Jollow v The Owners �e" Strata Plan No. 61407 [2025] NSWCATCD 43;

1. The Tribunal is satisfied that this is an application brought by a lot owner in a duly registered strata scheme, seeking orders under s 236 of the SSM Act. The Tribunal is satisfied that it has jurisdiction to hear an determine the application.

"(1) The Tribunal may, on application, make an order allocating unit entitlements among the lots that are subject to a strata scheme in the manner specified in the order if the Tribunal considers that the allocation of unit entitlements among the lots--

(a) was unreasonable when the strata plan was registered or when a strata plan of subdivision was registered, or

(b) was unreasonable when a revised schedule of unit entitlement was lodged at the conclusion of a development scheme, or

(c) became unreasonable because of a change in the permitted land use, being a change (for example, because of a rezoning) in the ways in which the whole or any part of the parcel could lawfully be used, whether with or without planning approval.

(2) Matters to be taken into consideration

In making a determination under this section, the Tribunal is to have regard to the respective values of the lots and to such other matters as the Tribunal considers relevant.

(3) Persons who may apply for order

An application for an order under this section may be made by any of the following--

(a) an owner of a lot (whether or not a development lot) within the parcel for the strata scheme,

(b) the owners corporation,

(c) the lessor, in the case of a leasehold strata scheme,

(d) the local council, or by any other public authority or statutory body representing the Crown, being an authority or body that is empowered to impose a rate, tax or other charge by reference to a valuation of land.

(4) Application to be accompanied by valuation

An application for an order must be accompanied by a certificate specifying the valuation, at the relevant time of registration or immediately after the change in the permitted land use, of each of the lots to which the application relates.

(5) Qualifications of person making valuation

The certificate must have been given by a person who is a qualified valuer within the meaning of the Strata Schemes Development Act 2015 .

(6) Ancillary orders that may be made if original valuation unsatisfactory The Tribunal may, if it makes an order allocating unit entitlements that were not allocated in accordance with a valuation of a qualified valuer and, in the opinion of the Tribunal, were allocated unreasonably by an original owner, also order--

(a) the payment by the original owner to the applicant for the order of the costs incurred by the applicant, including fees and expenses reasonably incurred in obtaining the valuation and the giving of evidence by a qualified valuer, and

(b) the payment by the original owner to any or all of the following people of the amounts (if any) assessed by the Tribunal to represent any overpayments (due to the unreasonable allocation) for which liability arose not earlier than 6 years before the date of the order--

(i) the lessor, in the case of a leasehold strata scheme,

(ii) the owners corporation,

(iii) the owners of lots.

(7) Lodgment of order

The owners corporation must ensure that a copy of an order made by the Tribunal under this section is lodged with the Registrar-General no more than 6 months after the order is made. Nothing in this section prevents a person who is entitled to apply for an order under this section from lodging a copy of an order made under this section."

1. The principles when the Tribunal must consider making an order under s 236 are set out in Anderson Stuart v Treleavan [2000] NSWSC 283, and are quoted with approval by the Appeal Panel in The Owners Strata Plan 675 v York & Edwards [2022] NSWCATAP 171 at [30]:

"(1) A staged process is contemplated. First, the Tribunal must ascertain the respective values of the lots subject to the strata scheme. Secondly, the Tribunal must determine whether, having regard to the respective values of the lots at the time the strata plan was registered, the allocation of unit entitlements at that time was unreasonable. Thirdly, if the allocation was unreasonable at that time, the Tribunal must consider whether to make an order reallocating unit entitlements among the lots subject to the strata scheme.

(2) The effect of the expression "have regard to" in s 236(2) is that the Tribunal must take the respective values of the lots into account as a fundamental element in determining (relevantly) whether the allocation of unit entitlement among the lots was unreasonable when the strata plan was registered. However, the respective value of the lots is not the exclusive consideration, and the Tribunal may have regard to other matters that show or tend to show that the allocation of unit entitlements among the lots was or was not unreasonable.

(3) If the Tribunal finds that the original allocation of unit entitlements was unreasonable, it has the power to vary the allocation, but is not bound to do so. Thus it may take other relevant matters into account in determining whether an order should be made varying the original allocation of unit entitlements."

1. I make the following findings based on all the evidence before the Tribunal. Whilst this decision will not refer to each piece of evidence specifically, these findings are based on a detailed consideration of all evidence.
2. The strata scheme was registered on 21 October 1999 and is a 13 lot apartment block.
3. At the date of registration, the unit entitlement of the lots was as follows:

1. All lots except lot 13 are two bedroom lots. Lot 13 has three bedrooms.
2. All lots except lot 13 and lot 11 have one garage. Lot 13 and Lot 11 have 2 garages.
3. Lot 3 is a ground floor unit with a large terrace, the size of which is greater than all other lots' terraces. The total floor space including outdoor area of lot 3 is greater than the total floor space of each of other lots.
4. The initial sale prices for each lot were as follows:

1. The initial unit entitlements are consistent with an allocation by total lot size, rather than market value.

1. The expert report of Peter Karvon and Peter Phippen each conclude that the unit entitlement was not based on the market valuation of the lots at the time of registration. Both experts are qualified, being certified practicing valuers, as required by s 36(5) of the SSM Act and have extensive experience.
2. The experts differ in the method they use to value each lot, concluding with different valuations. The Tribunal prefers the approach of Mr Karvon, who attended the hearing and gave evidence. Mr Karvon's valuations were based on sale prices of each lot directly following the time of registration, as well as comparison to nearby lots. Mr Phippen's valuations were based on a calculation of value per square metre of lot and garage space with consideration to neighbouring lots. Mr Phippen's valuation varies significantly, including by $100,000 or more, being 1/3 of the real sale price, for several lots without detailed explanation for such a difference in real amount paid against valuation. Mr Karvon has explained under oath his methodology and reasoning.
3. Mr Karvon's valuation is contained within a report, which Table 5 in substance complies with the requirement of s 36(4) for a certificate setting out the valuation of the lots.
4. The Tribunal adopts the market valuations of Mr Karvon, and finds that the market valuations of the lots at the time of registration were:

1. The Tribunal is not limited to considering the market valuations when determining whether the allocation of unit entitlements was unreasonable. In this case, the Tribunal finds it relevant that lot 3 has a large terrace with a private outlook.
2. However, the terrace and positioning of lot 3 is not sufficiently significant to amount to a one third increase in the unit entitlement compared to the next highest unit entitlement, being the top floor three bedroom apartment. The Tribunal is therefore satisfied, based on the evidence of both experts and the market valuation in paragraph 22 above and all the circumstances, that the unit entitlement allocation was unreasonable.

1. Unit entitlements are a key component of the management of a strata scheme. They form the basis for liability for rates, and control power of management through the owners corporation.
2. The applicant submitted that the unit entitlement should be reallocated because the current allocation is an inequality of entitlements, with the owner of lot 3 having a 33% higher unit entitlement than the second highest unit entitlement, despite being a smaller lot internally.
3. The owners corporation submitted that notwithstanding its expert's reports, the unit entitlements should not change because the lot owner had accepted the unit entitlement when she purchased the lot 11 years ago, and lot 3 with its terrace was a superior lot to many others.
4. The Tribunal considers that both experts propose a reallocation of the unit entitlements. The passage of time between when lot owner purchased her lot and commenced these proceedings is relevant, however it is far outweighed by the unreasonable unit entitlements today.
5. The Tribunal is therefore satisfied that discretion should be exercised to reallocate the unit entitlements based on the following unit entitlement allocations:

Should there be an order for overpayment of rates under s236(6) of the SSM Act?

1. The original valuation was undertaken by Phillip C.K. Hooi Pty Ltd. The Tribunal is satisfied that Philip C.K. Hooi Pty Ltd was not a qualified valuer at the date of registration.
2. However, for the Tribunal to make an order for the payment of either costs, under s 236(6)(a), or overpaid levies, under s 236(6)(b) of the SSM Act, the original owner of the strata scheme must be a respondent in the proceedings.
3. Under the SSM Act, original owner is relevantly defined as:

"(b) ... means the person who, immediately after registration of the strata plan for the scheme, is entitled to a leasehold estate in all the lots in the scheme or is entitled to a leasehold estate in 2 or more lots in the scheme with total unit entitlements exceeding more than two-thirds of the aggregate unit entitlement of the lots in the scheme."

1. In these proceedings, the sole respondent is the owners corporation, not the original owner.
2. Accordingly, the Tribunal dismisses the lot owner's claim for a refund of levies.

(1) The unit entitlements for Strata Plan 61407 be allocated as follows:

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.