Laws v The Owners - Strata Plan 97230 [2022] NSWCATCD 131 | Case summary

NCAT Consumer and Commercial|2022-07-26

The application to remove Mr Leis from the committee

The Law

Section 238 of the Act provides: 238 ORDERS RELATING TO STRATA COMMITTEE AND OFFICERS (1) The Tribunal may, on its own motion or on application by an interested person, make any of the following orders-- (a) an order removing a person from a strata committee, (b) an order prohibiting a strata committee from determining a specified matter and requiring the matter to be determined by resolution of the owners corporation, (c) an order removing one or more of the officers of an owners corporation from office and from the strata committee. (2) Without limiting the grounds on which the Tribunal may order the removal from office of a person, the Tribunal may remove a person if it is satisfied that the person has-- (a) failed to comply with this Act or the regulations or the by-laws of the strata scheme, or (b) failed to exercise due care and diligence, or engaged in serious misconduct, while holding the office.

The allegations

The applicant alleges that Mr Leis should be removed from office because his behaviour makes him unfit. She also complains that meetings have not been called, and that the roles of Chairperson, Secretary and Treasurer have not been filled, or if they have, there has been no transparency in that process. She complains that Mr Leis has trespassed on lot property, used her water without her consent, fenced an area of common property so that his dogs can play, and has been intimidating towards her.

Consideration

None of the allegations, even if proven, would support a finding that Mr Leis has failed to exercise due care and diligence or engaged in serious misconduct whilst holding office.
The applicant alleges that there has been conflict arising from Mr Leis and his family parking on common property. She alleges that Mr Leis has sworn at her and tried to intimidate her. Mr Leis denies these allegations. I can make no findings in respect of them.
The applicant also alleges that Mr Leis trespassed on the property of Ms Kiely, in relation to some building work being undertaken. She alleges that Mr Leis gave instructions to the builder without authority. Mr Leis disputes the applicant's version of events, says he went on to the lot only to loan a ladder to the builder, and denies giving instructions to the builder.
Even if I accepted the applicant's evidence about these matters they do not amount to grounds to remove Mr Leis form his positions.
There is one matter raised where there has been a failure to comply with the Act, and that is the failure to elect the office bearers at a properly convened meeting of the strata committee. However this failure is not that of Mr Leis alone. Indeed it seems that the strata manager believes he holds these positions. This is not the case. Section 41 makes it mandatory for the strata committee to appoint a Chairperson, Secretary and Treasurer. Whilst s 54 states that the strata manager may exercise the functions of the Chairperson, Secretary and Treasurer, it also states that the Chairperson, Secretary and Treasurer may continue to exercise the functions delegated to the strata manager.
I am not satisfied that there are grounds to remove Mr Leis form his position and I decline to make the order sought.

Orders

The application to remove Mr Leis from his position on the strata committee is dismissed.
Pursuant to s 149 of the Strata Schemes Management Act 2015 the Tribunal prescribes the making a common property rights by-law in and to the effect of the by-law referred to in motion 14 in the minutes of the annual general meeting of SP 97230 on 23 September 2021, a true copy of which is annexed to these orders.
The Owners Corporation is to ensure that the common rights by-law is registered in accordance with s 246 of the Act.

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

Amendments 29 September 2023 - Formatting amendments. 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: 29 September 2023

The Law

The Tribunal's power to make the order sought by the applicant is found in s 149 of the Strata Schemes Management Act 2015 ("the Act") which provides: 149 ORDER WITH RESPECT TO COMMON PROPERTY RIGHTS BYLAWS (1) The Tribunal may make an order prescribing a change to a by-law if the Tribunal finds-- (a) on application made by an owner of a lot in a strata scheme, that the owners corporation has unreasonably refused to make a common property rights bylaw, or (b) on application made by an owner or owners corporation, that an owner of a lot, or the lessor of a leasehold strata scheme, has unreasonably refused to consent to the terms of a proposed common property rights by-law, or to the proposed amendment or repeal of a common property rights by-law, or (c) on application made by any interested person, that the conditions of a common property rights by-law relating to the maintenance or upkeep of any common property are unjust. (2) In considering whether to make an order, the Tribunal must have regard to-- (a) the interests of all owners in the use and enjoyment of their lots and common property, and (b) the rights and reasonable expectations of any owner deriving or anticipating a benefit under a common property rights by-law. (3) The Tribunal must not determine an application by an owner on the ground that the owners corporation has unreasonably refused to make a common property rights by-law by an order prescribing the making of a by-law in terms to which the applicant or, in the case of a leasehold strata scheme, the lessor of the scheme is not prepared to consent. (4) The Tribunal may determine that an owner has unreasonably refused consent even though the owner already has the exclusive use or privileges that are the subject of the proposed by-law. (5) An order under this section, when recorded under section 246, has effect as if its terms were a by-law (but subject to any relevant order made by a superior court). (6) An order under this section operates on and from the date on which it is so recorded or from an earlier date specified in the order.
In Fong v The Owners - Strata Plan 82783 [2022] NSWCATCD the Tribunal discussed the application of this power: 58 The authorities which have considered s. 149(1)(a) of the Act or its equivalent provision in previous legislation dealing with the same topic, direct attention to the unreasonableness of the owners corporation and owners' conduct in refusing consent to the proposed common property rights by-law or alteration to the common property. This is an objective inquiry based on the ordinary meaning of reasonableness and unreasonableness: McCann v Owners SP 11318 [1998] NSWSSB 44. An "unreasonable" refusal is one that is not endowed with reason, not guided by reasonable good sense, not based on or in accordance with reason or sound judgment, immoderate, capricious or exorbitant: see Owners SP 69481 v Want [2013] NSWCTTT 440. 59 The authorities also indicate that the issue for the Tribunal must be approached by considering what was before, or reasonably available to the owners corporation or owners at the time they refused consent to the by-law or the common property alteration, rather than material which subsequently came into existence: Owners Corporation SP 7596 v Risidore & Ors [2003] NSWSC 966 at [11] - [13]; Owners SP 69140 v Drewe [2017] NSWSC 845 at [27] and compare in the context of s. 126 of the Act, Endre v The Owners - Strata Plan no. 17771 [2019] NSWCATAP 93 at [29]. 60 Particular lot owners in the strata plan the subject of proceedings can, on one view even should, adduce evidence of their reasons for their opposition to the proposed common property rights by-law: Milman v Owners SP 1389 [2005] NSWCTTT 196.
In Charitable Islamic Association of Beirut City Incorporated v The Owners- Strata Plan No 75506 [2019] NSWCATCD 53 the Tribunal noted: 40. A Lot owner bringing an application that the refusal of a proposed special privileges by-law must demonstrate the unreasonableness of the refusal, not the reasonableness of the proposed change (Ainsworth v Albrecht [2016] HCA 40 at [55]; [63]-[64]; [74]; [84]-[90]). Regarding this issue, and the relevant considerations under s 149 of the SSMA, the Tribunal stated in Capcelea v The Owners-Strata Plan No 48887 [2019] NSWCATCD 27 at [56]-[59]: "The fundamental assessment, on which the challenging owners bear the onus of proof as further discussed below, is whether or not, taking into account those interests, rights and expectations, the decision to refuse the proposed by-law was unreasonable. But the exercise required by s 149(2), unlike the exercise in Ainsworth, requires not only the consideration of an objective rational basis for refusal taking into account the interests of all owners in their lots and the common property but, also, an assessment of that basis by taking into account the rights and expectations of the owners propounding the by-law and anticipating a benefit from them. It is not a simple balancing exercise to test for reasonableness of the proposal being rejected, as the adjudicator engaged in and the Queensland Court of Appeal endorsed, in Ainsworth. But it is an exercise in which the unreasonableness of a refusal is assessed by, not only the interests of the refusing owners in their perception and expression of the status quo property rights, but also by the rights and reasonable expectations of the proponent owners that the refusing owners ought (to avoid acting unreasonably) have taken into account in coming to a decision. The Tribunal intrudes into the decision because it is required by the wording of s 149(2) to have regard to the matters in s 149(2) as they presented at the time of the refusal, and on an objective basis, in assessing the quality of the decision made by the refusing owners."

Laws v The Owners - Strata Plan 97230

At a glance

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Decision date

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Judgment (7 paragraphs)

Parties

Cases Cited (7)