Charitable Islamic Association of Beirut City Incorporated v The Owners Strata Plan No 75506

NCAT Appeal Panel|2018-03-07|Before: Knoll AM

Solicitors: Strata Specialist Lawyers (Appellant) Kerin Benson Lawyers (Respondent) File Number(s): AP 17/54206 Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Date of Decision: 23 November 2017 Before: D Charles, Senior Member File Number(s): SC 17/21877

Introduction

The appellant, the Charitable Islamic Association of Beirut City Incorporated, is the owner of lot 2 in a six-lot strata scheme (i.e. Strata Plan No 75506) at Merrylands. The land on which the strata scheme is located is zoned "IN2 Light Industrial" under the Holroyd Local Environmental Plan.
The respondent is the Owners Corporation of the strata scheme.
The appellant purchased lot 2 in March 2016.
In about April 2016, the appellant undertook building works to adapt lot 2 so that it could be used for Muslim prayer services. The works included work to the common property of the lot. The appellant did not notify, or seek approval of the works from the respondent or the local Council, Cumberland Council.
On 19 May 2017, the respondent filed an application in the Consumer and Commercial Division of the Tribunal seeking an order, under s 232 of the Strata Schemes Management Act 2015 (SSMA), that the appellant remove all unauthorised additions or alterations that it made to the common property of lot 2 and to reinstate the common property to its former condition.

Notice of Appeal

In its notice of appeal, the appellant identified its grounds of appeal as follows: "1. The Tribunal erred as a question of law in that it failed: (a) to ask itself whether the putative inevitable refusal of a common property rights by-law in respect of the appellant's work would be unreasonable, (b) to take into account the conclusions of the respondent's expert, in particular that (i) except for the insertion of a "step ramp" (which was inserted subsequently to the expert's inspection) the works complied with National Construction Code requirements (7.4.1), and (ii) "the overall quality of the completed works by all trades is of a high standard" (7. 5.1). 2. The Tribunal erred in refusing the application for an adjournment, and the exercise of the discretion miscarried, on the grounds set out below in Annexure 6A - Application for Leave to Appeal."
Annexure 6B to the appellant's Notice of Appeal set out the grounds on which leave to appeal was sought. These grounds were grouped into the following categories by the appellant: 1. the decision of the Tribunal to reject the application for an adjournment was unfair and inequitable, and may have led to the appellant suffering a substantial miscarriage of justice; and 2. further, or in the alternative, the decision of the Tribunal to reject the application for an adjournment may have led to the appellant suffering a substantial miscarriage of justice because the Tribunal failed to give sufficient weight to the evidence.
We have dealt with the appellant's contention and arguments in regard the abovementioned matters in more detail below.

Reply to Appeal

In its Reply to Appeal, the respondent stated that it supported the orders that were made by the Tribunal below.
In regard to the first ground of appeal, the respondent submitted that the appellant had not identified any error of law, or that the Tribunal's discretion in refusing an adjournment had miscarried. Any prejudice that may have been suffered by the appellant, the respondent contended to have been of its own making.
The respondent opposed the appellant's request for leave to appeal the Tribunal's decision to refuse the adjournment application. Again we have dealt with the respondent's submissions in more detail below.

Material before the Appeal Panel

The appellant sought to rely on an affidavit Moustapha Darwiche, the President of the respondent, sworn on 6 February 2018, an expert report of Mark Blaszczakiewicz, a civil/structural engineer dated 6 February 2018 and a transcript of the hearing before the Tribunal below.
The appellant sought leave of the Appeal Panel to rely on the report of Mark Blaszczakiewicz, as it was fresh evidence and not before the Tribunal below. The respondent objected to leave being granted, as it was evidence that could have been obtained and tendered into evidence before the Tribunal below. We refused leave, on this basis. However, we marked the report as MFI 1.
The respondent also objected to paragraphs 1 to 12 of the affidavit of Moustapha Darwiche and the attachments to which these paragraphs related. The respondent argued that, as this was evidence that was not before the Tribunal below, but was available to the appellant, the appellant should not be granted leave to adduce it into evidence in its application for leave to appeal. We upheld the respondent's objection and marked paragraphs 1 to 12, together with the attachments to which these paragraphs referred as MFI 2. The remaining paragraphs and attachments were accepted into evidence.
No objection was taken to the transcript of the hearing below and the minutes of the annual general meeting of the appellant held on 5 December 2017.
Without any objection from the appellant, the respondent tendered into evidence a folder of documents that had been before the Tribunal below.
Both parties provided written submissions.

Background to the application before the Tribunal below

It is convenient to set out the events, including the orders made by the Tribunal, leading up to the hearing of the respondents claim and relevant events that have occurred subsequently.
As we have noted above, the respondent commenced proceedings against the appellant on 11 May 2017.
On 19 May 2017, at the first directions hearing of the respondent's application, the Tribunal made a number of directions in regard to the filing and serving of evidence. Included in these directions was an order in the following terms: "4. The respondent [appellant in this appeal] to provide to the applicant [respondent in this appeal], by 27 May 2017, the following: (a) a completed Development Application concerning alterations to Lot 2; and (b) a request for the applicant's consent to the development application, which identifies which works the subject of the application the respondent considers are works affecting common property."
On 15 May 2017, the local Council sent the appellant a Notice of Intention to Give an Order under the Environment Planning and Assessment Act, 1979, to demolish and remove the unauthorised work and reinstate the lot to its original condition and layout if those works were not removed within 28 days. In the absence of any response by the appellant, the local Council issued the proposed Order on 7 June 2017.
On 7 June 2017, the Tribunal extended time within which the appellant was to comply with order 4 above, to 9 June 2017. The directions relating to the time within which each party was to serve its evidence was also extended.
On 28 June 2017, the appellant made an application to the local Council, seeking approval for a change of use of the lot to a place of worship. In that application, the appellant said that there were "no changes or any alterations to the building or the site". In support of its application for the change of use, the appellant had commissioned BCAVision to prepare a Compliance Report in March 2017. A copy of that report had been sent to the appellant on 28 March 2017.
On 13 July 2017, the Tribunal made a further order extending time within which the appellant was to comply with order 4 above. Time was extended to 21 July 2017 and the time for complying with the directions for the filing and serving of evidence was also extended. The Tribunal also ordered that the matter remained listed for directions on 22 August 2017.
On 14 August 2017, the appellant lodge with the local Council its application for change of use and a development application. On 16 August 2017, the Council wrote to the appellant acknowledging receipt of its applications.
On 22 August 2017, the Tribunal made the following orders: "1. … 2. Time to comply with order 4 made on 19 May 2017 is extended to 29 August 2017. 3. Time to comply with order 6 made on 19 May 2017 is extended to 19 September 2017. 4. … 5. A further extension of time will only be granted in exceptional circumstances. 6. Documents not provided by the respondent in accordance with orders 2 and 3 above may not be relied at the hearing without leave of the Tribunal. … 9. The Tribunal notes that the respondent may lodge its own application if the applicant refuses to stamp a DA and/or refuses consent to the making of a by-law. In the event that such an application is made, the respondent is to: (a) file the application with evidence on which it seeks to rely at the hearing; (b) provide a copy of the application and evidence to the respondent at the time the application is filed; and (c) request the Registry to list the matter for directions urgently before Principal Member Rosser."
In September 2017, the respondent's application was listed for a one-day hearing on 23 November 2017. This was a date each party had advised the Registry that was suitable to them for a hearing.
On 10 October 2017, the solicitor for the appellant, Colin Cunio, wrote to the respondent enclosing a requisition for the inclusion of two motions in the agenda of the next general meeting of the respondent and advising that the appellant was prepared to meet the reasonable costs of the annual general meeting. Attached to the letter was a copy of the motions, a Council "Building Certificate Application for Unauthorised Works", dated 1 August 2017, and a copy of the abovementioned BCAVision Report.
The first motion proposed by the appellant concerned the passing of a by-law that enabled the appellant to keep the alterations made to the common property and to consent to a development application being made by the appellant in relation to the alterations. The second motion concerned the consent to the development application, in the event, the first motion did not succeed.
The respondent's strata managing agent responded to the letter of the appellant's solicitor, on 13 October 2017. He advised that the agenda for the general meeting was being prepared. He also advised that the appellant was not financial and that an address for service was required, as correspondence addressed to the appellant was being returned as being unclaimed.
An annual general meeting of the respondent was scheduled for 5 December 2017.
On 23 November 2017, the Tribunal refused the appellant's application for adjournment of the hearing and determined the respondent's application.
On or about 30 November 2017, the appellant withdrew its development application, which included an application for change of use.
On 5 December 2017, the annual general meeting of the respondent considered the October 2017 motions of the appellant. Both motions were defeated. The appellant did not attend the meeting. The other lot owners were each represented at the meeting by their nominated proxy.

The appellant's case

At the hearing, counsel for the appellant stressed that the appellant's main grounds of appeal relate to the Tribunal's decision to refuse the appellant's adjournment application and this resulted in the appellant having suffered a substantial miscarriage of justice in the Tribunal hearing and determining the respondent's claim.
The appellant conceded that the granting of, or refusal of, an application for an adjournment is discretionary and an appellate court (or the Tribunal) is generally slow to interfere with the exercise of a discretion, unless a refusal to grant an adjournment "will result in a denial of justice" to the applicant for an adjournment and the adjournment "will not result in any injustice" to another party. The appellant cited House v R (1936) 55 CLR 499 at 504-507 and Chen v Baxter [2014] NSWCATAP 50 at [35] as authority in support of its proposition.
The appellant noted that it had conceded that the work it had undertaken was unauthorised. Hence, this was not an issue in dispute. It also contended that the works it had undertaken were "safe and sound". While the respondent's expert, Mark Kavanagh, Senior Building Consultant, had identified some non-complying matters in his report of 19 July 201, these had been promptly attended to by the appellant prior to the hearing. Hence, this was also not an issue in dispute before the Tribunal.
The appellant went on to argue that, under s 232(1) of the Strata Schemes Management Act 2015 (NSW) (SSM Act), the Tribunal was nevertheless required to resolve the entirety of the dispute between the parties, which it failed to do.
As we understand the appellant's submissions, it was contended that the dispute between the parties included the anticipated rejection by the respondent of its motions that were on the agenda for the 5 December 2017 annual general meeting of the respondent.
On this basis, the appellant argued that the Tribunal was required to balance the respective consequences to each party if an adjournment was not granted. This, the appellant argued the Tribunal failed to do and that failure was an error of law.
The appellant contended that the Tribunal failed to give any consideration to the impact on the appellant if not given an opportunity to realistically contest the reasonableness of the anticipated decision of the respondent to reject its motions. This, the appellant argued was the real issue in dispute rather than whether the works had not been authorised.
Hence, by making an order before the scheduled date of the annual general meeting, the Tribunal had in effect required the works to be removed, which in effect precluded consideration of the substantive and real issues in dispute.
The appellant also contended that there was no evidence of prejudice (save as to costs which was conceded) to the respondent if the adjournment were granted. On the other hand, the prejudice to the appellant was palpable, and was not at all considered by the Tribunal. The appellant submitted that there was no requirement for it to show that the respondent would not have approved the works in order for the adjournment to be granted. The fact that the owner of lots 4 and 5 had indicated that it would exercise its votes to prevent any approval of the works, the appellant submitted was evidence of the respondent being unamenable to reason.
The appellant argued that, instead of balancing the respective consequences to each party if an adjournment was not granted, the Tribunal gave emphasis to the appellant's delay and that the delay being inconsistent with the need for a just quick and cheap resolution of the real issues in the proceedings. The appellant did not dispute that the Tribunal was entitled to consider the effect of an adjournment on its resources and the competing claims by litigants, but it must not do so to the exclusion of weighing in the balance the impact on the respective parties.
The appellant submitted that the Tribunal's error was an issue of principle and leave to appeal should be granted and that the Tribunal's orders made on 23 November 2017 should be set aside.

The respondent's case

The respondent contended that the appellant had failed to demonstrate an error of law, or any other ground (i.e. an issue of principle, a question of public importance, or a matter of administration or policy that might have general application) that would warrant a grant of leave to appeal.
We have discussed the respondent's submissions in more detail below in so far as they relate to the grounds raised by the appellant in its outline of submissions.

Decision of the Tribunal

In its reasons for decision, the Tribunal noted that, in regard to its adjournment application, the appellant relied on an affidavit of Mr Darwiche sworn on 11 October 2017. That affidavit, the Tribunal noted, referred to the appellant's request for the respondent to consider the abovementioned motions at its next annual general meeting and that the appellant was prepared to pay the reasonable costs of the respondent to call that meeting. The Tribunal also noted the respondent's objection to the adjournment application
At [10] to [12] the Tribunal set out its reasons why it refused the appellant's (the respondent below) adjournment application as follows: "10. I refused the adjournment application. I had regard to the Tribunal's orders and directions made on 22 August 2017 and determined, in the context of the respondent's submissions to support its adjournment application today, that those orders and directions had afforded procedural fairness to the respondent. If the respondent wanted to bring its own application to the Tribunal for orders under the SSMA (including relief pursuant to s149) in respect of any refusal by the applicant of consent to a common property rights by-law, then the respondent needed to act in a timely manner. The clear intent of paragraph 9 of the orders made on 22 August 2017 is an imperative for the respondent to act expeditiously; that is, to requisition a meeting of the scheme to establish an absence of consent to a common property rights by-law, and then to bring its own application in advance of the hearing of this application so that further directions (if appropriate) could be made in this application and any cross application by the respondent before today's hearing: see, particularly, sub- paragraph 9 (c) of the orders. Mr Darwiche's affidavit provides no explanation as to why the respondent did not Requisition a meeting of the Owners Corporation (to consider and motion in respect of a common property rights by-law) any sooner than 10 October 2017. Nor was Mr Cunio able to offer a proper explanation in his oral submissions. 11. Apart from the absence of a proper explanation as referred to above, I took the view that an adjournment of today's specially fixed hearing would further delay resolution of the matters in dispute in the proceedings, particularly in circumstances where the respondent's legal representative had conceded (quite properly, in my opinion) that the Lot 2 works were within s 108 of the SSMA and had been carried out without the consent of the Owners Corporation. 12. Furthermore, I took the view that delay in the determination of the proceedings would impact not only on the parties, but on the proper management by the Tribunal of the resources available to it in terms of the allocation of hearing time. I was not satisfied that adjourning the hearing would be consistent with the guiding principle in s 36 (1) of the Civil and Administrative Tribunal Act 2013 NSW (NCAT Act) to facilitate the just, quick and cheap resolution of the real issues in the proceedings, or with the direction in s 36 (4) of the NCAT Act that practice and procedure be implemented so as to facilitate the resolution of the issues in such a way that the costs to the parties and to the tribunal is proportionate to the importance and complexity of the subject matter of the proceedings."
As we have noted, the Tribunal went on to deal with the respondent's substantive application.

Consideration

In our opinion, the issues for determination in this appeal are relatively straight forward. They are whether: 1. the Tribunal erred, as contended by the appellant, in the exercise of its discretion to refuse the appellant's applicant for an adjournment; and 2. if the Tribunal did err in the exercise of its discretion in refusing to grant the appellant an adjournment, may the appellant have suffered a substantial miscarriage of justice because; (a) the decision of the Tribunal was not fair and equitable, or (b) the decision of the Tribunal was against the weight of the evidence: see NCAT Act, Sch 4, cl 12(1).

Did the Tribunal err in the exercise of its discretion?

As pointed out by the parties a decision to grant or not to grant an adjournment is discretionary, which should be exercised judicially with due consideration of the circumstances.
In Chen v Baxter (supra), at [34], the Appeal Panel noted that the discretion to extend time under the NCAT Act was unfettered, but 'must be exercised judicially and having regard to s 36 of the Act and the need "to facilitate the just, quick and cheap resolution of the real issue in the proceedings"'. At [35], the Appeal Panel said: "35 The grant of an extension of time is not automatic. The discretion to extend time is given for the sole purpose of enabling the Appeal Panel to do justice between the parties. In order to determine whether the rules will work an injustice, it is necessary to have regard to the history of the proceedings, the conduct of the parties, the nature of the litigation, and the consequences for the parties of the grant or refusal of the application for extension of time. It is also necessary to consider the prospects of the applicant succeeding in the appeal. …"
In Donna O'Neil v T and I Engines Pty Ltd [2015] NSWCATAP 77 at [20] to [23], the Appeal Panel made the following remarks in regard to the principles applicable to adjournment applications: "20 In Expense Reduction Analysts Group Pty Ltd v Armstrong Strategic Management and Marketing Pty Limited [2013] HCA 46, a unanimous High Court said: "In Aon Risk Services Australia Ltd v Australian National University, it was pointed out that case management is an accepted aspect of the system of civil justice administered by the courts in Australia. It had been recognised some time ago by courts in the common law world that a different approach was required to tackle the problems of delay and cost in the litigation process. Speed and efficiency, in the sense of minimum delay and expense, are essential to a just resolution of proceedings. The achievement of a just but timely and cost-effective resolution of a dispute has effects not only upon the parties to the dispute but upon the court and other litigants. The decision in Aon Risk Services Australia Ltd v Australian National University was concerned with the Court Procedures Rules 2006 (ACT) as they applied to amendments to pleadings. However, the decision confirmed as correct an approach to interlocutory proceedings which has regard to the wider objects of the administration of justice." 21 That approach is applicable in this Tribunal. Section 36(1) of the Civil and Administrative Tribunal Act 2013 ('the Act') is in relevantly identical terms to s 56(1) of the Civil Procedure Act2005, the provision considered in the Expense Reduction decision. 22 It follows that a number of principles apply to applications for an adjournment: (1) matters should almost always proceed on the date fixed for hearing, for the reasons enunciated above, (2) an application for an adjournment should be seen as the exceptional rather than the ordinary course; (3) where the adjournment is caused, at least in part, by the delay of the party seeking the adjournment, or non compliance by that party with an extant order of the Tribunal, adequate explanation is called for, and its absence weighs heavily, and sometimes decisively against the grant of an adjournment 23 Further, there is the effect on the opposing party to consider. In Sayhoun v Owners Corporation Strata Plan 75123 [2014] NSWCATAP 112, an Appeal panel of this Tribunal said at [17], in terms we would adopt: "We are satisfied that the respondent would be prejudiced if an extension of time were granted. That prejudice may be addressed by an award of costs, although we note the remarks of the plurality in Aon Risk Services Aust Pty Ltd v Australian National University[2009] HCA 27; (2009) 239 CLR 175 at [100] that justice cannot always be measured in money and that a judge is entitled to weigh in the balance the strain the litigation imposes upon litigants; and their approval (also at [100]) of Bowen LJ's statement in Cropper v Smith [1884] 26 Ch D 700 that: Non-compensable inconvenience and stress on individuals are significant elements of modern litigation. Costs recoverable even on an indemnity basis will not compensate for time lost and duplication incurred where litigation is delayed or corrective orders necessary."
We adopt the principles set out in these decisions.
In our opinion, the appellant's contentions are misconceived. We agree that under s 232(1) of the SSM Act the Tribunal was required to resolve the dispute between the parties. As noted above, at the time of the hearing, the only matter in dispute before the Tribunal was the dispute the subject of the respondent's application. Nevertheless, we agree that, in the exercise of its discretion, the Tribunal was required to consider, in light of the material before it, the consequences to the appellant and the respondent if an adjournment was not granted.
In our opinion, on a proper reading of the Tribunal's reasons for decision, it did consider the consequences to the appellant and the respondent if an adjournment was not granted.
At [7], of its reasons for decision the Tribunal expressly set out the basis on which the appellant made its application for an adjournment (i.e. on the basis of its motions for consideration by the respondent at its next annual general meeting etc). At [9], the Tribunal set out the arguments of the appellant that it should have the opportunity to seek relief in the event its motions were rejected at the respondent's annual general meeting and the prejudice the appellant would suffer in the even an adjournment was not granted. These arguments are similar to those presented by the appellant in this appeal. However, in accordance with the abovementioned principles and s 36 of the NCAT Act, the Tribunal also considered the orders that had been made in progressing the matter so that the matter was ready for hearing, the delays of the appellant in requesting a meeting of the respondent to consider its motions, the delay of the appellant in failing to seek an adjournment prior to the hearing date and the absence of a proper explanation for those delays.
Section 36 of the NCAT Act relevantly provides as follows: "36 Guiding principle to be applied to practice and procedure (1) The guiding principle for this Act and the procedural rules, in their application to proceedings in the Tribunal, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. (2) The Tribunal must seek to give effect to the guiding principle when it: (a) exercises any power given to it by this Act or the procedural rules, or (b) interprets any provision of this Act or the procedural rules. (3) Each of the following persons is under a duty to co-operate with the Tribunal to give effect to the guiding principle and, for that purpose, to participate in the processes of the Tribunal and to comply with directions and orders of the Tribunal: (a) a party to proceedings in the Tribunal, (b) an Australian legal practitioner or other person who is representing a party in proceedings in the Tribunal. (4) In addition, the practice and procedure of the Tribunal should be implemented so as to facilitate the resolution of the issues between the parties in such a way that the cost to the parties and the Tribunal is proportionate to the importance and complexity of the subject-matter of the proceedings. (5) However, nothing in this section requires or permits the Tribunal to exercise any functions that are conferred or imposed on it under enabling legislation in a manner that is inconsistent with the objects or principles for which that legislation provides in relation to the exercise of those functions."
As we have noted, the appellant does not dispute that delay and the impact on the Tribunal's resources are relevant matters to be taken into account in the exercise of the discretion as to whether an adjournment should or should not be granted.
In our opinion, when regard is had to the Tribunal's reasons for decision in regard to the appellant's adjournment application, we can see no error as contended by the appellant. It is evident that the Tribunal took into account the matters relevant to the exercise of its discretion and the respective arguments of each party, including those of the appellant in regard to any prejudice it would suffer if an adjournment was not granted.
Accordingly, we are not satisfied that the appellant has established that the Tribunal erred as contended. Having had regard to the factors relevant to the exercise of its discretion and the arguments of the parties, in our opinion, the decision of the Tribunal was open to it on the material before it.

May the appellant have suffered a substantial miscarriage of justice?

In light of our finding above, it is unnecessary for us to determine this question.

Conclusion

For the reasons set out above, we find that the appellant has failed to establish that the Tribunal erred in law in the exercise of its discretion to refuse the appellant's adjournment application. Hence the appropriate order is to refuse the appellant's application for leave to appeal and otherwise dismiss his appeal.

Orders 1. The appellant's application for leave to appeal is refused. 2. Appeal dismissed.

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 September 2018

At a glance

Court

Decision date

Before

Source

Judgment (15 paragraphs)

Parties

Legislation Cited (3)

Cases Cited (7)

Cited By (3)