(2009) NSWLR 419
The Owners Strata Plan No 2245 v Veney [2020] NSWSC 134
The Owners-Strata Plan No 3397 v Tate [2007] NSWCA 207
Source
Original judgment source is linked above.
Catchwords
(2009) NSWLR 419
The Owners Strata Plan No 2245 v Veney [2020] NSWSC 134
The Owners-Strata Plan No 3397 v Tate [2007] NSWCA 207
Judgment (16 paragraphs)
[1]
REASONS FOR DECISION
This is an appeal from a decision of the Consumer and Commercial Division of the Tribunal involving the Strata Schemes Management Act 2015 (NSW) (SSM Act). The decision of the Tribunal under appeal is dated 6 November 2023.
The Tribunal ordered the appellant to "comply with by-law 19".
Under s 135(1) of the SSM Act, owners of Lots and occupiers within a strata scheme are bound to comply with the registered By-laws.
Mr Soon of Counsel appeared at the appeal hearing for the appellant. The first respondent was self-represented, with her husband (and co-occupant of the Lot) Mr Hunt. There was no appearance by the second respondent Mr Zbaras.
[2]
Background
By-law 19 of the strata scheme states as follows:
Floor coverings
1. An owner of a lot must ensure that all existing floor space within the lot is covered or otherwise treated to an extent sufficient to prevent the transmission from the floor space of noise disturbing the peaceful enjoyment of the owner or occupier of another lot.
2. This by-law does not apply to the floor space comprising a kitchen, laundry, lavatory or bathroom.
3. Owners, occupiers and other persons must not create a nuisance in relation to an owner or occupier of another lot. If there is a nuisance due to noise as a result of insufficient floor covering, the owner of the lot causing the disturbance must provide a report from a suitably qualified acoustic expert in regards to the acoustic adequacy of the flooring and treatment of the flooring.
4. If the report provides that there is inadequate floor covering, the owner must install floor covering sufficient to prevent excessive noise transmission into adjoining lots.
The appellant owns Lot 12 of the strata scheme. The first respondent owns Lot 8. There are 12 lots in the strata scheme building. The building comprises 3 floors, with the first floor located above a carpark area. Lot 8 is located on the first floor. Lot 12 is located on the third floor. Between the appellant's Lot and the first respondent's Lot is Lot 10, which is owned by Mr Zbaras. Lots 8, 10, and 12 are located vertically adjacent to each other.
Each of the floors of Lots 8, 10 and 12 have parquetry flooring directly glued to a concrete slab. Although it is not clear from the evidence before the Tribunal as to when the strata building was constructed, the strata plan was registered in April 2008. There is reference in email correspondence that was in evidence before the Tribunal to the strata building having been constructed in the 1960s.
Mr Zbaras was a respondent in the Tribunal proceedings, and was also ordered to comply with By-law19. Although he is a party to this appeal, he has not participated by way of filing and serving any submissions, or appearing at the appeal hearing.
The appellant filed a Notice of Appeal on 4 December 2023. The appeal was filed with the time period prescribed for internal appeals to the Appeal Panel (s 80 Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) and r 25 Civil and Administrative Tribunal Rules 2014 (NSW) (NCAT Rules)).
The dispute involved noise transmission within the strata building due to the alleged failure of flooring to adequately supress noise.
The first respondent moved into her Lot in September 2021. From about May 2022, the first respondent and Mr Hunt complained consistently to the strata managing agent about excessive noise from the appellant's Lot, and Lot 8. In June 2022, the appellant took noise mitigation measures involving placing shock absorbers underneath legs of furniture and beds; and placing rugs underneath workstation chairs.
At the Annual General Meeting of the owners corporation on 6 September 2022, it was resolved to engage an acoustic expert to prepare a report; and, further, to remind Lot owners of paragraphs 3 and 4 of By-law 19.
On 19 October 2022, Mr Curtis, acoustic engineer of Michael Phillips Acoustics prepared an expert report. Mr Curtis inspected the floors of Lots 8, 10 and 12. He performed acoustic testing, including the transmission of noise from the Lot 12 living area to the Lot 10 living area; and Lot 12 living area into the Lot 8 living area.
The report of Mr Curtis stated as follows:
1. An Association of Australasian Acoustic Consultants (AAAC) 3 Star Rating reduces the likelihood of noise complaints as a result of floor impact noise transmission. An AAAC 4 Star Rating significantly reduces the likelihood of noise complaints.
2. The acoustic transmission between Lot 12 and Lot 10 was the equivalent of less than a 2 star acoustic rating. The acoustic transmission between Lot 10 and Lot 8 was the equivalent of a 2 star acoustic rating.
3. The level of noise transmission between Lot 12 and Lot 10 breached the applicable acoustic decibel transmission level under Clause FV5.1(b) of the National Construction Code 2019 (NCC). The performance between Lot 10 and Lot 8 due to the consistency of floor finishes, ceilings and slabs between the floors was "highly likely to be similar in performance and not compliant with the NCC".
4. It is "highly likely" that noise transmission from activities including footfall, furniture movements etc are clearly audible between adjacent tenancies (sic) and based on formative results across two floors, are audible across multiple floors with similar constructions. The acoustic amenity of the existing building may be described as 'unsatisfactory'.
5. It is recommended that floor performance of AAAC 3 star rating or greater should be achieved to minimise noise disturbance.
6. Potential measures to reduce noise disturbance include "replacement of floor coverings to soft finish options including carpet;" hard floor coverings that "require a quality acoustic underlay to be installed, such as Reguopol Sonus Core 5, which may be a suitably acoustic compliant solution for timber, parquetry, bamboo or laminate floor covering installations". If replacement of flooring was not feasible, "all furniture should be fitted with soft felt feet protectors and temporary soft coverings such as thick rugs and hallway runners used to reduce noise disturbance."
7. Noise transmission from Lot 12 to Lot 8 (two floors below) was "identified as audible at a level that is likely to give rise to noise complaints for structure born noise transmission causing a disturbance. Although noise transmission criteria do not specifically address the performance of structure born noise across multiple floors (it) is likely to cause disturbance and give rise to noise complaints where the acoustic amenity is 'unsatisfactory'".
On 21 December 2022, there was an Extraordinary General Meeting of the owners corporation, where the recommendations in the report of Mr Curtis were considered. Various resolutions that flooring meet the acoustic recommendations in Mr Curtis's report were defeated. It was resolved that the strata manager issue correspondence to Lot owners and occupants with "hardwood flooring" to recommend "soft-finish flooring options and the fitting of furniture with protectors;" and "reminding all residents to be mindful of any noise that may be generated in their Lot."
In 2023, the first respondent and Mr Hunt continued to consistently raise noise complaints with the strata manager and owners corporation involving Lots 10 and 12. During 2023, there were periods where the appellant was overseas.
In April 2023 there was an unsuccessful mediation at NSW Fair Trading regarding the noise dispute.
On 31 May 2023, the first respondent commenced proceedings in the Tribunal. The first respondent asserted in the application that the appellant and Mr Zbaras were in breach of By-law 19, and sought an order that they install "floor coverings" that achieve compliance with By-law 19.
[3]
The Decision Under Appeal
The Tribunal's decision comprises of 14 pages.
The Tribunal noted that none of the parties requested any witnesses for cross examination. The hearing proceeded on the basis of the documentary evidence of the parties and submissions.
The first respondent relied upon the expert acoustic report of Mr Curtis; extensive documentary complaints regarding noise; and a "noise nuisance complaint diary" that identified dates and times of alleged excessive noise. The first respondent submitted that Mr Zbaras and the appellant should be ordered to install carpet on the parquetry floors of their Lots.
Mr Zbaras submitted that there was "no evidence" of excessive noise; the Tribunal should not be satisfied his Lot was in breach of By-law 19; he could not install carpet as he had an "allergy to dust mites"; a strata building constructed in the 1960s was not subject to current building standards; and if the Tribunal was going to make an order, one requiring rugs, floor runners and furniture shock absorbers was sufficient.
The appellant submitted that if the strata building was to be upgraded so that it met a 3 or 4 star AAAC rating, that should involve the whole building rather than merely two Lots, and the resolutions at the EGM on 21 December 2022 were not passed. The appellant submitted that an order to install carpet or other noise supressing floor coverings was unlikely to resolve the noise transmission issue when the remainder of the strata building structure was 'hollow.' It was submitted there was "doubt" as to whether an order that carpet be installed would mitigate the noise complaints. The appellant also referred in submissions to the period his Lot was uninhabited because the appellant was overseas, and noise complaints from the first respondent still occurred during that period.
The Tribunal found that an unreasonable degree of noise was being transmitted into the first respondent's Lot from both the Lots of Mr Zbaras and the appellant due to inadequate floor covering. That finding was based on the evidence of the first respondent (which was not the subject of cross examination) and the expert report of Mr Curtis. The Tribunal concluded that the appellant and Mr Zbaras where not complying with By-law 19, and that the Tribunal should exercise its discretion to make an order that they both take measures to comply with By-law 19. The Tribunal found that there was "utility" in making an order for compliance with By-law 19 because, if the order was not complied with, the first respondent could bring proceedings in the Tribunal seeking a penalty be imposed under s 247A of the SSM Act; and it was possible the owners corporation could impose a Notice to Comply with By-laws under s 146 of the SSM Act that may lead to the owners corporation taking penalty proceedings under s 147 of the SSM Act if that Notice was not complied with.
The Tribunal concluded as follows (paras [37]-[38] reasons):
Hence, why an order requiring the respondents to comply with by-law 19 may appear to have limited impact, it must be observed that there can be significant financial consequences in the event of non-compliance with such an order.
Despite the fact that a mediation conducted on 27 April 2023 failed to achieve an agreement, and despite the fact that resolutions seeking to address noise issues have not been passed by the SC and OC, it remains open to the lot owners in the strata scheme which is the subject of these proceedings to agree on steps to address to address noise transmission issues which will improve the situation for all lot owners and remove the need for further proceedings in the Tribunal.
The Tribunal simply ordered that the appellant and Mr Zbaras comply with By-law 19. It did not order the appellant or Mr Zbaras to take specific actions to comply with By-law 19, despite the report of Mr Curtis referring to various potential measures that could be taken (e.g. installation of hardwood flooring with acoustic installation; installation or carpet; or installation of soft furnishings in respect of thick mats and floor runners).
Rather, the Tribunal referred at paragraph 33 of the reasons to the report of Mr Curtis being a report in compliance with the requirement of By-law 19(3) (notwithstanding that it was obtained by the owners corporation rather than a Lot owner), and then left it to the appellant and Mr Zbaras to "install floor covering sufficient to prevent excessive noise transmission into adjoining lots" pursuant to the requirements of By-law 19(4), without direction as to what measures were to be taken.
Further, paragraphs [11] and [21] refer to reg. 57 and 58 of the Protection of the Environment Operations (Noise Control) Regulation 2017 (NSW) which refer to the use of musical instruments in residential premises (and the hours that instruments can be played) without any party having raised that statutory provision in evidence, and without there being any allegation by the first respondent that the appellant (or an occupant of the appellant's Lot) was playing a musical instrument.
The Tribunal also referred to s 153 of the SSM Act (which involves using a Lot in a manner that causes a nuisance to the occupier or any other Lot) and legal authorities referring to nuisance, without making any finding that the appellant (or Mr Zbaras) were in breach of s 153. Rather, the only salient findings were in respect of failure to comply with By-law 19.
[4]
Grounds of Appeal
The grounds of appeal filed by the appellant is a lengthy document. It does not identify with any precision errors on a question of law, but simply refers to "errors" in factual and legal findings of the Tribunal. Leave to appeal is also sought under cl. 12 of sch. 4 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act).
We summarise the purported "errors" of the Tribunal as follows:
1. The findings of the Tribunal that the appellant caused noise sufficient to breach By-law19; and there was insufficient floor coverings to the appellant's Lot were "illogical and irrational" such that "the jurisdiction of the Tribunal miscarried".
2. The Tribunal incorrectly interpreted By-law 19. The proper construction of By-law 19 was that it, "in its entirety refers to ensuring that floor sufficiently prevents the transmission of noise to adjoining lots only" (emphasis added).
3. The Tribunal "erred" by finding that the sounds emitted from the appellant's Lot constituted nuisance. The sounds were no more than "the sounds of daily living" and that could not constitute nuisance, assessed objectively. Additionally, there was "no evidence" to make a finding of nuisance.
4. The Tribunal "erred in applying" the Protection of the Environment Operations (Noise Control) Regulation 2017 (NSW), because there was no evidence that the appellant had transmitted noise by way of musical instruments or electrically amplified sound equipment.
5. The Tribunal "denied natural justice" to the appellant by considering the Protection of the Environment Operations (Noise Control) Regulation 2017 (NSW) because it was not part of the evidence nor had been raised at the hearing.
The appellant also seeks leave to appeal. Although the grounds of appeal refer to the appellant not seeking to rely on further evidence, the appellant did seek leave to rely on further evidence at the appeal hearing, which will be discussed further below.
Accordingly, we understand the appellant's application for leave to appeal to invoke all of the grounds under cl. 12 of sch 4 of the NCAT Act.
The form of the order made by the Tribunal is not challenged on appeal.
[5]
Interlocutory Appeal Panel Orders
On 15 December 2023, the Appeal Panel constituted by Suthers PM dismissed the appellant's application for a stay of the Tribunal orders. The Appeal Panel also joined Mr Zbaras as a party to the appeal as he was a party at first instance, but noting that he may decide not to participate in the appeal proceedings.
[6]
Scope and Nature of Appeals
To succeed in an appeal, an appellant must demonstrate either an error by the Tribunal below on a question of law, which may be argued as of right; or that permission (that is, "leave") to appeal should be granted to bring the appeal: NCAT Act, s 80(2).
An appellant to an internal appeal brought under s 80(2)(b) of the NCAT Act must identify with precision a question of law said to be raised by the appeal: Ferella & Anor v Chief Commissioner of State Revenue [2014] NSWCA 378 at [6], [22]; Schwartz Family Co Pty Ltd v Capitol Carpets Pty Ltd [2017] NSWCA 223 at [13]. Whether a question is one of law must be approached as a matter of substance: Haritos v Federal Commissioner of Taxation (2015) 233 FCR 315; [2015] FCAFC 92 at 62, [94], [203]; Kudrynski v Orange City Council [2024] NSWCA 33 at [50].
Each such question must be a pure question of law (adopting what was said in Orr v Cobar Management Pty Limited (2020) 103 NSWLR 36; [2020] NSWCCA 220 (Cobar) at [44], [49]; and Thomas and Naaz Pty Ltd v Chief Commissioner of State Revenue [2023] NSWCA 40 at [71], albeit in relation to different statutory provisions). In Cobar at [109] it was said by Bathurst CJ and Bell P (as the Chief Justice then was) with Garling, Johnson and Lonergan JJ agreeing:
"Those questions of law should be, in our opinion, what are sometimes described as 'pure questions of law.' They should not draw the Court of Criminal Appeal into questions of fact. Moreover, they must be questions whose character as a question of law can be recognised on the face of the question, and not depend upon the answer given to the question. This does not include a question which may ultimately disclose an error of law depending on an analysis of the facts but where this cannot be known without scrutiny of the facts."
The principles governing an application for leave to appeal under the NCAT Act are well-established and are repeated in many decisions of the Appeal Panel, often quoting Collins v Urban [2014] NSWCATAP 17. They are the same principles applied by the courts. It is only if the decision is attended with sufficient doubt to warrant its reconsideration on appeal that leave will be granted. Ordinarily it is appropriate to grant leave where there is an issue of principle, a question of public importance or an injustice which is reasonably clear, in the sense of going beyond what is merely arguable: Secretary, Department of Family and Community Services v Smith (2017) 95 NSWLR 597 at [28]. As explained in Collins v Urban at [84], it is not sufficient merely to show that the Tribunal below was arguably wrong or that there was a bona fide challenge to an issue of fact.
Further, the circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division of this Tribunal under s 80(2)(b) of the NCAT Act are limited to those set out in cl 12(1) of Sch 4 to the NCAT Act. In such cases, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on the basis that: (a) the decision of the Tribunal under appeal was not fair and equitable; or (b) the decision of the Tribunal under appeal was against the weight of evidence; or (c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).
In Collins v Urban, the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12 (1) of Sch 4 may have been suffered where:
"… there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance."
The wrong application of the correct legal principles to the facts is an error of mixed fact and law for which leave to appeal is required under s 80(2)(b) of the NCAT Act (TNT Building Trades Pty Ltd v Baker [2023] NSWCATAP 178 at [42]-[43] and the authorities cited therein).
Examples of pure questions of law include:
1. Denial of procedural fairness (Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at 13);
2. A constructive failure to exercise jurisdiction, which includes the failure to consider and address a material issue raised by a party in the proceedings that is within the jurisdiction of the Tribunal to determine (Alexandria Landfill Pty Ltd v Transport for NSW (2020) 103 NSWLR 479; [2020] NSWCA 165 at [8]-[12] and [413]). This category of error also includes a failure by the Tribunal to engage with a clearly articulated argument put to it.
3. Acting on the application of the wrong legal principle which materially affected the outcome (Bimson, Roads & Maritime Services v Damorange Pty Ltd [2014] NSWSC 734 at [38]-[53]).
[7]
Fresh Evidence Sought to Be Relied Upon By the Appellant
The new evidence that was sought to be relied upon by the appellant was a quotation of ACE Timber Floor Solutions dated 11 November 2023; an email from Ace Timber Floor Solutions dated 5 December 2023; emails from ACE Timber Floor Solutions to the appellant's partner in January 2024; and a statutory declaration of the appellant dated 7 February 2024.
The quotation was for the supply and installation of laminate flooring with rubber acoustic underlay ($7,125).
The email from ACE Timber Floor Solutions was to the effect that the cost of removal of the current parquetry floor and levelling of the slab underneath the floor was in the range of approximately $8,300 to $10,800.
The emails of January 2024 involved whether there would be increased cost if asbestos was found; and whether ACE Timber Floor Solutions could remove asbestos.
The statutory declaration of the appellant dated 7 February 2024 sets out the periods the appellant and his partner were not residing in the Lot; the time periods they were not at home in the Lot whilst working; and that the appellant had "complied with the NCAT orders" by placing "additional carpets in the living room and corridor".
[8]
Consideration
The documents before us in the appeal included the documents that each party relied upon as evidence before the Tribunal; and a transcript of the hearing. The transcript was filed by the appellant. The appellant's submissions were authored by Mr Soon of Counsel.
We now turn to the grounds of appeal; and the application for leave to appeal.
[9]
Ground 1-Findings Regarding Noise Transmission
This appeal ground involves factual findings made by the Tribunal.
It is not an appeal ground that there was no evidence to make the findings. In any event, there clearly was evidence.
As set out previously, the salient evidence was the expert report of Mr Curtis, and the evidence of the first respondent that she had experienced an unreasonable degree of noise into her Lot that disturbed her peaceful enjoyment of the Lot. Neither Mr Curtis nor the first respondent were cross examined (or sought to be cross examined) by the appellant at the Tribunal hearing.
In our view, this ground of appeal requires leave to appeal.
The expert report of Mr Curtis gave clear (and in our view, compelling) evidence that the degree of noise transmission into the respondent's Lot from both the appellant's Lot and the Lot of Mr Zbaras was sufficient to establish breach of By-law 19. The findings of the Tribunal are logical, orthodox and rational based on the evidence that was before the Tribunal.
Ground 1 of the appeal is dismissed, subject to our further consideration of leave to appeal.
[10]
Ground 2-Interpretation of By-law 19
The principles for interpretation of By-laws were referred to by McColl JA (with whom Mason P agreed) in The Owners-Strata Plan No 3397 v Tate [2007] NSWCA 207; (2007) NSWLR 344 (Tate) at [71]-[72] as follows (citations omitted):
71 The following propositions emerge from the foregoing discussion:
1. By-laws are the "series of enactments" by which the proprietors in a body corporate administer their affairs; they do not deal with commercial rights, but the governance of the strata scheme: Bailey;
2. By-laws have a public purpose which goes beyond their function of facilitating the internal administration of a body corporate; cp, Parkin, Lion Nathan;
3. Exclusive use by-laws may be inspected by third persons interested in acquiring an interest in a strata scheme, whether, for example, by acquiring units, or by lending money to a lot proprietor; such persons would ordinarily have no access to the circumstances surrounding their making; their meaning should be understood from their statutory context and language: NRMA ; Lion Nathan .
4. By-laws may be characterised as either delegated legislation or statutory contacts: Dainford; Re Taylor ; Bailey ; North Wind ; Sons of Gwalia;
5. Whichever be the appropriate characterisation, exclusive use by-laws should be interpreted objectively by what they would convey to a reasonable person: Lion Nathan;
6. In interpreting exclusive use by-laws the Court should take into account their constitutional function in the strata scheme in regulating the rights and liabilities of lot proprietors inter se : Parkin ; Lion Nathan .
7. Unlike the articles of a company, there does not appear to be a strong argument for saying exclusive use by-laws should be interpreted as a business document, with the intention that they be given business efficacy: cf NRMA (at [75]). That does not mean that an exclusive use by-law may not have a commercial purpose, and be interpreted in accordance with the principles expounded in cases such as Antaios Cia. Naviera S.A . , but due regard must be paid to the statutory context in so doing;
8. An exclusive use by-law should be construed so that it is consistent with its statutory context; a court may depart from such a construction if departure from the statutory scheme is authorised by the governing statute and if the intention to do so appears plainly from the terms of the by-law: Re Taylor ;
9. Caution should be exercised in going beyond the language of the by-law and its statutory context to ascertain its meaning; a tight rein should be kept on having recourse to surrounding circumstances: Lion Nathan.
72 The question of whether the by-laws constitute delegated legislation or a statutory contract was not fully argued. As the foregoing discussion reveals, the decision on their characterisation may be a distinction without a substantial difference from the interpretative perspective. It is not appropriate to express a final view on these issues. It is sufficient to say that on either approach the interpretation of Special By-Law 21 had to be approached on a basis which was consistent with the statutory scheme and that caution had to be exercised in considering surrounding circumstances.
The principles in Tate have been followed on many occasions (e.g. Pollak v The Owners Strata Plan No 2834 [2020] NSWSC 784 at [57]-[59]; The Owners Strata Plan No 2245 v Veney [2020] NSWSC 134 at [31]-[38]; Walker Corporation Pty Ltd v The Owners Strata Plan No 61618 [2022] NSWSC 1246 at [89]-[97]; Hunt v The Owners Strata Plan No 1158/84199 [2024] NSWCATAP 65 at [32]-[54]). It is well established that By-laws are assessed objectively.
There is no error of law established in respect of the Tribunal's interpretation of By-law 19. It is clear that By-law 19(1) which requires that the covering or treatment of the floor space in a lot must be to "an extent sufficient to prevent the transmission form the floor space of the noise disturbing the peaceful enjoyment of the owner or occupier of another lot," is not to be read down to only noise disturbing the peaceful enjoyment of the owner of occupier of an adjacent Lot. The By-Law specifically refers to "enjoyment of the owner or occupier of another lot," not an "adjoining" Lot
Had the By-law only applied to noise transmitted into immediately adjacent Lots (for example, noise from Lot 12 into Lot 10; but not noise from Lot 12 into Lot 8) the By-law would have used those words. The appellant is seeking to imply words into the By-law that are absent, and unnecessary to give the By-law its ordinary and natural meaning in the context of the obligation of all Lot owners and occupants to be bound by the By-laws under s 135(1) of the SSM Act.
Ground 2 of the appeal is dismissed.
[11]
Ground 3-Nuisance
No error on a question of law is established in respect of the comments of the Tribunal regarding nuisance. Although the Tribunal made reference to s 153 of the SSM Act and the principles regarding the tort of nuisance in its reasons, those comments were nothing more than obiter dicta that had no bearing on the factual and legal findings that provide the foundation for the decision.
Reading the reasons fairly and in their full context, we do not regard the references to s 153 of the SSM Act and principles of nuisance as the Tribunal taking into account an irrelevant consideration; or misdirecting itself as to the correct law to be applied.
As discussed previously, the only findings that were made were that the appellant and Mr Zbaras were in breach of By-law 19; not that they were in breach of s 153 of the SSM Act. By-law 19(1) involves sufficient floor coverings (other than the floor space comprising a kitchen, laundry, lavatory or bathroom under By-law 19(2)) to prevent the transmission from the floor space of "noise disturbing the peaceful enjoyment of the owner or occupier of another lot". That is a different obligation to statutory obligation under s 153 of the SSM Act not to use or permit a Lot in a manner that causes a nuisance or hazard to the occupier of any other Lot.
Ground 3 of the appeal is dismissed.
[12]
Grounds 4 and 5-The Protection of Environment Operations (Noise Control) Regulation 2017 (NSW)
We accept that r 57 and 58 of that Regulation were not part of the evidence, nor was that Regulation raised by either the parties or the Senior Member at the Tribunal hearing. A judicial officer referring to matters that are not the subject of evidence or submissions at the hearing and are not uncontroversial matters of judicial notice may constitute a denial of procedural fairness (Strinic v Singh [2009] NSWCA 15; (2009) NSWLR 419 at [59]-[65] and [115]).
Procedural fairness principles were recently summarised by the Appeal Panel in Borland v Brewis [2024] NSWCATAP 140 at [59]-[60]; [62] and [65]-[67] as follows:
In determining proceedings before it, the Tribunal is under a duty to afford procedural fairness to the parties. Procedural fairness, or the duty to act fairly, applies to courts and tribunals which are empowered to determine matters affecting the rights and interests of a person. Procedural fairness requires that the Tribunal give the parties a fair hearing, and that it be free from actual or apprehended bias. The term "procedural fairness" is synonymous with natural justice (the latter term is used in s 38(2) of the NCAT Act).
It is well established that the Tribunal must conduct a hearing that gives procedural fairness to both parties, even taking into account the less formal nature of Tribunal proceedings (s 38(4) and subs (5) of the NCAT Act). What is necessary and appropriate to ensure a fair hearing depends on the particular facts and statutory context, rules of procedural fairness being flexible and adaptable so as to be appropriate in a given case so as to avoid practical injustice (SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 228 CLR 152; [2006] HCA 63 at [26] and [29]; Saeed v Minister for Immigration and Citizenship (2010) 241 CLR 252; [2010] HCA 23 at [19]-[20]; Re: Minister for Immigration and Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1; [2003] HCA 6 at [37]-[38]).
…
Where there has been a breach of the requirement to afford the appellant procedural fairness, the question arises whether that error was material to the Tribunal's decision. A breach of procedural fairness will constitute jurisdictional error, if the error is material to the Tribunal's decision: Nathanson v Minister for Home Affairs (2022) 276 CLR 80; [2022] HCA 26 (Nathanson) at [1], [33] (Kiefel CJ, Keane and Gleeson JJ). Materiality is established if the procedural unfairness deprived the appellant of a realistic possibility of a different outcome on the application lodged in the Consumer and Commercial Division.
…
Procedural fairness requires that parties have an adequate opportunity to put their case and test the case against them. By s 38(5)(c) of the NCAT Act, the Tribunal is required to take "reasonably practicable measures" "to ensure that the parties have a reasonable opportunity to be heard or otherwise have their submissions considered in the proceedings".
As Justice Basten stated in Italiano v Carbone & Ors [2005] NSWCA 177 at [88]:
"An opportunity foregone, but reasonably available, does not demonstrate breach of procedural fairness. To demonstrate procedural fairness it is usually necessary to show that a claimant "lost an opportunity to put any information or argument to the decision-maker, or otherwise suffered any detriment," as explained by Gleeson CJ in Re Minister for Immigration, Multicultural and Indigenous Affairs; Ex parte Lam (2003) 214 CLR 1 at [36]. As the Chief Justice continued at [37]:
'"A common form of detriment suffered where a decision-maker has failed to take a procedural step is loss of an opportunity to make representations." at [37].'"
If it is established that there was a denial of procedural fairness, it must then be considered whether there exists a realistic possibility that the outcome of the decision could have been different had the error not been made (LPDT v Minister for Immigration, Citizenship, Migrant Services and Multicultural Affairs [2024] HCA 12 at [11]-[16] referring to Nathanson and Stead v State Government Insurance Commission (1986) 161 CLR 141; [1986] HCA 54). Finding that a properly conducted application would have inevitably produced the same result is not done lightly: Stevanovski v CLK Plumbing Pty Ltd [2017] NSWCATAP 180 at [30]-[31].
No denial of procedural fairness is established because:
1. The reference to the Regulation did not cause practical injustice. The reference to the Regulation was no more than an obiter dicta comments that had no bearing on the outcome. The Tribunal made clear in its reasons that it was not making any finding that the appellant (or Mr Zbaras) were playing musical instruments or using their Lots in a manner that allowed musical instruments to be played; or music to be transmitted by way of electrically amplified sound equipment.
2. The reference to the Regulation was not material to the Tribunal's decision. Why it was referred to is a mystery that is unnecessary to solve, because it was clearly not material to the Tribunal's decision that the appellant was in breach of By-law 19. As discussed previously, that finding was based upon the expert report of Mr Curtis, and the evidence of the first respondent (that was not challenged in cross examination) about the degree and extent of noise being transmitted into her Lot.
Grounds 4 and 5 of the appeal are dismissed.
[13]
Leave to Appeal
We have considered all the purported "errors" identified in the grounds of appeal and the specific references as to why leave to appeal should be granted.
We are not satisfied that the new evidence sought to be relied upon should be admitted, as it was evidence that was reasonably available to the appellant prior to the Tribunal hearing (Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown [2015] NSWCATAP 111 at [19]-[26]).
We have previously dealt with the grounds of appeal raised, other than leave to appeal.
We are not satisfied that the appellant may have suffered a serious miscarriage of justice on the basis that the decision was against the weight of evidence; or was not fair and equitable, or that there is significant new evidence now available that was not reasonably available at the date of the hearing.
Further, even if we were satisfied that the grounds under cl. 12 of sch. 4 of the NCAT Act were made out, we are not satisfied that this is a matter that involves questions of public importance; or an issue of principle; or an injustice which is reasonably clear such that leave to appeal should be granted.
Ultimately, the appellant disagrees with the findings that the floor coverings of his Lot are insufficient to achieve compliance with By-law 19. That is not sufficient to grant leave to appeal.
Accordingly, leave to appeal is refused.
[14]
Orders to Comply With By-Laws That Fail to Specify What Action Should Be Taken to Achieve Compliance
However, although the appellant has failed in the appeal, it is appropriate for us to make comment regarding the substance of the order made by the Tribunal.
The importance of final orders being clear and specific has been referred to on many occasions, in a wide variety of statutory contexts (e.g. Glenquarry Park Investments Pty Ltd v Hegyesi [2019] NSWSC 425 at [113]; Mania v NSW Land and Housing Corporation [2022] NSWCATAP 376 at [88]-[90]; ACCC v Dataline.Net.Au Pty [2007] FCAFC 146; (2007) 244 ALR 300 at [110]-[114]; Catapult Constructions Pty Ltd v Denison [2018] NSWCATAP 152 at [56]-[58]).
As discussed previously, the order made was simply that By-law 19 be complied with. It does not direct the appellant (or Mr Zbaras) to take any specific actions to achieve compliance.
That order may fail to finalise the dispute about noise transmission and compliance with By-law 19. It may invite further litigation.
However, before any future litigation is embarked upon, the parties should strongly consider the benefit of alternative dispute resolution, irrespective of the failure of an earlier mediation to resolve the dispute. As Beazley JA (as she then was) stated in Old v McInnis and Hodgkinson [2011] NSWCA 410 at [6]:
"Litigation is not a process for the faint hearted. It is a costly and time consuming process and usually productive of stress, all of which, of their nature, have adverse effects upon those involved in the process. In some, if not most, cases that come before the courts, it is a necessary evil…"
[15]
ORDERS
1. Leave to appeal is refused.
2. The appeal is otherwise dismissed.
[16]
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
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Decision last updated: 14 August 2024