009) 239 CLR 175.

(c) The proposed ground of appeal did not raise a question of law. The proposed ground could not be 'tied in to any alleged error on the part of SAT, as the issue now sought to be raised by the new ground of appeal was not argued before SAT in this guise or anything remotely close to it and never fell for decision by SAT' (respondents' submissions opposing appellants' application for leave to amend ground of appeal, par 35).

48 The respondents also repeated submissions previously made that the appellants could not demolish Building B and then contend that other lot owners were prevented from objecting to the construction of the new townhouses on the grounds specified in s 7(5)(b) - that is, the appellants could not maintain that the buildings were to be erected on vacant lots. It was said that such an approach would be contrary to the intention of Parliament that strata companies and lot owners should be able to exercise control over aspects of the development of individual lots within a strata scheme.

The appellants' proposed amendment raises a new point

49 In my view, the point that the appellants now seek to raise was not argued before the Tribunal. The proposition that the Tribunal possessed jurisdiction under s 7(2)(a) STA to determine whether approval should be given to so much of the Application for Approval that concerned the erection of new townhouses (stage 2 of the proposed redevelopment) was not pleaded in the grounds for the SAT Application and was not clearly put in the passages from the hearing to which the appellants referred in their submissions. In my view, the proposition was not dealt with by the Tribunal for that reason (it is to be noted that the appellants did not allege that the Tribunal had erred by failing to deal with a submission made by the Applicants in the hearing). I accept the respondents' submission that the proposed amended ground of appeal raises a new point that was not taken in the Tribunal.

50 I also accept that the proposed amendment represents a significant shift in the appellants' case. The SAT Application proceeded on the assumption that the demolition of Building B was prohibited by s 7(2) unless the Strata Company or SAT's approval was obtained. The appellants now seek to argue that they do not require the approval of either the company or the Tribunal to demolish the building and that the Tribunal possessed jurisdiction under s 7(2)(a) rather than s 7(2)(b).

51 I have concluded that SAT did not have jurisdiction over the SAT Application regardless of whether s 103F is read with s 7(2)(a) or s 7(2)(b). That is because of the effect that the demolition of a building that forms the boundaries or part of the boundaries of a lot (a Boundary Building) will have on the proprietary interests of the lot owners who comprise the affected strata scheme. In my view, the appeal must be dismissed even if:

(a) the appellants are given leave to amend their ground of appeal; and

(b) it is held that the Application for Approval could be severed so that the question of whether approval should be given to the construction of the new townhouses might have been separately considered by SAT.

52 The conclusion that has been reached means that it is not necessary to determine a number of the issues that were raised by the respondents concerning the jurisdiction of SAT under the STA and of this court under s 105 SAT Act. Those issues raised difficult questions on which the parties only made limited submissions by reference to the relevant authorities. It is not easy to extract a well-established and coherent set of principles from the case law. Accordingly, I have only made findings on some of the issues raised by the respondents. I have also made some observations on other issues in light of the parties' submissions.

53 One consequence of the Tribunal's finding was that s 7(2) does not prohibit the demolition of an entire structure. However, as has been noted, the Tribunal considered that other parts of the STA did regulate the demolition of buildings: 'when looked at in the context of the provisions of the Strata Titles Act as a whole, where a building is to be demolished and the proprietary interests of owners in respect of their lots or their share of the common property may be affected, jurisdiction to deal with or interfere with those interests resides solely in the District Court' [67] (emphasis added). Jurisdiction was conferred on the District Court by s 28 STA, supplemented by s 31.

54 The appellants did not in their initial submissions directly challenge the Tribunal's findings on the jurisdiction conferred by s 28 and s 31:

4.11 ... even if these provisions permit the District Court to vary the [strata plan] to permit the Proposal, they do not override s 7(2) ... obliging the appellants to obtain the requisite approval for the Proposal, nor the appellants' concomitant right pursuant to s 103F ... to have the Tribunal review the strata company's decision on the Proposal.

4.12 The learned member made a number of observations concerning the inability, pursuant to the STA, to identify the dimensions of a lot (being a cubic space defined by reference to existing buildings) in circumstances where those buildings have been (or are to be) demolished.

4.13 The appellants contend that such a lacunae cannot override the obligation and corresponding power set out in paragraph 4.11 ... (original emphasis)

(The term 'Proposal' was defined in the submissions as the proposal to erect a new building comprising four lots to replace Building B.)

55 It was not entirely clear what was meant by those submissions. The 'even if' suggested that the appellants held a doubt about the Tribunal's findings but did not consider that it was necessary to further explore the matter for the purpose of the appeal. However, the 'do not override' submission begged an obvious question that was relevant and which was left unanswered: why would Parliament have prohibited the erection of new structures and provided a procedure by which SAT was empowered to make an order dispensing with the requirement for approval and yet have conferred jurisdiction on another forum, the District Court, to deal with the same subject matter by a different procedure and possibly, on different criteria?

56 Further, the appellants contended in their subsequent submissions, and at the hearing of the appeal, that the STA did not impose any requirement on proprietors to obtain approval for the demolition of buildings situated on their lots. The argument put by the appellants was that only stage 2 of the redevelopment proposal was affected by the STA and accordingly, it was only that part of the Application for Approval that required the approval of other lot owners and which was caught by s 7. The appellants' submissions did not identify why the Tribunal had erred in its findings on the application of pt III STA to the proposed redevelopment.

57 The respondents emphasised that the appellants could not demolish Building B without the approval of the Strata Company and adopted, without elaboration, the Tribunal's findings at various points in their submissions. However, they did not expressly address the Tribunal's finding that the District Court had jurisdiction over the entire redevelopment proposal, including by exercising the power conferred by s 31. One reason for that apparent reticence may have been that they did not want to be seen to be inviting the appellants to apply to the District Court to terminate the existing strata scheme or to substitute a new strata scheme (the appellants indicated in their written submissions that they did not wish to terminate the existing scheme).

58 Three propositions were entailed in the Tribunal's reasoning on the application of pt III STA. First, the proposal to demolish Building B involved the destruction of a building within the meaning and for the purpose of s 28(1) STA. Second, the Applicants' lots (and accordingly, the common property forming part of the strata scheme) were, and could only be, defined by the boundaries of the townhouses forming Building B (together with the survey information that was used for the mergers by resolution). Third, the demolition of Building B necessarily affected the proprietary interests of the owners of each lot comprising the strata scheme and consequently, required a variation to or termination of the strata scheme.

59 In effect, the Tribunal assumed the first of those propositions. The remaining propositions were the subject of express findings. It is appropriate to first consider the Tribunal's findings on the second and third propositions as they are, in my view, determinate of the appeal. I will then return to the question of the jurisdiction conferred by s 28.

60 Section 4(1) STA provides that, 'land may be subdivided into lots, or lots and common property, by the registration of a strata plan or a surveystrata plan'.

61 Section 3(1) provides that the term 'strata plan' has the meaning given by s 4(1a) and the term 'survey-strata plan' has the meaning given by s 4(1b) STA. Section 4(1a) provides that:

A strata plan is a plan that -

(a) is described as such in its title or heading; and

(b) shows the whole or any part of the land comprised in the plan as being divided into 2 or more lots; and

(c) complies with section 5.

62 Section 4(1b) is in similar terms except that the stratasurvey plan must be described as such in its title or heading and must comply with the requirements of s 5A STA.

63 Section 5 STA provides that:

A strata plan shall -

(a) consist of a location plan and a floor plan in respect of the parcel; and

(aa) where section 3(2)(a) applies, contain a statement in the prescribed form describing all of the boundaries of a lot, or part of a lot, on the plan that are fixed by reference to a building or part of a building; and

(b) bear a statement containing such particulars as may be necessary to identify the title to the parcel; and

(c) be accompanied by a schedule specifying, in a whole number, the proposed unit entitlement in respect of each lot into which the parcel is to be subdivided and specifying also the proposed aggregate unit entitlement; and

(d) have endorsed on it the name of the scheme; and

(e) have endorsed on it the address of the parcel; and

(f) contain such other features as may be prescribed.

64 Section 5A differs from s 5 in two material respects:

(a) par (a) of s 5A provides that a survey-strata plan must contain a survey plan in respect of the parcel - that is, a plan that defines the boundaries of lots and common property by dimensions and survey information obtained from a survey of the parcel;

(b) par (c) provides that the plan must show the area of each lot and of any common property.

65 Section 3(1) defines the term 'strata scheme' to mean:

(a) the manner of division, from time to time, of a parcel into lots or into lots and common property under a strata plan and the manner of the allocation, from time to time, of unit entitlements among the lots; and

(b) the rights and obligations, between themselves, of proprietors, other persons having proprietary interests in or occupying the lots and the strata company, as conferred or imposed by this Act or by anything done under the authority of this Act and as in force from time to time.

66 The definition of a surveystrata scheme is in identical terms except for a reference to the division of a parcel into lots or lots and common property under a survey-strata plan.

67 Section 3(1) defines the term 'lot' in relation to a strata scheme to mean:

[O]ne or more cubic spaces forming part of the parcel to which a strata scheme relates, the base of each such cubic space being designated as one lot or part of one lot on the floor plan forming part of the strata plan, plan of resubdivision or plan of consolidation to which that strata scheme relates, being in each case, but subject to section 3AB, cubic space the base of whose vertical boundaries is as delineated on a sheet of that floor plan and which has horizontal boundaries as ascertained under subsection (2), but does not include any structural cubic space except where -

(a) the boundaries of the cubic space are fixed under section 3AB; or

(b) the boundaries are not so fixed and that structural cubic space -

(i) has boundaries described in accordance with the regulations; and

(ii) is shown in that floor plan as part of a lot.

[A] plan, consisting of one or more sheets which -

(a) defines by lines (in paragraph (c) referred to as base lines) the base of each vertical boundary of every cubic space forming the whole of a proposed lot, or the whole of any part of a proposed lot, to which the plan relates; and

(b) shows -

(i) the floor area of any such cubic space; and

(ii) where any such cubic space forms part only of a proposed lot, the aggregate of the floor areas of every cubic space that forms part of the proposed lot; and

(c) where proposed lots or parts thereof to which the plan relates are superimposed on other proposed lots or parts thereof to which the plan relates -

(i) shows the base lines in respect of the proposed lots or parts thereof that are so superimposed separately from those in respect of the other proposed lots or parts thereof upon which they are superimposed and

(ii) specifies, by reference to floors or levels, the order in which that superimposition occurs.

69 The term 'lot' in relation to a survey-strata scheme means land that is shown as a lot consisting of one or more parts on the plan for that scheme.

70 Section 3AB and s 3(2) define the boundaries of the cubic space forming a lot in a strata scheme by reference to the external surfaces of a building occupying the area represented by the floor plan or the common or party walls or the joining planes of buildings (s 3AB) or the walls corresponding with the base lines of the floor plan (and which provide the vertical boundaries of the cubic space) and the ceilings and floors that join the walls that form the horizontal boundaries of the cubic space or such boundaries as are described on the floor plan relating to the cubic space (s 3(2)). Section 3(2a) further provides that the floor plan may include dimensions of survey information defining a boundary that is external to a building. It should be noted that s 3AB applies to single tier strata schemes.

71 What emerges from this convoluted set of definitions is that:

(a) a strata scheme is defined by a strata plan; a survey-strata scheme by a surveystrata plan;

(b) a lot for a strata scheme is defined as a cubic space; a lot for a surveystrata plan is an area of land defined by dimensions and survey information;

(c) the effect of the definitions of 'lot' and 'floor plan', read with s 3(2), s 3AB and s 5 is that a strata scheme will ordinarily apply to lots created in a respect of a building or buildings; the effect of the definition of 'lot', read with s 5A, is that a surveystrata plan will ordinarily apply to subdivided vacant land (and see s 4(1c); but see also pt III, div 3 in relation to the conversion of single tier strata schemes to survey-strata schemes).

72 The effect of applying the definition of a 'lot' to lots 6 9 is significant. The lots are depicted on a registered strata plan and form part of a strata scheme by which the affected parcel of land is divided in to nine lots. Each lot is a cubic space, the horizontal and vertical boundaries of which are delineated in part by an existing structure (Building A or Building B). Each lot is not land shown as a lot on the strata plan (as is the case for a lot in a surveystrata scheme).

73 A lot in a strata scheme is a statutory construct created in relation to a three-dimensional space. The dimensions of that space are fixed by the surfaces of the walls, floors and ceilings of a building or parts of a building or by other physical features of a building in the case of structural cubic spaces. A lot is not an abstraction defined, for example, by what is depicted or described on the floor plan forming part of the strata plan for a strata scheme. A floor plan merely describes the cubic space and does so by reference to the physical structures that bound the space. It is the space created by those structures that constitutes the lot in a strata scheme.

74 The definition of a lot described on a strata plan by reference to the cubic space bounded by the walls, floors and ceilings of a building or parts of a building reflects the legislative history of the subdivision and strata titling of land and structures on land. The focus of the Strata Titles Act 1966 (WA) (the 1966 Act) was the subdivision and strata titling of parts of a building or buildings that shared common walls. The term 'lot' was defined in that Act to mean, 'A lot shown as such on a strata plan'. The term 'strata plan' was defined to mean a plan that:

(a) is described as such in its title or headings;

(b) shows the whole or any part of the land comprised therein as being divided horizontally into two or more strata, whether or not any such stratum was divided into two or more lots; and

(c) complies with the requirements of s 5 of the Former Act.

A strata plan shall:

(a) delineate the external surface boundaries of the parcel and the location of the building in relation to thereto;

(b) bear a statement containing such particulars as may be necessary to identify the title to the parcel;

(c) include a drawing illustrating the lots and distinguishing them by numbers or other symbols;

(d) define the boundaries of each lot in the building by reference to the floors, walls and ceilings, without necessarily showing any bearings or dimensions of the lot;

(e) show the approximate floor area of each lot;

(f) define any portions of the parcel not within the building that are or are intended to be separate tenements, and used in conjunction with the building or portion of the building.

Unless otherwise provided in the strata plan, the common boundary of a lot with another lot or with common property shall be the centre of the floor, wall or ceiling, as the case may be.

77 Consequently, although a lot was defined as something shown as such on a strata plan, what was shown on the plan was defined by the physical dimensions of a building or portion of a building. As has been seen, a lot in a strata scheme is not defined in the STA by reference to the strata plan but rather, as a cubic space. That reflects an essential characteristic of a lot in strata scheme - it is not an interest in land as such but an interest in a three-dimensional space.

Registration of a strata plan and title to the lots created

78 Lots in respect of subdivided land are created on registration of a strata plan or a surveystrata plan. Section 4(2) STA provides that where a strata plan or a surveystrata plan is registered, the lots comprised in the plan may devolve or be transferred, leased, mortgaged or otherwise dealt with in the same manner and form as land held under the provisions of the Transfer of Land Act 1893 (WA) (TLA). Further, on registration:

(a) the plan is deemed to have been embodied in the Register of Titles and a proprietor will hold his lot and share in the common property subject to:

(i) any interests for the time being notified on the registered strata/surveystrata plan;

(ii) any amendments to lots or common property shown on the plan;

(b) a memorial shall be entered on the certificate of title relating to the parcel of land and thereupon the Registrar of Titles may create and register a separate certificate of title for each lot, together with the share of common property pertaining to that lot;

(c) any dealing affecting a lot has the same effect in relation to the lot as a similar dealing affecting a lot on a plan of subdivision lodged pursuant to s 166 TLA has in relation to such lot.

(See s 4(2) s 4(4); my understanding of the process by which plans are registered and separate titles for the lots thereby created are issued is set out in Moore v Stockland South Beach Pty Ltd [No 2] [2012] WASC 468 [33] and following.)

79 Consequently, the cubic spaces that form the lots comprising a strata scheme are 'embodied' in the Register of Titles on registration of the strata plan - that is, on the plan being 'embodied' in the Register. A registered title is granted in relation to the cubic space comprising each lot on registration of the plan and the proprietor's interest in the space can be dealt with according to s 4(2) STA.

80 Section 5B(1) provides that a strata plan lodged for registration must be accompanied by, among other things, a certificate given by a licensed valuer in accordance with s 14(2). Section 14 concerns unit entitlements.

81 Section 14(1) provides that the unit entitlements of a lot determines the voting rights of a proprietor; the quantum of the undivided share of each proprietor in the common property and the proportion payable by each proprietor of contributions levied under s 36 (levies for the expenses incurred in the control and management of the common property). Section 14(2) requires a valuer to certify that the unit entitlement of each lot bears, in relation to the aggregate unit entitlement of all lots delineated on the strata plan, a proportion not greater than 5% more or 5% less than the proportion that the value of that lot bears to the aggregate value of all the lots delineated on the plan. Section 14(2a) provides that the term 'value' means, in the case of a strata scheme, the capital value within the meaning of the Valuation of Land Act 1978 (WA).

82 Section 4 of the Valuation of Land Act defines the term 'capital value' to mean 'the capital amount which an estate in fee simple in the land might reasonably be expected to realize upon sale'. The 'capital amount' that might reasonably be expected to be realised on a sale is the market value of the land: see, for example, Maludra Pty Ltd v Owners of Windsor Towers [2012] WASAT 160 [103] and following.

83 The long title to the STA states, 'an Act to facilitate the horizontal and vertical subdivision of land and the disposition of titles thereto, to provide for incidental and connected purposes'. The STA fulfils its primary objectives by providing for the drawing up and registration of a strata or survey-strata plan; the creation of lots on registration of a plan; the issue of titles under the TLA to the lots so created and by permitting dealings with the cubic space or land comprising a lot in the same way as dealings may be undertaken in respect of other land registered under the TLA. Consequently, the statutory concept of a lot is at the heart of the STA - in the case of a lot in a strata scheme, the cubic space that constitutes the lot.

84 Selfevidently, the demolition of a building will destroy the cubic space or spaces comprising or comprised in the building. Consequently, the demolition of a Boundary Building will destroy the structures by which the cubic space or spaces forming a lot or lots are bounded (or will destroy part of the boundary to a cubic space that forms a lot or lots). The cubic space is destroyed and with it, the lot that the space previously formed.

85 The subject matter of the strata scheme or the affected part of the scheme and the thing created on registration of the strata plan - the lot or lots - will have gone. There will be no cubic space or spaces capable of forming a lot or lots and nothing that can be part of a strata scheme and which a strata plan can continue to describe. That obviously has consequences for the owner of the affected lot. The proprietor's title is to the lot that was created on registration on the strata plan. The property interests created by s 4(2) are in respect of dealings with a lot.

86 The demolition of a Boundary Building will also affect the interests of other lot owners who are parties to the strata plan and strata scheme. First, it may destroy the boundaries to their lots and/or to their common property. Second, the demolition will affect the capital value of, at least, the affected lot and, therefore, the proportionality required by s 14(2) STA. It is conceivable that the demolition of a Boundary Building will also impact on the capital value of the remaining lots. As the Tribunal observed, changes in the capital value of a lot or lots will affect unit entitlements and the rights and obligations created and imposed by s 14 STA.

(a) The demolition of a Boundary Building will obliterate the cubic space that constitutes a lot. The lot will be destroyed with the building so that there is nothing in respect of which title can subsist. The proprietary interest constituted by a combination of the title to the lot and the power to deal with the lot conferred by s 4(2) STA is effectively extinguished by the demolition of the building and cubic space that comprised the lot. The proprietor will hold some interest in the land but that interest will not be in the cubic space that formed a 'lot' according to the statutory definition.

(b) It follows that there is no lot on which a new structure could be erected after a Boundary Building has been demolished.

(c) Consequently, there is nothing that could be the subject of the prohibition contained in s 7(2) and the approval processes provided for by s 7B and s 103F. It is not just that there would be a vacant lot following demolition, as the respondents feared; rather, the lot as depicted by the strata plan and which is the subject of the strata scheme, with its boundaries defined by the structures of the building that had been demolished, would no longer exist.

(d) Accordingly, the Tribunal could not make an order under s 103F approving the erection of a new building on the site of a Boundary Building that had been demolished.

(e) Further, the Tribunal could not make an order approving the erection of a new building prior to the demolition of a Boundary Building. The effect of an application to SAT in those circumstances would be to seek an order dispensing with an approval that is not required by s 7(2) as the section prohibits a proprietor from erecting a structure on a lot.

88 There are four aspects of s 7 that should be noted in light of those conclusions.

89 First, the analysis is not inconsistent with the reference to a vacant lot in s 7(5) when regard is had to the definition of 'vacant lot' contained in s 7(6).

90 Second, the analysis limits the circumstances in which s 7(2)(a) can apply. The structure concerned cannot be erected in a space that is no longer a lot because of some prior activity of the proprietor that had the effect of 'destroying' the lot.

91 Third, the effect of s 3(2) and s 3AB is that the destruction of a wall, floor or ceiling that adjoins two lots will necessarily destroy either common property (that is, where a space exists between the external surface of the two lots) or part of the cubic space that constitutes the other lot. Section 7 and reg 34 of the Strata Titles General Regulations make no reference to how the proposal will affect common property or the boundary of a lot or lots. That suggests that s 7 was only intended to apply where the proposal only affected a structure that was or was to be located within the boundaries of the cubic space comprising the lot.

92 Fourth, the Tribunal observed that a structure may be altered by the demolition of part of the structure. It considered that s 7 applied to such an alteration. However, a partial demolition that constituted an alteration was to be distinguished from the demolition of an entire building. Nevertheless, the demolition of, for example, a party wall that forms the boundary between two lots will 'destroy' one part of the structure that defines the cubic spaces that form the lots. On the conclusions expressed above, the lots would cease to exist as statutory constructs once the wall had been demolished. Does s 7(1) or the power conferred by s 103F permit such an alteration? If so, does that undermine the conclusions that have been reached regarding the nature of a lot in a strata scheme?

93 Those questions relate to an issue that was raised by the respondents and which is considered in the next section of the reasons. It is convenient to deal further with the issue in that section. It is sufficient to note that, in my view, s 7 and s 103F do not permit any alteration or extension to a structure that affects the boundary of a lot - a limitation to be implied by the STA read as a whole.

94 The conclusions expressed above are sufficient to dispose of the appeal, including any argument that the appellants might be permitted to make in the appeal that the Tribunal had jurisdiction to consider that part of the Application for Approval that concerned the proposed construction of the new townhouses. As the Tribunal found, SAT does not have jurisdiction under s 103F to consider any part of a proposal that involves the demolition of a Boundary Building:

(a) Section 7 and s 103F do not apply to a proposal to demolish a Boundary Building for the reasons given by the Tribunal concerning the meaning of the expression 'alteration of a structural kind to a structure'.

(b) The sections are concerned with proposals to undertake activities within a lot as defined by the STA. The sections cannot apply if there is no lot in existence as a result of a Boundary Building being demolished.

95 I turn now to some of the other issues raised in the appeal. As has been indicated, it not proposed to make findings about all of those issues.

The respondents' submissions on 'incremental' alterations/demolitions

96 The respondents submitted that the argument foreshadowed by the appellants was that SAT ought to have considered the Application for Approval 'in isolation of alteration/demolition issues and by segmenting the Application'. It was said that:

This argument involves a number of non sequiturs, firstly, that if alteration does not cover demolition, then there is no statutory restriction on demolition. As the Tribunal rightly held at [40], demolition would necessarily involve alterations at various points in time before total demolition is reached. So the prohibitions of ss 7(2) and 7(5) would apply. The Appellants' argument on appeal also involves the untenable proposition that SAT should in effect have passed over total demolition to go on to decide on erecting - even though demolition could not have occurred lawfully. And the Appellants have sought to argue that SAT could then decide whether the new buildings would be in keeping with the current ones - but, of course, there would then be 'vacant lots' and the requirements of s 7(5) would apply (respondents' submissions opposing appellants' application for leave to amend, par 26.1).

97 There are four points that can be made about those submissions.

98 First, the submissions suggest that, contrary to the Tribunal's findings in favour of the respondents, SAT has jurisdiction to deal with a proposal to demolish an entire structure as the demolition of the structure is, in practice, merely a continuing series of structural alterations for the purpose s 7 (demolition by incremental structural alterations). Possibly, the submissions reflected a tension inherent in the respondents' position. On the one hand, the respondents had successfully argued that SAT lacked jurisdiction over the SAT Application because the redevelopment proposal included the demolition of Building B - with the consequence that s 7(2) did not prohibit the demolition. On the other hand, the respondents disputed that the appellants could demolish Building B without obtaining the approval of the Strata Company under the STA.

99 Second, the appellants did not submit that s 7(5)(b) would not apply to the proposal to construct new townhouses as lots 6 9 would be vacant following demolition of Building B. The purpose of their undertaking was to allay any concern that they could or would make such an argument.

100 Third, the submission did not reflect the Tribunal's ultimate findings. The Tribunal observed that:

The Tribunal recognises that there may well be circumstances where to undertake an alteration, part of a structure such as a wall, may be necessary and, furthermore, during the act of demolishing a structure, one may be said for a time at least, to be altering a structure.

However, it would in every case be a question of fact and degree and the Tribunal is in no doubt that once the entire building is demolished, as is planned in the present case, one would be well past the point of what could be described as an alteration [39] [40].

101 However, the Tribunal made three findings that were expressed to be its conclusions:

(a) the term 'alteration' when used in s 7(2) does not include 'demolition' when the structure in question is an entire building which is part of a strata plan [66];

(b) where a building is demolished and the proprietary interests of owners in respect of their lots or their share of the common property may be affected, jurisdiction to deal with or interfere with those interests resides solely in the District Court [67];

(c) SAT does not have jurisdiction to make an order under s 103F STA dispensing with approval under s 7(2) where the alteration proposed involves the demolition of a building which may affect owners' propriety interests.

102 The fourth point to be made about the respondents' submissions is that the Tribunal identified how, in its view, the demolition of a building could affect the proprietary interests of lot owners [47] [55]. The respondents accepted the Tribunal's analysis, including that the District Court had jurisdiction under s 28 and s 31 STA to control the proposed demolition of a building where the proprietary interests of lot owners were affected (respondents' submissions opposing appeal, par 22). However, the respondents did not explain how their submission on the application of s 7(2) to a demolition by a series of structural alterations was consistent with the Tribunal's conclusions.

103 The Tribunal's finding that a partial demolition of a structure may constitute an alteration for the purpose of s 7 and s 103F raised a question as to whether those sections permitted an alteration or extension that affected the boundary of a lot or lots. If so, was that inconsistent with the conclusions that have been reached regarding the nature of a lot in a strata scheme?

104 As earlier indicated, in my view s 7 and s 103F were not intended to allow an alteration or extension that would change the boundaries of a lot or lots. A change in the boundaries of a lot or lots is, in effect, a re-subdivision within a scheme. Section 8 provides for such resubdivisions. The procedures prescribed necessarily require a new strata plan to be registered: see s 8A. The amendment of the strata plan has other consequences that are dealt with by s 8B and s 8C. Accordingly, s 7 and s 103F are subject to a limitation implied from the STA read as a whole that an alteration or extension of a structure cannot affect the boundaries of a lot or lots.

105 It may be that lot owners can approve an alteration that temporarily affects the boundaries of a lot or lots under s 7. However, it is unnecessary to decide that question.

Part III STA

106 As the Tribunal found, a proposal to redevelop a subdivided lot or lots will affect the interests of lot owners and the relevant strata scheme. A variation to the scheme or the termination of the scheme and the substitution of a new scheme will be required where a lot or lots are to be redeveloped. Section 28 enables the District Court to order that a scheme be varied or a new scheme be substituted. Section 31 permits the court to terminate a scheme. The Tribunal considered that the District Court was empowered to deal with redevelopment proposals involving the demolition and replacement of entire structures by a combination of s 28 and s 31.

Section 28

107 The wording of s 28 was reproduced earlier. It appears apparent from the remaining provisions of s 28 that the use of the past participle 'is damaged or destroyed' in s 28(1) was deliberate - the District Court's jurisdiction is contingent on a building having been damaged or destroyed. Section 28 would, in my view, allow the District Court to make an order varying a strata scheme to allow for the demolition of a building where the building had been damaged. However, as I read the section, the court is not given power to authorise an activity that will result in damage to, or the destruction of, a building that was not previously damaged. Section 28(3), in particular, indicates the jurisdiction conferred on the District Court is concerned with the consequences of damage to or the destruction of a building that has already occurred. The Court is not given power to authorise or manage an activity - demolition - that will result in an undamaged building being destroyed.

108 It is also to be noted that s 28 recognises that damage to or destruction of a building shown on a registered plan may require a strata scheme to be varied or even terminated and a new scheme implemented. That is consistent with the findings that have been made about the effect of the demolition of a Boundary Building on the interests of proprietors and on the strata scheme.

Section 31

109 The Tribunal did not fully explain its reasoning on the perceived interaction between s 28 and s 31, although reference was made to s 31(6). That section permits the District Court to treat an application under s 31(1) as an application made under s 28 if it considers that an order should not be made terminating a strata scheme. Section 31(6), and the corresponding provision in s 28 (s 28(6)), extend the relief that the District Court may grant on applications made under either s 28 or s 31. However, the sections do not enlarge the subject matters over which the District Court has jurisdiction.

110 As the Tribunal recognised, a proposal to redevelop a lot or lots by demolishing a Boundary Building and constructing a new building will affect the strata scheme so that it will be necessary to vary or terminate the existing scheme. Those are matters over which the District Court has been given jurisdiction. However, I think that there are difficulties in applying s 28 and s 31 to a proposal to redevelop a lot or lots where other proprietors in the scheme are opposed to the development. Those difficulties seemingly include:

(a) In my view, s 28 does not confer jurisdiction on the District Court to authorise the demolition of a Boundary Building or the construction of a new building following the demolition of an undamaged building. The section permits the District Court to make orders varying a scheme or substituting a new scheme where a building shown on a registered strata plan has been damaged or destroyed and to include in the order directions on matters such as the 'reinstatement' in whole or in part of the building.

(b) Section 31 permits the District Court to terminate a strata scheme and to make directions for the winding up of the strata company and the transfer of the scheme land. That is, in substance, a very different subject matter to a proposal by a proprietor or some proprietors to redevelop part of the scheme land in the face of opposition from other scheme proprietors.

(c) It is not apparent that Parliament intended that disputes over such a proposal could be resolved by the District Court under the guise of an application to terminate the strata scheme. The District Court would be first required to adjudicate on whether the proposed development should be permitted to proceed and to then provide for the consequences, ostensibly on an application to wind up the scheme. It is apparent that an application under s 31 will be made in circumstances where not all scheme proprietors agree that the scheme should be terminated (as s 30 permits termination by a unanimous resolution). However, s 28 and s 31 do not provide criteria by which a dispute over a proposal to redevelop a lot or some lots may be determined.

(d) Moreover, neither s 28 nor s 31 refers to the demolition of buildings or to proposals to redevelop lots by demolishing buildings and constructing new buildings.

(e) The Tribunal referred to s 31(3)(g) STA. That section provides that an order made under s 31 shall include directions on any matter in respect of which it is, in the opinion of the District Court, just and equitable to make provision in the order. That section does not, in my view, empower the District Court to approve the redevelopment of a lot by the demolition of a Boundary Building and the construction of a new building as part of an order terminating a scheme and providing for the consequences of termination. The reference to 'just and equitable' directions appears to have been imported from corporate and insolvency law because the termination of a scheme will necessarily require the winding up of the strata company.

111 The upshot is that the STA does not apparently provide a procedure by which a proprietor can obtain approval for a proposal to redevelop a lot by demolishing a Boundary Building and constructing a new building. Section 30 may facilitate a proposal by all lot owners to redevelop the entire scheme land by providing for the termination of the scheme. Some aspects of a redevelopment proposal might also be dealt with by orders made by SAT pursuant to powers conferred by pt VI. However, there is no express power conferred on SAT or the District Court to authorise the proposed demolition of a Boundary Building and the construction of a new building, at least where that is opposed by other scheme proprietors.

112 That is not necessarily a surprising result given the history of the STA. The 1966 Act was concerned with the subdivisions of existing buildings. The present Act was amended to permit the subdivision of vacant land but it is, perhaps, only with the passage of time since the enactment of the 1966 Act that proposals to redevelop stratatitled buildings have begun to emerge.

The court's jurisdiction over the appeal The parties to the appeal

113 The respondents submitted that the appeal was incompetent or lacked utility as 'what is now put to the Court and would go back to SAT in case of a successful appeal, would be a different proposal involving only three of the four proprietors of the back lots and their buildings' (respondents' submissions opposing appeal, par 8).

114 Section 105(1) and s 105(2) of the SAT Act provide that:

(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.

115 In my view, s 105 permits any party to proceedings in SAT to appeal; the section does not prescribe that all parties to the proceedings must join in an appeal before the court can exercise the jurisdiction conferred by s 105. I can see no reason why the section should not be interpreted according to the ordinary rule that any one of a number of joint parties may appeal a decision: Beckett v Atwood (1881) 18 Ch D 54. It is then a matter of procedure whether other parties should be joined in the appeal: Supreme Court (Court of Appeal) Rules 2005 (WA), r 5 and Rules of the Supreme Court 1971 (WA), O 18. Accordingly, I consider that the court has jurisdiction over the appeal even though Inertia is not a party.

116 The respondents' submission turned not so much on s 105 SAT Act as on the Application for Approval. The respondents have either assumed that the new owners of lot 8 do not wish to participate in the proposed redevelopment or that it is not possible for them to so do by, in effect, adopting the Application for Approval and seeking to be joined to the SAT Application should the matter be remitted to SAT.

117 The first of those alternatives appears to be factually incorrect. It is to be inferred from the appellants' submissions that Mr Nixon and the new owners of lot 8 wish to proceed with the proposed redevelopment of their lot according to the proposal contained in the Application for Approval.

118 As to the second alternative, the STA does not appear to provide a mechanism by which applications under s 7B and s 103F can, in effect, be transferred between proprietors of a lot that is the subject of a proposal to erect, alter or extend a structure. Section 103F provides that a proprietor who has applied for but not obtained an approval under s 7B may apply to SAT. In my view, the effect of the section is that:

(a) Each proprietor who wishes to erect a structure on their lot, and who has applied to the Strata Company under s 7B, is separately entitled to make an application to SAT. SAT's jurisdiction in this instance is not contingent on all of the parties to the Application for Approval joining or remaining in the SAT Application. The absence in SAT of a party to an application under s 7B involving a multilot development would be a factor that is relevant to the decision under s 103F but not to the existence of the jurisdiction conferred by that section.

(b) The new owners of lot 8 have not applied for approval under s 7B and accordingly, it would appear that SAT would not have jurisdiction over any proposal for the redevelopment of their lot if the SAT Application was remitted to the Tribunal for determination. However, that does not mean that the appeal necessarily lacks utility. It would be open to the new owners to make an application to the Strata Company under s 7B, to then apply under s 103F and to seek to have their application heard with the SAT Application in the event that the application was remitted to SAT. That possibility is a matter that would have been relevant to the exercise of the court's discretion under s 105(9) SAT Act had the appeal been allowed.

119 The respondents contended that the appeal was not on a question of law for two reasons. First, a question of law could only arise on the application that had been made to SAT. The SAT Application had 'two, interconnected limbs: the first, total demolition of existing four buildings ... and then the second, sequential step of erection of new buildings' (respondents' submissions opposing appeal, par 13). The appellants could not jettison the first limb of their application by amending their ground of appeal to raise a matter that had not been before the Tribunal and which had not, therefore, been decided by it. Second, the appellants had abandoned their argument before SAT - that the expression 'alteration of a structural kind' included the demolition of a structure - and had conceded that SAT had properly construed s 7(2)(b). It followed that SAT had not made an error of law.

120 Section 105(1) SAT Act permits an appeal from a 'decision' of the Tribunal. The characterisation of the Tribunal's decision may be significant in formulating the question of law that is said to arise and which is the subject matter of the appeal. Further, in this instance the question raised by the proposed amended ground of appeal was significantly different from the question posed by the ground of appeal as originally pleaded.

121 SAT's decision could be narrowly stated by reference to the issue as formulated by the Tribunal at [24] of its reasons: SAT did not have jurisdiction under s 103F STA where a proposed alteration involved the demolition of a building that would affect the proprietary interests of lot owners. That is the decision that is embodied in par 1 of the orders made by the Tribunal. It is a decision made solely on the jurisdiction conferred by s 103F read with s 7(2)(b) STA. The corresponding question of law would be whether the Tribunal had power under s 103F to dispense with the requirement for approval imposed by s 7(2)(b).

122 However, Tribunal's decision might be more broadly stated: that it did not have jurisdiction to 'entertain or determine' the SAT Application; that is, it could not make either of the orders sought by the Applicants. Paragraph 2 of the orders made by the Tribunal apparently gave effect to that decision. The decision stated in this broad way reflects the preliminary issue as formulated by the respondents.

123 The question of law on that decision would be whether SAT had jurisdiction under s 103F STA to dispense with any approval that might have been required under s 7 for the Application for Approval. The question entailed the further question of whether the Tribunal could deal with only part of the Application for Approval - that part that concerned stage 2. That is also a question of law as the respondents' submissions make plain. It is a question that concerns the meaning and effect of s 7 and s 103F STA and whether an application under s 103F falls within SAT's review or original jurisdiction.

124 Section 105(2) SAT Act is in substantially identical terms to s 44(1) of the Administrative Appeals Tribunal Act 1975 (Cth) (AAT Act) and s 148 of the Civil and Administrative Tribunal Act 1998 (Vic) (VCAT Act). A substantial body of case law has developed on the meaning and effect of the expression 'on a question of law' for the purpose of defining the appellate jurisdiction from a decision of the Administrative Appeals Tribunal (AAT) and the Victorian Civil and Administrative Tribunal. Decisions concerning the scope of the court's 'appellate' jurisdiction under s 44(1) AAT Act and s 148 VCAT Act have been held to apply to s 105(2): see, for example, Paridis v Settlement Agents Supervisory Board [2007] WASCA 97; (2007) 33 WAR 361 and Commissioner for Consumer Protection v Carey [2014] WASCA 7.

125 I do not propose to canvass the authorities on the application of s 105(2) and its equivalent provisions in other jurisdictions. However, there are some observations that I will make about the respondents' contention that the appellants' proposed ground of appeal (either as originally pleaded or in its proposed amended form) does not raise a question of law because it was conceded that the Tribunal did not err in construing s 7(2)(b) STA.

126 The respondents' contention seemingly equates a question of law with an error of law and the Tribunal's reasons with its decision. The argument put is that the appellants have conceded that there is no error of law to be found within the Tribunal's reasons and, therefore, no question of law could arise on its decision. However, there is a distinction between an error of law and a question of law and between a decision of SAT and the reasons given for the decision. Ordinarily, those distinctions are of no moment. An aggrieved party will search in the reasons for an error that can be characterised as an error of law in order to formulate the question of law that is to be the subject matter of the appeal. Consequently, courts often express their 'appellate' jurisdiction under provisions such as s 105 SAT Act according to whether the appellant has alleged an error of law (the review jurisdiction of the court being characterised as a search for an error of law; the problem that has often arisen being that parties mischaracterise the nature of the error to contend that a pure question of law arises out of an error on a question of mixed fact and law).

127 Nevertheless, the decision of an administrative tribunal and its reasons are conceptually distinct, as are a question of law and an error of law. The distinctions were explained by Perram J in Civil Aviation Safety Authority v Central Aviation Pty Ltd [2009] FCA 49; (2009) 253 ALR 263.

128 The question that arose in that case was whether an admitted failure by the AAT to give adequate reasons constituted an 'error of law'. Perram J noted that the Full Federal Court had held that the failure to give adequate reasons constituted an error of law (Dornan v Riordan (1990) 24 FCR 564) but that Finkelstein J had expressed a contrary view in Comcare Australia v Lees [1997] FCA 1415; (1997) 151 ALR 647. His Honour indicated a tentative preference for the view taken by Finkelstein J but held that, in any event, the question of whether the AAT had provided adequate reasons, as required by s 43(2) AAT Act, was a 'question of law' within the meaning of s 44(1) of the AAT Act. In reaching that conclusion, his Honour observed:

[31] First, the reasons which attend an administrative decision are conceptually distinct from that decision and it is the decision, and not the reasons which accompany it, which is the subject of judicial review or, as here, appeal under s 44. The reasons have no legal consequences in themselves. Rather, they provide material from which arguments about the correctness of a decision may be crafted. Their legal relevance is, therefore, derivative from the decision to which they are appurtenant. That derivative quality is illustrated by the circumstances in they are admissible.

...

[33] Second, once that derivative nature is understood it must follow that the legal requirements attending the production of reasons need have no necessary connexion with the legal requirements attending the decision. A decision accompanied by perfectly adequate reasons may be riddled with legal errors just as a decision which is accompanied by inadequate reasons may be legally impeccable. The fallacy in the view that the provision of inadequate reasons is an error of law in the decision springs from the conflation of rules concerned with the making of the decision itself with rules concerned with the provision of reasons ... This is not to say that questions of law do not arise from the operation of rules about the provision of reasons. It is only to say that such questions arise dehors the decision and cannot be errors in the decision itself.

[34] However, as I have said, the question of whether the tribunal's reasons are adequate is a 'question of law'. More formally, the question is whether the tribunal has complied with its statutory duty under s 43(2) of the AAT Act. That is, without doubt, a question of law even if a failure to provide adequate reasons might not involve an error of law in the decision of the tribunal. Thus the question of the correctness of the decision in Dornan does not arise for consideration in the context of an appeal under s 44 where what is required is not the identification of an error of law by the Tribunal but rather the existence of a question of law for the consideration of the Court. (emphasis added)

129 That analysis suggests that the Tribunal's decision might be broadly characterised by reference to the preliminary issue as formulated by the respondents and accepted by SAT and by the orders that were sought in the SAT Application. On that basis, the decision the subject of the appeal was the decision of the Tribunal that it lacked jurisdiction to determine the SAT Application under s 103F STA, read with s 7(2) - that is, both s 7(2)(a) and s 7(2)(b). Whether the Tribunal had jurisdiction to determine the application under those sections is a question of law. It is a question that would properly engage and form the subject matter of the court's jurisdiction under s 105 SAT Act. The issue to be determined would be whether the Tribunal's decision that it lacked jurisdiction was wrong on a proper construction of the relevant provisions of the STA; see, for example, BP Australia Pty Ltd v Contaminated Sites Committee [2012] WASC 221 [46] (Martin CJ).

130 However, that possibility needs to be further considered in light of the shift in the appellants' case that was foreshadowed by the proposed amended ground of appeal.

131 There are a number of authorities that have considered the circumstances in which an 'appellate' court, exercising review jurisdiction, can consider a question of law that was not raised in an administrative hearing or in which it can identify an error by reference to a point taken for the first time in an appeal. I do not intend to consider all of the relevant authorities. However, I note that:

(a) Reference is often made to the pithy observation of Gummow J in Federal Commissioner of Taxation v Raptis [1989] FCA 381; (1989) 19 ALD 726 that 'there must be some difficulty ... in finding as "error of law" in the failure in the Tribunal to make a finding first urged in this court' (728). In Comcare v Davies [2008] FCA 393, Flick J referred to Raptis and held that 'no "question of law", it is considered, arises in circumstances of the present appeal where the Tribunal did not resolve an issue or did not make findings of fact in respect to other forms of "suitable employment" where no such contention was advanced before it' [21].

(b) It is likely that Gummow J did not intend to identify a rule of strict application. His Honour's observation was not expressed in absolute terms - 'there must be some difficulty'. In any event, the Federal Court has recognised that a question of law in respect of an administrative decision may arise as a consequence of an argument first made on appeal from the AAT: see, for example, Ferriday v Repatriation Commission (1996) 69 FCR 521; (1996) 150 ALR 67; Repatriation Commission v Warren [2008] FCAFC 64; (2008) 167 FCR 511; (2080) [2008] FCAFC 64; 246 ALR 279 and Kuswardana v Minister for Immigration and Ethnic Affairs [1981] FCA 66; (1981) 35 ALR 186. Lindgren and Bennett JJ identified in Warren various factors that will 'more readily permit a matter to be raised for the first time on appeal from the Tribunal' [78]. The Full Federal Court accepted their Honours' analysis in Hussain v Minister for Foreign Affairs [2008] FCAFC 128; (2008) 169 FCR 241 and in Culley v Australian Securities and Investments Commission [2010] FCAFC 43; (2010) 183 FCR 279.

(c) In Ferriday, the respondent sought to raise on appeal a point of statutory construction that had not been taken in the AAT. Lee J allowed the point to be argued:

I accept that the point sought to be raised by crosscontention was central to the task to be performed by the Tribunal, and of similar character to an issue of jurisdiction. Unless fairness or prejudice may result that could not be remedied by an order for costs and it is in the interests of justice to do so, leave may be given to raise such an argument (FCR 527; ALR 72).

His Honour considered that a point going to a 'threshold issue' to be resolved as a preliminary step in determining the applicant's claim could be raised for the first time on appeal. See also Faull v Commissioner for Social Housing for the ACT and Residential Tenancies Tribunal [2013] ACTSC 121 [155].

(d) One matter identified by Lindgren and Bennett JJ in Warren as more readily permitting a question to be raised for the first time on appeal was that the matter went to a 'condition precedent' to the availability of a power, the exercise of which will have a serious impact on the individual [78].

(f) Similar issues have arisen in relation to appeals to the Supreme Court of New South Wales from decisions made by the Consumer, Trader and Tenancy Tribunal (CTTT). An appeal from the Tribunal is allowed 'if, in respect of any proceedings, the Tribunal decides a question with respect to a matter of law' (the Consumer, Trader and Tenancy Tribunal Act 2001 (NSW) s 67). In Smith v Collings Homes Pty Ltd [2004] NSWCA 75, Handley JA observed, 'It does seem clear, on any view, that the section prevents a new point of law being taken for the first time on appeal' [61]. That observation was cited with apparent approval by Basten JA (with whom Mason P agreed) in Grygiel v Baine [2005] NSWCA 218. In that case, the appellant sought to raise for the first time in the appeal that the CTTT had jurisdiction under a particular statute. Basten JA held that the appellant could not contend that the Tribunal had erred by not exercising jurisdiction under the statute. His Honour observed that, '[a]n important limit on the right of appeal is that it does not extend to matters which have not been the subject of decision by the Tribunal' [80] and continued:

[I]t may be necessary to distinguish between a conclusion upholding jurisdiction on a ground which is legally flawed, where there is an alternative basis for that conclusion and a decision denying that the Tribunal had jurisdiction in circumstances where there was an alternative basis to that considered, which could have given rise to a different conclusion. The present case falls into the latter class: the Claimant accordingly cannot obtain relief on the basis of the alternative argument [82].

(g) In Kostas v HIA Insurance Services Pty Ltd [2010] HCA 32; (2010) 241 CLR 390, the High Court held that an appeal under s 67 of the Consumer, Trader and Tenancy Tribunal Act extends to implicit decisions and those that were a necessary step in the reasoning of the Tribunal even if the point was not in contention or was not identified and argued.

132 Two points would seem to emerge clearly from those brief observations. First, a party cannot be prevented on a review under provisions such as s 105 SAT Act from contending that an administrative tribunal lacked jurisdiction on a ground that had not been previously argued. The review court cannot overlook the lack of jurisdiction merely because the aggrieved party initially failed to properly identify the relevant limitation on the tribunal's powers.

133 Second, the High Court has indicated that the notion of what constitutes the decision of an administrative tribunal is not to be narrowly construed. That does not necessarily mean that the distinction drawn by the New South Wales Court of Appeal in Grygiel v Baine between an argument raised for the first time on appeal that a tribunal lacked jurisdiction and a new point to the effect that a tribunal had erred by failing to exercise jurisdiction should not be applied. The public interest in finality might suggest that an aggrieved party should not be permitted to raise a new ground on appeal for contending that a tribunal ought to have exercised jurisdiction over a matter when the tribunal had correctly decided that it lacked jurisdiction according to the grounds that had been relied on before it.

134 Several issues arise from these brief observations. Should the appellants be given leave to amend because the point that they seek to raise concerns a threshold issue to be resolved as a preliminary step or a condition precedent to the availability of a power, the availability of which will have a serious impact on their proprietary interests? Has the Tribunal impliedly decided that it lacks jurisdiction under s 7(2)(a) as well as under s 7(2)(b)? Do the comments of High Court in Kostas have no application because the appellants seek to raise not merely a fresh point but a whole new case? Is the distinction drawn in Grygiel v Baine meaningful and if so, are there circumstances in which it should not be applied? For example, the public interest in finality is expressed in the principles of res judicata and issue estoppel. However, in this instance there is no reason why the appellants could not make a fresh application to the Stata Company and to SAT if the argument that they now seek to make is correct. If that is possible, what is the utility in requiring a fresh application to be made rather than remitting the matter back to SAT? Moreover, what is the benefit to the parties in not determining the substantive point now sought to be raised by the appellants?

135 These and related issues, along with the authorities concerning the circumstances in which an appeal court exercising a review function may permit a party to raise a new argument in the 'appeal', were not canvassed by the parties in their submissions. I do not consider that it would be in the interests of the parties for further expense to be incurred in providing additional submissions on the issues and authorities given that I have concluded that the appeal should not be allowed even if the appellants were granted leave to amend their ground of appeal. Accordingly, I do not propose to finally determine the question of whether the appellants should be granted leave to amend. It is for that reason that I have also decided that the appellants should not be granted leave to appeal.

136 There is, however, a final issue on which I wish to comment. That concerns the respondents' submissions concerning the decision made by the Strata Company on the Application for Approval and the jurisdiction of SAT.

The Strata Company's decision and the jurisdiction of SAT

137 The respondents argued that the SAT Application was made in SAT's review jurisdiction with the result that SAT could only review the decision made by the Strata Company; the Strata Company's decision was on the Application for Approval; the Application for Approval involved stage one (demolition) and stage two (construction) and accordingly, SAT could not separately consider whether it should make an order dispensing with any approval that might be required under s 7(2)(a).

138 Section 14 SAT Act provides that a matter in which the Tribunal has jurisdiction comes within either its original or its review jurisdiction. Section 15(1) states that if the matter that an enabling Act gives the Tribunal jurisdiction to deal with does not involve a review of a decision, the matter comes with the Tribunal's original jurisdiction. Section 17(1) provides that if the matter that an enabling Act gives the Tribunal jurisdiction to deal with is a matter that expressly or necessarily involves a review of a decision, the matter comes within the Tribunal's review jurisdiction.

139 Section 103F(3) states that SAT may make an order under s 103F if satisfied that the approval required by s 7 should have been given under s 7 but has been unreasonable withheld. Accordingly, SAT is required to review a decision made by the strata company (and note that the resolution considered pursuant to an application under s 7B is referred to as a 'decision' of the strata company - see s 7B(5) and s 7B(7)). That is notwithstanding that it is not easy to equate the procedures contained the SAT Act in pt 3, div 3, subdiv 2 with a decision made by a strata company under s 7.

140 The Application for Approval understandably referred to the two stages of the proposed redevelopment. However, the minutes recorded that the Applicant' motion failed as the Application for Approval 'was not in keeping with development'. That is obviously a reference to s 7(5)(b)(i) STA. That section provides that proprietors may refuse to approve a proposal where carrying out the proposal will result in a structure that is visible from the outside the lot and that is not in keeping with the rest of the development. Consequently, the Strata Company's decision was concerned with what was to be constructed rather with the demolition of the existing townhouses. It was, of course, the new townhouses that would constitute the structures that were considered by the respondents to not be in keeping with the development.

141 The demolition of Building B was, of course, a necessary step in the proposed redevelopment. However, the decision of the Strata Company was, in substance, concerned with the result of the proposal - the erection of new structures that were considered by the respondents to be out of keeping with the development. In my view, SAT could have separately considered whether an order should have been made under s 103F, read with s 7(2)(a), if those sections had applied to the proposed redevelopment. The decision made by the Strata Company on the Application for Approval did not limit SAT's jurisdiction in the way that the respondents contended.