The Western Australian Supreme Court decision of Tipene v The Owners of Strata Plan 9485  WASC 30 (Tipene) highlights the significance of the definition of the term “lot” under the Strata Titles Act 1985 (WA) (STA) insofar as it relates to a strata scheme and raises some issues which the owners of strata titled properties, surveyors, strata companies and managers, should be mindful of.
The parties are the owners of townhouses. The townhouses form two buildings. Building A comprises five single storey units and Building B contains four two storey units.
Strata plan no. 9465 (Strata Plan) was registered over the land upon which the two buildings were erected. The Strata Plan provided for nine lots, being:
(together, the Lots).
The boundaries of the Lots were initially defined in the Strata Plan by the floors and walls of the two buildings, however following a merger of some of the common property in the scheme, the boundaries of the Lots were partly defined by the structure of the buildings and partly by survey boundaries.
In 2011 the owners of lots 6 – 9 (the Lots 6 – 9 Owners) proposed to:
The Lots 6 – 9 Owners applied to the strata company for approval for the proposed development. The owners of lots 1- 5 (the Lots 1 - 5 Owners) objected this application.
At first instance, the State Administrative Tribunal (Tribunal) had to consider whether the Tribunal could make an order under section 103F of the STA dispensing with approval under section 7(2) of the STA if the alteration proposed involves the demolition of the structure.
The Tribunal dismissed the Lots 6 – 9 Owners’ application on the basis that:
The Lots 6 – 9 Owners appealed the Tribunal’s decision to the Supreme Court of Western Australia.
Corboy J ultimately dismissed the appeal and held that the Tribunal did not have jurisdiction over the application regardless of whether section 103F STA is read with section 7(2)(a) or section 7(2)(b) of the STA.
However, in reaching this decision, Corboy J made certain “findings” and “observations” that provide guidance to owners of strata lots and the redevelopment of strata lots.
Corboy J considered the effect that the demolition of a building that forms the boundary or part of boundaries of a lot would have on the proprietary interests of the lot owners who comprise the affected strata scheme.
Corboy J confirmed that the essential characteristic of a lot in a strata scheme is not an interest in land as such, but an interest in 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. In particular, Corboy J noted that a lot is not an abstraction defined 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.
The strata lot comes into existence on the registration of the strata plan. However, the strata plan cannot be registered until the building comprising the strata lots has been completed. This was a crucial point in the court’s decision.
According to Corboy J it, therefore, followed that:
This decision clarifies the position with respect to the redevelopment of strata lots. In our opinion, the decision is correct and applies logical reasoning.
The lessons from this case are: