[23] In my view, for the reasons that I have given both in these reasons and in argument, the present dispute is one that is classically the kind of dispute that should be referred to mediation. It therefore seems to me that, both because of the availability of mediation and because of the availability of a specialist tribunal to deal with the dispute, this Court should, in any event, notwithstanding what I have said about the serious question to be tried, decline to grant injunctive relief."
17 In support of his submission that the Court should exercise its discretion in favour of the defendant, Mr Hicks also drew my attention to an affidavit of Beth McIntyre, the solicitor for the defendant, sworn 31 August 2009. In that affidavit, Ms McIntyre has deposed that the defendant has now engaged its building consultant to call for competitive tenders for the rectification of defects and that it has been directed to inform the tenderers that the rectification of all the defective balustrades is to be the first priority in each of their programs for the rectification works. She has also deposed that on the basis of the current timetable, the defendant will convene an extraordinary general meeting on 1 October 2009 in order to decide on the appointment of the tenderer and to make arrangements for the execution of the contract. These facts were said to support the granting of a stay, as it now appears that the balustrades will be repaired in the very near future.
18 Mr Hicks did not submit that the commencement or prosecution of these proceedings constituted an abuse of the Court's process. Nor did he submit that its continuation prejudiced the defendant in any way in relation to the prosecution of the proceedings against the builders. He did, however, submit that in the exercise of its discretion, the court should take into account the apparent unfairness of permitting the owners of these two units in the apartment block to obtain what might amount to an advantage or priority over the owners of the other units simply because they have brought these proceedings, while the owners of the other units were content to permit the defendant to pursue the proceedings against the builders for the benefit of all owners as a whole.
19 Despite the inherent attractiveness of these submissions, particularly of the last-mentioned submissions, in the end I have formed the view that the stay sought by the defendant ought not be granted. In reaching that conclusion, I was ultimately persuaded by Mr G. A. Sirtes SC, who appeared for the plaintiffs, that in all of the circumstances, it would not be appropriate for me to stay these proceedings inter alia for the following reasons.
20 First, Mr Sirtes noted that unlike in some other pieces of legislation, there is no express provision in the Act that requires an owner of a unit to first exhaust his or her rights under the procedures provided by the Act before commencing proceedings in this Court. While those procedures are available to an owner, there is no express obligation or requirement to take advantage of them.
21 Secondly, he submitted that contrary to the submissions made by Mr Hicks, the provisions of Chapter 5 of the Act do not confer on the Tribunal any power to award damages.
22 As I have already noted, by reason of section 138(3)(d), an Adjudicator has no such power. Insofar as any matter is referred by an Adjudicator to the Tribunal, pursuant to section 164(1) of the Act, Mr Sirtes points out that as is provided by section 184(1), the Tribunal has the same powers as does an Adjudicator. In other words, the restrictions imposed on the powers of an Adjudicator by section 138(3)(d) carry over to limit the powers of the Tribunal where the Tribunal is exercising the functions of an Adjudicator.
23 Further, he submitted that where the Tribunal is exercising its appellate jurisdiction from a decision of an Adjudicator pursuant to section 177(1) of the Act, and where section 188(1) applies, the words "ancillary or consequential provisions" need be construed narrowly, particularly in light of the express provision of section 138(3)(b), and also keeping in mind that an order for damages is a form of substantive relief which could not be categorised as being merely of an ancillary or consequential nature.
24 In support of his submission, Mr Sirtes drew to my attention the decision of Brereton J in Seiwa Pty Ltd v Owners Corporation Strata Plan 35042 [2006] NSWSC 1157 at [24] where his Honour expressly stated that the Tribunal has no power to award damages.
25 It might be said that as the evidence presently stands, the plaintiffs' claim for damages is somewhat ephemeral. That evidence is limited to an unquantified assertion by the second plaintiff to the effect that she is suffering financial loss by not being able to move into her unit as a consequence of the hazard constituted by the defective balustrades.
26 The only other claim presently being made is that both plaintiffs are suffering a loss of amenity for which an award of damages could be awarded as a solatium: Westpoint Management Limited v Chocolate Factory Apartments Limited [2007] NSWCA 253, per Giles JA at [46].
27 Nevertheless, Mr Sirtes submitted that at this stage, it is not appropriate for me to consider the strength of the plaintiffs' claim for damages and that, so long as the claims satisfy the tests set out in cases such as General Steel Industries Inc. v Commissioner for Railways (NSW) (1964) 112 CLR 125, that is all that is required for the moment.
28 Although the apparent strength or weakness of the plaintiffs' claim for damages is a matter that I am entitled to take into account in the exercise of my discretion in whether or not I grant a stay, I accept Mr Sirtes' submission and find that the test in General Steel is met.
29 Thirdly, Mr Sirtes submitted that as a matter of discretion, it would not be appropriate to require the plaintiffs to exhaust their remedies under Chapter 5 of the Act as there is no "dispute" between the parties. He submits that it is clear, for the purposes of section 138(1), that the defendant has failed to exercise a function conferred on it by the Act in not attending to the repair of the balustrades. He drew my attention to the decisions of Justice Brereton in Seiwa and in Stolfa v Owners Strata Plan 4366 [2009] NSWSC 589, where his Honour made clear his view that an owners corporation is under an absolute duty to maintain the common property and to keep it in a state of good and serviceable repair, and where he also held that this duty also requires an owners corporation to do things even if it is not for the benefit of the proprietors as a whole or even a majority of them, and benefits one lot more than the others.
30 In answer to that submission, Mr Hicks raised a point that may, at some point of time, require further judicial consideration. He noted that in the present case, there were numerous balustrades requiring rectification at what I understand to be a very substantial cost. Further, it was considered by the defendant (presumably on legal advice) that third parties, namely the builders, were liable for the cost of their rectification (as has in fact been found to be the case).
31 The foregoing is not an uncommon occurrence in this State. It would not be unusual to find that at an early stage in its corporate life, an owners corporation has insufficient funds of its own to attend to costly rectifications. In view of the limitations imposed on an owners corporation in relation to mortgaging or otherwise encumbering common property, I expect that it would be difficult for an owners corporation to obtain funds by way of a loan. The only other avenue for raising such funds would be to strike a levy (which might be substantial) to raise the necessary funds. The obligations imposed by any such levy might cause significant hardship to its members, many of whom may default and cause a consequential disruption to the owners corporation and to its members generally.
32 It may well be arguable (although I do not express any view as to the merits of such argument) that in such circumstances, adopting a course of the kind presently adopted by the defendant may constitute sufficient compliance with the obligations imposed on an owners corporation by section 62 of the Act.
33 Were that issue to be raised in the proceedings presently before me, being an issue of law, it would in my opinion be desirable to have that issue determined by this Court rather than by an Adjudicator or the Tribunal, or by the District Court to which an appeal lies from the orders of a Tribunal, but only on limited grounds.
34 In other words, although perhaps not exactly for the reasons Mr Sirtes puts forward, I am of the opinion that this is yet another reason why these proceedings ought not be stayed.
35 Finally, it was submitted that in the exercise of my discretion, I ought not in any event stay these proceedings. It seems to me that there are a number of factors which would support that submission: