Crawley v the Owners Strata Plan 22481

COUNSEL : Plaintiff: Mr T S Hale SOLICITORS : Plaintiff: Aubrey F Crawley & Co Defendant: P McCarthy CATCHWORDS : Appeals from Commissioner to Strata Schemes Board Strata Schemes Managemt Act 1996 Strata Titles Act 1973 ACTS CITED : Strata Schemes (Freehold Development) Act 1973 Strata Schemes (Leasehold Development)Act 1986 Strata Schemes Management (Miscellaneous Amendments) Act 1996 Statute Law (Miscellaneous Provisions) Act (No 2) 1997 CASES CITED : The Ownwers Strata Plan No 52896 v Goldbind Pty Ltd & Anor (1 May 1998, Bruce J unreported) DECISION : Matter remitted for rehearing and determination

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

No: 10466 of 1999 Christopher William CRAWLEY v THE OWNERS STRATA PLAN 22481

1 Christopher William Crawley appeals by way of case stated against a determination of Mr G Keenan as a member of the Strata Schemes Board that he did not have jurisdiction to determine appeals against orders made by the Strata Titles Commissioner in proceedings which commenced prior to 1 July 1997 in respect of applications 105(1) 471/97, 105(1) 479/97, 106/480/97 and 106/635/97 and which had not been determined or finalised prior to that day. 2 Whether the Strata Schemes Board has jurisdiction depends upon the construction of the Strata Schemes Management Act 1996 and especially Schedule 4, Savings, transitional and other provisions. Mr Keenan held that in respect of proceedings commenced prior to 1 July 1997 in which orders were made after that date by the Commissioner of Strata Titles any appeal against those orders lay to the Strata Titles Board. Legislation which came into operation on 1 July 1997 substitutes Adjudicators for the Commissioner in respect of the hearing and resolution of disputes and provides for appeals to go to the Strata Schemes Board. The previous provision for appeals from the Commissioner to the Strata Titles Board was repealed.

The Facts 3 Mr Crawley is the registered proprietor of Lot 71, Strata Plan 22481, being premises on the ground floor of a commercial/residential building at 533-539 Kent Street Sydney. The strata plan covers the whole building. The appellant has development approval and building approval from Sydney City Council to convert his premises to a restaurant/bar. In implementing those consents the Proprietors SP 22481 (the Proprietors) contend that Mr Crawley is damaging the common property in breach of a by-law made pursuant to s58 of the Strata Titles Act 1973 (retitled the Strata Schemes (Freehold Development) Act 1973). That by-law applied to the building. 4 The following applications were made to the Strata Titles Commissioner under the Strata Titles Act 1973:

(a) On 29 April 1997 by the Proprietors for an order that Mr Crawley refrain from breaking by-law 16 by damaging a common property floor, walls and columns and rectify the damage done by him in breach of the by-law.

(b) On 1 May 1997 by Mr Crawley: (i) for an order requiring the Proprietors to deliver a written approval, under by-law 16 to him for the works the subject of the Development Approval and the Building Approval insofar as such works affect the common property; (ii) alternatively, for an order requiring the Proprietors to consent to him effecting alterations to the common property in accordance with such Approvals.

(c) On 3 June 1997 by Mr Crawley for an order requiring the Proprietors to consent to him effecting alterations to the common property in accordance with such Council Approvals. 5 On 15 August 1997 the Strata Titles Commissioner made these orders:

(a) an order requiring Mr Crawley to comply with by-law 16 of Schedule 1 to the Act of 1973 and to refrain from breaching by-law 16 by damaging a common property floor, walls and columns, and rectify the damage done by him in breach of the by-law; compliance with that order being required by 10 October 1997.

(b) An order dismissing each of Mr Crawley's applications. 6 On 2 September 1997 Mr Crawley filed appeals against the orders made by the Strata Titles Commissioner in each case with the office of the Strata Schemes Board. The forms completed by Mr Crawley stated that he was applying for: "An appeal against an order of an Adjudicator (sec 177)" 7 This was an obvious reference to the Strata Schemes Management Act 1996.

Statutory Background 8 For many years the Strata Titles Act 1973 governed strata titles and the resolution of disputes between proprietors and the body corporate, amongst others. Procedures were specified and the Commissioner had power to make certain orders. An appeal lay to a Strata Titles Board. It could admit further evidence, and it could affirm, vary or revoke the order under appeal. An appeal lay from a Board to the Supreme Court on a question of law. The provisions of ss101 to 110 of the Justices Act 1902 as to appeals were incorporated. 9 In December 1996 the Strata Schemes Management Act 1996 and the Strata Schemes Management (Miscellaneous Amendments) Act 1996 were assented to. They are complimentary and came into force on 1 July 1997. The objects of the former Act were stated to be:

(a) to provide for the management of strata schemes created under the Strata Titles (Freehold Development) Act 1973 or the Strata Titles (Leasehold Development) Act 1986, and

(b) to provide for the resolution of disputes arising in connection with the management of strata schemes. 10 Chapter 5 of the Strata Schemes Management Act deals with disputes and their resolution. Adjudicators are empowered to make orders on a fairly wide range of matters. Section 177 provides that an appeal lies to the Strata Schemes Board against an order made by an adjudicator. 11 The Strata Schemes Management (Miscellaneous Amendments) Act 1996 made extensive amendments to the Strata Titles Act 1973. The latter Act was renamed the Strata Titles (Freehold Development) Act 1973. Significant portions of that Act including Part 5 headed "Disputes" were omitted. The title of the 1973 Act was further amended by Item 3 of clause 2.27 of Schedule 2 of Act No 147 of 1997 to Strata Schemes (Freehold Development) Act 1973.

Clauses 3 and 4 of Schedule 4 12 Section 247 of the Strata Schemes Management Act 1996 provided that Schedule 4 had effect. It is headed "Savings, transitional and other provisions". Schedule 4 contained obvious drafting errors but it was clear what was meant. The errors were corrected by items [1] and [2] of clause 2.26 of Schedule 2 to Act No 147 of 1997 (Statute Law (Miscellaneous Provisions) Act (No 2) 1997). These amendments commenced on 17 December 1997 the date of assent, as provided in s2(2) of that Act. 13 As clause 3 of Schedule 4 of the Strata Schemes Management Act 1996, as originally passed, would have been construed to mean or read what the corrected and amended version states, it is sufficient to set out the latter and clause 4: "3 Pending proceedings and applications Any proceedings commenced but not determined or finalised under provisions of the Strata Schemes (Freehold Development) Act 1973 or the Strata Schemes (Leasehold Development) Act 1986 repealed by the Strata Schemes Management (Miscellaneous Amendments) Act 1996 may be dealt with and determined as if that Act had not been amended by the Strata Schemes Management (Miscellaneous Amendments) Act 1996. 4 Previous orders made by Commissioner or a board (1) An order made by the Commissioner or a strata titles board under the Strata Schemes (Freehold Development) Act 1973 or the Strata Schemes (Leasehold Development) Act 1986 is taken to be have been made by an Adjudicator or the Strata Schemes Board under the corresponding provision of this Act. (2) Despite subclause (1): (a) Part 6 of Chapter 5 of this Act does not apply to such an order, and (b) the provisions of the Strata Schemes (Freehold Development) Act 1973 and the Strata Schemes (Leasehold Development) Act 1986 relating to the contravention of orders as in force immediately before their repeal continue to apply to such an order." 14 Mr Keenan took the view that clause 3 was "absolutely central to and ultimately determinant of the question of jurisdiction in matters such as those that came before me". I do not agree. It would be important if Mr Crawley had contended that he had instituted an appeal to the Strata Titles Board. The prime question is whether clause 4 or any other provision permits Mr Crawley to appeal to the Strata Schemes Board when regard is had to the provisions of the Strata Schemes Management Act 1996. 15 Mr Keenan in rejecting the submission that clause 4 of Schedule 4 when combined with s177 of the Strata Schemes Management Act 1996 had the effect of enabling Mr Crawley to appeal to the Strata Schemes Board relied on anomalies that would result. He wrote: "For example, under the 1973 Act a Strata Titles Board could make orders under sections 120, 120A, 121, 122, 122A, 123, 124, 125, 126 and 127; the corresponding provisions under the 1996 Act are contained in sections 157, 158, 144, 159, 153, 149, 154, 147, 161 and 162 respectively - these sections provide that the relevant orders may be made by an Adjudicator. Under the provisions of clause 4 of Schedule 4, therefore, any order that might have been made by a Strata Titles Board under any of the enumerated sections of the 1973 Act would be taken to have been made by an Adjudicator under the enumerated corresponding provisions of the 1996 Act. On the appellant's submission, therefore, any appeal against any such order of a Strata Titles Board would be to the Strata Schemes Board under section 178 of the Act - surely a result that could not have been intended by Parliament." 16 Three comments should be made. Firstly, there are instances under the Strata Schemes Management Act 1996 where orders made by the Strata Schemes Board correspond with orders that could have been made by the Strata Titles Board under the 1973 Act. Secondly, the true equation under Schedule 4 clause 4 is between orders made by the Commissioner and those made by an Adjudicator on the one hand, and between orders made by the Strata Titles Board and the Strata Schemes Board on the other. Thirdly, the anomaly is not of much consequence and is unlikely to affect many cases given the time limits on appeals in s178. The anomaly, if it exists, is not such as to require a restrictive interpretation of clause 4 of Schedule 4. 17 Mr Keenan summarised his views of clauses 3 and 4 of the Schedule thus: "Clause 3 ... was ... intended ... to be a transitional provision to allow for: (i) determination under the provisions of Part 5 of the 1973 Act of proceedings that had been commenced under that Act, and (ii) finalisation under those provisions either by effluxion of time or by utilisation of relevant appeal processes. Clause 4 is a savings provision and serves to put beyond doubt any question as to the efficacy of orders made under the provisions of the 1973 Act which were extant on 30 June 1997." 18 Clause 3 covers cases where proceedings have been commenced but not completed as at 30 June 1997. Those proceedings continue under the Strata Titles Act. They would include pending proceedings before a Commissioner or a Strata Titles Board as at 30 June 1997. 19 I do not regard the primary purpose of clause 4 as being to put beyond doubt any question as to the efficacy of orders previously made. It is true that clause 4(2) of Schedule 4 renders the enforcement provisions of Part 6 of the 1996 Act as to the orders of Adjudicators and the Board inapplicable and preserves the provisions of the 1973 and 1986 Acts relating to contraventions of orders as in force immediately before the repeal of those Acts. Clause 4(2) has a different and wider scope. Amongst other things, orders made by the Commissioner after 1 July 1997 in respect of proceedings commenced prior to that date are taken to have been made by an Adjudicator. Clause 4 of Schedule 4 is of importance when questions of variation or revocation of orders made by a Commissioner or a Strata Titles Board arise or such applications are made (see ss171, 189 and 191 of the Strata Schemes Management Act 1996). Clause 4 facilitates the future conduct of strata scheme business. Subject to the exceptions contained in clause 4(2), clause 4 should be regarded as an assimilating provision, bringing what was done under the Strata Titles Act into line with the new regime under the Strata Schemes Management Act and enabling a smooth change over. Vested rights are not destroyed. 20 This is not a case of removing the right of appeal but of deciding to which Board or Boards an appeal lies from the Commissioner. What is at issue is a procedural matter. 21 On its correct construction, clause 4 of Schedule 4 confers on Mr Crawley the right to appeal from the Commissioner to the Strata Schemes Board. I do not propose to express a final view on clause 3 of Schedule 4. That is best left until the jurisdiction of the Strata Titles Board is challenged upon an appeal from the Commissioner to that Board in respect of proceedings commenced but not determined prior to 1 July 1997. As at present advised, my provisional view is that there is no appeal to the Strata Titles Board in such circumstances. There is much to be said for the view that clause 3 applies to proceedings before the Commissioner, the Strata Titles Board or before the Court on appeal by case stated pending but not concluded as at 1 July 1997 but not to appeals instituted after 1 July 1997. In my opinion Mr Keenan erred in his construction of clause 4 of Schedule 4. He did and does have jurisdiction as a member of the Strata Schemes Board to hear Mr Crawley's appeals. 22 Mr Keenan declined to follow an earlier decision of this Court in The Owners Strata Plan No 52896 v Goldbind Pty Ltd & Anor (1 May 1998, Bruce J, unreported). It was there held that clause 4(1) gave jurisdiction under s177 of the Strata Schemes Management Act 1996 to the Strata Schemes Board to hear an appeal from the Commissioner where the proceedings before the Commissioner commenced prior to 1 July 1997 and he made an order on 28 July 1997. Despite Mr Keenan's misgivings about that decision, he was bound by it and should have followed it. 23 Mr Crawley further contended that if there were any doubt on the correct construction of clause 4 of Schedule 4, his right of appeal to a Strata Schemes Board was put beyond doubt by the passage of the Strata Schemes Amendment (Transitional) Regulation 1997, gazetted on 21 November 1997, which reads: "Clause 28 Insert after clause 27: 28 Appeals from orders of Commissioner An appeal from an order made by the Strata Titles Commissioner under the provisions of the Strata Schemes (Freehold Development) Act 1973 or the Strata Schemes (Leasehold Development) Act 1986: (a) that was lodged after the commencement of the Strata Schemes Management Act 1996, and (b) that has not been determined as at the commencement of this clause, is to be heard and determined under the provisions of the Strata Schemes Management Act 1996." 24 Mr Keenan took the view that the regulation was invalid in that it was at variance with the positive provisions made by the Act, for example, clause 3 of Schedule 4 to the Act. 25 The regulation in question was not made pursuant to the general regulation making power in s246 of the Strata Schemes Management Act 1996, but pursuant to s247. Schedule 4 clause 1 relevantly provides: 1 Regulations (1) The regulations may contain provisions of a savings or transitional nature consequent on the enactment of the following Acts: this Act" 26 This clause does not contain the provision in s246(1) that the Governor may make regulations not inconsistent with the 1996 Act. Clause 1 of Schedule 4 is a different kind of provision from the usual section empowering the making of regulations. Clause 1 permits the regulation made thereunder to deal with a matter of substance, namely provisions of a savings or transitional nature consequent on the enactment of the Strata Schemes Management Act 1996. Provisions such as clause 1 of Schedule 4 are not uncommon, especially when deal with savings and transitional provisions. So often these need to be amended or supplemented. 27 There is no good reason why full effect should not be given to regulation 28. I do not regard it as invalid or ineffective. 28 At the commencement of the hearing of the case stated, the solicitor for the proprietors advised that advice of counsel had been taken and that after careful consideration the proprietors did not feel able to support the view of the law propounded by Mr Keenan. 29 The course of these proceedings has been unhappy. Mr Keenan raised the question of jurisdiction. He later declined to follow a decision of this Court. Unnecessary expense has been incurred and the parties have been delayed in obtaining a determination on the merits. 30 I answer the question raised in the case stated, namely whether the determination of Mr G Keenan, Strata Schemes Board, was erroneous in the affirmative. The case stated is remitted to the Strata Schemes Board to hear and determine. 31 No specific submissions were put as to costs. The hearing was much shortened by the course taken by the proprietors. Costs were sought in the summons. I order the proprietors of Strata Plan 22481 to pay Mr Crawley's costs. If eligible, the proprietors should have a certificate under the Suitors' Fund Act 1951. The order for costs is not to be entered for ten days to allow either party to put submissions as to a different order. **********

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