Delmont Purcell v The Owners - Strata

Was the decision against the weight of evidence?

1. In its reasons for decisions (at 3) the Tribunal rejected the appellants' claim that O'Neill had been managing the scheme in an incompetent and dishonest manner and, in addition, had been biased against Ms Purcell. In support of the contention that that finding was against the weight of evidence the appellants assert that O'Neill: 1. "doctored" the minutes of the minutes of the strata committee meetings; 2. assisted a consortium of owners to have Ms Purcell "criminally charged"; 3. had charged excessive fees for its services in managing the strata; 4. refused to give Ms Purcell access to the pool and electricity cupboard.
2. In support of those claims the appellants pointed to the following material that was apparently before the Tribunal at first instance: 1. Reports prepared by building manager, Clean Green Strata, of periodical inspections of the common property for the months November and December 2019; 2. A Computer Operational Policing System (COPS) report dated 3 February 2020, which recorded that Ms Purcell reported to NSW Police that a contract pool cleaner had removed a "No Smoking" sign she had erected. A verbal argument ensued. Ms Purcell is reported to have said,, "Go back to South Africa; nobody wants you here", to which the cleaner is reported to have replied, "John wants to get a contract against you"; 3. Several invoices issued to Jaridel Pty Ltd for expenses relating to the maintenance of the pool, totalling about $1,000; 4. Photographs apparently taken on the common property of broken flowerpots (2) and cigarette butts (1); 5. Numerous letters from Ms Purcell to O'Neill outlining her concerns about various issues, including: the provision of keys to electricity cupboards and garden gates for "owners involved in the running of the premises"; lots owners allegedly entering into short-term rental agreements; the use of CCTV cameras to monitor the common property; the removal of compost bins from the common property; O'Neill's alleged failures to enforce the purported by-law banning visitors from using the pool, to notify Ms Purcell and her husband of strata meetings, and to take action in relation to a resident who discarded cigarette butts throughout the common property.
3. The appellants assert that the oral evidence given by Ms Purcell at the hearing at first instance, together with the documentary material they filed in those proceedings, supports their claim that in managing the strata plan O'Neill had been incompetent, dishonest and biased against Ms Purcell, and the allegations listed at [28] above. Neither party filed a transcript or sound recording of the proceedings at first instance. In orders made on 20 July 2020, the Appeal Panel directed the parties to provide a transcript or sound recording of the hearing if they proposed to rely on any oral evidence given in proceedings at first instance.

Consideration

1. To establish that the decision to appoint O'Neill was made "against the weight of evidence", the appellants must establish that "the evidence in its totality preponderates so strongly against the conclusion found by the tribunal at first instance that it can be said that the conclusion was not one that a reasonable tribunal Member could reach": Collins at [77].
2. Once satisfied that the proposed strata manager met the qualifications for appointment listed in s 237(4) of the SSM Act, the Tribunal was required to decide whether to appoint O'Neill, Forshew or some other strata managing agent. The Act does not prescribe any matters the Tribunal was required to take into account in evaluating the respective merits of the nominees. Nonetheless, we accept that the issue of whether O'Neill had failed to properly discharge the obligations of its role was relevant to the Tribunal's determination.
3. The Tribunal had before it the history of the long-running dispute between Ms Purcell, other lot owners and O'Neill. The Owners Corporation filed in the proceedings at first instance a detailed statement made 5 June 2020 by O'Neill's principal, Mr John O'Neill. In that statement, Mr O'Neill addressed the multiple allegations made by Ms Purcell about O'Neill's management of the scheme. Attached to that statement were contemporaneous documents and business records said by Mr O'Neill to support the claims made in that statement. In addition, the Owners Corporation filed a detailed statement prepared by lot owner, Ms Julia Cantarella, disputing many of the claims made by Ms Purcell.
4. A difficulty posed in this appeal is that the appellants provided to the Appeal Panel only some of the documentary material, and none of the oral evidence, that was before Tribunal at first instance. Self-evidently, this makes it difficult, if not impossible, to evaluate whether, as contended by the appellants, the finding made by the Tribunal - that O'Neill was suitable to act as strata managing agent - was against the weight of evidence. We are being asked to evaluate whether the evidence "in its totality preponderates so strongly against the conclusion found by the tribunal at first instance that it can be said that the conclusion was not one that a reasonable tribunal Member could reach", in circumstances where we have not been provided with all of the material that was before the Tribunal.
5. The material filed by the appellants in this appeal falls a long way short of establishing the allegations made by the appellants against O'Neill. While Ms Purcell may hold the genuine belief that since its appointment O'Neill has failed to properly discharge its role and was biased against her, objectively assessed, the material filed in this appeal does not support that belief.
6. The contention that the finding made by the Tribunal that O'Neill was suitable to act as strata managing agent was made against the weight of evidence must be rejected.

Was the decision to appoint O'Neill not fair and equitable?

1. In deciding whom to appoint as strata managing agent, the Tribunal considered the respective merits of O'Neill and Foreshew.
2. The Tribunal identified the following factors favouring Foreshew's appointment: its "cheaper base management fee" and the absence of any history with the "personalities involved in the scheme". The Tribunal identified the following considerations as weighing against Foreshew's appointment: its "unknown scheduled fees"; its lack of knowledge of the "significant personal issues" within the scheme; the number of strata managers appointed over a relatively short period. While acknowledging that its lack of any history of "bad relations" with Ms Purcell was a powerful factor favouring Foreshew, the Tribunal considered this to be of limited significance, given Ms Purcell's history of becoming "discontented" with strata managers. The Tribunal considered it "a very possible outcome" that, if appointed, over time, Ms Purcell would "come to loathe Foreshew".
3. The Tribunal identified the following factors as favouring O'Neill's appointment: its history of managing the scheme for three years in "difficult circumstances"; the likelihood that, given its familiarity with the scheme, its estimate of its costs would be realistic; its willingness to undertake the role despite Mr O'Neill's candid assessment that "in his 24 years as a strata manager Delmont Purcell is one of my most challenging lot owners I have ever encountered".
4. Having addressed the threshold issue of whether O'Neill had acted dishonestly and incompetently in the discharge of its obligations as strata manager, the Tribunal went on to consider the respective merits of the nominees. It determined that of the two, O'Neill was the better choice and gave cogent reasons for that decision. That decision was open to the Tribunal on the available material. We are not persuaded that that decision was not fair and equitable.

Leave to appeal

1. The appellants have failed to establish that the decision to appoint O'Neill was made against the weight of evidence and/or was not fair and equitable. It follows that the power to grant leave to appeal cannot be exercised. Leave to appeal must be refused.

Costs

1. The Owners Corporation seeks its costs in the appeal. It contends that the appeal was hopeless and lacked any tenable basis in law or fact. Further, it contends that the proceedings commenced by the appellants in NCAT, and the appeal itself, was based on nothing more than a "multitude of wild claims" unsupported by evidence. In addition, the Owners Corporation contend that it is relevant to the assessment of their application for costs that the appellants have brought four sets of concurrent proceedings in NCAT.
2. The appellants oppose the application for costs.
3. Section 60 of the NCAT Act creates the general rule that each party to proceedings is to pay their own costs: s 60(1). An Appeal Panel may only order costs "if satisfied that there are special circumstances warranting an award of costs (emphasis added)": s 60(2). Section 60(3) sets out a non-exhaustive list of factors that may be taken into account in deciding whether there are special circumstances warranting an award of costs: (a) whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings, (b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings, (c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law, (d) the nature and complexity of the proceedings, (e) whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance, (f) whether a party has refused or failed to comply with the duty imposed by section 36 (3), (g) any other matter that the Tribunal considers relevant.
4. The term "special circumstances" is not defined by the NCAT Act. It has been interpreted to mean circumstances that are out of the ordinary but not necessarily extraordinary or exceptional. The discretion to award costs must be exercised judicially having regard to the underlying principle that parties to proceedings in the Tribunal are ordinarily to bear their own costs. (See eMove Pty Ltd v Naomi Dickinson [2015] NSWCATAP 94 at [48]; CPD Holdings Pty Ltd t/as The Bathroom Exchange v Baguley [2015] NSWCATAP 21 at [23]-[31]; Nguyen & Anor v Perpetual Trustee Company Ltd; Perpetual Trustee Company Ltd v Nguyen & Anor (no 2) [2016] NSWCATAP 168 at [16].)

Consideration

1. We agree with the Owners Corporation's contention that, in light of the grounds advanced and the material filed in support of the appeal, there was no reasonable prospect that the appeal would succeed. Arguably, it lacked any tenable basis in law.
2. With respect to the second ground in support of the costs application, the commencement of concurrent proceedings by the appellants, the available material is insufficient to determine whether, as suggested by the Owners Corporation, those proceedings are unmeritorious or demonstrate that the appeal proceedings were vexatious.
3. We have considerable sympathy for those lot owners who are frustrated by what they see as Ms Purcell's attempts to dictate how the strata scheme is managed and to act unreasonably in her dealings with O'Neill, other lots holders and residents. Nonetheless, we are not persuaded that it is appropriate to exercise the discretion to award costs, notwithstanding our view that the appellants' case probably lacked any tenable basis in law. Had there been evidence of other factors supportive of a finding of special circumstances, such as the appellants conducting the proceedings in a way that unnecessarily disadvantaged the Owners Corporation, or, for some collateral purpose, we may have been more inclined to exercise the discretion to award costs.
4. While the considerations are finely balanced, we are not satisfied that special circumstances warrant an order for costs in this appeal.

Orders

1. We make the following orders: 1. Leave to appeal refused. 2. Appeal dismissed. 3. Application for costs is refused.

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: 08 January 2021