Benson v The Owners, Strata Plan No 17676

NCAT Appeal Panel|2022-10-06

ingrose, General Member File Number(s): SC 21/35861; SC 22/06752

What is this appeal about?

This is an appeal by Ms Georgette Benson (Ms Benson or the Appellant) against a decision of the Consumer and Commercial Division of this tribunal. The appeal raises the issue of the extent to which a tribunal, in reaching its decision and in providing reasons for that decision, must engage with the submissions of the parties and provide adequate reasons for its decision.
Ms Benson is the owner of a strata unit at Wollstonecraft in Sydney, being lot 8 in the relevant strata plan. Lot 8 comprises the north-western corner of the top storey of a 3-storey strata building, together with a roof deck on the south-eastern corner of the top storey. On or near the boundary of that roof deck there is a brushwood fence. Ms Benson wishes to retain brushwood fencing on that roof deck.
The proceedings had their origins in a policy adopted some time ago by the respondent to the appeal, the Owners-Strata Plan 177676 (the owners' corporation or Respondent). As we understand it, that policy was to replace all brushwood fencing on or near the boundaries of lots with structures having materials and dimensions which in the owners' corporation's view accorded more fully with current safety, structural and building standards. Ms Benson has maintained sustained resistance to those proposals insofar as they will require the replacement of the brushwood fence on the boundary of her lot.

The grounds of appeal

Ms Benson, through her solicitor Mr Russell, asserts in an annexure to her Notice of Appeal that in making those orders the Tribunal erred at law, on two principal grounds: 1. the Tribunal had failed to engage with, or to engage adequately with, her case as respondent and cross claimant. It was contended on Ms Benson's behalf that although her case had been put to the Tribunal in detail, the Tribunal's reasons for decision (the Reasons) had merely described the case; that is, the Tribunal had merely recited or described Ms Benson's contentions and had not adequately engaged intellectually with them, in the sense of dealing with them by way of a proper assessment or a specific response (Ground 1); and 2. even if it could be said that the Tribunal had in fact adequately engaged in that sense, the Reasons did not adequately reveal how it had done so and it must follow that the Tribunal has failed to provide adequate reasons for its decision.(Ground 2)
Each of Grounds 1 and 2 was said to have resulted in an error of law by the Tribunal. There are 3 further grounds of appeal, each pleaded as an error of law, described in the annexure to the Notice of Appeal, which in essence are that the Tribunal was also in error by reason of : 1. its failure to take into account the mandatory considerations in section 149 (2) of the SSM Act (Ground 3); 2. its denial of procedural fairness to Ms Benson (Ground 4); and 3. making of a decision on the cross-claim which was legally unreasonable (Ground 5).
Section 149(1) and (2) of the SSM Act are relevant and are in the following terms: (1) The Tribunal may make an order prescribing a change to a by-law if the Tribunal finds - (a) on application made by an owner of a lot in a strata scheme, that the owners corporation has unreasonably refused to make a common property rights by-law, (b) on application made by an owner or owners corporation, that an owner of a lot, or the lessor of a leasehold strata scheme, has unreasonably refused to consent to the terms of a proposed common property rights by-law, or to the proposed amendment or repeal of a common property rights by-law, or (c) … (2) In considering whether to make an order, the Tribunal must have regard to - (a) the interests of all owners in the use and enjoyment of their lots and common property, and (b) the rights and reasonable expectations of any owner deriving or anticipating a benefit under a common property rights by-law.
At the opening of the appeal hearing Mr Russell indicated that he is content that we regard what we have identified as Grounds 3 to 5 as raising issues the resolution of which must follow our determination of the two principal grounds, being Grounds 1 and 2 identified above and that accordingly Grounds 3 to 5 were not separately pressed. That has been helpful in clarifying the actual grounds of appeal and in expediting the course of the appeal hearing.
Ms Benson does not seek leave to appeal.

The issues on appeal and our decisions

It therefore falls to us to decide whether the appeal should be allowed on the basis of an error of law, on Ground 1 or Ground 2 described above or otherwise and what orders should be made.
We have decided that, for the reasons which follow, neither of the grounds of appeal has been made out, that there has been no error of law on any other basis and that accordingly the appeal should be dismissed.

The relevant law: nature of NCAT appeals, questions of law and fact

Internal appeals in this Tribunal may be made as of right on a question of law, and otherwise with permission (that is, the "leave") of the Appeal Panel: s 80(2) Civil and Administrative Tribunal Act 2013 (NCAT Act).
As has been noted in Robinson and Lucy's "NCAT Practice and Procedure", 2nd edition 2020, at [NCATA80.30], p182, there is no satisfactory test of universal application to define the concept of an error of law (citing Collector of Customs v Agfa-Gevaert Ltd (1996) 186 CLR 389 [1996] HCA 36 at 394). In that case it was noted that cases in the United Kingdom had seen the need for a pragmatic approach to the distinction between error of law and error of fact.
In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 the Appeal Panel set out at [13] a non-exclusive list of questions of law: 1. whether there had been a failure to provide proper reasons; 2. whether the Tribunal had identified the wrong issue or asked the wrong question; 3. whether a wrong principle of law had been applied; 4. whether there had been a failure to afford procedural fairness; 5. whether the Tribunal had failed to take into account relevant (i.e., mandatory) considerations; 6. whether the Tribunal had taken into account an irrelevant consideration; 7. whether there had been no evidence to support a finding of fact; and 8. whether the decision was so unreasonable that no reasonable decision-maker would have made it.

Ms Benson's case on Ground 1 (failure to engage)

Ms Benson's case is contained in written submissions from her solicitor, Mr Russell, supplemented by his oral submissions at the appeal hearing.
Essentially her case in relation to Ground 1 is that the only evidence of intellectual engagement by the Member with the submissions put to him in support of Ms Benson's case appears in the penultimate paragraph of the Reasons, being paragraph [160], but that paragraph read as a whole contains no intellectual engagement with her submissions and indicates no attempt to do so or to apply the relevant principles to the facts of the case.
Paragraph [160] is in the following terms: [160] Applying these principles, the Tribunal is not satisfied that Ms Benson has established that the Owners Corporation's opposition to the proposed By-law was unreasonable and her cross-claim must therefore be dismissed. It follows that the Tribunal is also satisfied that the Owners Strata Plan 17676 has established its entitlement to the orders sought in the initial application SC 21/35861, although it could not be said that the entitlement to those orders would clearly have been established prior to the Special Resolution passed on 30 December 2021.
The Appellant, through her solicitor, relied particularly on the following cases: 1. the recent Appeal Panel decision in Marinko v The Owners-Strata Plan No. 7596 [2022] NSWCATAP 187 (Marinko), where it was confirmed, at [30] that there will be a failure to accord natural justice or a constructive failure to exercise jurisdiction, or both, where the Tribunal does not respond to submissions which have been "squarely raised" and seriously advanced; 2. Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; (2003) 77 ALJR 1088 Dranichnikov), a High Court decision which was relied on by the Appeal Panel in Marinko and in which, at [24], Gummow and Callinan JJ with whom Hayne J concurred observed as follows: To fail to respond to a substantial, clearly articulated argument relying upon established facts was at least to fail to accord Mr Dranichnikov natural justice; 1. Weal v Bathurst City Council & Anor [2000] NSWCA 88 (Weal), where Giles JA at [80] observed that taking relevant matters into account called for more than simply adverting to them; 2. SZRLO v Minister for Immigration and Multicultural Affairs [2013] FCA 825 where Barker J at [49] observed that an "active intellectual process" by the tribunal was necessary, requiring the tribunal to give relevant considerations genuine consideration; and 3. Minister for Immigration and Multicultural Affairs v Khaadgi [2010] FCAFC 145; (2010) 190 FCR 248 where the Full Federal Court criticised any tendency to give a particular submission; "cursory consideration only so that it may simply be cast aside despite its apparent relevance".

Ms Benson's case on Ground 2 (Inadequate reasons for decision)

Grounds 1 and 2 are in many respects interconnected.
In summary it is contended for Ms Benson in her written that although the Tribunal recited various submissions by the parties, it provided no commentary on those submissions and that it is therefore impossible to determine which of Ms Benson's submissions was upheld or rejected, or the grounds for evaluation of them, or to determine the Tribunal's reasoning process. That is asserted to constitute a failure by the Tribunal to provide adequate reasons for decision.

The owners' corporation's case on appeal

The owners' corporation's case on appeal is contained in written submissions from its solicitor, Mr Bacon, supplemented by his oral submissions at the appeal hearing.
As to Ground 1 (lack of adequate engagement) the owners' corporation denies that the Tribunal was in error of law in any of the ways asserted by Ms Benson and particularised in the Grounds of Appeal and it supports the decisions and order made by the Tribunal. It seeks an order that the appeal be dismissed. In its written submissions the owners' corporation also asks for directions and orders to enable it to be heard as to the question of costs of the appeal.
In brief summary, the owners' corporation contends that paragraphs [147] to [154] of the Reasons, which describe the reasons for the owners' corporation's reasons for its opposition to the By-Law proposed by Ms Benson, should be taken into account and read with other substantial portions of the Reasons and when that approach is adopted it is evident that the Member did intellectually engage with the case for each party in great detail.
The owners' corporation contends that a consideration of paragraphs [26]- [36]; [55]-[58]; [89]-[103] and [143]-[160] of the Reasons demonstrates that the Tribunal did grapple with the Appellant's case in detail and that it "engaged in the intellectual exercise" and then succinctly set out the competing merits on the issues for decision at paragraphs [137]- [142] of the Reasons.
As to Ground 2 (inadequate reasons for decision), Mr Bacon for the owners' corporation contends that this issue had to be judged from a reading of the Reasons as a whole and that when that is done the Reasons are adequate.
Mr Bacon asks us to bear in mind that upon the Tribunal making its order no.1 (being the section 124 order allowing the members' corporation access to Ms Benson's lot to carry out the works in dispute), Ms Benson's cross claim, which had sought an order under section 149 prescribing a by-law in the same terms as that unanimously defeated at the EGM on 30 December 2021, (being a by-law to permit brushwood fencing on the rooftop deck) became otiose.

Member's engagement with Ms Benson's case and adequacy of the Reasons

The Reasons are comprised of 42 pages and 161 paragraphs. In our view, it would not be unreasonable to describe them as "detailed" reasons for decision, in light of the nature of the dispute to which they relate and the respective cases put to the Tribunal by the parties. They record the relevant facts of the matter, the principal items of evidence before the Tribunal, the course of the parties' dispute, the meetings and resolutions of the owners' corporation and its strata committee, the submissions of each of the parties, relevant statutory provisions and case law authority relevant to those statutory provisions. They conclude with findings on the relevant issues and the making of orders.
Given the nature of Ms Benson's appeal and particularly the fact that it is directed at Member's degree of intellectual engagement with her case and accordingly brings into consideration the adequacy of the Reasons, it is appropriate to provide a brief "road map" to the contents of the final 10 pages and 22 paragraphs of the Reasons, which contain the findings and conclusions on each of the two claims. 1. At paragraphs [139]- [142], on pages 33 -35 of the Reasons, findings are made as to the first claim, SC 21/ 35861, the application for an order under section 124 of the SSM Act to allow the owner's corporation access to Ms Benson's lot. At [141]-[142] conclusions are then reached as to that first claim. 2. Commencing at paragraph [143], the Tribunal deals with Ms Benson's cross-claim. The relevant facts and orders sought are then described at paragraph [144]. 3. At paragraphs [145]-[154], which comprise a little over 3 pages, the parties' respective submissions are summarised. 4. Then, at paragraph [155], section 149 of the SSM Act is set out and at paragraphs [156]-[159], 3 relevant cases, being Olive Grove Investments Holdings Pty Ltd v The Owners-Strata Plan 5942 [2015] NSWCATAP 120 (Olive Grove Investments), The Owners Strata Plan 69140 v Drewe [2017] NSWSC 845 (Drewe) at [43] and Capcelea v The Owners Strata Plan 48887 [2019] NSWCATCD 27(Capcelea) are discussed. 5. There follows a statement of the Member's conclusions at [160],which is the penultimate paragraph of the Reasons. Because of its importance to the issue under consideration, we repeat the terms of that paragraph: [160] Applying these principles, the Tribunal is not satisfied that Ms Benson has established that the Owners Corporation's opposition to the proposed By-law was unreasonable and her cross-claim must therefore be dismissed. It follows that the Tribunal is also satisfied that the Owners Strata Plan 17676 has established its entitlement to the orders sought in the initial application SC 21/35861, although it could not be said that the entitlement to those orders would clearly have been established prior to the Special Resolution passed on 30 December 2021.
Paragraph [160] of the Reasons is the cornerstone of Ms Benson's assertions of error of law by reason of the Member's failure to engage with her case as the applicant and his failure to provide adequate reasons for decision. We have therefore devoted some time to assessing it.
A central contention in the written submissions for Ms Benson is as follows: [12] Despite setting out the appellant's case at length, the only intellectual engagement with, or analysis of that case, occurring in the Tribunal's reasons, is found in the first sentence of paragraph [160]… [13] This sentence contains no (sic) (and no attempt to) engage intellectually with the submissions of the appellant, nor to apply the relevant legal principles to the facts.
But we think that any proper assessment of paragraph [160] must take into account the fact that the Member has set out in nearby paragraphs of the Reasons, being paragraphs [155]-[157] and [159], the terms of section 149 (s) of the SSM Act (which sets out the factors to be considered when considering making an order under the section) and his summary of the factors to be derived from 3 pertinent decisions; being the 3 cases we have identified at 32 above: Olive Grove Investments, Drewe and Capacelea.
It is true that paragraphs [156] and [157] may be regarded as descriptive of the principles from the relevant case, rather than analytical and that the Member does not elucidate with any precision how each of the particular principles can be applied to the facts before him. But those paragraphs must be read with paragraph [158] and [159], which are in the following terms: 158 Mr Bacon submitted that the respondent, Ms Benson, had provided no coherent argument to support her claims that the applicant unreasonably refused the By-law. She appeared to rely on a range of historic examples dating back to the 1980's to demonstrate a form of unreasonableness adopted by the applicant today. 159 In Capcelea v The Owners Strata Plan 48887 [2019] NSWCATCD 27 Senior Member Burton SC held [58] It is not a balancing exercise to test for reasonableness and the proposal being rejected as the Adjudicator engaged and the Queensland Court of Appeal endorsed in Ainsworth v Albrecht [2016] HCA 40. [59] But it is an exercise in which the unreasonableness of a refusal is assessed by, not only the interests of the refusing owners in their perception and expression of the status quo property rights, but also by the right and reasonable expectations of the proponent owners that the refusing owners thought (to avoid acting unreasonably) have taken to account in coming to a decision. The Tribunal intrudes into the decision because it is required by the wording of s149(2) to have regard to the matters in s 149(2) as they presented at the time of the refusal and on an objective basis in assessing the quality of the decision made by the refusing owners. ..[64] The consequences of being required to have regard to interests, rights and expectations in the process of testing for unreasonableness of refusal is that the evidence (assessed objectively) may support the applicant's rights and expectations as outweighing the owners' interests in the proprietary regime established by the Scheme. Or it may demonstrate an absence of substantive detrimental effect on the existing proprietary rights. Either or both will be cogent and probably decisive factors in assessing a refusal as unreasonable. ..[67] In Ainsworth v Albrecht (supra), the plurality, while not attempting an exhaustive statement of the circumstances in which an order under the provision in the same category of the Strata Schemes Management Act s. 149 may be made, said that " opposition to a proposal that could not on any rational view, adversely affect the material enjoyment of an opponent's property rights may be seen as unreasonable…. The proposal in question was apt to create a reasonable apprehension that it would adversely affect the property rights of the opponents and the proposal and enjoyment of those rights. In these circumstances opposition of the lot owners who dissented from the proposal could not be said to be unreasonable.
Clearly, paragraph [158] constitutes a reference to the arguments and claims made by Ms Benson on the central issue of whether the refusal of the By-Law was "unreasonable" and paragraph [159] sets a methodology (supported by appropriate case law authority) for assessing "reasonableness" for the purposes of section 149.
In our view, a complete and fair reading of this section of the Reasons, from paragraphs [155] to [160] as a whole, demonstrates with reasonable clarity that the Member: 1. considered authorities relevant to the meaning of the phrase "unreasonably refused" in section 149(1)(b) including Olive Grove Investments, Drewe and Capcelea; 2. considered the case made for Ms Benson and the submission of the solicitor for the owners' corporation on it; 3. assessed whether the case made for Ms Benson established "unreasonable refusal", the terms of that assessment being briefly stated but readily apparent.
We note that the member did explain his conclusions as to persuasiveness of some Ms Benson's evidence earlier in the Reasons; for example in his comments at the conclusion of paragraph [102].
In Applicant WAEE v Minister for Immigration and Multicultural and Indigenous Affairs (2003) 75 ALD 630; [2003] FCAFC 184 (WAEE), the Full Federal Court which comprised French, Sackville and Hely JJ explained at [46]-[47] the relevant standards in the following terms (the "Tribunal" referred to there being the Commonwealth Refugee Review Tribunal) : [46] It is plainly not necessary for the Tribunal to refer to every piece of evidence and every contention made by an applicant in its written reasons. It may be that some evidence is irrelevant to the criteria and some contentions misconceived. …The Tribunal is not a court. It is an administrative body operating in an environment which requires the expeditious determination of a high volume of applications. ….(I)ts reasons are not to be scrutinised `with an eye keenly attuned to error'. Nor is it necessarily required to provide reasons of the kind that might be expected of a court of law. [47] The inference that the Tribunal has failed to consider an issue may be drawn from its failure to expressly deal with that issue in its reasons. But that is an inference not too readily to be drawn where the reasons are otherwise comprehensive and the issue has at least been identified at some point. It may be that it is unnecessary to make a finding on a particular matter because it is subsumed in findings of greater generality or because there is a factual premise upon which a contention rests which has been rejected. Where however there is an issue raised by the evidence advanced on behalf of an applicant and contentions made by the applicant and that issue, if resolved one way, would be dispositive of the Tribunal's review of the delegate's decision, a failure to deal with it in the published reasons may raise a strong inference that it has been overlooked.
For completeness we add that on our reading of what is before us and in the absence of a recording of the hearing or a relevant transcript we cannot find that described in the closing sentence of the passage above (namely a failure to deal with an issue which is dispositive) occurred at the Tribunal's hearing. The passage cited above was cited with approval in D'Amore v Independent Commission Against Corruption [2013] NSWCA 187 by Basten JA at [230].
On the basis of our findings and the Full Federal Court's explanation and conclusions in WAEE and the other authorities we have cited, we are satisfied that the Member's description in the Reasons of his decision-making exercise as described above was appropriate and sufficient. Importantly, it was completed by the Member having some regard to what had been put to him by and on behalf of Ms Benson, as is revealed by paragraphs [145]-[146] and [158] of the Reasons.
We are not persuaded by the proposition in the Appellant's Written Submissions at [26], citing Elias v Federal Commissioner of Taxation [2002] FCA 845, (2002) 123 FCR 499 at [62], that the Member gave any of Ms Benson's arguments: ".. cursory attention only..so that (it was) simply cast aside."
Similarly, we record that we reach our conclusions having taken into account the principles and standards pertinent to Grounds 1 and 2 which emerge from the major authorities cited by the Appellant and discussed at [21] above, namely Marinko, Dranichnikov, Weal, SZRLO and Khaadgi.
Our conclusions as to both these Grounds are also influenced by the observations of Ward JA (as Her Honour then was) in New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231 (Orr) at 114. Those observations are particularly relevant because Orr involved the assessment of the adequacy of reasons for decision in the Consumer and Commercial Division of this Tribunal.
In Orr at [114] Ward JA relied upon learned commentary by Sackville AJA, writing extra-judicially in "The Evolution of the duty of decision-makers to give reasons" (2016) 23 AJ Admin L 128 to the effect that the content of the judicial duty to give reasons varies depending upon the jurisdiction being exercised and the subject matter of the decision. Sackville AJA pointed to the tension for decision-makers, judicial or otherwise, who are confronted with a high-volume caseload and limited resources. Ward JA commented on that in the following terms, at [114]: At least anecdotally, that tension must be particularly apt for the (NSW Civil and Administrative) Tribunal, which has a high volume of cases and is established under an Act, the objects of which include " to enable the Tribunal to resolve the real issues in the proceedings justly, quickly and cheaply and with as little formality as possible": see section 3(d) of the NCAT Act.
Of course, as is the case with many matters which involve a challenge to the adequacy of reasons, in the proverbial "perfect world", in which a tribunal member has the comparative luxury of extensive time available for the hearing, for his or her consideration of the case and for decision-writing, the Member might well have provided his analysis of the relative strength of Ms Benson's case in further detail and in way which demonstrated more manifestly the degree of his engagement with the parties' respective cases.
But the reality is that there is a tension faced by all NCAT members between resolving the real issues in the matters before them justly, quickly and cheaply and with as little formality as possible; but yet within time limitations. As Ward JA observed in Orr at [114], that tension is "particularly apt for the Tribunal".
Given that Orr involved the issue of adequacy of reasons, that observation by Her Honour invites allowance for that tension to be made whenever the adequacy of reasons given in this tribunal is being considered.
For those reasons we have concluded that the Member did engage sufficiently with the case put for Ms Benson and that his reasons for decision were not inadequate and no error of law arose on that account as submitted by Ms Benson. Grounds 1 and 2 must therefore fail.

The Appellant's Grounds 3 to 5

As noted above, Mr Russell for Ms Benson indicated at the appeal hearing that he is content that we regard the other grounds of appeal, which we have identified as Grounds 3 to 5, as raising issues the resolution of which must follow our determination of the two principal grounds of appeal and Grounds 3 to 5 were not separately pressed. We confirm that those additional grounds involved assertions that an error of law arose by reason of: 1. a failure by the tribunal to take into account relevant (mandatory) considerations (Ground 3), 2. a failure to afford Ms Benson procedural fairness (Ground 4); and 3. the decision being "legally unreasonable" which we took as a reference to the error of law as described in Prendergast, as a decision so unreasonable that no reasonable decision-maker would have made it.(Ground 5)
It follows from the Appellant's concession that no error of law arises on the basis of these grounds .
We could see no other proper basis for concluding that there had been an error of law and none was put to us. In any case, we record that we did not have the advantage of considering any sound recording or transcript of the proceedings, despite a procedural order (order 4(d)) being made at the Directions Hearing on 12 August 2022, requiring Ms Benson to provide the sound recording of the Tribunal hearing and a typed transcript of any parts she relied upon if she relied on "what happened at the hearing at first instance".
On that basis we conclude that there no error of law arose.

Conclusion as to the appeal grounds

There being no error of law and no application having been made by the Appellant Ms Benson for leave to appeal, it follows that the appeal must be dismissed.
We order accordingly.

Costs

The Tribunal made directions which allowed either party to bring an application for costs of the proceedings which it heard. We have not been made aware of either party having made such a costs application.
Be that as it may, the owners' corporation's Reply in section C contains a request that we make orders and directions so as to enable it to be heard as to the costs of the appeal. We have therefore decided to allow each party leave within a limited time to make such an application. We have done so in Order 2 set out below.
Of course, such costs application will only succeed where the costs applicant can establish "special circumstances" warranting the award of costs, within the meaning of that phrase given by in section 60(3) of the NCAT Act). In saying that, we are not seeking to limit any right or discourage any rights to apply for costs of this appeal.

orders 1. The appeal is dismissed. 2. If either party seeks an order for the costs of the appeal that party (the Costs Applicant) must give to the Tribunal and the other party (the Costs Respondent) that application and any supporting submissions within 21 days of the date of these orders. 3. The Costs Respondent must give the Tribunal and the Costs Applicant any submissions in response to the costs application within a further 21 days. 4. Each party's submissions should address the issue of whether the Appeal Panel should dispense with a further hearing in respect of costs and proceed by determining the costs of the appeal on the papers. 5. The order staying the operation of Order 1 in matter number 21/35861 is continued until finalisation of the appeal.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 10 November 2022

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