Glenquarry Park Investments Pty Ltd v Hegyesi

Issues for determination

1. Repairs to, and replacement and renewal of, common property is covered by SSMA s 62. SSMA s 65A provides for the improvement of common property, but requires that the relevant works be approved by special resolution. The principal question in the Tribunal proceedings was whether the works proposed by the majority owners were covered by s 62 (in which case no special resolution was necessary) or by s 65A (in which case the necessary special resolution had not been obtained).
2. There were three aspects to Senior Member Ross' decision in favour of Ms Hegyesi. First, Senior Member Ross upheld Ms Hegyesi's contention that the disputed works required a special resolution under s 65A. Orders were made restraining the Strata Corporation from carrying out the works in the relevant resolutions without a special resolution of the Strata Corporation, and setting aside the consequential levy. There is no dispute as to the Tribunal's powers to make orders in this form if s 65A applied. The majority owners challenge Senior Member Ross' conclusion that it did.
3. Second, Senior Member Ross ordered that, on or before August 2019, the Strata Corporation replace or repair certain specified parts of the common property. The majority owners also challenge this order. They contend that the orders are unworkable.
4. Third, Senior Member Ross made an order appointing JSM as manager of the Strata Scheme. The order was made for the statutory maximum period of 12 months. The majority owners challenged this order, on the ground that it was not justified in the circumstances. When the proceedings came on for hearing before me, the order still had about eight weeks to run. Unfortunately I was not able to deliver my decision within this period. As the order has expired, the challenge to it has become moot.
5. Counsel for the minority owners did not present any argument against the grant of leave. In my view, the grounds of appeal are of sufficient significance to warrant the grant of leave.
6. It is clear from the Civil and Administrative Tribunal Act, s 83, that the appeal is limited to questions of law. Counsel for the majority owners did not suggest to the contrary.

Factual background

1. The building in question was constructed in the 1930s. Initially it appears to have been under company title; the strata plan was registered, bringing the property under the strata titles legislation, in 1981.
2. The property is located at Felix Bay on the northern end of Point Piper where there is a small harbour beach known as Lady Martin's Beach. The land slopes down from south to north. On the northern side, the ground level abuts a seawall with steps down to the beach.
3. The building has four floors and a basement area. The first three floors are residential and each has a north-facing balcony. Lots 5 and 6 are on the first floor, the balcony being about one metre above ground level. Lots 3 and 4 are on the second floor and Lots 1 and 2 are on the third floor. The top floor gives access to the street from the south and provides a garage for parking for the residents. Each floor of the building is served by a lift and a staircase which is described in more detail below.
4. In evidence are Strata Corporation minutes going back to 2001, but not covering the entire period. Each year at the AGM, an executive committee of owners appears to have been appointed. In earlier years, this committee consisted of only some of the owners, but from about 2012 onwards, all of the owners were members of the executive committee. The minutes in evidence include minutes of general meetings of the Strata Corporation (both AGMs and EGMs) and of the executive committee.
5. Throughout the relevant period, the Strata Corporation appears to have retained a strata managing agent to perform some management functions. The identity of the agent changed over time. The delegations which would identify the particular scope of the management functions in each year do not appear to be in evidence. JSM has been the strata agent since about 2012.
6. The minutes in evidence show that the dispute between the majority and minority owners goes back, in one form or another, at least to 2004. In April of that year, at the AGM, resolutions were passed approving repair works to be performed by a company called RM Watson Pty Ltd at a cost of approximately $220,000 and raising a special levy to fund the costs of those works. Two months later, in June, an EGM was requisitioned by Mr King and Ms Sinclair. They proposed, as an alternative to the works the subject of the April resolution, that a long-term plan be developed for upgrading of the building. The plan was to be prepared and tabled by mid-September. The funds raised from the special levy to fund the works authorised in April were to be refunded. The resolutions were passed.
7. Towards the end of 2006, Russell Prescott, an architect whose firm is known as Prescott Architects, produced a concept design for redevelopment and upgrade of the property. Sketch plans were provided to the Strata Corporation in May 2007. The work involved, among other things, the conversion of the existing garage to create a three bedroom apartment (referred to as a "penthouse"); excavations at first and second floor level to create replacement parking areas; "improvements to entry and foyers including security and new lift, more functional layout"; and "refurbishment of the existing building including new extended balconies, finishes, stairs, painting, window refurbishment, etc". Mr Prescott's letter sought the owners' approval to develop the proposal and prepare a formal development application. The estimated cost of the works was approximately $3.9 million.
8. An application for development approval was lodged with the consent authority, Woollahra Muncipal Council, by Mr Prescott as applicant in 2009. The evidence does not identify whether Mr Prescott's work was authorised and paid for by the Strata Corporation but presumably it was.
9. At the 2010 AGM, which was held in April, the minority owners proposed three resolutions. They were: that a financial plan "clearly indicating how the proposed new penthouse addition is to be financed and the costs/benefit of such work" be produced within seven days; that the works proposed by RM Watson which had been the subject of the April 2004 resolution, "be implemented immediately"; and that no further funds be spent on progressing the development application without further approval of the Strata Corporation. These resolutions were all defeated. It was noted, in connection with the resolution for the works to be undertaken by RM Watson that the motion had been deferred for consideration following an updated report from RM Watson and a second independent company, a sinking fund forecast and an OH&S report. It was further noted that the other motions were to be dealt with together at the "next EGM" after the Council had resolved the development application, and that the executive committee was not permitted to spend more than $10,000 on the application before the owners had to be made aware.
10. The development application was approved by Woollahra Council at the end of August 2010. The approval remains in force because balcony works which were part of the application were eventually undertaken in 2015 (see below). But the development, as a whole, has not been implemented. As will be seen, the minority owners have resisted the redevelopment aspect of the approval in favour of less extensive works. For their part, the majority owners have been unwilling to proceed with what they would characterise as piecemeal repair works, hoping to have them subsumed within the approved redevelopment.
11. In September 2013 Woollahra Council gave notice pursuant to the Environmental Planning and Assessment Act 1979 (NSW), s 121B, of intention to issue a fire safety order against the property. The proposed order was to provide for the specified works to be done in three stages. The first stage was to involve stair treads in the stairways, emergency lighting and swing exit doors. The second and third stages were to involve more extensive works, including a sprinkler system in the stairway and lift shaft.
12. In evidence is a report from Building Defects and Water Proofing Solutions Pty Ltd ("BDW Solutions") prepared in April 2014 at JSM's request. The report was prepared by George Drakakis, director of BDW Solutions, following inspections carried out in March and April. Mr Drakakis was asked to investigate a number of issues including fire compliance, the exterior brickwork, roof areas, the lift and the seawall. The report recommended works costing approximately $1.1 million.
13. The executive committee decided to obtain a review of the BDW Solutions report by another builder, Mr Daintry. Mr Daintry's report was delivered in February 2015. He raised doubts about the proposal by BDW. Mr Daintry seems to have been of the view that it would be better to undertake more extensive works.
14. At an EGM held in May 2015, several resolutions were proposed by both sides. For present purposes the only relevant resolution was one proposed by Ms Sinclair that the Strata Corporation engage Prescott Architects to co-ordinate various items of what were described as "repair and renovation works". As amended, the motion was passed on a poll, the majority owners voting in favour and the minority owners and Ms Thomas voting against. The items of work identified included the works which are the subject of these proceedings. The motion required Prescott Architects to do whatever was necessary to activate the development approvals which had been granted by the Council and to prepare an updated specification and scope of works and tender, but was expressed to be subject to a resolution to be passed at a subsequent EGM pursuant to SSMA s 65A.
15. Further EGMs followed in August 2015. A special resolution was passed for the purposes of SSMA s 65A to remove and replace the balcony adjacent to each lot. The works incorporated an extension to each balcony. These works have since been completed. The meetings did not deal with any other works.
16. Pursuant to the May 2015 resolution, Mr Prescott submitted preliminary drawings and a scope of work for what he described as "renovation construction" in September 2015. This covered lobby and lift works; replacement of timber windows with aluminium ones; repairs to the seawall and the roof; works on external walls and painting; and external paving and landscaping.
17. In November 2015 Mr Prescott obtained from Roy Parkinson Pty Ltd, a firm of quantity surveyors, an estimate of the costs of the works. The estimated total cost was approximately $2.2 million.
18. In February 2016 Woollahra Council issued a fire safety order as foreshadowed by the notice given in September 2013. The order required the stage one works to be completed by the beginning of June; the stage two works to be completed by mid-August and the stage three works to be completed by mid-October.
19. The minority owners requisitioned an EGM which was scheduled for 9.00 am on 14 June 2016. They proposed a motion to repair various items of common property. Then Mr King and Ms Sinclair requisitioned two EGMs of their own. These were scheduled for 7.30 am and 8.00 am on 14 June, shortly before the EGM requisitioned by the minority owners. At the meetings requisitioned by Mr King and Ms Sinclair, it was resolved to have Mr Prescott to prepare plans for alternative car stacking parking and the replacement of windows. The motions proposed by the minority owners at the later meeting were all deferred or defeated, apart from one resolution which is not relevant for present purposes.
20. On 17 June JSM wrote to Mr Prescott requesting advice on points arising out of his September 2015 proposal. The letter itself is not in evidence, but it appears to have been based on a letter which had earlier been prepared by a solicitor retained by the majority owners. Mr Prescott provided a written response on 24 June.
21. The majority owners then requisitioned a further EGM which was held on 10 August 2016. The majority owners proposed resolutions covering 18 items of work and numbered 4 to 21. Each resolution was first proposed as a special resolution; if it did not pass as a special resolution a further resolution was in most cases proposed as an ordinary resolution. Resolution 22 proposed a special levy of approximately $2.1 million to fund the works.
22. Each pair of resolutions was in substantially the same form. The special resolution was expressed to be a resolution pursuant to SSMA s 65A. The alternative ordinary resolution was expressed to be a resolution pursuant to SSMA s 62 "consistent with the Strata Corporation's statutory obligation to maintain and repair common property".
23. One of the resolutions, concerning works on the roof, was deferred. Another resolution, concerning awnings, was defeated as a special resolution and no ordinary resolution was put forward. Two of the resolutions, dealing with minor building works which are not now relevant, were carried unanimously. All of the other resolutions were supported by the majority owners and Ms Thomas but opposed by the minority owners. Each resolution failed as a special resolution but passed as a general resolution. The special levy resolution passed as an ordinary resolution. The minutes did not indicate whether the minority owners voted against it, but I assume that they did.
24. On 18 August, the Council issued a revised fire safety order governing the property. This removed the obligation (as part of the stage 3 works) to install a residential sprinkler system in the stairway and lift shaft. The order in its modified form also omitted a number of the tasks which had been the subject of the earlier order. These included the stair tread work and swing door work, which had apparently been undertaken in June. Other requirements also seem to have been dropped. The evidence before me suggests that these revisions resulted from a consultant's report which appears to have been provided directly to the Council on behalf of the minority owners.
25. Ms Hegyesi's application to the Tribunal was filed on 19 August. It was determined by Adjudicator Corley in November 2016. The appeal was heard by Senior Member Ross in May 2017 and decided in August 2017. There was no evidence before me about what was done after August 2016 about compliance with the fire orders. Nor was there any evidence that any other building work was done after that date.

Injunction against disputed works

1. The Tribunal's injunction prevented the undertaking of the following works in accordance with the resolutions passed in August 2016: (1) painting and cement rendering of the exterior of the building (resolution 9A); (2) upgrading and replacement of the internal stairs and lift shaft (resolution 12A); (3) installation of a new lift (resolution 13A); (4) finishing work for the internal stair, foyer and lobby area (resolution 14A); (5) external paving and landscaping (resolution 18A). In common with the parties and the Tribunal, I will refer to the works covered by the challenged resolutions as the "disputed works".
2. Ms Hegyesi's application also challenged resolutions for the replacement of timber with aluminium windows (a resolution passed in June 2016) and for the refurbishment of the street frontage and entry way (resolution 15A passed in August 2016). The challenge to the window works was not pressed before the Tribunal. The Tribunal found that the refurbishment of the street frontage and entry was, considered on its own, an item of repairs and maintenance and Ms Hegyesi's challenge to that resolution therefore failed. There was no attempt to pursue the challenge in these proceedings.

Replacement of lift, lift shaft and stairs (resolutions 12A, 13A) and finishing work (resolution 14A)

1. It is convenient to deal with the lift, the lift shaft and the stairs, and the associated finishing works, together.
2. The lift shaft is built of brick with a timber roof. It is surrounded by a stairway which winds around the lift shaft between each level. On each floor there is a swing door which provides access to the lift car. The lift car itself has a collapsible gate. On the top floor there is an enclosed lobby area providing access to the lift.
3. As part of its review, BDW commissioned a report on the lift from Pitfield & Associates Pty Ltd ("Pitfield"). Pitfield is described as a firm of international elevator consultants. Pitfield's report, which was dated September 2014, stated: The Lift Installation The lift was installed prior to the Second World War, c. 1936 by a reputable and well known lift company of the day Waygood Lifts Limited, which later became Johns & Waygood. … Maintenance It appears that the current service provider is maintaining the lift in a reasonable manner. There were no obvious signs of neglect, untidiness or poor workmanship (other than photo 2). OBSERVATIONS & COMMENT At the time this lift was installed, it was most likely considered 'state of the art'. Compared to today's lifts it is simplicity personified but still provides the same function as a modern lift; that is to convey passengers from one level to another. It does not however, meet current code requirements. As an existing, operating lift it does not have to meet today's rules and regulations as retroactivity does not apply. However under current legislation (Work Health & Safety Act & Regulation) an owner has a duty of care to manage risks in their building, surrounds and all equipment located therein. Provided a service provider can continue to source spare parts and carry out maintenance on a regular basis this lift could provide access to the owners/residents for many more years. However wear and tear will eventually catch up with the installation and should a component simply wear out it may be difficult to replace as photo 2 clearly shows. In addition, (and we were informed by residents that it had been the situation for some time) when the lift travelled from the bottom level to the one above it overshot the floor level by approximately 100mm. The service provider has not rectified this problem and it may be an indication of problems to come. There will be a time when replacement parts will simply be impossible to obtain. Should this occur as an unplanned event the lift could become inoperative for an extended period. Interestingly the control system appears to be in an 'original' condition and whilst that may appear a plus for the future of the lift it constitutes a major problem as photo 3 clearly shows when today's Work Health and Safety (WHS) regulations are considered. Life Cycle The lift has operated for eighty (80) or so years (and may continue to do so for many more) however some thought must be given to improving certain portions of the installation. Risk Management & Work Health & Safety As stated above, as an existing item of plan (Note: In the WHS regulations a lift is designated as 'High Risk Plan') retroactivity does not apply, that is; it is not required to be upgraded to meet current standards whilst still operational. … CONCLUSION & RECOMMENDATIONS From a very brief examination of the building a new lift that meets current laws and legislation could not be installed in same location as the existing unit, without major structural changes to the building. A limited upgrade should be undertaken which would address some of the identified Hazard & Risk issues and provide a more advanced control system for the lift. This would also provide a better ride quality, more accurate floor levelling and generally extend the life cycle of the total installation.
4. Like the lift car, the stairs would not comply with currently applicable regulations. They do not satisfy the requirements of the Building Code of Australia (BCA) and could not now be constructed in their present form. It was a condition of the DA that the staircase be upgraded so as to make it compliant. Mr Prescott's proposal was to replace the existing lift, lift shaft and stairs with a glass lift and a concrete staircase. This would meet BCA requirements. The foyer and lobbies were also to be upgraded; the idea was that a glass lift would help to bring light into the lobbies. In an email to JSM in January 2016 Mr Prescott stated: … The DA consent conditions requires the building to be brought up to current BCA requirements this includes complying stairs fire protection services etc. The current stair within the existing lift space cannot comply, however it may be possible to obtain a fire engineering report to vary this requirement. I believe however that a fragmented approach to upgrading the building is [sic] would compromise the overall project. The lobby and lift refurbishment was aimed not only to achieve fire compliance but to also improve the amenity, light and attractiveness of the lobby.
5. Adjudicator Corley dealt with all of the disputed works, including the replacement of the lift, the lift shaft and the stairs, together. She reasoned: 33. The owners of Lots 3, 5 and 6 have produced photographs which indicate that the building is in a very poor state of repair as referred to in the various technical reports. On the basis of the documented evidence I find that the items referred to in the above paragraph (par 37), that is, the brickwork, the lift, the internal timber staircase and the laundry are in a deteriorated and likely unsafe state and require immediate rectification. 34. The question that I need to determine is whether these works should be properly considered to be repair and maintenance governed by section 62 of the Act or whether this work falls within the ambit of section 65A SSMA. If the works are properly characterised as maintenance and repairs, governed by section 62 of the Act, a special resolution is not required [referring to Stolfa v Owners Strata Plan 4366 [2009] NSWSC 589, discussed below]. Section 62(2) of the Act expressly states that the Owners Corporation has the power to 'renew or replace' any fixtures or fittings comprised in the common property in carrying out its repair and maintenance obligations. A special resolution is required if the matter comes within Section 65A which refers to actions that (a) add to the common property, (b) alter the common property or (c) erect a new structure on the common property. Although each case must be considered on its facts I would generally consider the replacement of existing fixtures e.g. windows, doors and lift which have fallen into disrepair, as works coming within the ambit of section 62. It should be noted that building works may be characterised as repairs and maintenance even though the new construction is superior to that which pre-existed (Stolfa). At the other end of the spectrum, constructing something new on common property, such as the proposed new unit which was contemplated earlier but then abandoned, would clearly come s65A and require a special resolution. 35. In my view it must be expected that when property and fixtures fall into disrepair they may be replaced with modern construction materials and methods. It would be unrealistic to expect that repairs and replacements will always return property to its original appearance. 36. The applicant has not established that the works proposed by the majority to remedy the deterioration evident in the building go beyond the ambit of the owners powers and responsibilities under s62 SSMA.
6. On appeal, Senior Member Ross dealt separately with the different items of disputed works. Her reasoning on the replacement of the lift and associated works was: 10. There is no dispute between the parties that the lift requires replacement, and the Tribunal makes a finding that it does. The applicant seeks to have the lift replaced within the existing shaft, whilst the respondent also seeks to have the shaft replaced. It is common ground that replacement of the lift shaft will also necessitate replacement of the timber stair case. 11. The Tribunal must determine whether replacement of the lift shaft is necessary to comply with the respondent's obligations under s 62 to repair the lift. The Tribunal is not satisfied that it is. There may be benefits to replacing the lift shaft, by way of increased space and light, but these represent improvement or enhancement of the common property. Likewise, unless to facilitate the replacement of the lift shaft, there is no necessity for the wooden stairs to be replaced. The Tribunal finds that the fire order issued by Woollahra Municipal Council does not require replacement of the timber stairway with a concrete stairway and accordingly the obligation to repair the stairway does not extend to an obligation to replace it. 12. The Tribunal is satisfied that replacement of the lift shaft and timber main staircase requires a special resolution under s 65A.
7. There was no challenge before me to the Tribunal's conclusion that the fire audit issued by Woollahra Council did not require replacement of the timber stairway with a concrete stairway. Counsel for the majority owners nevertheless contended, as I understood him, that the replacement of the stairs (and the associated foyer refurbishment works) was justified as a consequence of the replacement of the lift shaft, which in turn was justified by a need to replace the lift.
8. SSMA s 62 provides: (1) An owners corporation must properly maintain and keep in a state of good and serviceable repair the common property and any personal property vested in the owners corporation. (2) An owners corporation must renew or replace any fixtures or fittings comprised in the common property and any personal property vested in the owners corporation. (3) This clause does not apply to a particular item of property if the owners corporation determines by special resolution that: (a) it is inappropriate to maintain, renew, replace or repair the property, and (b) its decision will not affect the safety of any building, structure or common property in the strata scheme or detract from the appearance of any property in the strata scheme.
9. SSMA s 65A relevantly provides: (1) For the purpose of improving or enhancing the common property, an owners corporation or an owner of a lot may take any of the following action, but only if a special resolution has first been passed at a general meeting of the owners corporation that specifically authorises the taking of the particular action proposed: (a) add to the common property, (b) alter the common property, I erect a new structure on the common property. (2) A special resolution that authorises action to be taken under subsection (1) in relation to the common property by an owner of a lot may specify whether the ongoing maintenance of the common property once the action has been taken is the responsibility of the owners corporation or the owner. (3) If a special resolution under this section does not specify who has the ongoing maintenance of the common property concerned, the owners corporation has the responsibility for the ongoing maintenance. (4) A special resolution under this section that allows an owner of a lot to take action in relation to certain common property and provides that the ongoing maintenance of that common property after the action is taken is the responsibility of the owner has no effect unless: (a) the owners corporation obtains the written consent of the owner to the making of a by-law to provide for the maintenance of the common property by the owner, and (b) the owners corporation makes such a by-law. (5) A by-law made for the purposes of this section: (a) may require, for the maintenance of the common property, the payment of money by the owner concerned at specified times or as determined by the owners corporation, and (b) must not be amended or repealed unless a special resolution has first been passed at a general meeting of the owners corporation and the owners corporation has obtained the written consent of the owner concerned.
10. In Ridis v Strata Plan 10308 (2005) 63 NSWLR 449; [2005] NSWCA 246 an occupier of one of the units in a strata building had his forearm severely lacerated when a glass pane in the entrance door shattered while he was entering the building. He had put out his hand to prevent the front door closing and locking on him. He sought damages against the owners' corporation for alleged breach of its duty of care as occupier. His contention was that the corporation should have replaced the glass in the door (which was old) with more modern safety glass. His claim was dismissed and he appealed to the Court of Appeal.
11. The plaintiff's contention was that the owners' corporation's duty of care depended on the scope of its obligation under SSMA s 62 to keep the common property in good repair. This appears to have been common ground in the appeal. Thus the Court of Appeal had to consider the proper scope of s 62 even though the section itself was not being enforced in the proceedings.
12. Hodgson JA said (at 451 [3]-[4]): 3. In my opinion, the circumstances that the words "where necessary" do not appear in subs (2) does not mean that the obligation under that subsection has no qualification, apart from that provided by subs (3). Suppose that there is a light-fitting in the common property. Subsection (2) cannot mean that this light-fitting must be continually replaced, unless there is a determination by special resolution that this is inappropriate. This view is confirmed by the consideration that the terms of subs (3) indicate that there cannot be a standing resolution not to replace a light-fitting. Paragraph (b) of subs (3) indicates that such resolutions are to be directed towards particular occasions when replacement is under consideration. 4. Accordingly, in my opinion, either words such as "where necessary" or "where appropriate" must be implied, or alternatively subs (2) must be read together with subs (1) to the effect that renewal or replacement must be undertaken whenever appropriate in the course of properly maintaining the common property and keeping it in a state of good and serviceable repair, as required by subs (1). It probably makes little difference in this case which of the two alternatives is chosen, but in my opinion the latter is the preferable view.
13. Tobias JA, who dissented, said (at [48]-[50]): 48. Firstly, a number of matters may be noticed about s 62 when compared to its predecessors. Whereas s 68(1)I of the Strata Titles Act imposed a duty (like s 62(2) of the Act) upon the owners corporation to renew or replace any fixtures or fittings comprised in the common property, the former prefaced that obligation with the words "where necessary" whereas the latter omitted them. In my opinion, that omission was deliberate. 49. Secondly, at first blush I considered that the duties the subject of subs (1) and subs (2) of s 62, although framed in absolute terms, must have only imposed the duty if the common property required repair on the one hand or its fixtures or fittings needed renewal or replacement on the other in the sense that the relevant item was broken or patently defective. Upon reflection no such qualification as a matter of statutory construction is justified in view of the provisions of s 62(3) which did not appear in any of the predecessors of the section. However, this said, it must be the case that the obligation to renew or replace only arises where such action is "appropriate" as contrasted with a special resolution that renewal or replacement is "inappropriate" as so determined by the owners corporation pursuant to s 62(3)(a) subject to the strictures of s 62(3)(b). 50. But what is "appropriate" involves, in my opinion, a broader concept than what is necessary or needed. In other words, it would be "appropriate" to replace a fixture or fitting even though it was neither broken nor patently defective but which nevertheless, presented a reasonably foreseeable safety risk. Where that risk was, for instance, due to the antiquity of the installation of the fixture or fitting in question so that as a matter of probability it did not conform or comply with current safety standards which, if adopted, would avoid that risk, then in my opinion s 62(2) required its replacement.
14. The third member of the Court, McColl JA, said (at [169]; [171]): 169. Turning to s 62(2), it is apparent that it conveys the sense of repairing fixtures or fittings which have deteriorated, are damaged or are operating inadequately. "Renew" as relevantly defined by the Macquarie Dictionary means "to make new, or as if new, … restore to a former state", while "replace" carries both the connotation of providing a substitute or equivalent or restoring or making good (Macquarie Dictionary). 171. It is apparent … that s 62(1) and s 62(2) do not impose an obligation on the respondent to insert new glass in a door which, as in the present case, was relevantly operating as intended (and, therefore, did not require maintenance or repair) - let alone an obligation to procure experts to assess the premises to determine whether any of the materials of which the common property was constructed could be made safer. …
15. The first question for consideration is the scope of the obligation to renew or replace imposed by s 62(2). Literally, the subsection directs the owners' corporation to renew or replace all of the fixtures or fittings comprised in the common property. But as Hodgson JA pointed out in Ridis, it would be absurd to read s 62(2) as imposing on the owners' corporation some sort of obligation constantly and perpetually to renew or replace fixtures and fittings forming part of the common property. The obligation in sub-section (2) must be read down by reference to the obligation in sub-section (1).
16. The difference in the approaches of the Judges who sat in Ridis lies in the degree to which sub-section (2) should be read as being controlled by the obligation in sub-section (1). On the view expressed by Hodgson JA, the obligation in sub-section (2) to renew or replace an item of common property arises only when it is "necessary" or "appropriate" to do so as part of complying with the obligation to maintain the common property in good serviceable repair under sub-section (1). I do not read his Honour as deciding between whether the repair or replacement is "necessary" or only merely "appropriate".
17. Tobias JA expressly said that something less than necessity was required and instanced the removal of a reasonably foreseeable safety risk as falling within sub-section (2). But although McColl JA did not address the question in quite the same way, her view at [169] was that the relevant fixture or fitting needed to have deteriorated, to have been damaged or to be operating inadequately. Given that the majority in the case rejected the idea that the safety glass should have been upgraded as part of a risk assessment, I consider the view of McColl JA best reflects the ratio of the Court's decision. I think that Tobias JA accepted that in the later case of Thoo, which is discussed below.
18. The next question is the relationship between s 62 and s 65A. Stolfa v Owners Strata Plan 4366 and Ors [2009] NSWSC 589 was a decision of Brereton J (as his Honour then was) concerning the cost of works done in a void space (part of the common property) under a building built on a steeply sloping site. One of the contentions was that the works were not maintenance works under s 62 but an enhancement or improvement under s 65A. His Honour said (at [68]): Prior to the disputed works, the Void had extensive damp, cracked walls and water entry. The retaining wall that formed its southern face was cracked, and water was entering under the building. Repairs were required to provide proper support for the porch and main entrance, to prevent water penetration into the void and under the building, and to provide support for the fill in the newly levelled front garden. Even though they may well have involved a superior construction to what pre-existed them - particularly insofar as a concrete slab was substituted for timber flooring I am satisfied that the Void works constituted the keeping of the building in a state of good and serviceable repair. Their purpose was to avoid damage to and defects in the building, not to introduce some new improvement. They came within the obligations and powers of the Owners Corporation under s 62. … The Void works were [not] enhancement or improvement within s 65A, … but appropriate repairs to common property that was in disrepair, within s 62. Accordingly, the Void works did not require the authority of a special resolution under s 65A …
19. The unsuccessful lot owners appealed to the Court of Appeal. The appeal failed: Stolfa v Hempton (2010) 15 BPR 28,253; [2010] NSWCA 218. Allsop P, who gave the leading judgment, said (at [10]): The primary judge concluded at [68] of his reasons that being work falling within s 62, the work was not covered by s 65A or by the relevant by-law. This was challenged. It was submitted that even though s 62 required repair and maintenance to be done, because the work in fact improved or enhanced the common property, a special resolution was required. The judge was correct to reject that submission. If, as a matter of fact, all the works satisfied the description in s 62 as repair and maintenance, they were not subject to any requirement of a special resolution in s 65A. The statute should not be construed so as to require the owners corporation to act, but then to place a voting barrier in its path in complying with the statute.
20. The Owners Strata Plan 50276 v Thoo [2013] NSWCA 270 concerned an attempt by a unit holder to upgrade the capacity of a mechanical exhaust ventilation system in a strata title building. The owner of the lot in question (lot 17) wished to use the lot as a take away Asian food shop. The council's conditions required that before the shop could be used for that purpose it had to be provided with an exhaust ventilation system with a specified minimum capacity. The existing exhaust ventilation system (known as the "MEVS") was not connected to lot 17, and even if it was connected, it had insufficient exhaust ventilation capacity. The owners' corporation declined to expand the system so as to allow lot 17 the exhaust ventilation capacity which its owner required.
21. At first instance, the owners' corporation was ordered to upgrade the exhaust ventilation system so as to give lot 17 the capacity sought. The Court of Appeal reversed that decision. Tobias AJA said (at [125]-[130]): 125. … it is now well established that where the duty of an owners corporation under s 62(1) or (2) is engaged, s 65A does not require the passing of a special resolution notwithstanding that the relevant work to be performed in compliance with the owners corporation's duties under s 62(1) and (2) involves an addition to the common property which improves or enhances it: Stolfa v Hempton [2010] NSWCA 218 at [9] and [10] per Allsop P, with whom Basten and Young JJA agreed. On the other hand, where the duties under s 62(1) and (2) are not engaged, then any additions to the common property for the purpose of improving or enhancing it must comply with the requirements of s 65A. 126. Reliance was thus placed on s 65A by the Owners Corporation to demonstrate that s 62 looks backwards, requiring that existing common property be returned to a previous state of proper performance, whereas s 65A looks forwards and is concerned with improving or enhancing the common property beyond its current level of performance. The real distinction between ss 62(1) and (2) on the one hand, and s 65 A on the other, is in my opinion dependent upon the purpose or objective of each provision. Subsections 62(1) and (2) are engaged if the proposed work is for the purpose of maintaining and keeping in a state of good and serviceable repair the common property or when any fixtures or fittings in the common property are required to be renewed or replaced. The purpose of s 65A, as its opening words reveal, is to provide for the improvement or enhancement of the common property where otherwise that objective could not be achieved. 127. In the present case, as the Owners Corporation correctly submits, the renewal or replacement of the existing MEVS for the purpose of enhancing its capacity to the point where it will be capable of servicing the anticipated reasonable demands of all lots within the Food Court and/or the basement area of the Building, goes beyond the requirements of s 62(2) and thus cannot proceed without compliance with the requirements of s 65A. 128. There is a clear relationship between subsections 62(1) and (2). The former applies to any part of the common property; the latter to any fixtures or fittings comprised in the common property. However, it does not follow that a fixture or fitting that is not in a state of good and serviceable repair must be renewed or replaced. 129. The first obligation on the owners corporation is to keep the fixtures and fittings in such a state. But if that cannot be achieved, then the defective fixture or fitting must be renewed or replaced subject, of course, to s 62(3). The point is that s 62(3) [sic: s 62(2)] is only engaged when the fixture or fitting can no longer be kept in a state of good and serviceable repair. This is consistent with McColl JA's dicta in Ridis that both subsections are directed and, I would add, only directed, to the circumstances where a fixture or fitting is no longer operating effectively or at all, or has fallen into disrepair. 130. I would therefore accept the submission of the Owners Corporation that common property fixtures or fittings must be renewed or replaced under s 62(2) only when they are no longer operating effectively or have fallen into disrepair to the point where their renewal or replacement is called for as they can no longer be kept in a state of good and serviceable repair pursuant to s 62(1). Once it was found, as his Honour did, that the system had not fallen into disrepair but was operating according to its original design capacity, there could be no breach of s 62(2) by reason of the refusal of the Owners Corporation to replace the system. Accordingly, in my respectful opinion the statement by his Honour at [115] of his reasons that there was a specific duty on the Owners Corporation under s 62(2) to keep common property operating efficiently so it could be used and enjoyed by all lot owners, subject only to the passing of a special resolution for its exclusive use, is too broad.
22. Barrett JA concurred with Tobias AJA but added some additional remarks "merely by way of confirmation and emphasis". After referring to Stolfa v Hempton at [10] (quoted above) his Honour said (at [3]-[7]): 3. Section 65A is concerned with the forms of activity undertaken "for the purpose of improving or enhancing the common property". Two of the relevant forms of activity are adding to the common property and altering the common property. Section 62(2), by contrast, creates a duty to "renew or replace any fixtures or fittings comprised in the common property". 4. Replacement is a large concept. If a modest single-bulb light fitting is removed and a grand crystal chandelier is installed in its place, the former has obviously been replaced by the latter. There is also replacement if a substantial brick wall is erected on a site previously occupied by a flimsy brushwood fence. Replacement connotes no more than the installation of one thing in the place of another to achieve functional equivalence. 5. While s 65A does not curtail the duty imposed by s 62(2) or impede performance of that duty, the existence of s 65A does serve to shape the s 62(2) duty so that, in the ordinary course, anything amounting to alteration or addition for the purpose of improving or enhancing is beyond the concept of renewal or replacement with which s 62(2) is concerned. 6. In determining how s 62(2) and s 65A apply at any particular time, regard must be had to the attributes of the common property at some earlier reference point. The question of what amounts to renewal, replacement, alteration or addition must be answered by a process of comparison with the position that prevailed at the earlier reference point. The first such reference point is the time at which the strata plan is registered and the common property comes into being. The initial attributes are fixed at that time; and it is from that base that characterisation as renewal, replacement, alteration or addition is to be approached. Once any addition or alteration is made in accordance with the Act, the attributes of the common property are changed, a new reference point is identified and future questions of renewal, replacement, alteration and addition fall to be assessed by reference to the changed state at that new reference point. 7. Generally speaking, renewal or replacement of fixtures or fittings will, of its nature, involve improvement because old will be superseded by new. It may also entail alteration or addition, in that the new or replacement item may be large than or otherwise different from the old. To the extent that alteration or addition is, in that way, incidental to renewal or replacement, s 62(2) both requires and allows it. But s 62(2) does not, at a particular time, impose a positive requirement for superior functionality, compared with that inherent in the nature and quality of the relevant part of common property as most recently fixed in the way I have mentioned.
23. Counsel for the majority owners submitted that the views of Adjudicator Corley should be preferred to those of Senior Member Ross. Counsel submitted that, once part of the common property was in need of repairs and maintenance work, or replacement work, within s 62, there was an obligation on the Strata Corporation to undertake the necessary work and it was up to the Strata Corporation as to how to do so. Counsel referred to the finding made by Senior Member Ross that the lift needed to be replaced. In Counsel's submission, once that point was reached, the decision to replace it with a glass lift was a matter for the Strata Corporation's discretion.
24. There is force in the contention that practicality requires allowing a degree of judgment and latitude to an owners' corporation in determining how far to go with repair and replacement work in a maintenance context. Often, the replacement of an old and obsolete item may be cheaper and more effective in the long run than continuing to try to patch it up. There is also a textual basis for allowing a degree of latitude to an owners' corporation in deciding what and when should be replaced. Maintenance is not necessarily confined to responding to a breakdown; the term usually also includes preventative maintenance, that is, replacing something which has reached the end of its service life before it fails: Hamilton v National Coal Board [1960] AC 633 at 647; Greetings Oxford Koala Hotel Pty Ltd v Oxford Square Investments Pty Ltd (1989) 18 NSWLR 33 at 40 per Young J.
25. On the other hand, the purpose of s 65A was clearly to protect minority owners in a building from having the costs of enhancement imposed on them by the majority. The minority may prefer to continue to eke out the existing facilities even if in the longer run, that may prove more expensive or inefficient. They may have less money to spend, or their priorities may be different. The legislative purpose behind s 65A could arguably be subverted if unnecessary costs could be imposed on the minority at the discretion of the majority just because some, much less extensive, repair or maintenance is required.
26. The lift in the building the subject of these proceedings illustrates this tension very well. It is clear from the Pitfield report that it would be possible to continue to patch the lift up; but that may well not be the most economical or practical course. On the other hand, the replacement of the lift, which the majority owners now characterise as a form of repairs and maintenance under s 62, was originally conceived as part of an overall plan for the refurbishment of the building which was undoubtedly, taken as a whole, an enhancement.
27. In my view, it is implicit in what Tobias AJA said in Thoo that the obligation in s 62(2) to renew or replace items of common property is limited by a concept of reasonable necessity. His Honour stated at [129] that the provision is only engaged where the item can no longer be kept in a state of good and serviceable repair. He went on to say that the provision is only directed to circumstances where the item "is no longer operating effectively or at all, or has fallen in to disrepair".
28. The passages I have quoted from the judgment of Senior Member Ross (at [53] above) are expressed in terms of the Tribunal not being satisfied that the works in question were necessary to comply with the Strata Corporation's repair obligations under s 62. In expressing herself in this way, Senior Member Ross may have reversed the onus of proof. No doubt if the work the subject of the resolution fell within s 62 then the Strata Corporation had a legal obligation to undertake it. But the majority owners had no obligation, in responding to Ms Hegyesi's application, to demonstrate affirmatively that s 62 applied. It was for Ms Hegyesi as applicant in the Tribunal to show that the resolution fell foul of s 65A.
29. In my view, Senior Member Ross should, strictly speaking, have asked herself whether the works the subject of the resolution fall within s 65A. But counsel for the majority owners did not identify reversal of the onus as a ground of appeal against Senior Member Ross' decision. The case was argued before me by reference to the evidence and without any submissions from either party as to onus. This is understandable because in my view the question comes down to one of statutory construction based on facts which are not in dispute.
30. I think that, despite the "finding" by the Tribunal based on the position taken by the parties in the proceedings that the replacement of the lift was "required", the facts make it clear that the disputed works associated with the lift were not reasonably necessary in the sense implicit in Thoo. The Pitfield report shows that it would be possible to continue to maintain the existing lift and that it can be expected to operate for many years into the future. There is nothing in the evidence which establishes that a new lift car is required, much less a new lift shaft.
31. On the facts, the lift is operating in accordance with its design requirements and can be kept operating into the future. It has not reached the point where it "can no longer be kept in a state of good and serviceable repair" to use the language of Tobias AJA in Thoo. In the language of Barrett JA, the existing functionality of the lift can be maintained without renewing or replacing it. Installing a new glass lift would be an improvement, not the maintenance or reinstatement of the functionality of the existing lift.
32. At the end of the hearing before me on 29 June 2018, directions were made for further written submissions by the minority owners and Ms Thomas, with a reply on behalf of the majority owners. Submissions were lodged on behalf of the minority owners and Ms Thomas, but no submissions were lodged in reply. The point was raised by the Court in March 2019 and written reply submissions were then lodged at the end of the month.
33. Those reply submissions sought to characterise the dispute as one about the scope of the Strata Corporation's power to undertake repair and maintenance, rather than the minimum extent of its duty to undertake repair and maintenance under s 62. The submissions relied upon the Interpretation Act 1987 (NSW), s 50(1)(e) which provides that a statutory corporation: may do and suffer all of the things that body's corporate may, by law, do and suffer and that are necessary for, or incidental to the exercise of its functions.
34. The submissions argued that the Strata Corporation's power with respect to repairs and maintenance went beyond doing the bare minimum required to ensure that the common property continued in good order and condition. For instance, the Strata Corporation could, it was said, undertake anticipatory or preventative maintenance. It could also obtain reports and advice to enable it to meet future maintenance requirements.
35. The submissions argued that the Strata Corporation's powers under s 50(1)(e) were wide. The submissions instanced the decision in the Owners Strata Plan No 57164 v Yau [2016] NSWSC 1056 where Darke J said that an owners' corporation had power under s 50(1)(e) to settle proceedings as an incident of its ability to sue and liability to be sued. This was said to illustrate the width of the word "incidental" in s 58(1)(e). Just because an owners' corporation has the ability to bring proceedings does not make it "necessary", so it was argued, that the corporation should be able to settle those proceedings.
36. The submissions argued that Senior Member Ross had erred in limiting her consideration to the minimum necessary to comply with the Strata Corporation's obligation under s 62. She should instead, so the submissions argued, have considered the full scope of the Tribunal's power, as expanded by s 50(1)(e). In this regard, the submissions relied on The Owners - Strata Plan 21702 v Krimbogiannis [2014] NSWCA 411.
37. In Krimbogiannis, an external glass window of a strata title building was replaced with a sliding door without the consent of the owners' corporation. The owners' corporation sought access to the relevant lot in order to restore the common property to its original state. This was refused by the trial judge. The Court of Appeal held that the trial judge had been wrong in refusing the order.
38. I do not think this decision assists the majority owners in the present case. The trial judge had read down the requirement of maintenance in s 62 so as to limit it to keeping the common property in a state of good and serviceable repair. The Court of Appeal held that this was wrong. The case did not concern the discretionary limits of the owners' corporation's powers under s 58(1)(e): in fact, Basten JA, who gave the leading judgment, approached the case on the basis that for the owners' corporation to be entitled to the order it sought the work it sought to do had to be required by s 62(1): see at [14].
39. I accept that s 58(1)(e) applies to an owners' corporation's obligations under s 62 so as to confer a power to take action which is necessary or incidental to the discharge of that obligation, and that the exercise of that incidental power is discretionary. It may be that if preventative maintenance falls outside s 62, it may still be undertaken under s 58(1)(e). But the power under s 58(1)(e) still remains an incidental one. Before s 58(1)(e) can apply, the works in question must be rendered necessary by, or be incidental to, some other works required under s 62. The submissions did not identify any such other works, and I have rejected the idea that the replacement of the lift car was required under s 62.
40. It is therefore unnecessary to consider the scope of the incidental power under s 58(1)(e) as it relates to SSMA s 62. I would only observe that the present circumstances are remote from those in Yau where the owners' corporation's power to enter into the settlement was not in dispute: see Yau at [99].
41. In my view, the disputed works are more extensive than is justified by the Strata Corporation's obligation to keep the existing lift in repair. The challenge to the Tribunal's decision on this point fails.
42. Senior Member Ross did not in her judgment deal separately with the resolution concerning the finishing works in the lift foyers and the lobby. Given her conclusion about the replacement of the lift shafts and the staircase, I do not think it was necessary to do so. Those works could only have been covered by s 62 if the replacement of the lift shaft and the stairs were necessary. A question might still arise whether these additional works were incidental to, or otherwise required as a consequence of, those works. In view of the conclusion I have reached concerning the replacement of the lift shaft, it is not necessary to consider this question.

Cement rendering and painting (resolution 9A)

1. The building is constructed with a double layer of masonry walls. Brick ties are used in the walls to connect the external brick wall to the internal brick wall. Pipework has been mounted on the external walls. At the time the building was constructed brick ties with limited resistance to corrosion were being used. Over time the ties corrode (especially in a salty environment) and lose their strength.
2. In BDW's report of April 2014, BDW recorded that the bricks themselves had deteriorated in some places because of salt attack and they needed to be replaced. The brick mortar had also broken down in places. BDW referred to three options. One was to retain the brick façade but replace the damaged bricks and repoint the brick mortar. The second was to paint over the exposed brick work. The third was to cover the entire façade with cement render and paint it. This last option would be recommended if "a totally new look of the property is desired".
3. Mr Prescott's September 2015 proposal was to replace brick ties in areas where rust deterioration was apparent. He thought that allowance should be made for three hundred ties, but fewer would probably be required. He added that the walls should be rendered and painted after the installation of replacement aluminium windows had taken place, with pipework being chased in and concealed wherever possible. The existing projecting courses of bricks running in bands around the building were to be retained.
4. Replacement of the brick ties was the subject of a separate resolution in August 2016 (resolution 8A) which has not been challenged. For the purposes of these proceedings the disputed aspect of the works is the cement rendering and consequential painting.
5. I have already quoted Adjudicator Corley's general findings and reasoning. On appeal, Senior Member Ross dealt with this aspect of the disputed works as follows: 14. Both parties agree that there are some bricks which require replacement, and some brick ties. There is no dispute that the building is not currently painted or rendered. The respondent argues that rendering and painting the walls after the brick ties and external brick works are complete is: "the most efficacious and durable way of both repointing degraded mortar and protecting the work from future deterioration"
6. Senior Member Ross referred to the statement in the BDW report about cement rendering involving "a totally new look". She continued: 16. The Tribunal is not satisfied that it can be argued that painting and rendering is required in the exercise of the duty to repair and maintain the common property. The Tribunal is satisfied that the purpose of rendering and painting the property is to improve and enhance it. A special resolution under s 65A is required.
7. According to counsel for the majority owners, Senior Member Ross' decision on this aspect of the disputed works involved the same error as with the replacement of the lift. I have rejected counsel's argument concerning the lift and reject it here as well. The existing functionality of the external walls can be restored by repairs to the damaged bricks and mortar. In my view, to render the walls, putting a new surface on the building and incorporating the external pipe work, would be an enhancement. This is not because of the cosmetic effect, but because, in my view, it involves going beyond the restoration of the walls to their previous functional state. A fully rendered wall with pipework chased into it is in my view something different from a brick wall with exposed pipework affixed to it.

Landscaping and external paving (resolution 18A)

1. Before Senior Member Ross, the debate on this issue turned on the scope of the proposed work. On behalf of Ms Hegyesi, it was submitted the work the subject of the resolution included demolishing a laundry building which formed part of the common property at ground level, and constructing a kayak rack and a circular staircase to provide access from outside to Mr King's and Ms Sinclair's apartments. The objection was that this work was either for the benefit of lots 5 and 6 or was an enhancement of the common property. The response on behalf of the majority owners was that this was a misconception and the works covered by the resolution were limited to paving, landscaping and the like.
2. Senior Member Ross resolved this debate in favour of Ms Hegyesi. She said: 19. Whilst the Tribunal accepts the respondent's submission that the work includes work "to clean up the area to be landscaped, plant various nominated plants, lay lawns and install stepping stones and footpaths", the Tribunal notes that the proposed work also includes work to "make the alterations to footpaths and steps as indicated on drawing B1016 as compared with the survey drawing A1001" and "to construct modified terrace areas and circular stairs to units 5 and 6 at their point of intersection". The Tribunal is not satisfied that the alterations to footpaths and steps and construction of modified terrace areas and circular stairs to units 5 and 6 fall within the Owners Corporation's duty to maintain and repair common property. They are not merely enhancement or improvements consequential upon necessary repair or maintenance. They require a special resolution of the Owners Corporation.
3. The question for Senior Member Ross was one of fact: what was the scope of the works proposed. Her conclusion that the works the subject of the resolution included features which, on any view, were not limited to repairs and maintenance under s 62. I see no reason to disagree with that conclusion. But even if I were disposed to disagree with it, that would not make the decision appealable. It was not suggested in argument that Senior Member Ross had misconstrued the resolution. In my opinion, the challenge to her decision on this point did not give rise to any question of law.

Order to undertake building works

1. The order made by Senior Member Ross, and which is challenged by the majority owners, is in the following terms: (8) The Owners Corporation SP 17043 must, in a proper and workmanlike manner, on or before 31 August 2019, carry out repairs to the common property to: (i) Remove chimney stack on northern tiled roof (ii) Replace flashing on northern tiled roof (iii) Replace metal roofing and guttering on southern roof (iv) Replace the lift in the existing shaft and associated works (v) Repair the driveway bridge (vi) Repair or replace the brick ties and loose bricks (vii) Repair and paint the eaves (viii) Repair or replace and paint external timber (ix) Replace the balcony roof to unit 1 (x) Retile the driveway, main external entrance area and parking pad (xi) Paint and recarpet the main foyer and stairwell (xii) Replace both front doors and ground floor door with fire compliant glass (xiii) Replace the faulty intercom (xiv) Repair the path and drainage on ground level (section of western path outside unit 5) and repair broken gas pipe under western path (xv) Repair the seawall
2. The reasons Senior Member Ross gave for making these orders were: 22. The Tribunal is satisfied that the evidence supports a finding that the Owners Corporation has failed to perform its duty to repair the common property. Some lot owners have been focussed instead on achieving the enhancement of common property in accordance with the advice of Mr Prescott… . … 24. The applicant seeks that the Tribunal make an order for the Owners Corporation to make the nominated repairs and undertake maintenance of various items of common property. There is no dispute between the parties that repair and maintenance of those issues is required. The Tribunal will make the order sought. The Tribunal will not impose a method of rectification. It will be a matter for the strata managing agent [appointed by the Tribunal: see [8] above] to explore the competing options and undertake the work within the scope of the Owners Corporations obligations.
3. At the hearing before me, the majority owners sought to lead evidence from the strata manager to the effect that the orders left the strata manager in a quandary, not knowing how they were to be complied with, or whether they could be complied with. Counsel for the defendant objected to this evidence.
4. I do not think it is necessary to resolve the dispute as to admissibility. The challenge to the orders can be resolved simply by reference to their terms. Evidence from the strata manager about the effect of the orders (or, more strictly, about what the strata manager believes to be the effect of the orders) may well, strictly speaking, be inadmissible. Even if admissible, it is not necessary for the Court to receive such evidence to decide the issue.
5. As Senior Member Ross acknowledged, the orders did not specify the works in question. Orders in this form gives rise to two particular problems. The first is that the orders leave it unclear what it is that the Strata Corporation is being ordered to do. The second is that the order are not necessarily confined to complying with the Strata Corporation's obligations under SSMA s 62.
6. Both of these problems are illustrated by the replacement of the lift. The relevant order requires the Strata Corporation "to replace the lift in the existing shaft and associated works". No doubt the reference to replacement in the existing shaft was included in Ms Hegyesi's application because, whatever else she wanted the Strata Corporation to do, she did not want it to adopt the approach which had been put forward by the majority owners of replacing the whole lift shaft as well as the lift car. But there is no concrete proposal for the replacement of the lift in the shaft, in the sense of a defined scope of works. All sorts of technical difficulties might arise. The order gives no guidance as to how such difficulties would be overcome. It simply commands the Strata Corporation to achieve a specified result by a specified date. And the "associated works" are completely unspecified. The Strata Corporation is left to guess what it is required to do.
7. Furthermore, despite the "finding" by the Tribunal that the lift should be replaced, the Pitfield report shows that there is in fact no actual need to do so. The lift can be kept functioning without any replacement of the lift car, whether in the existing shaft or otherwise. The order thus goes beyond what I consider to be the Strata Corporation's obligations under s 62.
8. I should first consider what power there was to make the orders in question. Ms Hegyesi's application invoked the powers of the Adjudicator to make orders under SSMA Ch 5 Pt 4. Divisions 1 to 10 (ss 138-162) deal with different types of order which an adjudicator may make. The appeal to the Tribunal was essentially a review and Senior Member Ross had power to make any order which could have been made by the Adjudicator: s 181(3), (5).
9. An adjudicator has a general power to make orders to settle disputes or rectify complaints (s 138). This extends to disputes or complaints arising under s 62. The adjudicator's decision may then, under s 207, be included in an order which takes effect as a resolution of the owners' corporation which is binding and enforceable by the courts: see Thoo at [211].
10. The power under s 138 may be exercised where there is a dispute or complaint about, among other things, "a failure to exercise" a function conferred or imposed by or under the Act, or the operation, administration or management of a strata scheme under the Act. But sub-section (2) provides that for the purposes of sub-section (1) the owners' corporation is taken to have failed to exercise a function if it decides not to exercise the function where application is made to it to exercise the function and it fails for two months after the making of the application to exercise the function. This suggests that the proposal must be put before the owners' corporation in some sort of formal and concrete way.
11. Although in a general sense the minority owners had been pressing for repairs to be done, the orders made do not reflect any specific proposals. It is thus doubtful whether there was a "failure" sufficient to enliven the power under sub-section (1). But this is not the only problem.
12. Senior Member Ross appears to have considered that the majority owners are responsible for the impasse about repairing the building. But on any view the Tribunal is not entitled to order an owners' corporation to do things just because the Tribunal considers it desirable to do so. If, as seems to have been assumed, the justification for the order was that the Strata Corporation had not complied with its obligations under s 62, then the Tribunal's order could go no further than the minimum necessary to comply with that obligation.
13. In the present case, the Tribunal did not ask itself what needed to be done so as to order to achieve a minimal compliance with s 62(1) and then frame orders accordingly. In my view this means that there was no proper statutory foundation for the orders.
14. Furthermore, the orders are in the nature of mandatory injunctions. Such orders can be enforced (indirectly, under NCAT: Civil and Administrative Tribunal Act, s 73) by way of contempt. It is unacceptable that the recipient of the order should be in any doubt as to what is required. In my view, for the Tribunal to make an order giving rise to such a doubt is itself an error of law.
15. An adjudicator, and on appeal, the Tribunal, may have power to make an order that an owners' corporation carry out a defined repair in order to comply with its obligation under SSMA s 62. But the orders made in this case have been made in a form which takes them outside the limits of any such power. In truth, the orders are nothing more than a vague "wish list" from Ms Hegyesi. They should not have been made and must be set aside.

Conclusions and orders

1. I have concluded that: (1) the majority owners' challenge to the Tribunal's decision that the disputed works required a special resolution because of SSMA, s 65A, fails; (2) the majority owners' challenge to the order directing the Strata Corporation to repair certain parts of the common property succeeds.
2. I will hear the parties, to the extent necessary, on costs.
3. The orders of the Court are:
4. Grant leave to the plaintiffs to appeal against the orders of the NSW Civil and Administrative Tribunal made on 29 August 2017.
5. Appeal allowed in part.
6. Set aside order 8.
7. Grant liberty to either party to apply with respect to costs, such application to be made within 28 days of today's date by notice to my Associate.

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: 16 April 2019