The appellant appeals from a decision of the Tribunal's Consumer and Commercial Division made in favour of the respondent.
The respondent is the body corporate consisting of the owners of the 44 lots in a strata scheme (the "Scheme") located in Homebush, NSW. The appellant is a part owner of lot 37 in the Scheme.
There is a long history of disputes between the parties concerning the need for extensive and costly repairs, and delays to necessary works being undertaken. The parties were at loggerheads. The Tribunal appointed a compulsory strata manager two months before the hearing below. The strata manager began necessary work and began planning for the balance of necessary work to be done.
The appellant opposed that course and sought orders that work identified in two expert reports be undertaken by the respondent.
The Tribunal dismissed the appellant's application, preferring to give the strata manager further time to attend to necessary work.
The appellant appeals from that decision, but in our opinion the appeal should be dismissed for the reasons set out below.
[2]
Background
There was no dispute between the parties that the Scheme was in need of extensive, complex and costly remedial building work to common property. However, disputes had arisen between the appellant and respondent in relation to, in summary and broadly speaking, the nature and scope of that work, delays in commencing that work and its cost.
Those disputes led to (according to the Tribunal below) the appellant filing nine applications against the respondent in and since 2016 (it is not said whether the present application was one of those nine, or in addition to them). In his written submissions on this appeal the appellant says he has initiated 13 proceedings since 2014.
In relation to the application the subject of this appeal, filed in the Tribunal and dated 27 August 2018, the appellant sought orders pursuant to s 232 of the Strata Schemes Management Act 2015 (NSW) ("SSMA") to the effect that the respondent:
1. rectify, in accordance with the Building Code of Australia, certain building compliance issues identified in a report by Mr Qusai El-Jurf dated 24 April 2018 and headed "Electrical Room Inspection and BCA Compliance Report"; and
2. rectify, in accordance with the Building Code of Australia, the building defects that directly affect Lot 37 as identified in the report of Demlakian Remedial and Strata Pty Ltd (an engineering firm) dated October 2015.
Section 232 of the SSMA provides that the Tribunal "may" make orders to settle a dispute between interested persons (which include the parties to these proceedings) concerning, amongst other things, the management and administration of a strata scheme, and the exercise or failure to exercise a function conferred or imposed by or under the SSMA. The use of the word "may" in this section means that the Tribunal has a discretion whether or not to make orders under that section.
The function at the centre of the appellant's case is the statutory duty imposed on the owners corporation under s 106 of the SSMA to properly maintain and keep in a state of good and serviceable repair the common property. In short, the appellant has been asserting in these and earlier proceedings that the respondent has breached this duty. He therefore seeks relief by way of orders under s 232 of the SSMA.
Importantly, on 19 November 2018, which was after the filing of the application the subject of this appeal but before its hearing on 11 January 2019, the Tribunal made an order in separate proceedings that Premier Strata Management Pty Ltd ("Premier") be appointed strata manager of the Scheme to exercise all the functions of the owners corporation, and the chairperson, secretary, treasurer and strata committee of the owners corporation. The order was made for a period of twelve months. In making those orders the Tribunal noted it was satisfied that the management of the Scheme was not functioning or was not functioning satisfactorily.
That is, between commencing his application for orders that certain work be done, and the hearing of that application, the Tribunal removed responsibility for undertaking the necessary remedial building work from the owners corporation and its officers and placed that responsibility in the hands of Premier. By the time of the hearing Premier had been strata manager pursuant to that appointment for about two months, which period included the Christmas holiday period.
The Tribunal below dismissed the appellant's application.
[3]
The Tribunal's Reasons
The Tribunal noted the parties' agreement that the necessary remedial works were extensive, complex and costly. The Tribunal found that the necessary work would be lengthy.
The Tribunal held that whilst the delay in commencing the work was regrettable, the fact was that the work had commenced under Premier's management. The Tribunal found that, for that reason, Premier was best placed to continue as the managing agent.
The Tribunal referred to other applications made by the appellant and found that those applications had interfered with the progress of the remedial works and added to the costs incurred by the respondent. The Tribunal found that those two matters, delay and cost, were two matters about which the appellant complained but to which he had contributed.
The Tribunal held that, assuming other matters in the appellant's favour, it was not minded to exercise its discretion to make the orders the appellant sought. This is a reference to s 232 of the SSMA which provides that the Tribunal "may" make orders to settle a dispute.
The Tribunal then referred to the appellant's "focus" in the proceedings, being a reference to the real issues in dispute. Those issues were the alleged failure of the respondents to manage the Scheme and resolve the defects, properly deal with the items requiring maintenance and repair, the alleged absence of a plan for rectification and using unqualified people to deal with fire safety issues.
The Tribunal noted Premier had only been the strata manager for two months (since its appointment in late 2018). The Tribunal accepted the evidence of Mr Black, a strata manager employed by Premier in relation to the Scheme, that works had commenced, a scope of works was expected to be completed within two months, and the works were expected to be completed within 12 - 18 months.
The Tribunal then turned to the two reports referred to in the appellant's application (see [9] above), namely the El-Jurf and Demlakian reports.
The Tribunal noted the Demlakian report was more than three years old, the respondent had terminated Demlakian's retainer and replaced Demlakian with another engineering firm, and that Premier was nevertheless taking steps to review the defects raised in the Demlakian report.
The Tribunal noted that the new engineers, Izzat Consulting Engineers, had been engaged to review various reports, respond to various defects, undertake inspections and superintend remedial works. Izzat had also inspected the appellant's lot and temporary remedial works had been undertaken on the balcony of the appellant's lot. The Tribunal was satisfied that steps were being taken in relation to the matters raised in the El-Jurf report.
The Tribunal found that Premier should be given the opportunity to properly investigate and continue with planning to repair relevant defects and found there was no reason to make the orders sought by the appellant.
In other words, the Tribunal was not persuaded by the appellant that the Tribunal should exercise its power under s 232 of the SSMA to interfere in the plan for, and undertaking of, the remedial works commenced by Premier with the assistance of qualified engineers.
The Tribunal then turned to the fire safety issues identified in the El-Jurf report. The Tribunal said it was satisfied that steps were being taken in relation to fire safety.
The Tribunal accepted Mr Black's evidence that some fire safety work was being organised by Mr Elmier Ronquillo of Flex Fire Services. The appellant challenged whether Mr Ronquillo was appropriately qualified and certified in relation to such works but the Tribunal found that he was a fire safety practitioner (meaning that the Tribunal was satisfied Mr Ronquillo was appropriately qualified and certified in relation to fire safety issues).
The Tribunal then expressed its satisfaction that Premier, in the short time since its appointment in late 2018, was attending to the maintenance and repair of the items raised by the appellant.
The Tribunal then found that a failure of a builder to comply with a BCA requirement prior to the creation of a strata plan is not a failure of an owners corporation to maintain and repair common property. This is a reference to certain opinions expressed in the El-Jurf report that various fire safety matters did not comply with Building Code of Australia requirements, and that they appeared to have arisen from when the Scheme was first constructed. The appellant had complained that the respondent's failure to rectify these issues was a breach of the respondent's statutory obligation to properly maintain and keep in a state of good and serviceable repair the common property pursuant to s 106 of the SSMA.
The Tribunal said it was satisfied that Premier should be given a reasonable opportunity to deal with the issues raised by the appellant and was satisfied (having accepted Mr Black's evidence) that Premier was in the process of conducting necessary works in relation to the Scheme. In those circumstances, the Tribunal said it was of the opinion it should not exercise its power under s 232 of the SSMA and make the orders sought by the appellant. The Tribunal therefore dismissed the appellant's application.
[4]
Grounds of Appeal
The appellant raises five grounds of appeal. They are:
1. denial of procedural fairness;
2. the Tribunal's decision was not fair and equitable;
3. the Tribunal mistook facts and/or failed to take into account material considerations;
4. there is significant new evidence now available that was not reasonably available at the time of the hearing; and
5. the decision was against the weight of evidence.
[5]
Ground 1
The appellant says that he was denied procedural fairness in two respects.
First, that he had filed five folders of material, the Tribunal could not find three of those folders and those three folders were not admitted into evidence. The appellant says that the missing three folders contained factual material that contradicted the findings of the Tribunal. By "factual material" the appellant means both objective evidence and submissions made by him (earlier in these proceedings and in other proceedings commenced by him).
Second, that he was denied an opportunity to respond to two late written "submissions" served by the respondent. By "submissions" the appellant means both written argument and objective evidence (being a written statement of evidence by Mr Black together with annexures annexed to that statement).
We do not agree that the appellant was denied procedural fairness in either respect.
Tangentially, the appellant contends that the Tribunal's holding that a failure of a builder to comply with a BCA requirement prior to the creation of a strata plan is not a failure of an owners corporation to maintain and repair common property was incorrect, and refers to Seiwa Australia Pty Ltd v Owners Strata Plan 35042 [2006] NSWSC 1157.
The appellant's submission is correct insofar as an owners corporation's obligations extend to requiring remediation of defects in the original construction of common property (see Seiwa at [6]). Be that as it may, the Tribunal's error in this regard was not part of its reasoning process in any significant way. Put another way, a reading of the Tribunal's reasons and the evidence indicates that the Tribunal's decision would not have changed had it held a correct view of the law in this regard.
[6]
Folders
In relation to the folders, it is correct that the appellant had filed and served five folders of material, and the Tribunal did not, at the commencement of the hearing, have available to it all five folders.
The Tribunal rightly expressed a disinclination to read through five folders of material given the appellant said that the five folders:
".. provides a history of the issues so it won't happen overnight to get the repairs fixed ..." (Transcript at 20:18)
The history of the issues, as is clear from the Tribunal's reasons, was not as important to the Tribunal as what remedial works had been done since Premier had been appointed and what planning and preparation for further remedial works was being undertaken.
In any event, the appellant told the Tribunal that he did not intend that the Tribunal read the entirety of the five folders (Transcript at 21:32).
The Tribunal then told the appellant (Transcript at 21:11) that he should direct (meaning provide the Tribunal with copies) the Tribunal to any documents in the five folders and those documents would be received by the Tribunal and considered. The appellant told the Tribunal that that course was his original intention (Transcript at 21:11). That is what occurred, and that bundle of documents became Exhibit 1.
Having agreed with the Tribunal's approach to the five folders of documents, namely that those documents contained within the five folders which the appellant wanted considered be extracted by him and given to the Tribunal, the appellant cannot now contend that he was denied procedural fairness. He voluntarily did not tender various documents from the five folders of material, he had told the Tribunal that he did not intend to refer to every document in the five folders and so he cannot now complain that he was denied the opportunity to tender them.
[7]
Late Material
The two late "submissions" about which the appellant complains were:
1. a one-page statement of nine paragraphs by Mr Black dated 7 January 2019 and containing six annexures being:
1. orders of the Tribunal appointing Premier as strata manager;
2. a scope of works by Mr Ronquillo;
3. two invoices from Mr Ronquillo;
4. an invoice from Izzat Consulting Engineers together with photos of work done to the appellant's lot;
5. a proposed scope of works and fee proposal from Izzat;
1. written submissions of the respondent dated 10 January 2019 consisting of five pages.
[8]
Mr Black's Statement
The appellant objected to the statement of Mr Black dated 7 January 2019 on the basis he was prejudiced. He submitted that he could not deal with that material because:
".. there are further submissions about the repairs, about how they are purportedly progressing toward something and that should not be added while I wasn't given enough time to investigate, or to, contest until even the discovery of what's underlying those claims."
The respondent submitted the material should be admitted because it outlined what had relatively recently occurred so that the Tribunal could make a decision on what was "happening now" rather than what had happened two months ago.
The Tribunal held that the statement and its annexures was relevant, they would be of assistance to the Tribunal in making its discretionary decision, Mr Black was available to be cross-examined (and was subsequently cross-examined) and some of the material was already known to the appellant.
In our opinion the Tribunal did not deny the appellant procedural fairness in admitting this statement. It was evidence of recent work done, and proposals for work to be done, to remediate various defects to common property. Such evidence was important to a decision of the Tribunal whether to make orders under s 232 of the SSMA and the appellant has not demonstrated to us any prejudice.
For example, he has not demonstrated to us that there was evidence to the effect that the work said to have been done was not done. The proposals for work were simply that, proposals. They were simply indicating the beginning stages of discussions and planning between the respondent and consultants as to what work was necessary to remediate defects and how those defects might be remediated.
On this appeal the appellant sought to tender a "report" dated 4 February 2019 prepared by himself and submitted to Strathfield Council. That document contains submissions drafted by the appellant of 19 pages and various emails, photos and other documents.
The appellant says that this "report" could have been submitted to the Tribunal were it not for the procedural unfairness, and given that unfairness, it is significant new evidence that was not reasonably available at the hearing.
We disagree.
First, as we have explained above, there was no procedural unfairness because the appellant agreed with and acquiesced in the course taken by the Tribunal. He tendered such documents as he desired, no more and no less.
Second, a reading of that "report" reveals that all of the material in it was reasonably available to the appellant at the time of the hearing. The documents were either in the appellant's possession before the hearing, were drafted by him before or after the hearing (and are not evidence) or contained information available to the appellant before the hearing (for those documents that came into existence after the hearing). Accordingly, to the extent that the appellant seeks leave to appeal pursuant to cl 12(1)(c) of Schedule 4 of the Civil and Administrative Tribunal Act 2013 (NSW) (the "NCAT Act"), that evidence did not meet the description of being evidence that was not reasonably available to the appellant at the time of the hearing.
Third, that evidence was not significant in our opinion. It might have some significance to historical events but was not significant to the Tribunal's consideration of the work done, and proposed to be done, since Premier was appointed in late 2018 and which were the dominant factors relied upon by the Tribunal.
[9]
The Respondent's Written Submissions
The appellant objected to the respondent's written submissions dated 10 January 2019 on the basis they raised a new defence, being that the appellant was estopped from bringing all or part of his claim (because he had allegedly brought the same claims in earlier proceedings).
There was no denial of procedural fairness to the appellant by the Tribunal receiving those submissions because the Tribunal did not find in favour of the respondent on that (estoppel) basis. The Tribunal held that even if the appellant was not estopped from bringing this application it would not make the orders sought in the exercise of its discretion (under s 232 of the SSMA).
The Tribunal did not hold that the appellant was estopped from bringing this application, its reference to "even if ... the applicant was not estopped" was simply a refence to an assumption for the purpose of saying that the appellant had not persuaded it that s 232 orders should be made.
[10]
Ground 2
Ground 2 contends that the decision was not fair and equitable. This is a reference to cl 12(1)(a) of Schedule 4 of the NCAT Act which provides that a party may seek leave to appeal if we are satisfied the appellant may have suffered a substantial miscarriage of justice because the decision was not fair and equitable.
The appellant contents himself with submitting that the submissions he makes in relation to Ground 1 are also his submissions in relation to Ground 2.
For the reasons we have given in relation to Ground 1 we do not consider the appellant may have suffered a substantial miscarriage of justice, nor do we consider the Tribunal's decision was not fair and equitable.
Accordingly, we refuse leave to appeal in relation to Ground 2. Had we granted leave to appeal on that Ground we would have, for the reasons we have given, dismissed that Ground.
[11]
Ground 3
Ground 3 contends that the Tribunal mistook facts and/or failed to take into account material considerations.
The appellant submits that this ground raises a question of law and refers to House v R (1936) 55 CLR 499 at 505 per Dixon, Evatt and McTiernan JJ.
The appellant submitted that all of his submissions in the hearing below amounted to two questions for the Tribunal to answer:
1. had the respondent breached s 106 of the SSMA; and
2. were the orders sought by the appellant warranted by the respondent's statutory breaches under the circumstances?
The appellant submits that in the Tribunal below he referred to various considerations such as time, money, the number of long-standing defects, the physical risks to occupants of the Scheme, the history of the inability of the respondent to rectify defects, Premier's alleged incompetency as a strata manager, the forcing out of a Mr Robin Sears from the Scheme (who allegedly sold his lot because defects about which he complained were not rectified) and the refusal of four out of five insurance companies to offer quotes to the Scheme for strata insurance policies.
The appellant submits that the Tribunal failed to take account of those matters and failed to give proper reasons (in relation to the matters identified in the paragraph above). A failure to give proper reasons is, in substance, an additional ground of appeal, but we shall consider it in this part of our reasons.
In relation to the Tribunal mistaking facts, the appellant submitted that the Tribunal mistook Mr Ronquillo for a competent safety practitioner, mistook Mr Ronquillo's work for competent rectification work of the fire safety issues and mistook Premier for a competent strata managing agent. The appellant also submits that Mr Ronquillo was not an honest witness.
We reject the appellant's submissions.
Whilst the two questions referred to by the appellant (see [65] above) were relevant, they were not the only relevant questions. As the Tribunal made clear, a dominating factor in its refusal to make the orders sought was that since the appointment of Premier in late 2018 remedial work had been done and planning for further remedial work was being undertaken.
It is apparent, at least by implication, that the Tribunal considered the appellant's complaints had some basis in fact, at least historically so. But the choice for the Tribunal in deciding whether it would make the orders sought was between allowing Premier to continue planning and undertaking the remedial work the retained experts advised was required, or interfering in that process by dictating, at least to some extent, what work should be done.
What the Tribunal did was focus on what was the best course of action to remedy the situation rather than to focus on what had led the parties to this point. Although not in terms, the Tribunal said that although there was some factual basis for the appellant's complaints, nevertheless it would not make the orders sought.
The Tribunal so ruled because it said that, accepting there was some cause for complaint, the more important consideration was the best way forward so far as remedial work was concerned. Should the Tribunal allow Premier to continue what it had started since its late 2018 appointment, or should it interfere and direct what work should be done.
The Tribunal favoured the former approach having accepted the evidence of Mr Black, having taken into consideration the work that had been done since Premier's appointment, the planning that had been undertaken since that appointment, that a scope of work was expected to be completed within two months, that those works were expected to be completed within 12 - 18 months and that the matters referred to in both the El-Jurf and Demlakian reports were being considered by experts retained by the respondent (via Premier).
It is true that the Tribunal did not extensively refer to the matters identified by the appellant (see [66] above), but the Tribunal had at least some of those matters in mind because it referred expressly to delays (time and long-standing), cost (money) and the number of defects (complex and extensive).
We cannot see the relevance of the allegations concerning Mr Sears, the refusal to offer insurance by certain insurers or, in relation to recent work, or the alleged incompetency of Premier when it had been the strata manager at an earlier point in time. If there were any relevance as to the latter matter, it was overtaken by the Tribunal's acceptance of the evidence of Mr Black, who was cross-examined by the appellant.
Therefore, in those circumstances, we do not consider the Tribunal failed to give proper reasons. It is clear that the evidence identified by the appellant (which was relevant) was considered by the Tribunal and there was no need to refer to it in detail [as mentioned in the quote from Beale v Government Insurance Office (NSW) (1997) 48 NSWLR 430 at 443 contained in the appellant's submissions]. The remaining matters identified by the appellant were not relevant.
It follows, that to the extent necessary in this case, the relevant matters were taken into account, and there was no need to take into account the irrelevant matters.
As for the appellant's submission that the Tribunal mistook the facts identified at [68] above, the submission is misconceived in that none of the matters identified were "mistaken" as lawyers would understand that term.
The appellant submits that the Tribunal mistook Mr Ronquillo for a competent fire safety practitioner, mistook Mr Ronquillo's work for competent rectification work of the fire safety issues and mistook Premier for a competent strata managing agent.
Insofar as the Tribunal impliedly found those facts, no error of law is raised in relation to those findings, no leave is sought to appeal from those findings on other grounds and no error is discernible to us in relation to those findings. Neither were we taken to any incontrovertible, objective or other evidence supporting those assertions. We reject them.
The appellant also submits that Mr Ronquillo was not an honest witness, a serious allegation which requires compelling proof. But so far as we read the appellant's cross-examination of Mr Ronquillo, it was never put to Mr Ronquillo that any part of his evidence was false. In the absence that allegation being put squarely to the witness it should not now be entertained on appeal.
[12]
Ground 4
Ground 4 contends that there is significant new evidence now available that was not reasonably available at the time of the hearing.
The appellant submits that by reason of the admission of Mr Black's statement of 7 January 2019 the evidence (meaning his "report" to Strathfield Council dated 4 February 2019) was not reasonably available at the hearing.
We have earlier in these reasons rejected the submission there was any procedural unfairness in admitting Mr Black's statement and rejected the submission that the material in the "report" was not reasonably available at the time of the hearing. We need not repeat those reasons.
We reject Ground 4.
[13]
Ground 5
Ground 5 contends that the decision was against the weight of evidence. The appellant relies upon the submissions made on the other grounds.
Against the weight of evidence is a reference to cl 12(1)(b) of Schedule 4 to the NCAT Act. For the reasons we have given in relation to the other grounds we reject the application for leave to appeal on a ground other than one raising a question of law. We are not persuaded the appellant may have suffered a substantial miscarriage of justice and not persuaded that the decision was against the weight of evidence.
Having accepted Mr Black's evidence, taken note of the remedial work done and planned to be done, and that the matters in the El-Jurf and Demlakian reports would be considered, the weight of evidence favoured the Tribunal's decision.
[14]
Conclusion
In our opinion all of the grounds of appeal should be rejected and the appeal should be dismissed.
We note that the parties made references to their applications for costs below. The decision on costs below is not before us, and neither is there any appeal (by leave or otherwise) from that decision on costs (assuming it has been made).
Both parties seek costs of this appeal. In those circumstances we shall make orders allowing for submissions on costs.
[15]
Orders
The orders are:
1. Appeal dismissed.
2. If either party desires to make an application for costs:
1. they are to so inform the other party within 14 days of the date of these reasons;
2. the applicant for costs is to lodge with NCAT and serve on the respondent to the costs application any written submissions of no more than five pages on or before 14 days from the date of these reasons;
3. the respondent to any costs application is to lodge with NCAT and serve on the applicant for costs any written submissions of no more than five pages on or before 28 days from the date of these reasons;
4. any reply submissions limited to three pages are to be lodged with NCAT and served on the other party within 35 days of the date of these reasons;
5. both parties are to indicate in their submissions whether they consent to an order dispensing with a hearing of the costs application, and if they do not consent, submissions of no more than one page as to why a hearing should be conducted.
[16]
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: 30 August 2019