Linney v The Owners - Strata Plan No. 11669 - [2021] NSWCATCD 123 - NSWCATCD 2021 case summary

The Application for Orders Under s 106 of the SSMA.

This issue arises from renovations to the applicant's Lot affecting common property where a hot water system was installed.
Ms Hopkins statutory declaration dated 15 June 2021 contains evidence of relevant events; together with reference in the submissions of the Lot owner and her documentary evidence.
There had been a dispute between the Lot owner and the owners corporation regarding works to the bathroom of the Lot were a hot water system had been installed. The bathroom bulkhead had been replaced and man holes in the bulkhead had not been re-installed to access pipes and services.
On 10 October 2019 the applicant; Mr Kuskis and Ms Parks attended mediation at NSW Fair Trading Strata Mediation.
A written agreement was entered into. That agreement reflects that the applicant had drafted and submitted to the owners corporation a "retrospective common property rights By-law" (i.e. a common property rights by-law required to approve alterations to common property by a Lot owner under ss 108, 111 and 142 of the SSMA).
The written agreement was that the common property rights By-law would be put to an EGM of the owners corporation, together with associated matters. The written agreement also stated: 1. Agreed by the owner of Lot 4 that should there be an instance in future where the bathroom bulkhead in Lot 4 needs to be cut in to investigate the source of a leak or similar, the owner of Lot 4 is responsible for all the costs of reinstatement and painting.
Ms Hopkins states that on 11 October 2019, the owners corporation was notified of a leak into the bathroom of Lot 4. She then arranged for a contractor to inspect the leak. The contractors removed part of the bulkhead to inspect the source of the leak which "is the hole in the bulkhead subject to this application".
According to the submission of the applicant, in October 2019 the tenant of Lot 4 reported a water leak to the applicant's managing agent. A licensed plumber attended the Lot and the Lot above (Lot 8) to investigate) "on at least two occasions". The plumber made a "rough hole in the bathroom ceiling bulkhead to investigate" which was not repaired by the owners corporation.

Application for Orders Under ss 24 and 25 of the SSMA Arising from the Annual General Meeting on 24 August 2020

This aspect of the application arises from the manner in which the strata manager Ms Hopkins conducted the meeting and dealt with the applicant and Mr Kuskis.
Prior to the 2020 Annual General Meeting of the owners corporation there had been disputation between the parties in 2019 involving renovations and repairs to Lot and common property. The parties had participated in mediation at NSW Fair Trading on 10 October 2019, where a signed agreement was entered into.
At an Extraordinary General Meeting of the owners corporation on 6 November 2019, a common property rights by-law was passed authorising alterations to common property by the Lot owner as part of renovations to the Lot.
The 2020 Annual General Meeting was held remotely using the 'Blue Jeans' videoconferencing system. The meeting was scheduled to commence at 5.30 pm.
According to the applicant, she logged in at approximately 5.20 pm. Mr Kuskis was present with her.
The evidence of the applicant was that she and Mr Kuskis were effectively excluded from participating in the AGM by the strata manager terminating her connection to the meeting.
Mr Kuskis did not hold a proxy to vote on behalf of the applicant.
The applicant asserted that the strata manager opposed Mr Kuskis speaking at the meeting on behalf of the applicant. According to the applicant, the strata manager proposed that owners take a vote whether to exclude her from the meeting. The vote was taken, and other Lot owners voted to exclude the applicant from the meeting. The strata manager then terminated the connection. The applicant was not able to vote on the Motions at the meeting.
The applicant asserted that neither the applicant nor Mr Kuskis stated that he would speak at the meeting; and he had attended the 2019 AGM of the owners corporation "as an observer" without speaking and without objection.
According to the applicant, she had "informed the strata managing agent" (although it was not clear from the evidence as to whether this was orally or in writing) on about 10 August 2020 that Mr Kuskis would be attending the meeting "as an observer" and that the strata manager had informed her that Mr Kuskis "would not be permitted to attend".
The evidence of Ms Hopkins was that prior to the AGM, the "branch manager" of the strata manager had informed the applicant that Mr Kuskis could not attend the meeting unless other Lot owners agreed, and an email had been sent on 17 August 2020.
The email referred to states that: …Owners may attend a meeting or a proxy of the owner. A proxy cannot vote if the person appointing proxy votes…if it refers to your partner attending this should be done sending through your proxy for your partner so he can attend…
Prior to the email of 17 August 2020, Ms Hopkins had sent an email to the applicant on 10 August 2020 that stated that due to COVID-19 restrictions physical meetings were "not recommended"; which was the reason the meeting was being held remotely. The email concluded: I note that any persons who are not holding a proxy will only be able to be an observer should the rest of the owners agree.
According to Ms Hopkins, the relevant events at the AGM were as follows: 1. Prior to the meeting, Ms Hopkins was given a proxy to vote on behalf of one of the Lot owners (the owner of Lot 2). 2. Ms Hopkins asked the other Lot owners in attendance who had logged on (being Ms Parks; Ms Fisher and Mr Bourke) if they agreed to Mr Kuskis attending. 3. The 3 other Lot owners each stated they did not want Mr Kuskis to attend. 4. Ms Hopkins requested Mr Kuskis leave the meeting. 5. Mr Kuskis and the applicant became "argumentative" that Mr Kuskis had a right to attend, including Mr Kuskis stating that "tenants have a right to attend". 6. Ms Hopkins stated that Mr Kuskis was not a tenant. Ms Hopkins asked the applicant on two occasions if she would attend the meeting without her partner. The applicant refused. The applicant and Mr Kuskis were "yelling" and being loudly argumentative. Ms Hopkins put the applicant and Mr Kuskis on mute. 7. Ms Hopkins asked other Lot owners whether the applicant and Mr Kuskis needed to be removed from the meeting. The other Lot owners agreed. 8. Ms Hopkins unmuted the applicant and again asked whether she would attend the meeting without Mr Kuskis. The applicant again refused and "yelled" at Ms Hopkins. 9. Ms Hopkins disconnected the applicant from the meeting. The applicant did not attempt to reconnect to the meeting. 10. The meeting then proceeded. Motions were voted upon. A strata committee was elected.
Ms Parks version of events as to what occurred at the meeting was broadly consistent with the recollection of Ms Hopkins.
The Minutes of the 2020 AGM relevantly noted the following: At the commencement of the meeting, G. Linney joined via Blue Jeans with her partner, M Kuskis. The managing agent asked the owners if they agreed that this non-owner and non-proxy holder M. Kuskis be allowed to attend the meeting, which they unanimously agreed not to provide their consent. It is noted that G. Linney has been advised by the Branch Manager of Robinson Strata Management in writing prior to the AGM that M Kuskis would be able to attend should a proxy be provided in accordance with the legislation, which it was not. The managing agent requested more than twice that only the owner for the lot to attend, to which G. Linney refused on each occasion and then both the lot owner and her partner proceeded to become disruptive and argumentative. M Kuskis also asserted his legal right to attend the meeting. The Chairperson then asked them to leave the meeting as it was impossible to continue. The owners were all in support of this decision and the meeting continued with no further disruption.
The applicant gave evidence that the content of the Minutes of the meeting setting out what had occurred was inaccurate. According to the applicant, neither she nor Mr Kuskis were aggressive, argumentative or disruptive. The applicant accepted that she and Mr Kuskis were upset, but that was because they believed that Mr Kuskis had a right to observe at the meeting and could not be excluded from doing so.
The evidence of Ms Hopkins and Ms Parks was that the notation in the AGM Minutes as to what had occurred was accurate and that the applicant and Mr Kuskis were unreasonably disruptive.
Sections 24 and 25 of the SSMA state: 24 Order invalidating resolution of owners corporation (1) The Tribunal may, on application by an owner or first mortgagee of a lot in a strata scheme, make an order invalidating any resolution of, or election held by, the persons present at a meeting of the owners corporation if the Tribunal considers that the provisions of this Act or the regulations have not been complied with in relation to the meeting. (2) The Tribunal may, on application by an owner or first mortgagee of a lot in a strata scheme, make an order invalidating any resolution of, or election held by, the persons present at a meeting of the owners corporation if the Tribunal considers that the provisions of Part 10 (other than Division 6 or 7) of the Strata Schemes Development Act 2015 have not been complied with in relation to the meeting. (3) The Tribunal may refuse to make an order under this section only if it considers - (a) that the failure to comply with the provisions of this Act or the regulations, or of the Strata Schemes Development Act 2015, did not adversely affect any person, and (b) that compliance with the provisions would not have resulted in a failure to pass the resolution or affected the result of the election. (4) The Tribunal may not make an order invalidating a resolution under subsection (2) if an application for an order has been made under Division 6 of Part 10 of the Strata Schemes Development Act 2015 in relation to the same or a related matter. (5) The Tribunal may not make an order under this section invalidating a decision by an owners corporation to approve, or not to approve, the appointment of a building inspector under Part 11. 25 Order where voting rights denied or due notice of item of business not given (1) The Tribunal may, on application by a person entitled to vote on a motion for a resolution of an owners corporation at a general meeting, order that a resolution passed at the general meeting be treated as a nullity on and from the date of the order. (2) The Tribunal must not make the order unless the Tribunal is satisfied that the resolution would not have been passed but for the fact that the applicant for the order - (a) was improperly denied a vote on the motion for the resolution, or (b) was not given due notice of the item of business in relation to which the resolution was passed. (3) An application for an order may not be made unless - (a) an application for mediation of the dispute was made not later than 28 days after the date of the meeting at which the resolution was passed, or (b) if an application for mediation was not made, the application for the order was made not later than 28 days after the date of the meeting at which the resolution was passed. (4) If a resolution that is to be treated as a nullity by an order changes the by-laws and the order has been recorded in the Register under this Act, the by-laws have force and effect on and from the date the order is so recorded to the same extent as they would have had if the change had not been made. (5) Subsection (4) is subject to the by-laws having been or being changed in accordance with this Act and to any relevant order made by a superior court. (6) The Tribunal may not make an order under this section if an application for an order has been made under Division 6 of Part 10 of the Strata Schemes Development Act 2015 in relation to the same or a related matter. (7) The Tribunal may not make an order under this section invalidating a decision by an owners corporation to approve, or not to approve, the appointment of a building inspector under Part 11.
The first issue for determination is whether 2020 AGM complied with the provisions of the SSMA and the Strata Schemes Management Regulation 2016 (NSW) ('the SSM Regulations'). The applicant must establish the meeting was non-compliant with the SSMA or the SSM Regulations (including the provisions of Part 10 of the SSMA dealing with information such as strata roll information) as a starting point under s 24 (1) and (2) of the SSMA.
Only if the Tribunal is satisfied that the meeting was non-compliant with the SSMA or SSM Regulations does the Tribunal need to determine the matters in s 24 (3) of the SSMA.
The 2020 AGM on 24 August 2020 was chaired by the strata manager Ms Hopkins. The evidence of Ms Hopkins and Ms Parks was that the procedure that had been adopted by the owners corporation at general meetings over a number of years (since about 1991) was that the strata manager would chair meetings rather than the Chairperson of the strata committee.
Section 13 (1) (f) of the SSMA allows an owners corporation; strata committee; or officer of the owners corporation to delegate to the strata manager the conduct of meetings of the owners corporation.
Under the strata managing agency agreement (a copy of which was attached to Ms Hopkins statement of 15 June 2021), Schedule A1 and A2 identify that the strata manager has delegated authority to arrange and undertake administrative duties in relation to meetings of the owners corporation, including acting as Chairperson at annual general meetings.
There was no evidence that the strata managing agency agreement was not validly entered into and the Tribunal is satisfied that, pursuant to the strata managing agency agreement, Ms Hopkins was able to perform the duties of Chairperson of the strata committee at the 2020 AGM on 24 August 2020. Ms Hopkins was exercising the power of the Chairperson to "preside" at a general meeting under Sch. 1 Cl. 12 (1) of the SSMA, and there is nothing in the applicant's evidence or submission to satisfy the Tribunal that this was not a power that could be delegated; or that the delegation was improper.
In this regard, the Tribunal notes that the strata scheme was small, comprising of 8 Lots and there does not appear to be anything improper or unusual about a licensed strata manager (provided they have been duly appointed and authorised) exercising by way of delegation the power to preside at a general meeting of a strata scheme when the strata scheme is a small scheme.
The 2020 AGM on 24 August 2020 was conducted by way of videoconference. Although the submissions of the applicant are critical of the manner in which the meeting was conducted, there is nothing in the evidence or submissions of the applicant to satisfy the Tribunal that the decision to hold the meeting electronically contravenes Clause 10 of Schedule 2 of the SSMA; Reg. 14 of the SSM Regulations; or Part 11 of the SSM Regulations.
The focus of the applicant's submissions and evidence was that the meeting had been improperly held not because it had been conducted by videoconference, but because she had unreasonably been excluded from the meeting.
The SSMA and the SSM Regulations do not proscribe the general procedures to be adopted by the Chairperson of a strata committee (or their delegate) when presiding over a meeting of the owners corporation.
Rather, the provisions focus upon matters including tenants who are occupants in the strata scheme having a right to attend a meeting but not vote (unless the holder of a proxy from a person entitled to vote at the meeting-Sch. 1 Cl. 21 of the SSMA); who is entitled to vote and voting procedures (Sch. 1 Cl. 23-25 of the SSMA); appointment of proxies (Sch. 1 Cl. 26 of the SSMA); manner of voting (Sch. 1. Cl. 28 and 29 of the SSMA).
In this matter, it is clear that that Mr Kuskis was not a tenant of a Lot owner in the strata scheme; he was not the Lot owner; and he was not given a proxy to vote at the annual general meeting of the owners corporation on 24 August 2020 by a Lot owner. Accordingly, he had no right to "attend" the meeting under the SSMA or the SM Regulations.
The applicant asserts that Mr Kuskis was attending the meeting only as an "observer". The Tribunal is not satisfied on the evidence that this was the case. Mr Kuskis did not provide any sworn statement as to his version of events; nor did the applicant make any application for him to be granted leave to give oral evidence. Mr Kuskis appeared at the hearing before the Tribunal solely in the capacity as representative of the applicant under s 45 of the Civil and Administrative Tribunal Act 2013 (NSW).
Rather, the Tribunal is satisfied having considered the versions of events by the applicant; Ms Hopkins; and Ms Parks that Mr Kuskis did seek to participate in the meeting beyond being a mere observer, by strongly asserting that he had a right to attend the meeting.
As discussed previously, even if Mr Kuskis sought to appear only as an "observer" without speaking or prompting the applicant to speak, there is nothing in the SSMA or SSM Regulations that gave him the right to do so. The SSMA and/or SSM Regulations did not give Mr Kuskis a right to attend the meeting as a mere observer, even if he had attended previous meetings of the owners corporation in that capacity as the partner of the Lot owner.
Ultimately, in the circumstances of this matter, for the applicant to succeed under s 24 (1) of the SSMA, the Tribunal must be satisfied that Ms Hopkins conducted the strata meeting in such an unreasonable, unfair, or oppressive way when exercising the power to prescribe the procedure of the meeting that the applicant was denied her right as a Lot owner to attend the meeting and vote on Motions. "Attendance" at a meeting includes being able to make submissions about the Motions on the Agenda; and vote on Motions (provided that the Lot owner is not in levy arrears).
The Tribunal is not satisfied that the meeting was conducted in such an unreasonable, unfair, or oppressive manner that the applicant was denied a reasonably opportunity to attend and vote. The applicant was informed prior to the meeting that Mr Kuskis could only attend as an observer or participant only with the consent of other Lot owners.
The Tribunal accepts the evidence of Ms Hopkins that the meeting became heated, due to Mr Kuskis strongly asserting he had a right to attend; although he described the capacity in which he was attending as an "observer". The Tribunal accepts that prior to Ms Hopkins terminating the connection of the applicant the applicant was told on a number of occasions that she could attend the meeting without Mr Kuskis; and was given warnings that the connection would be terminated if she insisted that Mr Kuskis also attend.
Under these circumstances, it was the action of the applicant that led to her not participating and voting at the meeting without Mr Kuskis being in attendance, rather than her being precluded from doing so in a manner that contravened the SSMA or the SSM Regulations. The Tribunal also accepts the evidence of Ms Hopkins that after the applicant's connection was terminated by Ms Hopkins she did not further attempt to log into the meeting.
The applicant submits that Ms Hopkins had no power to do anything other than rule Motions out of order, and had no power to "exclude" Mr Kuskis from the meeting. However, as discussed previously, part of the role of the Chairperson (Ms Hopkins exercising delegated powers) is to "preside" at the meeting. This involves providing direction, guidance and control of the meeting. The manner in which Ms Hopkins presided over the meeting was not, assessed objectively, unreasonable or inconsistent with the power provided in Sch. 1 Cl. 12 (1) of the SSMA, irrespective of the subjective views of the applicant and Mr Kuskis.
Having heard the evidence of the parties, the Tribunal infers there was pre-existing animosity due to the previous dispute about renovations to the applicant's Lot and alterations to common property. Considering the manner in which the persons who gave evidence at the hearing presented, the Tribunal is satisfied that the meeting became heated over the issue of whether Mr Kuskis could attend the meeting.
The applicant, Mr Kuskis and Ms Hopkins could have all acted in a much more conciliatory manner towards each other on 24 August 2020 but did not do so. It is unfortunate that cooler heads did not prevail. All persons involved may reflect that their behaviour could have been better. However, the Tribunal is not satisfied that the actions of Ms Hopkins in terminating the connection of the applicant to the meeting in all the circumstances of the matter, constitutes a failure to comply with the SSMA or SSM Regulations pursuant to Section 24 (1) of the SSMA.
There is nothing in the evidence or submissions of the applicant to suggest there was any failure to comply with any applicable provision of Part 10 (other than Division 6 or 7) of the Strata Schemes Development Act 2015 (NSW). Accordingly, s 24 (2) of the SSMA is inapplicable.
For the sake of completeness, the Tribunal will also consider s 24 (3) of the SSMA in the event that its conclusion regarding s 24 (1) of the SSMA is erroneous.
In Read v The Owners-Strata Plan No 2533 [2021] NSWCATAP 218 ('Read') the Appeal Panel referred to the principles applicable to s 24 (3) of the SSMA as follows at [50]-[56]: Whilst the late provision of the minutes was a breach of the Act, it was not a breach which affected the conduct or outcome of the meeting. The intention of section 24 is to confer a discretion on the Tribunal to invalidate resolutions where there has been non-compliance with the Act or Regulations in relation to the meeting. In our view the late provision of the minutes after the meeting did not affect the resolutions passed at the meeting and is not a breach of the Act in relation to the meeting within the meaning and intent of section 24. If we are wrong in this view, then we consider that it is clear that the late provision of the minutes did not adversely affect any person or have any bearing on the resolutions passed at the meeting and could not have resulted in an order invalidating any resolution under section 24. In these circumstances, we see no error in the Tribunal focusing on the breaches of the Act which it identified and considered, namely the failure to allow Dr Read to chair the meeting and the failure to comply with the notice provisions of the Act. The appellants submit that the Tribunal made further errors of law in the way in which it interpreted section 24 of the Act, by failing to decide the issues raised by section 24(3)(a) and (b), namely whether any person was adversely affected by each non-compliance with the Act which was found to have taken place and whether compliance with the provisions of the Act would have resulted in a failure to pass the relevant resolution. We consider that this submission is incorrect. The Tribunal correctly identified the questions which it was required to consider at [35(a) and (b)] of the Reasons. The Tribunal then proceeded to answer those questions in substance at [51] - [57] of the Reasons. The Tribunal identified a number of matters which had a bearing on the question of whether any person was adversely affected by the breaches of the Act, principally that: Four of the 12 lot owners attended the AGM. There had been no complaint from any other owner regarding notice and it was reasonable in the circumstances to assume that an owner who was prevented from attending the AGM as a result of inadequate notice would have come forward and complained. A considerable period of time had elapsed since the AGM and an EGM had subsequently been held which gave the Owners another opportunity to come together and potentially address matters of concern from the previous meeting; Even though the appellants sought to overturn all of the resolutions made at the AGM, several of those resolutions were decided unanimously. Those which were not decided unanimously were generally amendments proposed by Dr Read which were not of a substantive nature. These amendments were defeated. The Tribunal expressly held at [56] that there were no issues arising from the AGM which would be decided differently should resolutions be invalidated. The Tribunal identified other considerations which also emphasised a conclusion that the resolutions should not be invalidated, such as that invalidation of the resolutions now would be counter-productive and an unnecessary cost to the Owners. We see no error in the Tribunal taking into account additional considerations which justified a conclusion that the resolutions should not be invalidated, provided that the Tribunal had found the matters required to be established by sub-section 24 (3) (a) and (b) of the Act. We are satisfied that the Tribunal did address those matters and found both of those matters established, justifying the refusal of orders under section 24. It follows that we are satisfied that the Tribunal made no error of law in the manner in which it interpreted section 24 of the Act.
In its written submissions filed on 25 August 2021, the first respondent submits that even if the applicant had voted on the Motions at the meeting, the Motions would have passed in any event due to the Lot entitlements of those who voted at the meeting compared to the Lot entitlements of the applicant (paragraphs [12]-[17] of the submissions).
The Tribunal accepts those submissions; and accordingly the Tribunal is not satisfied that had the applicant continued to attend and vote at the meeting that the resolutions that were passed would not have passed (Section 24 (3) (b) of the SSMA).
In respect of the election of the strata committee, Motion 17 called for nominations for persons to be elected to the strata committee. No written nomination to stand for election to the strata committee had been given by the applicant before the AGM on 24 August 2020. However, by reason of Reg. 9 (1) (b) of the SSM Regulations, an eligible person can orally nominate for election to the strata committee at the meeting, when the Chairperson calls for oral nomination.
The applicant submits that by reason of her connection being terminated she "lost the right" to nominate. However, the applicant's affidavit of 14 May 2021 does not state that she intended to nominate for election to the strata committee at the annual general meeting on 24 August 2020, nor was there sufficient evidence at the hearing by way of answers to questions in cross examination for the Tribunal to be satisfied that she did intend to nominate.
Further, even if the applicant intended to nominate, the Tribunal accepts the submission of the first respondent that the evidence of Ms Hopkins and Ms Parks regarding voting intentions of Lot owners was that even if the applicant had nominated, she would not have been elected as a strata committee member. At the meeting, Ms Parks (owner of Lot 1), Ms Fisher (owner of Lot 6); and Mr Bourke (owner of Lot 7) were elected to the strata committee; and the Tribunal is not satisfied the outcome would have been different had the applicant nominated at the meeting.
Section 25 of the SSMA involves the denial of voting rights; or absence of due notice of an item of business that was voted on at the meeting. By reason of s 25 (1) of the SSMA, the Tribunal has a discretionary power to declare any Motions passed as a "nullity". It is not a mandatory power; but a discretionary power.
However, by reason of s 25 (2) of the SSMA, the Tribunal must not exercise its discretion in favour of making such a declaration unless it is satisfied that (a) the applicant was improperly denied a vote on the Motion(s) for the resolution(s); or (b) the applicant was not given due notice of the item of business on which the resolution was passed.
In respect of s 25 (2) (b) of the SSMA, there is nothing to satisfy the Tribunal that the Agenda for the meeting did not properly reflect the Motions that were to be voted upon; or any Motion was passed that was not set out in the Agenda that had been circulated prior to the annual general meeting on 24 August 2020. Accordingly s 25 (2) (b) of the SSMA does not apply.
The Tribunal accepts that the applicant not participating in the AGM and voting on Motions potentially adversely affected the applicant under s 24 (3) (b) of the SSMA. However, because the Tribunal is not satisfied of the matters under s 24 (1) and 24 (3) (b) of the SSMA, it makes no difference whether the applicant was adversely affected under s 24 (3) (a) of the SSMA.
In respect of s 25 (2) (a) of the SSMA, the Tribunal is not satisfied that the applicant was improperly denied a vote at the meeting, for the same reasons as set out previously dealing with s 24 (1) of the SSMA.
Finally, to the extent it is relevant to ss 24 and 25 of the SSMA (Read at [55]), there are discretionary reasons not to set aside the Motions passed at the AGM on 24 August 2020. There has been an AGM since that date. To set aside Motions passed at the 2020 AGM; or declare them to be a nullity; would likely create significant uncertainty and potential cost to the owners corporation by reason of retrospectively invalidating Motions passed at the meeting; the election of the strata committee; and contracts entered into by the owners corporation in the period between the 2020 AGM and the 2021 AGM.

Linney v The Owners - Strata Plan No. 11669

At a glance

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Judgment (3 paragraphs)

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Legislation Cited (5)

Cases Cited (9)

Cited By (6)