Lai v Community Association No DP 270214

The relevant legislation

1. The relevant sections of the Civil and Administrative Tribunal Act 2013 (NSW) ("NCAT Act") which are applicable to the appeal are as follows: "82 Interpretation (1) Each of the following kinds of decisions of the Tribunal is an appealable decision of the Tribunal for the purposes of this Division: (a) any decision made by an Appeal Panel in an internal appeal, (b) any decision made by the Tribunal in an external appeal, (c) any decision made by the Tribunal in proceedings in which a civil penalty has been imposed by the Tribunal in exercise of its enforcement or general jurisdiction. Note. An appealable decision includes any ancillary or interlocutory decisions of the Tribunal in such proceedings. … (3) For the purpose of this Division, the appropriate appeal court for an appeal against a decision in proceedings in which a civil penalty has been imposed is: (a) if the Tribunal was constituted by one or more senior judicial officers - the Supreme Court, or (b) if the Tribunal was not constituted by or with any senior judicial officers - the District Court. … (5) In this section: senior judicial officer means any of the following: (a) a Judge of the District Court, (b) (Repealed) (c) a Judge of the Land and Environment Court, (d) a Judge of the Supreme Court." "83 Appeals against appealable decisions (1) A party to an external or internal appeal may, with the leave of the Supreme Court, appeal on a question of law to the Court against any decision made by the Tribunal in the proceedings. (2) A person on whom a civil penalty has been imposed by the Tribunal in proceedings in exercise of its enforcement or general jurisdiction may appeal to the appropriate appeal court for the appeal on a question of law against any decision made by the Tribunal in the proceedings. (3) The court hearing the appeal may make such orders as it considers appropriate in light of its decision on the appeal, including (but not limited to) the following: (a) an order affirming, varying or setting aside the decision of the Tribunal, (b) an order remitting the case to be heard and decided again by the Tribunal (either with or without the hearing of further evidence) in accordance with the directions of the court. (4) Without limiting subsection (3), the appropriate appeal court for an appeal against a civil penalty may substitute its own decision for the decision of the Tribunal that is under appeal. (5) Subject to any interlocutory order made by the court hearing the appeal, an appeal under this section does not affect the operation of the appealable decision of the Tribunal under appeal or prevent the taking of action to implement the decision."
2. Section 97B of the CLM Act provides as follows: "97B Civil penalties for contravention of orders under this Part (1) The Tribunal may, by order, require a person to pay a pecuniary penalty of an amount of up to 50 penalty units for contravention of an order under this Part (the original order). (2) An application for an order under subsection (1) may be made by: (a) the applicant for the original order, or (b) an association or strata corporation involved in the order, or (c) in the case of an order that gives effect to any agreement or arrangement arising out of a mediation session - either party to the mediation."

Procedural background

1. This dispute has a lengthy and complex procedural background. At the commencement of the appeal, the plaintiffs tendered a folder of documents which became Exhibit A which set out documents which included relevant decisions made by NCAT.
2. The defendant is the Community Association of DP No 270214 which consists of a number of residential properties at Cabarita in Sydney in New South Wales. The plaintiffs own and reside in Lot XX of DP 270214. It seems to be not in contention that sometime between 2008 and 2009, the plaintiffs installed 11 security cameras to the exterior of their lot. In 2013, the plaintiffs installed walls made out of stacked blocks in the courtyard of their lot. Photographs of the 11 cameras and a wall were in Exhibit A.
3. The defendant commenced adjudication proceedings against the plaintiffs under the CLM Act: see s 71 of the CLM Act. In the adjudication proceedings, the defendant claimed that the plaintiffs had breached by-laws 10 and 12 of the Community Association by installing the cameras and walls without permission.
4. By-laws 10 and 12 of the Community Association were in evidence and were as follows: "BY-LAW 10 Fixing of Shutters, Blinds, Security Devices and Fly Screens 10.1 The proprietor or occupier of a Lot must not, except with the approval of the Community Association: (a) fix shutters, blinds, canopies or awnings to the outside of a building on a Lot or the outside of a building containing a Lot; (b) fix bars, screens, security doors or other security devices, to the outside of a building on a Lot or the outside of a building containing a Lot other than aluminium frames and aluminium security screens or doors with: (i) powdercote finish; (ii) Duralco Amplimesh pattern or the same pattern of another brand of similar quality; and (iii) fly mesh if desired; and (c) fix fly screens to windows or fly screen doors to doorways of a building on a Lot or a building containing a Lot. 10.2 The approval of the Community Association may not be withheld unreasonably where the items to be fixed comply with the Architectural Standards established for a Lot in relation to the items." … "BY-LAW 12 Things not in keeping The proprietor or occupier of a Lot must not, except with the approval of the Community Association, construct, install or maintain on or in a Lot any thing which can be seen from outside the Lot and which in the reasonable opinion of the Community Association is not in keeping with the building or the landscaped areas of the Lot."
5. The defendant sought an order from the Adjudicator that the plaintiffs remove the security cameras, all related conduits and the stacked brick walls. After considering the filed material on behalf of each party, the Adjudicator handed down his decision on 1 December 2015: Exhibit A pages 2-6. The Adjudicator was satisfied that the cameras and the walls breached the By-laws and that orders should be made for the removal of the unauthorised items. In paragraph 19 of the Adjudicator's reasons dated 1 December 2015 the Adjudicator stated as follows: "19. I am persuaded to make the orders sought for the removal of the unauthorised items. In making this order I will allow sufficient time for the respondents to carry out the order or to follow the correct process and retrospectively seek the proper approval for the items to remain from the Community Association."
6. On 1 December 2015, the Adjudicator made the following orders under the CLM Act: "1. The respondents Chi Leung Au-Leung and Po Wah Irene Lai shall on or before 28 February 2016 remove all the security cameras and all related conduits on the exterior of their lot that have been installed without the permission of the Community Association and return the common property to its original condition, colour and state. 2. The respondents Chi Leung Au-Leung and Po Wah Irene Lai shall on or before 28 February 2016 remove the loose stacked faux brick walls on either side of their garden on their lot that have been installed without the permission of the Community Association and return the common property to its original condition and state."
7. The plaintiffs appealed the decision of the Adjudicator. On 3 August 2016, Senior Member Simon of NCAT dismissed the appeal from the decision of the Adjudicator and gave detailed reasons for her decision: Exhibit A pages 8-19. The Tribunal found that the cameras installed were "security devices" within By-law 10 and that the wall was visible from outside the lot and that consent was required to be obtained by the plaintiffs from the Community Association for the construction of the wall. It was also found that consent had not been unreasonably withheld by the Community Association: see [37]-[39]. An argument that the Community Association had given its consent was rejected. The Senior Member found that it did not appear that approval had ever been formally sought by the plaintiffs for the cameras or that consent had been formally denied by the defendant on any basis: see [42].
8. No appeal was made to the Appeal Panel of NCAT from the decision of Senior Member Simon.
9. There was then a considerable amount of correspondence between the Community Association and the plaintiffs in relation to compliance with the orders made by the Adjudicator on 1 December 2015. Formal application was made by the plaintiffs for retrospective approval of the cameras and the walls: Exhibit A page 207. This application was rejected: Exhibit A pages 209; 215.
10. It seems from the evidence that in April 2017 the cameras which had been installed prior to the Adjudicator's orders and the walls were removed. Soon after, a lesser number of cameras (it appears six cameras) and bamboo screens were installed by or on behalf of the plaintiffs. No approval was granted by the Community Association for the installation of the lesser number of cameras or the bamboo screens: Exhibit A pages 219-229.
11. On 26 June 2017, the defendant applied for orders imposing a civil penalty on the plaintiffs for breach of the 1 December 2015 orders. That application resulted in extensive evidence being filed, detailed submissions being filed and a hearing. These documents and a transcript of what occurred at the hearing in NCAT were part of Exhibit A in the appeal.
12. It was submitted by the defendant/applicant that a pecuniary penalty should be imposed upon the plaintiffs because, despite repeated requests from the defendant and in contravention of the Adjudicator's orders dated 1 December 2015, the plaintiffs "continued to unlawfully keep security cameras on the exterior of their lot and had now installed bamboo fencing on the exterior of their lot in contravention of the by-laws": Exhibit A page 23 at paragraph 2.
13. At the hearing in relation to the penalty, the defendant relied on two statements of Mr Tony Robertson. Mr Robertson's wife had been an owner in the Community Association since 2002. Mr Robertson had been a member of the Executive Committee of the Community Association for approximately 12 months prior to June 2017. He had also previously served on the Executive Committee of the Community Association at different times. He stated in his first statement dated 21 June 2017 that he had read the defendant's submissions and believed that the contents were true and correct to the best of his knowledge. Later, a more detailed witness statement of Mr Robertson dated 29 August 2017 was served and relied upon by the defendant. This statement gave a detailed chronology which suggested that the existing cameras and the existing stacked walls were removed in April 2017 and that about the same time the new cameras and bamboo fencing were installed.
14. The application by the defendant for the imposition of a civil penalty was heard by Senior Member Paull on 17 November 2017. The defendant's case, in summary, at the hearing was: 1. That the plaintiffs had breached the Adjudicator's orders made on 1 December 2015 as they had not returned the common property to its original condition, colour and state; and 2. That in all the circumstances it was appropriate to impose a civil penalty on the plaintiffs for that breach.
15. The plaintiffs' position at the hearing, in general summary, was as follows: 1. There had been no breach of the orders made on 1 December 2015 as the plaintiffs had removed the 11 cameras and the stacked walls even though other cameras and alternative bamboo screens were later constructed; and 2. That in any case, in the circumstances no civil penalty should be imposed. The primary submission of the plaintiffs was that on the evidence they had complied with the criteria in relation to the security cameras and consent had been unreasonably withheld by the Community Association within by-law 10.2: see Exhibit A pages 209, 217, 224-229, 235.
16. As stated above, a transcript of the proceedings before Senior Member Paull was before the court on the appeal: Exhibit A page 446 and following. At the hearing in NCAT (and which was included in the transcript), a detailed cross-examination of Mr Robertson by counsel appearing for the plaintiffs occurred: see pages 493 and following of Exhibit A.
17. In the written submissions of counsel for the plaintiffs, relied upon for the purposes of the appeal, a number of observations were made in relation to Mr Robertson's evidence before NCAT. Mr Robertson was taken to certain correspondence in which the plaintiffs through their lawyers advised the Executive Committee of the Community Association of the number and style of cameras that were to be installed at the property. Mr Robertson gave evidence that he could not recall that correspondence being tabled before the Executive Committee at the relevant meeting on 13 June 2017: Exhibit A pages 235 and 526-527. Mr Robertson, who was giving evidence for the defendant, was said to have conceded that the documents should have been brought to the attention of the committee members and that the plaintiffs were entitled to feel aggrieved that the correspondence was not shown to the members for the purposes of their decision: Exhibit A page 527. Other evidence was also given by Mr Robertson which is referred to in paragraph 38 of the written submissions of counsel for the plaintiffs on the appeal.
18. At Exhibit A page 541 Mr Robertson doubted that the plaintiffs' contravention has affected "the administrational management of the Community Association".
19. One of the relevant documents complained about was a letter from a Mr Taing of Universal Security & Communications dated 18 April 2017 which certified that cameras had been replaced as at 18 April 2017 at the plaintiffs' premises and that the locations of each new camera were illustrated on attached diagrams. The diagrams referred to did not show the coverage of the cameras which was a matter of significance to the Committee. It seems from the evidence that the letter and the diagrams may not have been brought to the attention of the Committee members.
20. At the hearing before NCAT, the plaintiffs also relied on an expert report from a Mr Arena from The Alarm & Camera Specialist Pty Ltd. Mr Arena expressed the opinion that the cameras installed satisfied the four criteria which had been stated by the Community Association in correspondence; see Exhibit A pages 209 and 431-432. Mr Arena stated that the security system was set on motion detection and only recorded when there was motion in the plaintiffs' property.

The decision under appeal

1. As stated above, Senior Member Paull handed down her decision on 13 February 2018. Pursuant to s 97B of the CLM Act, Senior Member Paull ordered the plaintiffs to pay the Secretary of Finance Services and Innovation $3,000 within two weeks of the orders taking effect. Leave was also given to the parties to apply for costs. The Senior Member gave detailed reasons for her decision: Exhibit A pages 165-174.
2. I make the following general observations in relation to the reasons of decision of Senior Member Paull: 1. At paragraphs 3-10, the Senior Member provided the background to the decision; 2. At paragraphs 11-14, the Senior Member set out the case of the current defendant; 3. In paragraph 13, the Senior Member referred to the evidence of Mr Robertson (incorrectly referred to as Mr Robinson) in which he agreed that the number of cameras at the plaintiffs' premises were fewer and less obtrusive than the original 11 cameras, the subject of the Adjudicator's orders. Reference was also made to Mr Robertson's concession that he could not think of any reason why the current (reduced number of) cameras should not be approved but stressed that the current cameras were installed without approval. In paragraph 14, the current defendant accepted that the plaintiffs had removed the wall, the subject of the Adjudicator's orders, but had replaced it with the current bamboo structure which was said to be in breach of the Adjudicator's orders; 4. At paragraphs 15-19, the Senior Member set out the case of the plaintiffs, that the current cameras and bamboo wall constituted "new work" that was not in existence at the date of the Adjudicator's orders and had not been the subject of adjudication. It was also mentioned that the plaintiffs had been allegedly the subject of "selective prosecution" by the defendant; 5. The matter of the alleged "selective prosecution" was considered in paragraphs 20-23; 6. At paragraphs 24-37 of the reasons for decision, the Senior Member considered Mr Robertson's evidence. As indicated above, Mr Robertson gave evidence on behalf of the defendant and was a member of the Executive Committee. In the course of her reasons, the Senior Member rejected the plaintiffs' submission that Mr Robertson was evasive. It was found that Mr Robertson made a concerted effort to respond as best he could to the line of questioning in cross-examination, made a concerted effort to answer questions and was prepared to make concessions in cross-examination: paragraphs 25 and 29-30. 7. At paragraph 31, Mr Robertson is recorded as agreeing when asked that it was "a possibility" that the current cameras may be approved by the Community Association. The Senior Member held that this amounted to no more than the opinion of one lot owner and one committee member without any reference to the regulatory framework within which the defendant would have to consider the question. It was said that the say so of Mr Robertson as one member, although a frank concession, did not constitute persuasive evidence. In submissions, it was said that this factual finding was incorrect as Mr Robertson had conceded that in the light of the material that the Executive Committee would "probably" (not possibly) vote to accept the cameras as they were replaced: Exhibit A page 528. Whilst this submission seems to be correct, the Senior Member was correct that it was the opinion of Mr Robertson as only one member of the Executive Committee. The reference in paragraph 31 also shows that this matter was taken into account by the Senior Member; 1. At paragraphs 38-48 of the reasons for decision, the Senior Member considered whether the plaintiffs had breached the Adjudicator's orders. It was held that the offending items had been removed in accordance with the orders but that the plaintiffs who had been ordered to return the common property to its original condition and state had not done so due to the installation of new cameras and the bamboo walls. It was held that the plaintiffs had failed to reinstate the common property to its original condition: see paragraphs 44-46. It was noted by the Senior Member that while it may be open to the defendant to bring proceedings for the removal of the current devices and structures it was equally open to the defendant to bring the proceedings seeking a penalty on the basis that the current bamboo structure was in breach of the orders; 2. At paragraphs 49-53, the Senior Member considered the question of the imposition of a civil penalty under s 97B of the CLM Act. The Senior Member stated the following at paragraphs 49-51: "49. The fact that the Respondent, under the directive of an Adjudicator's orders, removed the 11 cameras and almost simultaneously installed the current cameras, without approval, is telling. It allows the Tribunal to draw the inference that the Respondents have not heeded the findings and abided by the orders of the Adjudicator, nor accepted or at the very least understood the necessity to operate within the statutory framework imposed under the Act. 50. While, the Respondents point to the Applicant's unreasonable stance in responding to their attempts to obtain approval for the cameras and argue that they have been singled out by the Applicant for "selective prosecution" it follows from my findings that these are not persuasive arguments. 51. What is more I accept that the nature of the Respondent's contravention and the period of time over which it has persisted may send out adverse signals to others that could impact on the smooth administration and management of the complex. This makes deterrence both in relation to others as well as the Respondents an important consideration." 1. The Senior Member imposed a penalty of $3,000 which was described as "being in the upper-middle range".

Submissions on the current appeal

1. I have set out the grounds of appeal relied upon by the plaintiffs at the commencement of these reasons.
2. Counsel for both parties provided detailed written submissions in relation to the grounds of appeal. These were supplemented at the hearing by oral submissions.
3. I will consider each of the grounds of appeal in due course. However, it was clear that the principal matters upon which the plaintiffs relied were as follows: 1. There was no breach of the Adjudicator's orders by the plaintiffs. The plaintiffs had indeed removed the 11 cameras and the stacked walls in accordance with the orders of the Adjudicator. The replacement cameras and the bamboo walls were "new work" and were installed after the orders had been complied with, and in any case should have been approved by the Committee. There was thus no breach of the orders; 2. In relation to whether a penalty should be imposed and the extent of that penalty, the Senior Member had failed to take into account the expert evidence, the concessions of Mr Robertson and the fact that permission by the Community Association had been unreasonably withheld for the cameras within By-law 10.2. The fact that, according to the expert evidence, the plaintiffs had complied with the criteria stipulated by the Executive Committee in correspondence in relation to the cameras, was a significant matter to be taken into account in determining what, if any, civil penalty should be imposed on the plaintiffs. This was not given any consideration by the Senior Member. Further, inadequate reasons were provided by the Senior Member in relation to these matters which itself constituted an error of law. Accordingly, the decision of the Senior Member and the orders made should be set aside.
4. The plaintiffs relied on the decision of The Owners-Strata Plan No 82306 v Anderson [2017] NSWCATCD 85 where NCAT, headed by the President Justice Wright, gave a decision in which the Tribunal stated as follows at paragraphs 84-86: "[84] In cases under strata schemes management legislation, specific deterrence requires that the penalty be sufficient to provide a real incentive for the person the subject of the order to comply with the order. General deterrence requires that any pecuniary penalty should also be sufficient to serve as a warning to other persons who are or might become subject to an order concerning the operation, administration or management of a strata scheme that failure to comply with such an order is likely to be met with significant consequences. [85] The penalty should not be so low as to encourage persons subject to orders under the strata schemes management legislation to ignore orders and pay any penalties because it involves less trouble or expense than complying with the orders. Nonetheless, as observed in the Full Federal Court in Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543 at [93]; [2007] FCAFC 65, "the penalty should not be such as to crush the person upon whom the penalty is imposed or used to make that person a scapegoat." [86] Having regard to these matters and without attempting to be exhaustive, in our view the relevant factors to consider when determining whether and in what amount to impose a pecuniary penalty under s 202 of the 1996 Act include, where relevant: (1) The nature and extent of the contravention; (2) The circumstances in which the contravention took place; (3) The effect of the contravention on the operation, administration or management of the strata scheme in question; (4) The maximum penalty that may be imposed; (5) The need for deterrence, both specific and general; (6) The individual or personal circumstances of the contravenor; (7) Any other relevant mitigating circumstances; (8) Where there are a number of contraventions: (a) whether it is appropriate to impose separate penalties; and (b) whether the penalty or penalties are appropriate having regard to the totality principle."
5. It was submitted that a relevant mitigating circumstance in the present case was the evidence of the expert and the concession of Mr Robertson that it was "probable" that the cameras as replaced would be given approval by the Executive Committee.
6. In relation to the alleged failure to take the matters relied on into account, reliance was placed by the plaintiffs on the decision of the Appeal Panel of NCAT in Matterson v Sunrise Pools Australia Pty Ltd [2017] NSWCATAP 211 where the Tribunal stated as follows at paragraphs 52-53 in relation to the duty as to the giving of reasons: "[52] In these circumstances, in our opinion, Mrs Matterson's evidence was sufficiently significant that the reasons for decision on this central controversy as to leakage needed to refer to her and explain what the Tribunal made of it and why it was not to be accepted, if that was to be the case. In our opinion, the Tribunal erred in law in not doing this: Collins v Urban [2014] NSWCATAP 17 at [46]-[57]. As to dealing with conflicting evidence, see: Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430 at 443.7; Mitchell v Cullingral Pty Ltd [2012] NSWCA 389 per Allsop at [2]; Mifsud v Campbell (1991) 21 NSWLR 725 per Samuels JA at 728; Hadid v Redpath [2001] NSWCA 416 per Heydon JA at [53]; Khan v Kang [2014] NSWCATAP 48 at [41]. [53] In the passage from Collins v Urban to which we have referred reference is made to part of the judgment of Samuels JA in Mifsud v Campbell (1991) 21 NSWLR 725 at 728 in which His Honour referred to a "sense of grievance" that can arise, and that a litigant may not just be disappointed but "disturbed" by a decision which fails to refer to evidence "critical" to an issue in the case and contrary to an assertion accepted by the trial judge. We see those remarks as pertinent to the problem that arises in this case."
7. Reliance was also placed on paragraphs 25-26 of the frequently quoted John Prendergast & Vanessa Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 which are as follows: "25. In this case, the grounds of appeal are set out as numbered paragraphs that correlate to the numbered paragraphs of the Decision. They identify factual disputes. As noted in Waterford v Commonwealth [1987] HCA 25; (1987) 163 CLR 54 per Brennan J at 77 "[t]here is no error of law simply in making a wrong finding of fact." 26. Nevertheless, pointing to a wrong finding of fact may be indicative of an underlying error of law and therefore raise a question of law. For instance, a wrong finding of fact may be indicative of an error of law occasioned by a failure to consider a relevant consideration, or consideration of irrelevant factors, or be reflective of a decision no reasonable decision-maker would make. Also, the distinction between fact and law is not always clear. In Lombard Farms Pty Ltd v Chief Commissioner of State Revenue [2013] NSWADTAP 42 at [9] to [23] the Appeal Panel considered the distinction between questions of law and fact."
8. On these major issues raised by the plaintiffs, the defendant submitted as follows: 1. No error of law was made by Senior Member Paull in relation to the question whether there had been a breach of the Adjudicator's orders. While there was no issue that the plaintiffs had removed the original 11 cameras and the stacked walls that did not mean that the orders had been complied with. There were two aspects to the orders: first, the plaintiffs were required to remove the items and secondly, the plaintiffs were required to return the common property to its original condition and state. To remove the cameras and the stacked walls and then soon afterwards to replace them without the approval of the Community Association with another series of cameras and the bamboo screens did not amount to compliance with the orders. The orders have to be read sensibly and seen in the context of the decision in which they were made. There was a clear breach of the orders by the plaintiffs; 2. There was no error of law in relation to a consideration of the plaintiffs' arguments on the question of whether, and if so what, civil penalty should be imposed on the plaintiffs. The judgment of the Senior Member needs to be read as a whole. The reasons for decision in paragraphs 13 and 50 show that the Senior Member took into account the matters raised by counsel for the plaintiffs concerning the alleged unreasonable stance of the defendant and the evidence of Mr Robertson that he could not think of any reason why the current cameras should not be approved. Clearly there was no error of law as these matters had been taken into account; 3. In relation to the failure to give reasons argument, detailed and comprehensive reasons are not required to be given, only adequate reasons: Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247 at 278-280. At page 280 McHugh JA stated as follows: "If an obligation to give reasons for a decision exists its discharge does not require lengthy or elaborate reasons … But it is necessary that the essential ground or grounds upon which the decision rests should be articulated. … The extent of the duty to give reasons is related "to the function to be served by the giving of reasons". Thus more elaborate reasons are required where legislation gives a right of appeal against a decision than where no appeal lies."

Application for an Extension of time

1. An appeal was initially commenced by the plaintiffs in NCAT by filing a Notice of Appeal in that Tribunal on or about 13 March 2018. An issue arose as to whether NCAT was the appropriate venue for the appeal or whether the proper place to commence the appeal was in this court. It seems clear having regard to ss 82 and 83 of the NCAT Act, that the proper place for the appeal is this court. Thereafter, the Summons was filed in this court on 19 April 2018.
2. Under s 84(2)(a) of the NCAT Act, an appeal to a court must be made within such time and in such manner as is prescribed by the rules of the court to which the appeal is made. The court may allow further time to make the appeal. Part 50.1 of the Uniform Civil Procedure Rules applies the part in question to any appeal other than certain excluded appeals. Under Part 50.3 a summons commencing an appeal must be filed within 28 days after the "material date" or within such further time as the court may allow. Part 50.2 defines "material date" in the case of a Tribunal as being the date on which notice of the decision was given.
3. It is accepted that the appeal in the present case is out of time and an extension is required.
4. The plaintiffs sought an extension of time in the present case to bring the appeal. In its written submissions the defendant opposes that leave being granted. It seems that the decision to file the appeal in NCAT was based on a misunderstanding as to the appropriate body to appeal to. Despite his written submissions, counsel for the defendant conceded orally that he could not point to any prejudice to the defendant in extending time for the purposes of the appeal. Clearly, if the time is not extended then the plaintiffs will not be able to run their appeal and they will thereby be materially prejudiced.
5. I take into account the written submissions made by the parties including the written submissions of counsel for the defendant at paragraphs 28-31.
6. I note in the present case that the length of the delay in bringing the appeal in this court was of a short duration and the potential prejudice to the plaintiffs if leave is not given is significant. The appeal would seem to be arguable, particularly in relation to the question of the failure to provide adequate reasons.
7. In my view, taking into account all of these matters, and the fact that no prejudice can be pointed to by the defendant, it is in the interests of justice in this case that an extension of time to the date of filing of the Summons be granted. In coming to this conclusion I note and apply the principles set out in Tomko v Pilasty (No 2) [2007] NSWCA 369 at [14], [17] and [55]-[59]; Madden v The Owners-Strata Plan No 64970 [2013] NSWSC 469 at [35].

Whether there was a breach of the Adjudicator's orders by the plaintiffs

1. In my view, no error of law has been shown by the plaintiffs in relation to the decision of the Senior Member under appeal concerning whether there was a breach of the Adjudicator's orders. In my opinion, the analysis at paragraphs 38-48 of the reasons for decision under review is correct.
2. While it is true that the plaintiffs caused the removal of the original 11 cameras and the stacked walls, those items were soon after replaced with the lesser number of new cameras and the bamboo screens (also described as a "bamboo screed"). Accordingly, the plaintiffs had not returned the common property to its original condition and state within the orders.
3. I reject the submission made on behalf of the plaintiffs that the new cameras and the bamboo screens were "new work". The orders made by the Adjudicator have to be construed sensibly and in the context of the decision in which they were made which was to require the plaintiffs to remove the existing cameras and walls. In my view, the second aspect of the orders being that the plaintiffs were ordered to return the common property to its original condition and state was not complied with. The original condition and state did not have any cameras or walls. A temporary removal to be replaced by alternative security devices and structures in my view amounts to a breach of the orders.
4. If the plaintiffs' argument was taken to its logical conclusion, then the removal of the 11 cameras and the stacked walls and their replacement with say 30 different cameras and a permanent wall would not amount to a breach of the orders and would require new orders to be obtained following a new application. If an application was made and those were removed then on the plaintiffs' argument new security devices and a new structure could be replaced the next day. In my view, that is not giving a sensible and proper construction to the orders made by the Adjudicator.
5. The Senior Member was clearly correct in finding that there had been a breach of the Adjudicator's orders. There is no error of law.

The reasons of the Senior Member

1. It is clear in my view that the reasons for decision of the Senior Member under consideration have to be reviewed in their entirety.
2. At the hearing, the plaintiffs relied on their arguments that they had in fact complied with the criteria for the grant of approval in relation to the security cameras and that this was supported by the expert evidence before the Tribunal.
3. It is unarguable that the Senior Member could have provided more detailed and comprehensive reasons for her decision to impose a penalty on the plaintiffs and in relation to the amount of that penalty. The reasoning in paragraphs 49-53 of the decision under appeal is limited: see Exhibit A page 173.
4. However, in making those observations, I do not express the opinion that no consideration was given by the Senior Member to these matters. I note: 1. At paragraph 13 of the reasons for decision, the Senior Member noted the concession of Mr Robertson that he "could not think of any reason why the current cameras should not be approved but stressed that the current cameras were installed without approval"; 2. At paragraph 15, the Senior Member referred to a report and the statement of the female plaintiff; 3. At paragraph 23, the Senior Member referred to the extensive cross-examination of Mr Robertson; 4. At paragraph 31, the Senior Member referred to Mr Robertson's agreement that it was a "possibility" that the current cameras may be approved. However, the Senior Member noted, correctly in my view, that this amounted to no more than the opinion of one committee member. I accept as correct the conclusion of the Senior Member that although it was a frank concession it did not constitute persuasive evidence; 5. In paragraph 32, reference is made to the various written submissions in which the issue of compliance with the criteria of the Executive Committee in relation to the approval of the cameras was referred to in detail; 6. At paragraph 43, the reference is made to the plaintiffs' submission that after the Adjudicator's orders were made, the plaintiffs sought approval which was unreasonably refused. Reference was correctly made to the fact that the plaintiffs had avenues open to them to challenge the refusal under the CLM Act; 7. At paragraph 50, the Senior Member referred to the plaintiffs' submission that the defendant had taken an unreasonable stance in responding to their attempts to obtain approval for the cameras and argued that they had been singled out for "selective prosecution". It was noted from the findings that "these are not persuasive arguments". This must be viewed as a determination in relation to both the "selective prosecution" point and the alleged "unreasonable stance" of the defendant.
5. In my view, although there could have been a more comprehensive analysis, it is clear when the judgment is read as a whole that the submissions made by the plaintiffs were properly taken into account by the Senior Member who rejected them on the basis that they were not persuasive in the light of the stated necessity in paragraph 49 of the reasons, for the plaintiffs to comply with the orders of the Adjudicator and to operate within the statutory framework imposed under the CLM Act. Accordingly, in my view there is force in the submission of the defendant that there was no error of law as the matters relied upon by the plaintiffs were taken into account by the Senior Member. Thus, the Senior Member took into account a relevant consideration as submitted by the plaintiffs in determining whether, and if so what, penalty should be imposed.
6. In Tudor Capital Australia Pty Ltd v Christensen [2017] NSWCA 260 McColl JA (with whom Macfarlan JA agreed) stated at [387]-[388] as follows: "[387] The principles concerning adequacy of reasons are well known. It is apposite, however, to consider how those principles apply in an appeal confined to a grievance in point of law. In that situation, as Macfarlan JA explained in Wilkinson, Soulemezis v Dudley (Holdings) Pty Ltd, "is authority for the proposition that where a right of appeal is given only in respect of a question of law … reasons for a finding of fact 'can be treated less elaborately than [those on] an issue involving a question of law or mixed fact and law'. Nevertheless the principle that justice must not only be done but must be seen to be done remains applicable". [388] Thus, in Soulemezis, McHugh JA held that "the failure to explain the basis of the crucial finding of fact involves a breach of the principle that justice must not only be done but must be seen to be done" and is an error of law because the decision-maker "has not properly fulfilled the function which the law calls upon a judicial person to exercise". There will be a failure to give adequate reasons where a decision-maker ignores evidence critical to an issue in a case and contrary to an assertion of fact made by one party and accepted by the decision-maker."
7. In my view, it is apparent from the reasons that the Senior Member did not ignore the submissions made on the relevant issues on behalf of the plaintiffs. This is due to the consideration in the paragraphs I have referred to. On a proper and fair reading of paragraphs 49-53 of the reasons for decision, it seems clear that the Senior Member considered the argument and determined that a civil penalty was appropriate in light of the inference that the plaintiffs had not "heeded the findings and abided by the orders of the Adjudicator". Reference was also made to the nature of the plaintiffs' contravention and the period of time over which it had persisted.
8. Courts need to look at the minimum requirement for reasons not a desired requirement, to determine whether there has been an error of law: Resource Pacific Pty Ltd v Wilkinson [2013] NSWCA 33 at [47]-[52]. The requirement to give reasons has a variable content and relates to the minimum necessary to constitute "a proper exercise of the judicial function": Resource Pacific at [48]. Elaborate reasons are not needed.
9. The decision of Lukac v The Royal Australian and New Zealand College of Obstetricians and Gynaecologists [2018] NSWSC 436 relied upon by the plaintiffs stands for the principle that a decision maker to accord procedural fairness must not fail to respond to a clearly articulated argument on a central issue in dispute based on an established fact: at [70]. Here, it seems from the reasons for decision that Senior Member Paull considered the matters relied on by the plaintiffs but regarded the plaintiffs' breaches as the more significant matters which necessitated a penalty being imposed in the circumstances.
10. In the present case, the plaintiffs could only appeal on a question of law against any decision made by NCAT in the proceedings: s 83(2) of the NCAT Act. A failure to give adequate reasons is a clear error of law. I have carefully considered the submissions which were made by the plaintiffs on this issue. In the end, I am of the opinion that, reading the judgment as a whole, the reasons provided by the Senior Member were brief but were adequate and do not disclose an error of law. They referred to the arguments made briefly and pointed to other factors which were seen as more significant in the exercise of the power to impose a penalty. This aspect of the appeal is rejected.
11. I will now consider the specific grounds of appeal in the light of my previous analysis of the plaintiffs' arguments.

Appeal Ground 1: That the Senior Member erred in law by having no regard to the appellants' stated defence that:

i. The appellants had complied with the requirements as set out by the KICA for the installation of the cameras and as such should not be subject to a penalty order.

1. This ground of appeal is rejected. For the reasons which I have given, the Senior Member did have regard to the appellants' defence in the course of her reasons for decision.

Appeal Ground 2: The Senior Member erred in law by having no regard in her reasoning to the actual requirements of the Kenfall Inlet Community Association (KICA) for the installation of such cameras and whether or not the appellant had actually complied with those requirements.

1. For similar reasons to Appeal Ground 1, the Senior Member gave some consideration to the defence which had been put forward. I accept the submission on behalf of the defendant that the Senior Member below was not required to answer the question whether any refusal was unreasonable but to determine whether the installation of the new cameras had breached the Adjudicator's orders. While I accept that these matters were relevant to the question of penalty, as I have concluded above, it seems when the decision is read as a whole that these matters were taken into account. This ground is rejected.

Appeal Ground 3: The Senior Member erred in law by having no regard in her reasoning to the failure of the KICA to correctly apply its own rules to the decision to refuse the appellants' request to be permitted to install the cameras, and generally had no regard to the decision making process at all.

1. In my view, this ground of appeal has no substance for the reasons which I have previously given. I reject the submission that the Senior Member erred in law by having "no regard in her reasoning" to the alleged failure to approve the cameras. As indicated, the matter was taken into account by the Senior Member.

Appeal Ground 4: The Senior Member erred in law by impermissibly finding as a matter of fact that Mr Robinson conceded it was a "possibility" that the current cameras "may" be approved, when his evidence was that the cameras would be approved in their current form.

1. I have earlier referred to the evidence in relation to this issue.
2. The evidence at Exhibit A page 528 was as follows: "Speaker 3: "…Having had a look at everything I've taken you through, would you now, in your position as a member of the committee probably vote to accept the cameras are [sic - as] they currently are? Mr Robertson: "I think that we would probably be happy to go down that path … Yes".
3. In my view, this apparent error by the Senior Member does not give rise to particular concern. It is clear that a primary decision maker may make an error of fact and it will not necessarily give rise to an appeal being allowed: Chahal Group Pty Ltd v 7-Eleven Stores Pty Ltd [2018] NSWCA 58 at [124]. Mr Robertson, although he was giving evidence on behalf of the defendant, could only express an opinion in cross-examination as to the cameras and whether they complied with the criteria of the defendant and a likely decision which would be made. Mr Robertson was clearly only one member of the Executive Committee and his opinion is not decisive on the issue. Accordingly, a concession by Mr Robertson in cross-examination that it was probable that the committee would be happy to accept the cameras as they currently were is not decisive. Therefore, any factual error made by the Tribunal does not constitute an error of law which would lead to the appeal being allowed.

Appeal Ground 5: The Senior Member erred in law by not holding that Mr Robinson's concession that the cameras would be approved was an admission against interest and failed to give due weight to that admission in her reasons.

1. In my view, this ground of appeal should be rejected. For the reasons given in relation to Ground 4, although a concession was made by Mr Robertson, he was only one member of the Executive Committee. This in my view was properly considered by the Senior Member.

Appeal Ground 6: The Senior Member erred in law by impermissibly finding as a matter of fact that Mr Robinson's concession was "no more than an opinion without any reference to the regulatory framework within which the applicant would have to consider the question" when in fact the witness was taken to and asked to consider the cameras installed in light of the KICA's own regulations governing such installations.

Appeal Ground 7: The Senior Member erred in law by finding that Mr Robinson's concession that the cameras would be approved was "no more than the opinion of one lot owner and one committee member" such as to infer or imagine that the other committee members may have held an opposing view, when they chose to give no evidence, in contravention of the rule in Jones v Dunkel (1959) 101 CLR 298.

1. In my view, these grounds of appeal should be rejected. The Senior Member properly noted in paragraph 31 of her reasons for decision that any opinion of Mr Robertson amounted to no more than the opinion of one committee member and it would depend on the evidence and submissions placed before the committee when it considered the question in its context.
2. I reject the submission made by counsel for the plaintiffs that a Jones v Dunkel (1959) 101 CLR 298 inference should be made against the defendant as a result of the other committee members not giving evidence. In my view no inference should be drawn from the failure of the members to give evidence. The question of whether approval would be given did not directly arise for consideration in the course of the hearing below. Secondly, even if Jones v Dunkel applied in the present case, which in my view it does not, a court is not obliged to draw the inference: Newell v De Costi Seafoods (Franchises) Pty Ltd [2018] NSWCA 49 at [78]-[80]. Having regard to the issues which were involved in the present case, being whether there was a breach of the Adjudicator's orders and the penalty to be imposed, in my view it is not appropriate to draw a Jones v Dunkel inference from the failure of the other committee members to give evidence.
3. In addition, Ground of Appeal 6 and Ground of Appeal 7 do not amount to errors of law but challenges to factual findings. Accordingly, they may not be taken into account in this appeal.

Appeal Ground 8: The Senior Member erred in law by finding that the appellants' installation of the cameras "may send out adverse signals to others that could impact on the smooth administration and management of the complex" when there was no evidence to support such a finding.

1. In my view, the submission made by counsel for the plaintiffs that this finding amounted to an error of law should be rejected. The matter referred to in paragraph 51 of the reasons for decision of the Senior Member below was a proper matter to be taken into account by the Senior Member in determining whether a penalty should be imposed and in what amount. Direct evidence was not required to support such a finding as it is a legitimate matter to take into account on the question of deterrence.

Appeal Ground 9: The Senior Member failed to give adequate reasons. The reasons given do not show the reasoning process behind the decision that was ultimately made.

1. I have rejected this ground of appeal in my analysis above.

Appeal Ground 10: There was no evidence to support a finding that the Bamboo screen offended the association's by-laws.

1. In my opinion, this ground of appeal should be rejected. The question was whether the orders made by the Adjudicator had been breached by the plaintiffs' failure to return the common property to its original condition and state. The erection of the bamboo wall or screen clearly amounted in my view to a breach of the order as the common property had not been returned to its original state.

Appeal Ground 11: Due to any or each of the above errors the learned Senior Member's discretion to award damages miscarried such as to support a finding of error per House v The King (1936) 55 CLR 499.

1. This ground of appeal seems misconceived as no damages were awarded by the Senior Member.
2. As I have found that there were no errors of law in the earlier grounds of appeal, I reject that there was any error within House v The King (1936) 55 CLR 499.
3. It is clear that considerable resources have been devoted by the parties to these proceedings. In my view, therefore, it is appropriate that I express my opinion if I am wrong in relation to the adequacy of the reasons for decision. If I am wrong in relation to that legal issue, I have considered the evidence relied upon by the plaintiffs including: 1. The expert report relied upon below; 2. The By-laws in question; 3. The cross-examination of Mr Robertson; 4. The correspondence to the Committee and the earlier letter from another expert in relation to the cameras; 5. The correspondence between or on behalf of the parties; 6. The plaintiffs' argument that the criteria for the installation of the new cameras had been satisfied. I have assumed that this argument is correct.
4. Even taking all of these matters into account, I would not have altered the decision as to the imposition of a penalty and the amount of the penalty made by the Senior Member: see s 83(4) of the NCAT Act. In my view the orders of the Adjudicator are clear. I also take into account the matters referred to in paragraphs 49-52 of the reasons for decision. In my view in the light of those matters, and even taking into account the matters relied upon by the plaintiffs which I have referred to, the imposition of a penalty by Senior Member Paull was appropriate. Parties should work within the statutory framework imposed under the CLM Act and if a decision is not forthcoming by the Executive Committee should commence the appropriate proceedings to obtain relevant orders and not take action themselves. The orders were made by the Adjudicator on 1 December 2015 and there was no real attempt to comply with them until April 2017, a very lengthy period.
5. In relation to the question of quantum, this did not appear to be directly challenged. However, I have considered this issue and I believe that the penalty, whilst reasonably high, is within the range which was available reasonably to the Senior Member for the longstanding breach of the orders.
6. I accordingly reject the grounds of appeal. In those circumstances, I see no reason why the appellants/plaintiffs should not pay the costs of the appeal. However, I will give an opportunity to the parties to make any application as to costs if they wish.

Determination

1. I make the following orders: 1. The time for the filing of the Summons is extended up to the date the Summons was filed. 2. The orders of Senior Member Paull are affirmed. The appeal is dismissed; 3. The plaintiffs are to pay the costs of the defendant of the appeal as agreed or assessed; 4. The parties have liberty to apply within 28 days to vary Order 3 above.

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: 20 August 2018