Fong v The Owners - Strata Plan No. 82783 - [2022] NSWCATCD 56 - NSWCATCD 2022 case summary

NCAT Consumer and Commercial|2022-03-17

REASONS FOR DECISION

The applicant is the owner of a lot, unit A101, in the strata scheme the subject of strata plan 82783 ("the Strata Plan"), which is located at XX Queens Road, Hurstville, New South Wales. The respondent is the Owners Corporation of SP82783, for the purposes of the Strata Schemes Management Act 2015 (NSW) ("the Act"). By application filed 4 November 2021 in the NSW Civil and Administrative Tribunal ("the Tribunal"), the applicant initially sought an order under s. 126 of the Act. The applicant later amended her claim and now seeks orders under either s. 126 or s. 149 of the Act. The Tribunal heard the matter by means of an audio-visual linked hearing on 17 March 2022. The applicant was represented by James Kanridis, who lives in unit A101 and is the domestic partner of the applicant. He was supported by his father Terry Kanridis. The respondent was represented by Yun Gu, the current strata manager for SP82783.
The central issue in the proceedings is whether the respondent had "unreasonably refused its consent" (see s. 126(2) of the Act) to a building work proposed by the applicant or had "unreasonably refused to make a common property rights by-law" (see s. 149 of the Act). The work proposed by the applicant, which was the subject of the relevant common property rights by-law, involves the replacement of an existing pergola and attached awning, affixed to the rear of the building which is situated within the applicant's lot, and extending over the courtyard also within the applicant's lot, with a more extensive pergola and attached awning.

Factual background

The factual background against which this matter arose, is as follows:
In July 2020, the applicant moved into her lot within SP82783. The Strata Plan was registered on 17 September 2009. The property which is part of the Strata Plan appears to consist of a residential apartment building, made up of seven floors, and featuring numerous individual lots and items of common property. There was no evidence about the total number of lots within the Strata Plan. The property has a frontage along Queens Road.
The applicant's lot, on level 1 of the floor plan to the Strata Plan, appears to be located at ground level. Her lot includes a rear courtyard, which in turn is at the rear of SP82783 and this courtyard is completely enclosed with no access to external roads or pathways. The area of the courtyard is 6.5 metres by 6.1 metres. There is a pergola and attached awning extending from the rear edge of the building within the applicant's lot and into the courtyard. The pergola/awning structure extends 1.5 metres into the courtyard. The applicant's evidence suggested that the wall enclosing the courtyard is common property and represents part of the boundary of the Strata Plan. The registered plan for level 1 of the strata scheme the subject of the Strata Plan records that "courtyards extend to a height of 2.5 metres above the upper surface of their respective floors except where covered."
The registered plan for the Strata Plan and photographs tendered by the parties show that there are a number of other lots directly above the applicant's lot. The photographs tendered by the parties, and an aerial photograph, also appear to show that there is a large residential apartment block situated behind the Strata Plan and the applicant's lot within the Strata Plan. That residential apartment block has a frontage along Bond Street which is parallel to Queen's Road. Adjacent to the Strata Plan, and in the vicinity of the applicant's lot within the Strata Plan, are two other properties, first there is another property the subject of a strata scheme and then there is another property which the evidence suggested was part of the Hurstville Library.
On 11 July 2020, the applicant sent an email transmission to the strata manager for SP82783 in relation to a proposal by her to replace and extend the pergola/awning structure attached to the building within the applicant's lot. The text of the email transmission referred to attached plans of the proposed work. It described the materials to be used in constructing the proposed work. It identified the proposed builder and that company's relevant insurance and other details. It advised that the work would take two days and reported that George's River Council had said the work did not need Development Application approval as what was proposed was under 25sqm.
This email transmission tendered before me did not contain the attached plans but it was clear from other evidence before me that the existing pergola/awning extends 1.5 metres from the edge of the applicant's building within her lot and that what the applicant was proposing, was that the pergola/awning be extended so that it would extend 4 metres from the edge of the applicant's building within her lot. Along the two sides of the courtyard, the proposed extended pergola/awning would be attached by metal posts to the walls enclosing the applicant's courtyard. At the rear of the courtyard, there would still be open space between the edge of the proposed extended awning and the rear of the applicant's lot. The courtyard is, as mentioned above, 6.5 metres in length from the edge of the applicant's building within her lot to the rear boundary fence of her lot.
(I should note that the report tendered by the respondent suggested that the length from the edge of the applicant's building within her lot to the rear boundary fence was just over 7 metres in length. It is not necessary for present purposes for me to resolve this discrepancy in the evidence).
The posts which would support the proposed awning would be attached to the boundaries of the applicant's courtyard and the boundaries are common property of SP82783. For two of the proposed supporting posts, there would be base plates to the posts bolted to the ground of the courtyard. The evidence before me suggested that immediately under the surface of the courtyard was a waterproof membrane which was common property of SP82783.
On 13 July 2020, the strata manager replied by email transmission to the 11 July 2020 communication and stated, amongst other things, that the applicant would have to create a by-law and organise a meeting with the relevant Strata Plan committee to discuss the proposal before then inviting the applicant to let the manager know how she wanted to proceed.
On 29 July 2020, the applicant sent an email transmission to the strata manager complaining about cigarette butts which had been thrown from properties above and either landed in the courtyard of the applicant's lot or on the existing awning, leaving burn marks. The strata manager responded with advice about placing notices on the notice board and in mailboxes to address that issue.
There was a meeting between the applicant and the strata manager and then on 11 October 2020, the applicant sent another email transmission to the strata manager attaching photographs which appear to show other lots within SP82783 exceeding the 1 - 1.5 metre allowance for awnings. The applicant stated that the strata manager had told her that she would need to wait for a special meeting and provide her own by-law. The applicant stated that she should not have to wait as the more extensive awnings had already been built on some of the other lots within the Strata Plan.
A number of email transmissions passed between the applicant and the strata manager on 12 October 2020, debating why a by-law was needed for the extended awning proposed by the applicant when other extended awnings already existed for some other lots within SP82783. The strata manager said that some awnings were registered and had been built as part of the original construction of SP82783 and further, that in the past ten years there were no by-laws permitting awnings/pergolas to be extended from 1.5 metres to 4 metres.
On 19 October 2020, the strata manager advised the applicant that one of the strata committee members had made an objection to the proposal to extend the applicant's pergola to four metres. The four reasons given for the opposition were as follows: 1. safety: extending the pergola would give easier access to the other lot owner's property; 2. reflection of sunlight: the proposed pergola/awning would reflect sunlight onto the other lot owner's balcony "and surrounding area", which would be more severe than the current reflection of sunlight and this would worsen the neighbour's mother's dry eye disease. The neighbour's mother was also suffering from depression; 3. the noise from raindrops: the noise from raindrops on the existing awning gave rise to a heavy beat. The noise was still bearable but a 4-metre-long pergola "would be quite a concern" especially for the other lot owner's mother who was suffering from insomnia; 4. financial loss: the neighbouring lot owner bought her lot ten years previously because of the view and an extended pergola for the applicant's lot would change the view, giving rise to a "possible fall in property price … thus creating financial loss."
The committee member who made the objection was not identified in the strata manager's email transmission.
The applicant procured a report from Tyrrells Property Inspections Pty Limited, dated 22 October 2020, and sent that report to the strata manager on 23 October 2020. This report, as mentioned above, was tendered as part of the applicant's evidence before me. The report provided an opinion rejecting the four objections which had been raised. It stated that extending the pergola would not increase safety risk. It noted that the pergola roof sheets were not load bearing and that any person walking on the structure, using similar materials to the current construction, would fall through the sheeting and suffer injuries. As for sunlight reflection, the opinion given was that there was no reflectivity from the existing pergola roofing as the roof sheets were translucent and do not reflect light or heat. As for noise from rain, the opinion given is that if the occupants are suffering from existing medical conditions, they should seek medical advice about the "root causes" of those conditions which "cannot be linked to a simple pergola structure." As for financial loss, the opinion was that the extended pergola would not devalue the neighbour's unit and that in fact, it was 'anticipated' that "it would add value to both the units as it will provide increased privacy and separation."
On 11 November 2020, the strata manager advised the applicant that a neighbour of the applicant, the owner of lot A201, was "still looking for an appropriate third party to provide a report." There was no subsequent email transmission from the strata manager advising the applicant that an "appropriate third party" had been found, that a report was completed and then accompanying that advice with the provision of the report by the strata manager to the applicant.
Lot A201 is situated immediately above the applicant's lot. The evidence showed that lot A201 has a balcony, which extends along the rear of the building which is part of lot A201. The balcony is immediately above the existing pergola/awning structure in the applicant's lot. The width of the balcony enjoyed by lot A201 and the width of the existing pergola/awning enjoyed by the applicant is not clear in the evidence but photographs tendered before me suggest the two structures run in parallel to each other for some distance, at least several metres.
As mentioned above, at the hearing of this application, the respondent relied upon a report called the "Preliminary Property Inspection & Expert Report". The report was procured by the owner of lot A201 in SP82783. The report records that its author did a "site inspection" which took approximately one hour, during which measurements were taken. The inspection took place on 19 January 2021.
In the body of the "Preliminary Property Inspection & Expert Report" there is a copy of part of the text of what appears to be an email transmission recording four reasons why an objection had been taken by Han Zhang to the applicant's proposed works. This text appears to coincide with the text in the 19 October 2020 email transmission, referred to above, apart from some editorial minor changes, by which the first-person form used in the email transmission contained in Preliminary Property Inspection & Expert Report was changed into the third-person form in the 19 October 2020 email transmission. Han Zhang appears to be the owner of lot A210.
The inference that I draw is that the Strata Plan lot owner who made the objections reported in the 19 October 2020 email transmission, was the owner of lot A210.
The Preliminary Property Inspection & Expert Report also contains a copy of the first page of the report from Tyrrells Property Inspections Pty Limited, dated 22 October 2020.
Turning to the findings made in the Preliminary Property Inspection & Expert Report, the author, Mr. Ge: 1. Includes a sub-heading in his report "Deopardise [sic] air space to the strata common area of whole building". He calculates a loss of air space for the "first floor tenant" (which appears to be the owner of lot A201) as 41 cubic metres or a 20% "percentage of loss." He gives his opinion "this is a very large loss in air space for this congested apartment. Pergola extension is not suitable for this strata complex." 2. Includes a sub-heading in his report "Roof noise to unacceptable level". He says "[r]oof noise increases due to increased sqm would be unacceptable. Roof noise have directly impact on units surrounded." He gives his opinion "it is not suitable to build a pergola with extreme noise when it rains is not acceptable. It impact on Human's health and it also does not comply with current strata regulations." 3. Includes a sub-heading in his report "Draiange [sic] is big issue for strata management." Under that sub-heading he says "[s]trata issue and strata manage should be have concerns about building drainage, which is different from a detached house development." 4. Includes a sub-heading in his report "Roof cleaning issue." Under that sub-heading he suggests that the increase in the area of the pergola roof from 9sqm to 24sqm "and most space unreachable, with my 10 years building inspection experiences, the roof would be left dirty and full of rubbish from all units above." He gives the opinion: "Roof cleaning is a big issue which directly affects tenants above and around." 5. Includes a sub-heading in his report "Reflective heart can deopardise [sic] fresh air." Under that sub-heading, he says that reflective heat can jeopardise fresh air, especially in hot summer days "which is long in Sydney." He notes that the owner's mum has dry eye disease and notes that he is not a doctor. He gives the opinion: "large pergola is not suitable for a strata complex with reflective heat rising up to other levels." 6. Includes as a final sub-heading in his report "Safety issue", and under that sub-heading he says "the larger the space of the roof the more free space for climbing into the units possible."
The respondent's evidence did not suggest that this report was provided to the applicant, at any time after 19 January 2021 and before these proceedings were commenced in November 2021.
By December 2020, the applicant had applied for mediation of her dispute about the proposed work with NSW Fair Trading, Strata and Community Living. In December 2020 and January 2021, there were also discussions between the applicant and the strata manager about the process to resolve the issue. On 25 January 2021, a mediator from NSW Fair Trading, Strata and Community Living advised the applicant that it was premature to seek mediation as there had not yet been a formal resolution made about the proposed awning by the owners corporation at a general meeting. On 29 January 2021, Mr. J. Kanridis wrote to the strata manager requesting that a motion be put on the agenda of an Extraordinary General Meeting, seeking an approval "in accordance with sec 110 of the Strata Schemes Management Act 2015 for the owner of Lot A101 to extend the existing rear pergola" in accordance with certain conditions enumerated in the email transmission.
Eventually, on 12 March 2021, there was an Extraordinary General Meeting of the owners of SP82783. According to the minutes, the topic addressed in the meeting was the extension "of the existing pergola from 1.5m to 4m." The minutes of the meeting record "Defeated That in accordance with Sec 110 7 (b)(c) of the Strata Schemes Management Act 2015, by ordinary resolution to decide the Owners Corporation should not approve the owner of Lot 1 (A110/112 Queens Rd, Hurstville) to extend the existing rear pergola in their courtyard." There were 15 votes in favour of that resolution, 2 votes against and there were 2 recorded as unfinancial and unable to vote.
On 6 October 2021, a mediation between the applicant and the respondent was conducted by NSW Fair Trading, Strata and Community Living. It was unsuccessful.
On 4 November 2021, the applicant commenced proceedings in the Tribunal. At a directions hearing before the Tribunal on 30 November 2021, the respondent argued that s. 110 of the Act did not apply as the work proposed by the applicant did not involve a "minor renovation." (See in that regard the inclusive definition of "minor renovations" in s. 110(3) of the Act). The applicant indicated that she would consider providing a by-law for the work she proposed and if the by-law were rejected, she might consider applying under s. 149 of the Act. (On 31 January 2022, by way of the covering letter to the applicant's evidence filed in this proceeding, the applicant indicated that she was seeking relief under s. 149 of the Act).
Notice was given of the annual general meeting of the owners of SP82783 to take place on 20 January 2022. The agenda for the meeting included as Annexure A thereto, the applicant's proposal for a new by-law to permit her to extend the pergola/awning structure at the rear of her building within her lot. Annexure A included the text of the proposed special by-law number 29, which provided for works relating to unit A101.
The proposed by-law includes the required acceptance of liability by the applicant for maintenance of the works, indemnity to the Owners Corporations and the applicant's obligation to apply for any necessary approvals required in relation to the proposed works.
The by-law identified as the proposed works, works to install an extended pergola within lot 1. The design of the works was specifically identified in drawing SK01 attached to the by-law and dated 30 November 2020. There was a quotation provided by a builder to do the proposed works. In the quotation, part of the work was described as follows: "Provide a new colour bond frame pergola to selected colour with wall anchor points and weighted 90 x 90 posts with no ground anchors (no ground membrane disturbance). Provide new low reflective roofing with matching profile light well sheets with gutter DP system in selected colour. Make good all surrounding areas."
The builder's licence number and certificate of the currency of his insurance was also attached.
On 20 January 2022, there was an annual general meeting of the owners of SP82783. The minutes of the annual general meeting record in relation to item 14, considered at the meeting, the following: "Lot 1 (Unit A101) Pergola Renovation By-Law Defeated the Owners - Strata Plan No. 82783 SPECIALLY RESOLVES pursuant to sections 141 and 143 of the Strata Schemes Management Act 2015 to make an additional by-law in the terms outlined in Annexure A attached to the agenda of this meeting. (Proposed by Lot 1 Owner). 1 Pursuant to a special resolution of the Owners Corporation and in accordance with the provisions of Division 3 of Part 7 of the Strata Schemes Management Act 2015, the Owners Corporation specially resolves to authorise the strata managing agent to sign and affix the common seal of the Owners Corporation by way of execution of the Consolidation/Change of By-Laws (which incorporates the By-Law) attached to the Agenda of the Annual General Meeting, subject to any subsequent non-material amendments by the Owners Corporation. Vote: 15 votes in favour 1 vote against"
Notwithstanding the reference in the minute to "15 votes in favour and 1 vote against", it was common ground between the parties that the resolution which the applicant sought to support the by-law, was defeated. The word "Defeated", immediately under the sub-heading pertaining to this item considered by the annual general meeting is accurate.
There is an email transmission dated 21 January 2022, in which the applicant writes to the strata manager: "We had our AGM yesterday and the strata manager, Yun Gu mentioned he could send me a copy of the report which provides reasons why our pergola application has been rejected. Can you please send me a copy today so I can review the concerns?"
On 24 January 2022, the applicant sent another email requesting the report.
On 24 January 2022, the strata manager responded by advising: "The report is for the owner of unit A201. As this case is going to be resolved on NCAT, the owner of unit A201 would like to provide it on Tribunal. We do not have a copy of the report in our office."
I find that the Preliminary Property Inspection & Expert Report was not provided to the applicant by 20 January 2022, being the date of the annual general meeting, and that the applicant did not have a chance to address the opinions offered in that report. On the other hand, the applicant had received the 19 October 2020 email transmission referred to above which contained reasons for objecting to the applicant's proposal which have some overlap with some of the opinions expressed in the Preliminary Property Inspection & Expert Report.
There is also in the respondent's evidence, as already mentioned above, eight documents, all of which feature an introductory paragraph and six paragraphs of identical text, in which opposition to the applicant's proposed by-law is stated. The first appears to have signed by the owner of lot B605, the second is by the owner of lot B603, the third from the owner of lot A605, the fourth is from the owner of lot A503, the fifth from the owner of lot C605, the sixth from the owner of lot B301, the seventh from the owner of lot A201, the eighth from the owner of lot C701 and the final document has a table below the text of the introductory paragraph and six paragraphs in which opposition to the applicant's proposal is expressed. The table identifies eight additional lot owners (E201, D803, B202, A703, A702, A202, A203 and E102) who oppose the change to the by-law and the signatures of these lot owners has been endorsed in the table.
On their face, the eight documents record, according to the introductory words appearing in the documents, "our opinion about the by-law proposal to allow pergola extension raised by the owner of A101." A characteristic of these eight documents is the identical content of the document. After the introductory words, the six points made against the applicant's proposed works and associated by-law are as follows: 1. a concern about ventilation "in the common area of the building" if the pergola is extended from the current 1.3 m [sic] long pergola "since there is only one door that can be opened for A101. If there is no sufficient airflow, it will be easy to grow mold [sic], impacting the wellbeing and health of the residents in the whole building; 2. a concern about noise, "[w]hen it rains the neighbours can hear the big noise of rain beating the existing 1.3 m pergola. If … extended from 1.3m to 4m, the noise will massively increase and this disturb the normal life of the neighbours"; 3. challenging the applicant's commitment to keep the pergola/awning clean, "… the existing 1.3m pergola is very dirty and has never got cleaned, much doubt will be cast on the frequency of the pergola cleaning in the future despite the promise of the owner of A101"; 4. a concern about the health of the mother of the neighbour living upstairs "[t]he neighbour living upstairs can feel strong heat and sunlight, reflected from the existing pergola, especially during Summertime. The mother of the owner upstairs has got dry eye disease and she cannot even step into the balcony due to the excessive heat and sunlight when it is clear and sunny"; 5. a concern about security, "[t]he extension of the pergola will also make burglary easier." There then follows some text dealing with some "incidents" but there is no suggestion that the incidents had any link to the applicant's lot; 6. a concern about setting a precedent which would, it is asserted, impact on the value of lots within the Strata Plan. "If the by-law proposal was passed, pergola setup would be legalized in this community and it would be very likely that all the owners on Level 1 would consider setting up pergola. In that case, the view and layout of the whole building complex will be largely changed and be different to what the owners originally intended to purchase here. And it is very likely that property price will be affected by this change."
It was not made clear to me by the respondent how or why these eight documents, recording opposition to the applicant's proposal, were prepared or what was their nature and significance to the applicant's case presented at the hearing. Only one of them is dated, that is the document of the owner of unit B301 and it bears the date 30 January 2022, being of course 10 days after the annual general meeting referred to above. The documents are addressed "To whom it may concern." Who prepared the text of the documents? When did he or she do so and for what purpose? How was it that sixteen lot owners came to sign a document in identical terms? Were any other lot owners within the Strata Plan asked to sign the documents and if so, did any refuse to do so? What is their relevance to the issues the Tribunal has to consider? What probative value, if any, should the Tribunal attach to the documents? None of these matters were addressed by the respondent during the hearing.
By way of further context, at a directions hearing on 30 November 2021, directions were made by the Tribunal requiring the parties to serve on each other all documents which they intended to rely upon at the hearing. An important note attached to those directions identified that "document" meant, amongst other things, "witness statements/statutory declarations or affidavits: and expert reports. Order 6 of the Tribunal's directions on 30 November 2021 was: "All evidence from a party's witness(es) in support of that party(ies) must be in the form of a statement, statutory declaration, affidavit or expert report as appropriate."
There was no evidence that the eight documents were tabled and discussed at the annual general meeting on 20 January 2022. There was no evidence as to whether they were collected after the meeting, perhaps with the intention to send them to the applicant so she could understand why 15 votes were cast against the applicant's by-law proposal. The documents are not in the form of witness statements, affidavits or statutory declarations.

Disposition

The Tribunal has jurisdiction to make orders pursuant to ss. 126 and 149 of the Act. There was no submission by the respondent to the contrary.
I will deal first with the applicant's claim for an order under s. 149 of the Act, as that is the primary way the applicant put her case.
The applicant bears the onus of proof having regard to the elements of s. 149 of the Act: compare Gazebo Penthouse PL v Owners SP 73943 [2015] NSWCATCD 93 at [88]; Owners SP 69140 v Drewe [2017] NSWSC 845 at [43].
The by-law which the applicant proposed for consideration at the annual general meeting on 20 January 2022 was framed under s. 141 and 143 of the Act, that is, as a "common property rights by-law" within the meaning of s. 142 of the Act. Clause 1.1 in special by-law 29 - works for Lot 1 (Unit A101), which was part of Annexure A considered at the 20 January 2022 annual general meeting, uses the language of "special privilege". What the applicant sought in regards to the proposed by-law is properly characterised as a common property rights by-law, and at least s. 142(b) of the Act was satisfied with respect to the applicant's proposed works. That is because the proposed works involve two metal posts, supporting the leading edge of the pergola/awning structure proposed, which appear to be anchored to the walls surrounding the applicant's lot's courtyard, which side walls are part of the common property. The quotation dated 21 December 2021 describes the proposed work as involving a pergola "with wall anchor points and weighted 90 x 90 posts with no ground anchors."
The respondent argued that the proposed work did not fall within s. 110 of the Act. I accept that argument as it seems to me that the proposed work, inter alia, is work that would change the external appearance of a lot (see s. 110(7)(c) of the Act) since the existing pergola/awning within the applicant's lot is being extended.
There were no submissions from either party about whether the proposed works would be constructed entirely within the airspace owned by the applicant, which, as observed earlier, extended 2.5 metres above the courtyard floor except where covered, or instead, would intrude into airspace owned by another entity or lot owner within the Strata Plan.
Section 149(1) and (2) of the Act are in the following terms: "(1) The Tribunal may make an order prescribing a change to a by-law if the Tribunal finds -- 1. 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, or … 2. …, or. 3. …. 1. In considering whether to make an order, the Tribunal must have regard to - 1. the interests of all owners in the use and enjoyment of their lots and common property, and 2. the rights and reasonable expectations of any owner deriving or anticipating a benefit under a common property rights by-law."
The authorities which have considered s. 149(1)(a) of the Act or its equivalent provision in previous legislation dealing with the same topic, direct attention to the unreasonableness of the owners corporation and owners' conduct in refusing consent to the proposed common property rights by-law or alteration to the common property. This is an objective inquiry based on the ordinary meaning of reasonableness and unreasonableness: McCann v Owners SP 11318 [1998] NSWSSB 44. An "unreasonable" refusal is one that is not endowed with reason, not guided by reasonable good sense, not based on or in accordance with reason or sound judgment, immoderate, capricious or exorbitant: see Owners SP 69481 v Want [2013] NSWCTTT 440.
The authorities also indicate that the issue for the Tribunal must be approached by considering what was before, or reasonably available to the owners corporation or owners at the time they refused consent to the by-law or the common property alteration, rather than material which subsequently came into existence: Owners Corporation SP 7596 v Risidore & Ors [2003] NSWSC 966 at [11] - [13]; Owners SP 69140 v Drewe [2017] NSWSC 845 at [27] and compare in the context of s. 126 of the Act, Endre v The Owners - Strata Plan no. 17771 [2019] NSWCATAP 93 at [29].
Particular lot owners in the strata plan the subject of proceedings can, on one view even should, adduce evidence of their reasons for their opposition to the proposed common property rights by-law: Milman v Owners SP 1389 [2005] NSWCTTT 196.
Section 149(2) permits me to take into account the interests of the applicant in the use and enjoyment of her lot and common property and the rights and reasonable expectations of her in deriving or anticipating a benefit under a common property rights by-law: and see Capcelea v The Owners - Strata Plan No 48887 [2019] NSWCATCD 27 at [57].
In January 2022, the agenda for the annual general meeting included material from the applicant setting out the terms of the proposed by-law, a design drawing and other information pertaining to the proposed work, as recorded already above in these reasons. The applicant's proposal on its face seems relatively modest in the amount of building work required and in regards to the limited extent to which it will create a special privilege for the applicant in regards to one part of the Strata Plan's common property, by anchoring part of the proposed extended structure to the walls surrounding the applicant's courtyard. There is an appropriate acceptance by the applicant of her liability for maintenance of the proposed structure and the provision of appropriate indemnities. No issue has been taken by the respondent with the text or form of the by-law proposed by the applicant. There was no cross-examination by the respondent of either Mr. J Kanridis or Mr. T. Kanridis to suggest that the applicant's commitment to maintain the applicant's extended pergola/awning should be disbelieved.
The by-law which the applicant has proposed seems to me to be consistent with the use and enjoyment of her lot and the relevant part of the common property in the Strata Plan affected by her proposed works, as well as the applicant's rights and reasonable expectations deriving or anticipating a benefit under a common property rights by-law. I must have regard to that matter (s. 149(2) of the Act) but of course the applicant must demonstrate the unreasonableness of the refusal, not the reasonableness of the proposed change. I am also obliged to have regard to the interests of all other owners and the rights and expectations of any other owner, as stipulated in s. 149(2) of the Act.
The minutes of the annual general meeting show that 15 other lot owners within the Strata Plan were opposed to the applicant's proposed by-law and there was only one vote in favour of the proposal. But what are the reasons for the opposition?
The record of the voting does not record the reasons why the 15 lot owners cast votes against the resolution.
At the hearing of this matter, there was no witness statement, affidavit or statutory declaration from any of the lot owners who opposed the proposed by-law, identifying their reasons for opposing the by-law.
It is somewhat striking that the owner of lot A201, who procured the Preliminary Property Inspection & Expert Report some time before January 2021, did not provide any evidence to the Tribunal, in some probative form, as to reasons why she was opposed to the applicant's proposal. While it is not obvious that extending the applicant's pergola/awning from 1.5 metres, would have implications for other lot owners within the Strata Plan, the applicant's proposed extended pergola/awning, on its face, would have an impact on, at the very least, the view from the balcony of lot A201. But there was no objective evidence from the owner of lot A201, or indeed any evidence at all, about the view and its value, the extent of the impact on the view if the applicant's proposed works went ahead, the extent to which the impact would be adverse, and how it might compare with the current usage of her lot. Nor was there any objective, properly-based evidence from the owner of Lot A201 about an adverse impact, in any other respect, arising from the applicant's proposed works.
Similarly at the hearing of this matter, there was no expert report, which complied with the Tribunal's Practice Note relating to the requirements for expert reports, which gave the Tribunal an explanation why the proposed by-law might have been rejected, based on matters that may have been known by other lot owners within the Strata Plan when they made their decision on 20 January 2022.
At the hearing, Mr. Yun explained that the proposed pergola would be "heavy" and that there was a risk to the stability of the wall surrounding the applicant's lot's courtyard were the proposed extended pergola/awning to be built. There was no evidence before me to suggest that any of the other lot owners within the Strata Plan took into account any of those matters raised by Mr. Yun at the hearing, when they rejected the applicant's proposed by-law. In any event, the respondent did not suggest that Mr. Yun had any relevant expertise to offer such opinions about the extended pergola/awning proposed by the applicant. Nor were the steps in his reasoning to reach the conclusions that the proposed pergola would be "heavy" and that there was a risk to the stability of the wall surrounding the applicant's lot's courtyard were the proposed extended pergola/awning to be built, exposed to the Tribunal. I give no weight to Mr. Yun's explanation. I do not regard it as providing me with any objective evidence on which I can rely.
Mr Yun made submissions about certain other reasons as to why objection was taken to the applicant's proposed by-law, as noted above, dealing with 'ventilation', 'cleanliness', 'health issues' and 'safety.' The precise link between those submissions and matters which other lot owners did take account of when rejecting the applicant's by-law at the annual general meeting was not made clear to me. There is however, in the respondent's evidence tendered at the hearing, material which explains in part why Mr. Yun made those submissions. The material might provide a basis for inferences to be drawn as to the reasons why some lot owners might have opposed the applicant's proposed by-law in January 2022, so it is necessary that I consider the material.
First, there is the email transmission dated 19 October 2020 setting out four reasons why another lot owner within the Strata Plan objected to an extension of the applicant's awning to 4 metres. Before dealing with the content of those objections, it will of course be appreciated that this email transmission is dated well before January 2022. Whether any of these reasons were still maintained in January 2022 is a matter of conjecture. Importantly, no lot owner gave evidence at the hearing that these reasons motivated their vote in January 2022. Nonetheless, my findings in relation to each of the reasons expressed in the 19 October 2020 email transmission, assuming they were still adhered to in January 2022, are as follows.
The first objection in the October 2020 email transmission was about 'safety'. I do not find that suggested reason to be guided by reasonable good sense or in accordance with reason or sound judgment. It is hard to see how the extended structure would allow easier access, for a potential intruder, to another lot owner's property within the Strata Plan. The evidence showed that the applicant's courtyard was not surrounded by any roadways or pathways. There is no explanation from the respondent as to how an intruder might be in the applicant's courtyard in the first place. There was little evidence about the nature of any of the properties adjoining the applicant's lot on any side, and how an intruder from any of those properties could benefit from the applicant's proposed works, if that intruder wanted to target any lot owner's property within the Strata Plan. The logic behind the objection is hard to follow. Assuming an intruder did make his or her way into the courtyard of the applicant's lot, it seems to me that the more narrow, existing awning might even be an easier obstacle to surmount than a 4-metre-long proposed awning. Further, given the large apartment tower immediately behind the property which is part of the Strata Plan and the applicant's lot, it seems to me that there would be greater risk or prospects for an intruder to be seen if he or she was scrambling over a longer awning than the current 1.5 metre long awning.
The second objection in the October 2020 email transmission was about 'reflection of sunlight'. There is no expert evidence before me which persuasively explains why the works the applicant proposes would cause a reflection of sunlight problem for the owner of lot A201 and worsen the dry eye disease, asserted to be suffered by the mother of the owner of Lot A201. There was no evidence that the lot owner's mother did suffer from "dry eye" disease, about how frequently the lot owner's mother attended Lot A201 and there was no submission about whether such a matter is a relevant consideration or what would weight should be given to it, for the purposes of s. 149 of the Act.
I can appreciate the potential for there to be a reflection of sunlight from the extended pergola/awning onto the balcony of the owner of Lot A201 and possibly, into some "surrounding areas". In making an assertion about the reflection of sunlight, it does not appear that any consideration has been given to the actual material to be used in constructing the applicant's proposed works. The works proposed by the applicant and considered at the annual general meeting in January 2022, in fact featured "low reflective roofing", as is clear from the building quotation dated 14 December 2021.
The photographs also suggest that there were other surfaces in the vicinity of Lot A201 which are likely to be reflective of sunlight, including what appears to be an off-white Colourbond fence surrounding the courtyard in the applicant's lot, that itself would likely to be highly reflective of sunlight, as well as other walls, including a wall to which the balcony on the property on Lot A201 is adjacent to, which appear to be made from concrete or perhaps covered in a light- coloured render.
I do not find the suggested reason to be guided by reasonable good sense or in accordance with reason or sound judgment. It is not based on persuasive evidence from any relevant expert or experts and does not take into account other facts and circumstances which may be relevant to the question of sunlight reflection that might be caused by the applicant's proposed works.
The third objection in the October 2020 email transmission was about the noise from raindrops if the applicant's pergola/awning was extended. There is no expert evidence before me which persuasively explains what extra noise from raindrops would be created if the works proposed by the applicant were to go ahead, how that extra noise might be evaluated against any building standards or codes which might apply, the frequency at which such rainfall would likely to occur and how the asserted extra noise would exacerbate an asserted insomnia problem suffered by the mother of the owner of a neighbouring lot.
I do not find the suggested reason to be guided by reasonable good sense or in accordance with reason or sound judgment. It is not based on persuasive evidence from any relevant expert or experts.
The fourth objection in the October 2020 email transmission was about financial loss if the applicant's proposed extended pergola/awning were to go ahead. The logic behind this reason is difficult to follow. Whatever might be the benefits of the view down from the balcony on Lot A201 into the courtyard of the applicant's lot, there may on the other hand be a benefit in terms of privacy for someone on the balcony if the awning were extended. In any event, to the extent there is any "financial loss" that is going to be suffered based on loss of the view, is a question that is hard to grapple with in the absence of some persuasive expert evidence explaining how, to what extent and why the financial loss would arise. I do not find the suggested reason to be guided by reasonable good sense or in accordance with reason or sound judgment. It is not based on persuasive evidence from any relevant expert or experts.
I next consider the Preliminary Property Inspection & Expert Report, which, it will be recalled was a response to the Tyrrells Property Inspections Pty Ltd report obtained by the applicant, and dated 22 October 2020, to respond in turn to the objections identified in the 19 October 2020 email transmission.
There is no evidence that the content of the Preliminary Property Inspection & Expert Report was relied upon by any lot owners who voted against the applicant's by-law proposal. But during the annual general meeting on 20 January 2022, it seems that reference was made by the respondent's strata manager, to the Preliminary Property Inspection & Expert Report. The evidence shows that on 21 January 2022, the applicant requested a copy of the expert report. It was not provided in answer to that request or in answer to a further request on 24 January 2022. On the assumption that the contents of this report were discussed on 20 January 2022, some consideration should be given to whether there is anything in the report which provide some objective evidence of adverse impact of the proposed by-law on other lot owners in the Strata Plan.
As set out above in these reasons, there were six opinions expressed in the Preliminary Property Inspection & Expert Report which criticised the works proposed by the applicant.
Two of those opinions, dealing with the topics "drainage" and the "safety issue", I reject as providing objective evidence capable of supporting a lot owner's decision to oppose the applicant's by-law. I do so because the opinions expressed in the Preliminary Property Inspection & Expert Report do not rise above mere assertion and the steps in the reasoning to reach those opinions are not articulated. The opinions are not persuasive.
Two of those opinions, dealing with the topics "reflective heat" and "roof noise to an unacceptable level" I reject as providing objective evidence capable of supporting a lot owner's decision to oppose the applicant's by-law. I do so because the author of the report does not appear to have relevant expertise to give the opinions which he has given on these two matters. Further, what particular Australian standards have been evaluated and applied by the author of the report and the steps in the reasoning to reach those opinions, are matters not articulated. The opinions are not persuasive.
As to the 'roof cleaning issue' addressed by the author of the report, in circumstances where the applicant will be obliged by the proposed by-law to maintain the extended pergola/awning she proposes, and where there was no cross-examination by the respondent suggesting that the applicant's commitment to maintain the proposed work should not be believed, I find the author's opinion on this matter to be an opinion which does not rise to the level of objective, properly-based evidence. It is not a persuasive opinion.
As to the author's opinion about the loss of lot owner A201's air space, the evidence before me does not in fact suggest that the air-space into which the extended pergola/awning would be built, is airspace owned by the lot owner of lot A201. No submission to that effect was made by the respondent at the hearing. This opinion depends on a fact which has not been established by other evidence. I find the author's opinion on this matter to be an opinion which does not rise to the level of objective evidence. To the extent that this opinion relates to air-space "to the common area of whole building", there was no evidence that the applicant's proposed works infringed on any airspace that was common property within the Strata Plan. No submission to that effect was made by the respondent at the hearing. This opinion depends on a fact which has not been established by other evidence. I find the author's opinion on this matter to be an opinion which does not rise to the level of objective, properly-based evidence.
I next consider the eight documents, signed by lot owners and recording their "opinion about the by-law proposal to allow pergola extension raised by the owners of A101."
It is difficult for the Tribunal to place weight on these documents as there was no evidence from the respondent about the circumstances leading to their creation. The fact that the eight documents are in identical terms carries a real risk that the documents do not represent the independent views of each relevant lot owner, untainted by prompting or suggestion by another person. There is a common factual error in the eight documents in the suggestion that the existing awning in the applicant's lot extends 1.3 metres into the courtyard, rather than 1.5 metres. There was no explanation why, if these documents do represent the views of the lot owners who endorsed these documents, none of these lot owners gave evidence at the hearing, in a form which the Tribunal might find probative. As none of the lot owners who endorsed these documents gave evidence at the hearing by way of witness statement, affidavit or statutory declaration, the applicant had no ability to challenge or cross-examine these lot owners. I am not confident that I can place any weight on these eight documents, or that it would be fair for the applicant, if I were to place any weight on these documents as objective evidence relevant to the inquiry the Tribunal is engaged in under s. 149 of the Act. I conclude that I should not, and I do not, place any weight on the eight documents as probative evidence of the reasons why 15 lot owners voted against the applicant's by-law proposal in January 2022.
It I am in error in coming to that conclusion, and if the eight documents are evidence of the reasons why 15 lot owners voted against the applicant's by-law proposal in January 2022, I will, on that premise, consider whether the reasons given within the eight documents are unreasonable.
The six reasons given in the eight documents were set out above in these reasons. I will deal with the last of those reasons, as set out above, first.
I can take into account as relevant, questions of setting a precedent for proposed work, but I can only do so to a limited extent. It is not correct to suggest that "pergola setup would be legalised in this community" were the by-law proposal to be passed. The Act makes it clear that it falls to an Owners Corporation to decide each issue as it arises. Authority suggests that fear of setting a precedent would not be sufficient to oppose proposed works by an individual lot owner: Milijash v Owners SP 3618 [2002] NSWCTTT 297. The weight that precedent effect should be afforded also depends on evidence of what the precedent effect may be and how real that potential effect was. The respondent has not provided any evidence of those matters. To the contrary, the sixth paragraph in each of the eight documents merely suggests other all other owners on level 1 "would consider" setting-up a pergola. There is other evidence that some other pergolas already exist and were built as part of the original construction of the building located on the Strata Plan. Further, the applicant's proposed works interfere with common property in only a limited way so there is little or no weight to be given to any potential precedent effect here. I do not find the suggested reason to be guided by reasonable good sense or in accordance with reason or sound judgment.
I now deal with the other reasons expressed for opposition to the applicant's proposed works and by-law.
The first matter, pertaining to ventilation and growth of mould "impacting the wellbeing and health of the residents in the whole building" is not a reason guided by reasonable good sense or in accordance with reason or sound judgment. Such a reason would need to be supported by a properly-reasoned opinion, from a properly-qualified person, who had assessed the applicant's proposed works and evaluated the works and their effects (if any) against appropriate standards. There is no evidence to suggest such an opinion was supplied to any of the lot owners who endorsed any of the eight documents.
The second matter pertaining to a 'massively increased' noise burden from rain which would 'disturb the normal life of neighbours' is not a reason guided by reasonable good sense or in accordance with reason or sound judgment. Such a reason would need to be supported by a properly-reasoned opinion, from a properly-qualified person, who had assessed the applicant's proposed works and evaluated the works and their effects (if any) against appropriate standards. There is no evidence to suggest such an opinion was supplied to any of the lot owners who endorsed any of the eight documents.
The third matter involves a factual assertion that is not supported by any evidence, namely that the existing pergola "is very dirty and has never got cleaned." It ignores the obligation of maintenance upon the applicant in her proposed by-law. Therefore this is not a reason guided by reasonable good sense or in accordance with reason or sound judgment.
The fourth matter involves a factual assertion about the health of the mother of a neighbour, implicitly, the mother of the owner of lot A201. There is no medical or other evidence about the individual's health problems, the extent of those problems, the frequency with which the individual concerned attended the neighbouring lot or the extent to which she would be impacted by the applicant's proposed works. Therefore this is not a reason guided by reasonable good sense or in accordance with reason or sound judgment.
The fifth matter involves an assertion that the extension of the pergola would make burglary easier. The assertion is not supported by any factual material and makes no reference to circumstances such as the nature of the applicant's lot, the courtyard therein or any surrounding buildings or structures and for the reasons set out previously in this decision, the logic of the assertion is not persuasive. Therefore this is not a reason guided by reasonable good sense or in accordance with reason or sound judgment.

Conclusion on s. 149 of the Act

I come to the conclusion that the owners corporation has unreasonably refused to make the common property rights by-law proposed by the applicant. There is no rational or sound basis for the refusal of the applicant's proposed by-law. No lot owner who opposed the applicant's proposed by- law gave evidence before the Tribunal about why he or she was opposed to the applicant's proposed by-law. There was no expert evidence, properly-founded and reasoned, suggesting the existence of a rational or sound basis for the refusal of the applicant's proposed by-law.
Doing my best with material which the respondent presented to the Tribunal, I considered material in the respondent's evidence which contained content recording reasons given by other lot owners for opposition to the applicant's proposed works, albeit material which at times could not necessarily be readily connected to the voting at the annual general meeting in January 2022.
In particular, I considered the email transmission dated 19 October 2020, the Preliminary Property Inspection & Expert Report based on an inspection in January 2021 and a set of eight documents, only one of which was dated, setting out certain lot owners' opinions about the applicant's by-law proposal. I did not find any of this material to constitute objective evidence with probative value. Nonetheless, I have considered the reasons expressed in this material for why the applicant's by-law proposal and proposed works were refused. I found the reasons to be unpersuasive, at times dependent upon the proof of facts which have not been proven, at other times, dependent upon expert opinion evidence which was not provided and at other times, featuring mere assertions which did not address all the relevant facts and circumstances. I found the reasons not to provide any sound or rational basis for the refusal. Having had regard to the reasons expressed in this material, I am further and additionally persuaded that the refusal to make the proposed by-laws was unreasonable.
I have had regard to the matters identified in s. 149(2) of the Act.
In determining the application, I will do so by making an order prescribing the making of a by-law in terms to which the applicant is prepared to consent in that I will make the order in the same terms which the applicant put forward to the annual general meeting in January 2022 and has been relied upon by the applicant in her evidence relied upon in these proceedings: s. 149(3) of the Act.

Section 126 of the Act

The applicant also put her case, in the alternative to the s.149 of the Act case, on the basis of s. 126 of the Act. In submissions at the hearing, reference was made specifically to s. 126(1)(a) of the Act and the phrase therein "other alterations to common property directly affecting the owner's lot." I am not convinced by this aspect of the applicant's case and I do not make any order under s. 126.
The applicant's proposed works cannot be characterised as involving "repairs" (see s. 126(1)(b) of the Act), nor do they involve "minor renovations" (as defined in the Act) (see s. 126(1)(a) of the Act). But the applicant has not persuaded me that the work proposed does involve an "alteration" to common property. The common property is going to be used to support the proposed extended pergola/awning. Certain posts which are to be part of the structure to be anchored to the common property by "wall anchor points". This does not strike me as involving an "alteration" to the common property other than incidentally. It seems to me that the works proposed by the applicant, insofar as they will need to be supported by the common property, have some similarities with the works that were the subject of The Proprietors SP 1627 v Schultz (1978) Strata Title Law and Practice [3-024] per Holland J at 50,284 and 50,285b.

Order

I make the following orders: 1. Order pursuant to section 149 of the Strata Schemes Management Act 2015 (NSW) that the by-law, described as special by-law 29 and described at item 14 in the minutes of the annual general meeting of the Owners Corporation SP 82783 on 20 January 2022 is prescribed as a change to the by-laws of the said strata scheme, with the wording that appears in Annexure A to those minutes, as copied as pages 55 to 62 of the applicant's written evidence in the proceedings, and with special by-law 29 to operate on and from 20 January 2022. 2. Order the Owners Corporation SP 82783 promptly to do all acts necessary to record the by-law described in order 1 pursuant to section 246 of the Strata Schemes Management Act 2015 (NSW).

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: 22 June 2022

Fong v The Owners - Strata Plan No. 82783

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Judgment (8 paragraphs)

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