McCullum v The Owners �e" Strata Plan No 15404; The Owners �e" Strata Plan No 15404 v McCullum [2025] NSWCATCD 210;

1. An owners corporation owes lot owners a strict duty to maintain and repair, including as required to renew or replace, common property under SSMA s 106(1) and (2) as interpreted in well-established authority: Seiwa PL v Owners SP 345042 [2006] NSWSC 1157 at [3]- [7], [21]-[23]; Trevallyn-Jones v Owners SP 50358 [2009] NSWSC 694 at [128] et seq, esp at [154]-[156]; Riley v Owners SP 73817 [2012] NSWCA 410 at [75]- [76], referring to the same content of duty in the predecessor to SSMA s 106, being s 62 of the 1996 Act; more recently in Owners SP 33368 v Gittins [2022] NSWCATAP 130 at [57]- [59].
2. There was no qualification on appeal to what was said in Seiwa at first instance in relation to the strict nature of the duty: Owners SP 345042 v Seiwa Australia PL [2007] NSWCA 272 - Hodgson JA at [5] referred to the strict nature of the duty in similar terms to Brereton J in Seiwa, as did Tobias JA at [54] with an acknowledgement of what is now s 106(3) that is not presently relevant. The same approach on the present provision was endorsed by reference to the earlier authority in Smith v Owners SP 3004 [2022] NSWSC 1599 at [30]- [31] and more recently in Selkirk v Owners SP 2661 [2024] NSWSC 760 at [16] et seq.
3. The duty extends to remediation of defects in the construction of the common property, because repair means making something good even if it was not originally good: Proprietors SP 6522 v Furney [1976] 1 NSWLR 412 at 416; Seiwa [2006] NSWSC 1157 at [4]. The duty also extends to requiring the owners corporation to restore common property that has been altered, replaced or destroyed without authority: Owners SP 21702 v Krimbogiannis [2014] NSWCA 411. It also extends to repairing damage caused by others. In either of the last two situations, the owners corporation may pursue rights against those others: Lubrano v Proprietors SP 4038 (1993) 6 BPR 13,308.
4. Brereton J in Seiwa [2006] NSWSC 1157 at [4]- [5] expressly referred to the duty as including keeping the common property "in proper order by acts of maintenance before it falls out of condition, in a state which enable it to serve the purpose for which it exists ... Thus the body corporate is obliged not only to attend to cases where there is a malfunction, but also to take preventative measures to ensure that there not be a malfunction ... It follows that as soon as something in the common property is no longer operating effectively or at all, or has fallen into disrepair, there has been a breach of the [s 106] duty". This encompasses preventative maintenance and repair and financial provision for such preventative work; see also at [14], [19]-[21], [23], where it is clear that it is unnecessary to decide whether the owners corporation had attended to the defects with due diligence.
5. Reasonable steps is not a defence, nor is contributory negligence a consideration: Seiwa PL v Owners SP 345042 [2006] NSWSC 1157 at [4], [21]; Owners SP 345042 v Seiwa Australia PL [2007] NSWCA 272 at [46]; Owners SP 74232 v Tezel [2023] NSWCA 35 at [35]. The statutory provision is not cast in the form of a duty on an owners corporation to take reasonable care. It does not embody a range of reasonable excuses for inaction. The common property is out of the state of repair and maintenance in breach or contravention of duty until the repair or maintenance occurs: Owners SP 80412 v Vickery [2021] NSWCATAP 98 at [36], [63]; Owners SP 36613 v Doherty [2021] NSWCATAP 285 at [84], [93]-[94].
6. Alleged restriction of access to, or interference with or resistance to, remediation by a lot owner as a matter of law does not qualify the OC's performance of its strict duty, but will be relevant in determining whether and, if so, to what extent the lot owner has established that a reasonably foreseeable type of loss (which also needs to be established) was "as a result of" a breach of such statutory duty as distinct from whether all or part of such loss was caused by an intervening act or by the lot owner's own conduct, such as in refusing access and the consequent delay while the necessary access order under SSMA ss 122 and 124 is obtained: Owners SP 2661 v Selkirk [2024] NSWSC 760 at [9], [21]-[24], [130], [138]-[144] [149]-[150], [163]-[176], qualifying the decision of the Appeal Panel [2024] NSWCATAP 17 on this point. The lot owner's conduct will be relevant, as will the owner's corporation's response - for example, did the owners corporation act sufficiently to seek to overcome lot owner resistance; did the lot owner unreasonably prolong rectification; was the lot owner undertaking renovations, or did the lot owner take the opportunity to undertake renovations, which meant that no rent was obtainable and for what period, and was such period extended by the owners corporation's work to fulfil its strict duty.
7. An owners corporation does not require approval by the owners in general meeting to carry out its strict statutory duty under SSMA s 106: Stolfa v Hempton [2010] NSWCA 218 at [9]-[10].
8. Delays associated with an owners corporation's insurers are an explanation but not an excuse: Nicita v Owners SP 64837 [2010] NSWSC 68 at [11]. One would expect the same to apply to others involved in the process such as delays by contractors or regulatory authorities, subject to the limited exception in s 106(4) where an owners corporation itself takes the initiative in bringing proceedings against a third party.
9. It should not be the case that the strict duty as established by authority is qualified to operate differentially depending on whether the common property in question is purely related to a particular lot or that a particular lot owner is the only person affected by the breach. To so differentiate would be to read into the application of SSMA s 106 a differentiation that is not there on the plain words and is inconsistent with the thrust of the authority just cited. It is not there for good reason. Such a differentiation would potentially be very difficult to administer and would potentially increase disputation. An owners corporation's judgment call on who was affected by fulfilment of its duty in respect of specific common property would have that consequence. Such a differentiation would be inconsistent with what Brereton J said in Seiwa [2006] NSWSC 1157 at [4]: "And it extends to oblige the owners corporation to do things which could not be for the benefit of the proprietors as a whole or even a majority of them ... ; see also Proprietors SP 159 v Blake [1986] CCH Strata Titles Cases 30-068.
10. The foregoing principles are not qualified by the decision in Glenquarry Park Investments PL v Hegyesi [2019] NSWSC 425 at [57]- [74] et seq, [100]-[114]. In Glenquarry Park there were jurisdictional deficiencies in formulation of the orders for remediation, because the formulation potentially imposed on the owners corporation in that case, without basis in the findings, a scope of works which went beyond the owners corporation's strict duty. It was not a dispensation from the strict duty. There was recognised a degree of flexibility in the form of compliance by the owners corporation with the strict duty, which, on the authorities canvassed extensively in that decision (Ridis v Owners SP 10308 (2005) 63 NSWLR 449, [2005] NSWCA 246, Owners SP 50276 v Thoo [2013] NSWCA 270 and Stolfa) includes replacement if that is reasonably necessary because the item has come to the end of its serviceable operating life and can no longer be kept in a state of good and serviceable repair. The same must be true if the state of the item is so damaged or deteriorated that it cannot be repaired but must be replaced.
11. An owners corporation's fulfilment of its strict obligation requires it to repair or replace common property so that it substantially is similar in appearance, characteristics and quality compared with what was there before, to which could be added functionality and amenity to the extent those are not already encompassed within the foregoing words. It is inevitable that replacement in fulfilment of duty, and some repairs, will bring an element of improvement and do not attract a discount, unless it is established that the repair or replacement was an unreasonable choice or was extravagant: Owners SP 36613 v Doherty [2021] NSWCATAP 285 at [163], [165]-[166], [181]; authority discussed in Glenquarry already referred to; cp Hyder Consulting (Australia) PL v Wilh Wilhemsen Agency PL [2001] NSWCA 313 at [47], [54], [107].
12. The requirements in Glenquarry find complementary support in the requirements for work orders under the Home Building Act 1989 (NSW) (HBA). Under HBA s 48O(1)(c) an owner is required to specify action by the builder that is grounded in proof by the owner of, not only the defect, but also the manner of remediation and a work order must focus on the particular defect to be rectified and must be certain, practical and enforceable: Catapult Constructions PL v Denison [2018] NSWCATAP 158 at [46]- [61] and the authority there cited. The evidentiary onus is on the homeowner to set out the appropriate method of rectification: ibid, at [59]. In Bellgrove v Eldridge (1954) 90 CLR 613, [1954] HCA 36, the High Court said that the scope of remedial works must not be disproportionate to the defect. The High Court has also stated that there is a high bar for unreasonableness or disproportion once a breach is established: Tabcorp Holdings Ltd v Bowen Investments PL (2009) 236 CLR 272, [2009] HCA 8 at [13]- [20]; see also Walker Group Constructions PL v Tzaneros Investments PL [2017] NSWCA 27 at [186]; Barwick v Shetab [2017] NSWCATAP 127 at [87]- . The analysis in the paragraphs in the decision, and the authority there reviewed, also makes it clear in these passages that reinstatement, provided it is not extravagantly disproportionate, is the appropriate measure of relief. Reinstatement means works with a certain standard of amenity and presentation which includes not being at risk of emergent problems returning or growing which in form and finish produces an outcome that matches other components in form and finish and makes the works of the originally-intended quality and integrity.
13. An expert report may be integral to formulation of the precise scope of work required to assist the owners corporation to fulfil its strict duty or as an incident of the relief granted to require the owners corporation to fulfil its strict duty: Carli v Owners SP 56120 [2018] NSWCATCD 55i at [53]; cp in a home building context Marr v JCK Building Solutions PL [2018] NCATCD, unreported, 4 December 2018, HB 16/43946 at [46]-[54], where an element of the manner of remediation in certain circumstances may inherently require inspection, properly defined so as to be sufficiently specific, to establish the need for and required scope of remediation.
14. It is consistent with the strict nature of an owners corporation's duty that, once a breach of that duty is admitted or established, it is incumbent on the owners corporation, to fulfil the duty, to establish the source or reason for the breach and the scope of the breach. If the owners corporation fails in fulfilling those aspects of its duty then part of the remedial order is necessarily to compel the required investigations (often expert) to establish those matters so that they can be undertaken as part of the order: Selkirk v Owners SP 2661 [2024] NSWSC 760 at [101], [108], [170(1)-(3)]; [2024] NSWCATAP 17 at [22]- [30]; Campbell v Owners SP 88807 [2024] NSWCATCD 50 at [p24].
15. While a lot owner will be required, on the applicable principles to establish alleged loss under SSMA s 106(5) is of a type that is "reasonably foreseeable" as well as arising out the breach of duty, certain types of loss will be self-evident as to reasonable foreseeability from the breach of strict duty admitted or established by its consequences: cp McCue v Owners SP 3844 [2021] NSWCATCD 35.
16. One type of self-evident loss (unless otherwise demonstrated) from the breach of strict duty admitted or established by its consequences is loss of rent, particularly where there is a history of the lot being a rented property: Owners SP 80881 v Gregg [2022] NSWCATAP 172 at [39]; Smith v Owners SP 3004 [2022] NSWSC 1599 at [34]- [37], approving Shum v Owners SP 30621 [2017] NSWCATCD 68 at [60]- [61], see also at [64]; Vickery v Owners SP 80412 [2020] NSWCA 284 esp at [160]-[166]; Selkirk v Owners SP 2661 [2024] NSWSC 760 at [143]- [144]; [2024] NSWCATAP 17 at [47].
17. Another category of loss will be damage to lot property caused by the breach of duty: see, eg, Trevallyn- Jones, already cited, at [329]-[337].
18. In Fligg v Owners SP 53457 [2012] NSWSC 230 at [40], [83] and [114], consistent with a similar conclusion in Nicita, already cited, at [21], pre-litigation legal and expert expenses came within potential heads of damage unless they were more properly characterised as the subject of costs orders.
19. In that last respect, costs may include the assessed or agreed amount for the expenses on expert reports prepared for the purposes of the proceedings. This may include reports used in the proceedings (even if not commissioned predominantly for that purpose and so able to be claimed as part of damages). Such are sufficiently connected with the proceedings to be "costs of, or incidental to, proceedings" within the meaning of s 60 of the NCAT Act since they have been incurred in the preparation for litigation and were preparatory steps reasonably connected to the proceedings: Cominos v Di Rico [No 2] [2016] NSWCATAP 138 at [54]- [57]; Owners SP 21563 v Rutherford [2023] NSWCATAP 326 at [52], [67]-[68], [95]-[96].
20. In a strata context, in Smith [2022] NSWSC 1599 at [39], already cited, there was approved the statement on mitigation in _Karakominakis v Big Country Developments P_L [2000] NSWCA 313, (2000) 10 BPR 18,235 at [87]:

"This is often misleadingly referred to as a duty to mitigate, although the plaintiff is not under a positive duty. The plaintiff does not have to show that he] has fulfilled his so-called duty, the onus is on the defendant to show that he has not and to the extent of which he has not ... Since the defendant is the wrongdoer, in determining whether the plaintiff has acted unreasonably a high standard of conduct will not be required and the plaintiff will not be held to have acted unreasonably simply because the defendant can suggest other and more beneficial conduct if it was reasonable for the plaintiff to do what he did".

1. SSMA s 37 provides "It is the duty of each member of a strata committee of an owners corporation to carry out his or her functions for the benefit, so far as practicable, of the owners corporation and with due care and diligence." A note says that s 260 provides protection from personal liability for SC members who act in good faith in executing their functions.
2. SSMA s 237 provides as follows:

(1) Order appointing or requiring the appointment of strata managing agent to exercise functions of owners corporation The Tribunal may, on its own motion or on application, make an order appointing a person as a strata managing agent or requiring an owners corporation to appoint a person as a strata managing agent -

(a) to exercise all the functions of an owners corporation, or

(b) to exercise specified functions of an owners corporation, or

(c) to exercise all the functions other than specified functions of an owners corporation.

(2) Order may confer other functions on strata managing agent The Tribunal may also, when making an order under this section, order that the strata managing agent is to have and may exercise -

(a) all the functions of the chairperson, secretary, treasurer or strata committee of the owners corporation, or

(b) specified functions of the chairperson, secretary, treasurer or strata committee of the owners corporation, or

(c) all the functions of the chairperson, secretary, treasurer or strata committee of the owners corporation other than specified functions.

(3) Circumstances in which order may be made The Tribunal may make an order only if satisfied that -

(a) the management of a strata scheme the subject of an application for an order under this Act or an appeal to the Tribunal is not functioning or is not functioning satisfactorily, or

(b) an owners corporation has failed to comply with a requirement imposed on the owners corporation by an order made under this Act, or

(c) an owners corporation has failed to perform one or more of its duties, or

(d) an owners corporation owes a judgment debt.

(4) Qualifications of person appointed A person appointed as a strata managing agent as a consequence of an order made by the Tribunal must - (a) hold a strata managing agent's licence issued under the Property, Stock and Business Agents Act 2002, and

(b) have consented in writing to the appointment, which consent, in the case of a strata managing agent that is a corporation, may be given by the Secretary or other officer of the corporation or another person authorised by the corporation to do so.

(5) Terms and conditions of appointment A strata managing agent may be appointed as a consequence of an order under this section on the terms and conditions (including terms and conditions relating to remuneration by the owners corporation and the duration of appointment) specified in the order making or directing the appointment.

(6) Return of documents and other records A strata managing agent appointed as a consequence of an order under this section must cause a general meeting of the owners corporation to be held not later than 14 days before the end of the agent's appointment and must on or before that meeting make arrangements to return to the owners corporation all documents and other records of the owners corporation held by the agent.

(7) Revocation of certain appointments An order may be revoked or varied on application and, unless sooner revoked, ceases to have effect at the expiration of the period after its making (not exceeding 2 years) that is specified in the order.

(8) Persons who may make an application The following persons may make an application under this section -

(a) a person who obtained an order under this Act that imposed a duty on the owners corporation or on the strata committee or an officer of the owners corporation and that has not been complied with,

(b) a person having an estate or interest in a lot in the strata scheme concerned or, in the case of a leasehold strata scheme, in a lease of a lot in the scheme,

(c) the authority having the benefit of a positive covenant that imposes a duty on the owners corporation,

(d) a judgment creditor to whom the owners corporation owes a judgment debt.

"(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."

An "interested person" is defined in s 226 relevantly to include a lot owner.

1. SSMA ss 237 and 238 give, by the word "may", a discretion to the Tribunal which needs to be exercised on principled grounds and may lead to an appointment or a removal, respectively, not being made even if some conduct would satisfy the criteria in s 237 (or s 238): McGrath v Owners SP 13631 [2022] NSWCATCD 60.
2. The removal of a strata scheme officer under s 238 or the appointment of a compulsory strata manager under SSMA s 237 is not lightly done and similar principles apply, mostly derived from authority on s 237.
3. It is unlikely that principled grounds would lead to exercise of the discretion to remove an officer of the OC (chair, secretary, treasurer) or other elected member of the SC for isolated incidents, however important in themselves in terms of consequences, unless the incidents showed serious misconduct or dereliction of duty (including disobedience to Tribunal or Court orders) that justified overturning an elected outcome: Linney v Owners SP 11669 [2021] NSCATCD 123 at [94]; Lockrey v Rosewall [2022] NSWCATCD 27 at [15]- [16].
4. Equally, the appointment of a compulsory strata manager, like the removal of a strata scheme officer, is not lightly made and requires some dereliction of duty or dysfunction in operation of the scheme, usually not arising from an isolated incidence unless it showed serious misconduct or dereliction of duty (including disobedience to Tribunal or Court orders): see, eg, Kahn v Owners SP 2010 [2017] NSWCATAP 39 at [30]; Owners SP 14593 v Soares [2019] NSWCATAP 3 at [44], [46]; Anderson v Owners SP 61034 [2019] NSWCATAP 61 at [41]- [42].
5. The aim of SSMA s 237 and s 238 and their predecessors in the 1996 Act is, where possible, to maintain a democratic system which the legislative scheme has established, rather than remove someone so elected or substitute a compulsory appointment as strata manager: Kahn v OC SP 2010 [2017] NSWCATAP 39 at [30].
6. Focusing on SSMA s 237, it is not enough that the owners or groups or factions of them simply do not get along: Bischoff v Rita Sahade [2015] NSWCATAP 135. The evidence may show a properly functioning strata scheme in all practical respects despite any personal animosities or disagreements on the decisions made: Robinson v Owners SP 61717 [2018] NSWCATCD 49 at [53]- [58]; Anderson v Owners SP 61034 [2019] NSWCATAP 61 at [41]- [42]. Disagreement by a lot owner or a number of lot owners with the properly-made decisions of the SC or OC does not establish that the scheme is not functioning satisfactorily: Hoare v Owners SP 73905 [2018] NSWCATCD 45 at [202]. The same applies in the context of OC officers or other SC members.
7. However, if dispute becomes chronic, complex and/or litigious the trigger point may well have been reached: Moallem v CTTT [2013] NSWSC 1700 at [7]; Bate v Owners SP 60549 [2018] NSWCATCD 36 at [77]- [78]. This may also be the case where there is a clear and substantial dereliction in the duty of the SC and/or the strata manager to manage the scheme in accordance with statutory requirements and in the interests of all lot owners under SSMA s 9(2) and its statutory predecessors, without discrimination: Gershberg v Owners SP 5768 [2011] NSWCTTT 411; Owners SP 14593 v Soares [2019] NSWCATAP 3 at [44], [46].
8. Failure to engage or reasonably to act in accord with relevant expertise and advice, including the strata manager for voluntary members of a strata committee, may be a sufficient indicium: Co Funds Management PL v Owners SP 78945 [2011] NSWCTTT 488 at [27]- [28].
9. There may be a need for intervention to provide a "clean slate", to re-establish proper functioning, and to facilitate non-repetition of dysfunctional conduct or non-compliance with statutory requirements (which in the case of a compulsory strata manager may require the maximum appointment period of two years): Kotevski v Seadon and Owners SP 82413 [2013] NSWCTTT 597 at [74]. For a compulsory strata manager, this may require continuation on a serial basis if the complexity of the mix of uses in the scheme, the size of the scheme or other ongoing management issues are present: Foong v Scutella [2021] NSWCATAP 225.
10. If a compulsory strata manager is appointed, it should be someone who, in addition to giving the statutory consents, will provide the necessary impartial management at least cost: Farland v Simmons [2018] NSWCATCD 28 at [45].

Alleged unreasonable refusal of consent by lot owners

143 Requirements and effect of common property by-laws

(1) An owners corporation may make a common property rights by-law only with the written consent of each owner on whom the by-law confers rights or special privileges.

Note - Any addition to the by-laws will require a special resolution (see section 141).

(2) A common property rights by-law may confer rights or special privileges subject to conditions specified in the by-law (such as a condition requiring the payment of money by the owner or owners concerned, at specified times or as determined by the owners corporation).

(3) A common property rights by-law may be made even though the person on whom the right of exclusive use and enjoyment or the special privileges are to be conferred had that exclusive use or enjoyment or enjoyed those special privileges before the making of the by-law.

(4) After 2 years from the making, or purported making, of a common property rights by-law, it is conclusively presumed that all conditions and preliminary steps precedent to the making of the by-law were complied with and performed.

1. A common property rights by-law is a by-law conferring a right of exclusive use and enjoyment or special privileges in respect of the whole or a specified part of common property. It includes changes to such a by-law: s142. Change to a by-law means "amend or repeal" of a by-law as well as addition of a by-law: s 133 Definitions.
2. Consequently, a by-law that amends an existing by-law is a common property rights by-law to which s 143 applies.
3. SSMA s 149 provides as follows:

149 Order with respect to common property rights by-laws

(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 by-law, 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.

1. In GS and CS Holdings PL v Owners SP 63227 [2022] NSWCATAP 206 at [29]- [44] the Appeal Panel, in reliance on existing Supreme Court authority extensively dealt with in the reasons and referred to in part by the lot owners' submissions in the present proceedings, held that an owners corporation could not make such a by-law or alter an existing by-law without the consent of the lot owner on whom the by-law confers rights or special privileges; cp the requirement for owners' consent in SSMA s 108(5). Rather, an application under s 149(1)(b) to compel the relevant lot owner's consent was required, followed (if successful) by the making of the by-law under Tribunal order. Passage of a by-law conditional on consent being obtained subsequently was not necessary to be considered (nor is it necessary to consider it here).. It is clear that consents can be retrospective: s 149(6). Both parties referred to Tribunal single instance authority consistent with the reasoning and decision in GS and CS Holdings.
2. The relevant principles in respect of unreasonable refusal of consent in either limb of SSMA s 149(1), taking into account the factors in s 149(2), were comprehensively reviewed in terms of authority and set out in Capcelea v Owners SP 48887 [2019] NSWCATCD 27 at [30]- [81], [101] which were consistently re-stated by the Appeal Panel in Bruce v Knight [2021] NSWCATAP 224 at [42]- [53].
3. Of most present importance is that the inquiry is objective, based on the ordinary meaning of reasonableness and unreasonableness, on the circumstances at the time of the decision (which can be shown by material which elucidates those circumstances that was before or reasonably available to the lot owners or the owners corporation) and that the challenger bears the onus of establishing that the grounds justifying refusal had "no rational basis in that they were not guided by sound judgment or good sense", to quote from Owners SP 69140 v Drewe [2017] NSWSC 845 at [43], and see at [27].

1. The claims for relief were somewhat curiously framed. As already said, the work orders sought were specific to later stages of scope of work in a quotation dated 24 August 2024 and the scope in a quotation dated 9 December 2024. Those quotations did not necessarily match the work required to fulfil the OC's strict duty in respect of the common property in and adjacent to lot 5, but that strict duty was relied upon as the basis for their being made. There was no expert evidence specific to those quotations to support such a conclusion but, as mentioned below, there was no alternative quotation or other scope of works said to correlate with performance of the duty and there was no expert critique of alleged deficiencies in the quotations.
2. Irrespective of whether the case for the work orders was made out, the OC's alleged breach of its strict duty in chronic form lasting over many years, and beyond lot 5, was the major particular in the lot owners' claim for appointment of a compulsory strata manager, which in written submissions for the interim hearing the lot owners acknowledged may, if granted, render the claim for work orders unnecessary.
3. It is therefore necessary, even if the work orders were found not to match what was required to fulfil the OC's strict duty in respect of works to common property in and near to lot 5, to consider whether the duty was breached as part of considering whether or not a compulsory strata manager ought to be appointed.
4. Equally, there was no claim in the present proceedings by the lot owners that was maintained to final hearing for compensation for allegedly performing part of the content of the OC's strict duty, nor any claim by iiPainting for payment or contract enforcement; rather, the latter appears to have been the subject of separate proceedings to the extent that work by iiPainting was the subject of the invoice sued on in the other proceedings described earlier.

1. The lot owners said that the OC since at least 2019 had obtained at least 10 separate reports from structural engineers and builders in respect of the building's unstable ceilings and flooring and had not acted on the reports. The reports pointed consistently to the need to secure the timber boards to the joists and to remove the flyash which had been the historic form of insulation. The ceilings showing signs of deflection should be propped to forestall collapse and the attendant safety risk, pending remediation.
2. The ceilings were described as attached to timber planks which in turn were supported by heavy Oregon timber floor joists. The flyash sat on top of the planks. The flooring of the lot above was fixed above the flyash.
3. It was not in dispute that the OC obtained multiple reports from engineers and builders in respect of parts or all of the ceilings, including: 7 May 2019 (engineers); 25 November 2020 and 26 March 2021 (builder); 20 February 2023 (specialist remedial engineer/builder); 9 May and 27 and 28 August 2024 (engineers); September 2024 and 23 April and 30 June 2025 (engineers).
4. The 2019 report recommended that "areas of major movement be more closely investigated and repaired/replaced by a licensed builder", and noted minor movement across most ceilings. The capital works plan dated 2 April 2019 had stated "There have been collapsed ceilings reported to several units. A contingency should be included to cover any ceiling intrusive investigation and possible repairs required". Further investigation but not remediation had occurred, according to the strata manager in cross-examination. This included not acting on an iiPainting quotation of 22 May 2020 based on the 2019 reports at $18,900 plus GST for a 35sqm lot.
5. The report dated 26 March 2021 from another builder stated "the existing ceiling would need to be removed and the timber boards retaining the flyash refixed as follows ... this will effectively anchor the metal mesh to the floor joists so a collapse under normal use cannot occur".
6. The report dated 20 February 2023 from a specialist remedial builder stated as follows:

"In our opinion, the combination of the weight of the fly ash insulation in the ceiling structure and the nail fixings of the timber boards to the timber joists (that have a low pull out capacity) is causing the ceilings to deflect and in some cases collapse.

We believe that the existing construction of the Units poses a safety risk to the occupants. We recommend that the ceiling showing signs of deflection be propped to prevent any more collapses until remedial works can be done.

We recommend engaging a contractor to remove the ceiling and fly ash material. The ceilings should then be reinstated using modern construction methods that also include fire and sound insulation.

In areas where ceilings have not yet failed, however display minor deflection of the ceiling lining, each of the boards supporting the fly ash concrete can be affixed with 75mm bugle screws to the floor joists over. It should be noted that this is a make safe task and not considered to be a long term solution. Should the fly ash become wet, the weight increase will increase and the boards have the potential to fail. It is recommended to undertake a fly ash removal programme over a period of time that meets the Owners' budget and access requirements that will eventually remove the fly ash from the floor structure.

Where deflections are prominent (5+mm), the ceilings should be replaced as soon as practical."

1. There was in evidence no resolution that had been passed pre-emptively to repair all ceiling fixings or to provide a scheduled programme, with corresponding provision for capital works fund-raising for this work, for regular monitoring of all unremediated ceilings and for rapid preventative or remedial response in the event of anticipated, imminent or unexpected collapse of one or more ceilings.
2. The amount of funds required for such capital works was very significant as the costings mentioned above indicated.
3. Turning to the immediate events concerning lot 5 from August 2024, the history of collapse in other lots, together with the rapid sequence of purchase, a three-metre ceiling crack in and deflection and collapse of the lot 5 ceiling and commencement of proceedings, all between 16 and 20 August 2024, has been referred to at the outset of these reasons.
4. Following a telephone conversation between Mr Ivancic and the strata manager on Friday 23 August 2024 at about 3pm the content of which was disputed and is discussed below, iiPainting attended over the weekend and installed temporary ceiling propping.
5. On Sunday 25 August 2024 at 9.08pm Mr Ivancic sent a quotation, as requested on Friday, by email to the strata manager which contained the three-stage scope of works already referred to in these reasons, to be carried out in respect of the lot 5 ceiling and associated areas and said that work would start the following morning on stage 1.
6. On Monday 26 August 2024 at 8am iiPainting began carrying out the first stage of the scope of works.
7. On 26 August 2024 at 10.04am the strata manager emailed iiPainting. He asked for confirmation that the ceiling had been propped as requested and in accord with the OC engineer's telephone instructions and queried the authority to undertake any of the further works in the iiPainting quotation.
8. The OC position was that the limit of authorisation was in the telephone conversation with the strata manager on 23 August 2024 at about 3pm and was for temporary propping to make safe the ceiling of lot 5 which had been advised by iiPainting would cost "a few hundred dollars", together with provision of a quotation for further works for consideration by the OC.
9. Mr Ivancic's version was that he was authorised to go beyond the weekend propping to whatever the OC engineer required to make the lot 5 ceiling safe and that was the content of stage 1 of the quotation, with stages 2 and 3 being the more permanent remedial work.
10. The works continued into late August 2024 and other work was said to be occurring in lot 5 up to about 11 September 2024. One of the other owners reportedly was told at some point it was for propping up the ceiling. Emails on behalf of the OC constantly said the works should cease as unauthorised works on common property and going beyond make safe. In an email on 16 September 2024 at 1.17pm iiPainting said that the make safe work was concluded "early September 2024". In cross-examination Mr Ivancic said "The workup was authorised, but we were only authorised to undertake stage one work to make safe".
11. A report dated 27 August 2024 confined to lot 5 by the OC's engineer Mr Walsh stated that the ceiling was "actively moving towards collapse".
12. On 13 September 2024 the OC obtained interim orders (already referred to) restraining, among other matters, works "affecting common property, including but not limited to work carried out or inside [lot 5]". The OC received the orders on 16 September 2024, advised the lot owners and iiPainting of the orders by email at 11.26am and alleged that the lot owners carried out contravening works on 17 September 2024. At the interim orders hearing Mr McCullum had said that he had engaged another contractor, not iiPainting, to carry out ceiling works in lot 5.
13. The OC put into evidence stills from video footage on 17 September 2024 that showed unidentified workers entering the building, and referred to reports of audible drilling sounds heard in lot 5 from the neighbouring lot.
14. A notice dated 4 November 2024 for an EGM contained a proposed special by-law (the lot 5 by-law referred to earlier) for retroactive and prospective approval of the works in lot 5, to which the lot owners refused written consent. The by-law contained obligations on the lot owners to maintain the works the subject of the proposed by-law. There was an agreed fact that an expert report by a further engineer, obtained by the OC, dated 6 November 2024 and compliant with the code for expert witnesses, stated that the works in the lot 5 by-law accurately reflected the works that had been carried out to lot 5 and the adjoining common property and what was required still to be carried out in the lot. The proposed by-law was passed unanimously by those attending and voting at an EGM on 20 November 2024; the lot owners were not minuted as present.
15. A report dated 23 April 2025 noted numerous connection failures in building ceilings between floor timbers and ceiling battens which indicated the progressive impact of sustained loading over the near century since construction. The joist span of over 7m exceeded the recommended span of maximum 5m for the cross-section without additional support. The design bending capacity of the joists was exceeded, causing "noticeable sagging", exacerbated by the flyash load along with the two-layered plasterboard ceilings, "compounding the load burden on the timber joists beyond their intended capacity".
16. A report dated 30 June 2025 on building ceilings stated that the deflection within acceptable serviceability limits would be restored without the weight of the flyash. The ash could be removed and replaced with modern, lightweight insulation and all failed or compromised ceiling batten fixings reinstated or replaced in order to restore structural performance and prevent further sagging or detachment. Alternatively,, if the ash remained in place, ceiling fixings would need to be repaired and "annual inspections are essential to track deflection over time and detect early signs of system failure".
17. The report also observed that more recently-added suspended ceilings had increased cumulative weight and "As a result, the floor system is now at risk of progressive sagging, and in a worst-case scenario, ceiling collapse". Several fixings had already failed from "long-term creep in the timber under continuous load over several decades" which aligned with the "visible sagging and deformation in multiple ceiling areas". There was evidence of historical moisture damage, even while no active water ingress was observed:

"The structural assessment results confirm that while the floor system is not at risk of immediate failure due to inadequate strength, its current deflection under full dead load (with ash-deafening) exceeds serviceability limits, and ongoing degradation of ceiling fixings adds to the risk of localised failure."

1. To remove the flyash would require removal of ceilings and exposure in any event of the battens that required re-fixing.
2. The 2025 capital works plan provided for intrusive ceiling investigations to be budgeted for but not for the other remediation programme elements described above. The five-year plan had been due in 2024.
3. The OC defended its response between 2019 and August 2024 on the basis that it had regular monitoring of the ceilings and until August 2024 effectively the situation was one of "watch and act" as required. In August 2024 it authorised limited immediate make safe, with the balance of remediation to be considered and approved, but the lot owners "jumped the gun" and took over both remediation and unapproved renovations to lot 5. That required retroactive and prospective approval by means of the lot 5 by-law to which the lot owners refused consent.
4. The OC's reasons for its approach in and following August 2024 in respect of the lot 5 collapse was primarily as follows, with the lot owners' response summarised against each element:

(1) The works were not approved. The lot owners responded that: consistent with case law (cited earlier in these reasons) no OC approval by resolution was required to fulfil the s 106 duty; the ceilings were common property, were at risk of collapse and required immediate repair; the strata committee (SC) should have resolved to proceed but didn't; in respect of the lot 5 works, when the OC did not do the ceiling work to seal off flyash falling into the lot, the lot owners engaged another contractor to undertake that and what was said to be cosmetic works (picture rails and dado wall panels) not requiring approval by reason of SSMA s 109.

(2) There was no approved contract of the OC with iiPainting, whose contract was with the lot owners for unauthorised works, and no insurance in place. The lot owners responded that: the situation was urgent; iiPainting was a regular contractor for works in the building, having previously undertaken works over $1.5m in value; insurance cover was on the OC file and evidence of licence and such cover had been provided whenever requested; there was no request for contract or evidence of insurance; verbal requests for repairs were made and paid regularly; the strata manager confirmed that a verbal approval to start work that was urgent had been given; the strata manager had previously given such urgent approvals, including in respect of the engineering investigations; both Mr Ivancic and Mr McCullum denied a contract between them and there was no documentary evidence to support such a contract; Mr Ivancic's evidence was that he would have taken out insurance if authorised by the OC to proceed with stages 2 and 3 and stage 1 was costed under the insurance threshold of $20,000.

(3) The only approved works were those discussed between Mr Ivancic and the strata manager on 23 August 2024 which were for temporary ceiling propping that iiPainting advised would cost approximately "a few hundred dollars". The lot owners responded that: the OC engineer Mr Walsh, who was engaged by the strata manager (without objection from the SC) urgently to inspect lot 5 and review the iiPainting scope of works so that the ceiling could be made safe, gave evidence that making safe involved more than propping and also confirmed that the stage 1 scope of works accorded with his make safe recommendations; there was no challenge to the quality of the works done; Mr Ivancic said during the 23 August telephone conversation that the bulkhead in the living room would need to be removed for the propping and that the strata manager orally instructed him to make safe in accord with the engineer's directions; the make safe report of the engineer on 27 August 2024 contained photographs of basic propping that was already urgently in place, so the report clearly referred to further work beyond that propping; the OC's stipulation that iiPainting take instructions from Mr Walsh indicated a scope for at least make-safe beyond initial propping and inferentially for the entirety of stage 1.

(4) Works within the iiPainting quotation exceeded the spending limit of $30,000 under SSMA s 102(1) and reg 25 of the Strata Schemes Management Regulation 2016 (NSW) (SSMA) without requiring two quotations. The lot owners responded that: the alleged unauthorised stage 1 works were below the $30,000 limit and in any event were for "emergency purposes" within SSMA s 102(5); the SC could have an urgent meeting for further approval or inform lot owners and seek retrospective approval; the SC instructed the strata manager to obtain further quotations and that didn't occur which was not the responsibility of the lot owners or iiPainting. (One could add that there is no express provision in s 102 that invalidates a contract made without following the prescribed process, there is no penalty for not following the process and there is arguably no implied invalidation of any contract on a proper construction of the provision: cp Nyunt v North Shore Homes PL [2020] NSWCATAP 143 at [106] et seq.)

(5) The works invoiced did not reflect what was carried out. In response, the lot owners denied that there was a need for the significant renovations stated in the lot 5 by-law for the purposes of the lot owners, as opposed to being part of the scope of works provided by iiPainting to the OC for the purposes of fully remediating the common property.

(6) From 20 August 2024 the lot owners were on video footage shown as carrying in materials for unauthorised works. The lot owners responded that: the photographs and video were taken outside the building or in the entry which were not specific to lot 5; the photographs within a lot, if it was lot 5, were not sufficiently specific and some did show propping; as said earlier, the lot owners engaged another contractor to do minor works which they said were in the category not requiring approval.

1. The OC did not directly dispute the quoted cost of the ceiling works or the later quotation for floor works in lot 5, or obtain alternative quotations (in the latter case despite requests by the SC to the strata manager to do so). On final hearing, the OC said that the quotations provided by the lot owners should not be accepted, or should be given little weight, since there was no supporting and "litigation-compliant" expert report.
2. The lot owners submitted that the OC gave conflicting and ultimately unsupported reasons for stopping the works after stage 1 (temporary support) was completed. Since the ceiling in lot 5 was not sealed, the lot remained uninhabitable with flyash coming through the ceiling boards and required what the lot owners engaged another contractor to do. That work restored the ceiling to be fire-rated and sealed (which was why some photographs no longer showed propping) and such works were signed off by the engineer. They contended, as described earlier, that: the kitchen did not need renovation; minimal removal and reinstatement in the kitchen was required as part of the ceiling make safe by the lot owners' contractor, and the ceiling works required removal and reinstatement of bulkheads and ceiling features.
3. There was no support in the engineering evidence that the ceiling crack was caused by the lot owners. Further extension to the kitchen was consistent with the "zipper effect" of the crack in the living room extending to and pulling down the ceiling in an adjacent room, as described to Mr Ivancic by Mr Walsh.
4. The lot boundaries (being the inner surfaces) made the affected ceiling and flooring common property within the OC's strict duty and responsibility: Le v Williams [2004] NSWSC 645 at [51]- [55], applying Lawrom Nominees PL v Kingsmede PL [2000] NSWSC 1048 esp at [65]; Strata Schemes (Freehold Development) Act 1973 (NSW) s 5; Strata Schemes Development Act 2015 (NSW) (SSDA) s 6(1); the lot boundaries are fixed on date of registration of the strata plan: Seiwa (CA).
5. The breadth and meaning of the strict duty in SSMA s 106(1) and (2) expressly includes a strict duty to "maintain" as well as to repair. The ordinary meaning of "maintain" is to keep in continuance or preserve or retain in due condition. In other words, the OC's strict duty includes taking steps to avoid the common property falling into disrepair or otherwise ceasing to continue in a proper state and to ensure such continuance. The authorities already cited state that the OC's obligation is to keep the common property "in proper order by acts of maintenance before it falls out of condition, in a state which enables it to serve the purpose for which it exists": Brereton J in Seiwa [2006] NSWSC 1157 at [4]. Such obligations require properly-provisioned and funded pre-emptive action, including investigative inspection, once a risk that the common property has fallen or will fall "out of condition" has become obvious or ought reasonably (including by reasonable further steps on what is then known) to become obvious or a matter of awareness: Doherty at [180]-[181].
6. Accordingly, once the risk of further rapidly-emerging and severe damage to persons and property from overly-loaded and structurally-weakened ceilings (which also encompassed the flooring above a ceiling) was recognised consistently in expert reports as reasonably foreseeable even if not fully predictable as to time of occurrence, coupled with actual occurrence in several lots, the relevant common property was out of maintenance and the OC was in contravention of its strict duty until the state of maintenance was restored.
7. Given the strict nature of the statutory duty, the drastic consequences of collapse and the speed with which a prospect of collapse could become an actuality, in my view the OC's duty to restore and continue maintenance required in the circumstances a properly-provisioned and funded pre-emptive investigation and action programme that would forestall ceilings and flooring from moving towards and into actual collapse and a funded preparedness to remediate very promptly once a collapse occurred.
8. Even if the lipped, uneven flooring that was also the subject of complaint had been lot property, the responsibility to remediate it would fall on the OC either to arrange at its cost for the work or to pay the lot owners the cost of the work. That damage was consequential on the effect of the OC's breach of its strict duty which included not letting the floor joists subside to the point where the pressure resulted in the lipping and unevenness.
9. For some lots this was a more imminent issue than others, but for all it was a common property duty of the OC - including remediating the ceilings and floorings, not just the sub-structures - because of the uniformity of the risk throughout the building. It was to be expensive and required prudent and timely provisioning so that quick action could be taken on whatever scale at a particular point in time was required. There was evidence that catastrophic collapse could occur from first visible signs to full collapse within 24 hours, in a matter of hours at end stage, with potentially serious risks to life, health and property. There were required urgent interim make-safe processes to be ready to be actioned and a funded remediation programme to be in place. There was no evidence of notifying owners of how to monitor for warning signs, including via managing agents since many were absentee landlords. There was no clear and systematised preventative inspection programme.
10. The dispute over the engagement of iiPainting would not have arisen in the form it has in these proceedings if documented approval procedures had been followed consistently with the requirements of a proper monitoring, prevention and remediation programme.
11. Accordingly, the OC was in breach of its duty to maintain and repair common property in respect of lot 5 and more broadly in respect of the flyash-loaded structures in the scheme. That would lay the ground for work orders.
12. However, it is not clear on the face of the iiPainting quotation for stage 2 and stage 3 works, or from the quotation for lot 5 flooring, or from other evidence, that the quoted works matched what was required to fulfil the OC's strict duty in respect of lot 5, and those quotations in any event do not apply to other parts of the common property of the scheme. The expert report obtained by the OC from Endeavour stated that the existing works in lot 5 and the adjoining common property matched the description in the lot 5 by-law, and provided for a scope of further works to be included in the lot 5 by-law. That also does not in itself define the scope of the OC's duty. Mr Walsh's witness statement confirmed that repair using one of two methods he referred to would restore structural adequacy to the lot 5 ceiling, but it was not entirely clear that either was the best method or that it accorded entirely with stage 2 of the iiPainting quotation, and of course it did not extend to the lot 5 flooring or to all other affected common property. In particular, the different remediations dealt differently with removal of the flyash.
13. Accordingly, given the findings in the following section of these reasons and the relief that will be ordered on the basis of those findings, it is appropriate not to order such specified work order relief but, rather, to allow the compulsory strata manager to assess the litany of existing expert reports, order any further expert reports that it considers appropriate and engage appropriate contractors of its choice (which may or may not be iiPainting) to define and undertake the appropriate scope of works for investigation and monitoring and pre-emptive and remedial action to deal with the risks and actualities identified in those reports in respect of lot 5 and other common property of the scheme, together with any work to remediate lot property affected by such common property works.
14. Turning to collateral matters raised, much of the OC case related to alleged disobedience to the interim cease work order that it obtained on 13 September 2024, to the absence of OC authorisation for the quoted stage 1 works beyond initial propping and to the absence of any enforceable rights in respect of those works. That is not of direct relevance to whether or not the OC ought to be the subject of a work order to perform its strict duty or other relief in respect of its strict duty. It may be relevant to other claims not made in these proceedings.
15. I have already discussed the absence of relevance of the iiPainting proceedings.

1. The lot owners primarily relied upon the chronic state of non-compliance since 2019 by the OC with its statutory duty in respect of the ceilings.
2. The lot owners also relied upon selective enforcement of by-laws. In particular, the owner of lot 1 was said to have taken part of the common property for storage and, with his employee and two other owners whose lots were managed by the lot 1 owner, formed a majority on the SC and acted so as to promote the business managed by lot 1. The operation of the business of short-term accommodation out of lot 1 as reception led to breaches of by-laws governing noise, adding signage and making additions (a drop-key box) to common property, was without development consent and contrary to residential zoning and was not notified to the scheme insurers. Common property was damaged by luggage carts. Guests slept on the foyer sofa while waiting for their rooms and obstructed entry with their luggage. Lot 1 alone had access to the common service room.
3. The OC said that the behaviour was not sufficient to cause offence or embarrassment.
4. Additionally, the lot owners alleged the following as alleged instances of dysfunction and breach of duty by the OC justifying the appointment of a compulsory strata manager:

(1) Façade cosmetic upgrade preferred over structural remediation of collapsing ceilings and other more serious repairs to common property.

(2) No updated capital works plan within five years since 2019 contrary to SSMA s 80(3); the 2025 plan does not include ceiling remediation in accord with scope of works of expert reports obtained by the OC, with costing for required works being estimated at $1m (40 lots at $20,790 per lot plus electrical and painting, based on the 22 May 2020 quotation by iiPainting) despite the consistent message in expert reports which made collapse of some and possibly many ceilings, and resultant serious damage and danger, reasonably foreseeable. Temporary remedial work has occurred only since the lot owners commenced these proceedings and the OC has, by the strata manager, requested that invoices for the works be issued to the relevant lot owners in breach of the OC's duty under SSMA s 106.

(3) 2024 budget showed $4,333.12 surplus in the administration fund, an excess of expenditure over income of $27,154.56, unnecessary retainer of lawyers to demand access to the rooftop instead of making a request, and only $170,669.82 in the capital works fund.

(4) Immediate access was demanded to lot 5 in September 2024 without required notice of 24 hours and for collateral purposes rather than preparation of an expert report; no notice was given on other occasions.

(5) The putting forward of a proposed by-law for lot 5 that was contrary to the lot owners' proposal of OC responsibility for all lot 5 works and which sought to impose responsibility and indemnity for those works on the lot owners.

(6) Some fire doors locked, others left open; no smoke alarm re-installed into lot 5.

(7) Use by short-term accommodation service of western terrace rooftop without development consent or SSMA s 108 special resolution for a structure erected, and no notification of insurer of use for functions.

(8) Conflict of interest: building manager is owned by lot 1 owner whose employee is an SC member; building manager also administers the short-term accommodation service participated in by over half the lots in the scheme; two other SC members participate in the short-term accommodation service; no alternative quotations obtained when appointing the building manager; non-disclosure of pecuniary interest at AGM.

(9) Dogs of employees of the short-term accommodation service left off-leash within the building in breach of by-laws.

(10) Failure to put motions for ceiling remediation on general meeting agenda.

(11) Failure to pursue a project manager for breach of warranties or for a refund of $100,000 of fees, including failure to attend an arranged mediation, with the payment of fees having been authorised by the OC treasurer who was alleged to be a friend of the principal of the project manager.

(12) Failure of the strata manager to act on instructions to lodge an insurance claim for lot 5 and to obtain additional repair quotations for lot 5.

(13) Not communicating engineer reports and other matters to lot owners.

(14) Legal fees of $115,907.93 as at April 2025 placed within the category maintenance/building consultancy fees in the administrative account with approved identified legal fees amounting only to $8,580. (It should be observed that note 12 to the consultancy fees entry did identify the legal fees within the entry as relating to a dispute with an owner over unauthorised works, but they were not a separately-listed item.)

1. There was vigorous contest over the veracity and seriousness of most of the matters alleged, what evidence there was (if any beyond allegation and assertion) in support and, if made out, whether they met the stringent test for appointment of a compulsory strata manager. The existing action in respect of ceilings and floorings was contended to have been appropriately developed as a proportional response and timely notification of the reports was said to have been given to the scheme's insurers.
2. In my view the photographic and documentary evidence bore out at least the alleged clutter of luggage and people in the entry and foyer, the accounting matters and the fire door issues. Leaving aside the other matters, in my view the chronic failure of the OC in complying with its strict duty in relation to flooring and ceilings, as described and found in the preceding section of these reasons, was sufficient in itself to justify appointing a compulsory strata manager properly and in a timely manner to establish and manage what was required by way of properly-provisioned and funded programmes to comply with that duty.
3. The potential complexities and difficulties in this scheme in putting in place such programmes supports the view that the appointment period of twelve months sought by the lot owners in their points of claim (down from 24 months in the interim application) is appropriate. An extension in due course may be required if it can be properly justified.
4. It appears from the material on the interim application that was in evidence on the final hearing that the written consent of the nominated compulsory strata manager and fee proposal required under SSMA s 237(4)(b) was placed before the Tribunal on that occasion. It was also directly in evidence before me.

1. The OC in its cross-application sought compulsory consent by the lot owners to the lot 5 by-law under SSMA s 149(1)(b) or alternatively that the lot owners remove unauthorised works and reinstate common property under ss 132 and/or 241. It should be noted that the lot owners' application to invalidate the alleged by-law is, on the authority cited earlier in these reasons, unnecessary because of the absence of the lot owners' consent to the passage of the by-law. At present there is no by-law and there will not be unless an order is made under s 149(1)(b): see s 149(5) and (6).
2. The lot owners submitted that they had shown a rational basis for refusing consent within the criteria in the authorities discussed earlier in these reasons. The OC was impermissibly attempting to pass responsibility for works within its strict duty to maintain and repair common property onto the lot owners (and for further works onto other lot owners). There was no basis for requiring a common property rights by-law in respect of works to common property that were within the OC's strict duty to maintain and repair common property.
3. I respectfully agree with the lot owners' submission to the extent that it is presently unclear the extent to which the work in lot 5 was within the scope of what the OC's strict duty required it to do, and for which it could not pass responsibility on a compulsory basis to a lot owner, although of course an owner may consensually assume responsibility for works to common property as the price of a privilege in respect of common property, under a common property rights by-law. It was also not clear what works to lot property consequential on the OC's performance of its strict duty would be required and which it would be the OC's responsibility to perform or pay for.
4. When the compulsory strata manager has assessed the scope of the OC's strict duty in respect of the scheme ceilings and flooring, including for consequential damage to lot property or other consequential losses, there may emerge the delineation of a common property rights by-law in respect of further works sought by this or any other lot owner, together with the potential for other forms of approval of works that the lot owners (or other lot owners) wish to undertake following such works.
5. Accordingly, the lot owners were justified in refusing to consent to the lot 5 by-law in its present form and timing. It is not necessary to canvass the other arguments put forward by the lot owners in support of that conclusion

1. For strata schemes, there are special legislative provisions which govern recovery of OC costs and expenses in respect of proceedings, as relevantly determined by the Appeal Panel in Owners SP 74698 v Jacinta Investments PL [2021] NSWCATAP 387 at [180]- [208].
2. First, SSMA s 232 supports the making of an order quarantining lot owners against contributions (from the existing funds of an owners corporation or from levies) to pay damages and costs orders against the owners corporation in favour of the lot owners.
3. Secondly, SSMA s 104 operates of its own force, without need for orders, to quarantine successful lot owners from contributing (from the existing funds of an owners corporation or from levies) to the owners corporation's costs and expenses in the proceedings.
4. Thirdly, it is appropriate, if there is a separate determination on costs and expenses in the proceedings, to reserve for that determination any dispute as to the operation of SSMA s 104 in terms of whether the lot owner is successful in the proceedings and the owners corporation unsuccessful in the proceedings, even if that appears reasonably clear. Since SSMA s 104 operates as a statutory obligation without need for an order once the lot owner is established as the successful party, a notation of that statutory force is sufficient without further order.
5. What is not the subject of such quarantining is expenditure from existing funds or from levies to fund remedial work to common property.

(1) In 2024/00306673 order that Network Strata Services Pty Ltd t/as Netstrata is appointed strata manager of The Owners - Strata Plan No 15404 for a period of 12 months commencing on date of these orders, with all the powers of the said owners corporation and its office-bearers and strata committee to the exclusion of exercise of those powers by others, and with its responsibilities to include assessing the existing expert reports (that are in the records of the owners corporation since 2016) in respect of ceilings, floors and associated matters in the common property, ordering any further expert reports that it considers appropriate and engaging appropriate contractors of its choice (which may or may not include iiPainting Carpentry and Maintenance Pty Ltd) to undertake the appropriate inspection, preventative and remedial programmes and scopes of works and raise the required funds to deal with the risks and actualities identified in those reports.

(2) Dismiss the application in 2024/00337871.

(3) In respect of costs:

(a) any application in respect of costs together with submissions and any further documents in respect of costs are to be filed and served on or before 30 January 2026;

(b) any submissions and further documents in respect of costs in response are to be filed and served on or before 20 February 2026.

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.