McDonnell v The Owners - Strata Plan No 64191 - [2022] NSWSC 1631 - NSWSC 2022 case summary

McDonnell v The Owners - Strata Plan No 64191 - [2022] NSWSC 1631 - NSWSC 2022 case summary — Zoe

JUDGMENT

Peter McDonnell and his wife Jannette McDonnell are architects. They, together with their son James (who is also an architect), are the directors of Peter McDonnell Pty Ltd t/as MC Design. Mr and Mrs McDonnell and their company (MC Design) are collectively the plaintiffs in these proceedings. I shall refer to them either as "the plaintiffs" or as "the McDonnells". They are owners of Lot 5 in Strata Plan 64191 which comprises five lots in premises in the Waverley Council area. They purchased Lot 5 in 2004.
Four of the five lots in Strata Plan 64191 comprise three-storey townhouses with pitched rooves. At the time that the McDonnells purchased Lot 5 it comprised a one-storey commercial premises (a shop). It is common ground that the airspace above Lot 5 was common property. Shortly after purchasing Lot 5 the McDonnells expressed a desire to develop the airspace above the shop. They prepared a development application ("DA") for alterations and additions to the space above Lot 5 and in 2006 and 2010 they effectively built a two story unit with a flat roof in the airspace above the commercial premises.
The Owners Corporation of Strata Plan 64191 (the "OC") claims that the McDonnells were not authorised to build into the common property in the way that they did, a claim which the McDonnells dispute. In 2018, the OC brought proceedings in the NSW Civil and Administrative Tribunal ("NCAT") seeking orders, inter alia, that the McDonnells remove all works above Lot 5 and reinstate the common property. The OC was successful. On 20 March 2019, NCAT Senior Member S Thode ("Senior Member") made the orders sought and provided reasons for her decision on 1 April 2019.
The McDonnells appealed against the decision of the Senior Member to the Appeal Panel of NCAT. They were unsuccessful: McDonnell v The Owners Strata Plan No 64191 [2019] NSWCATAP 172 (the Appeal Panel decision). On 11 July 2019, the Appeal Panel confirmed the orders of the Senior Member which were in these terms: "The [plaintiffs] shall pursuant to s 132(1)(a) on or before 19 September 2019: 1a. remove all works above lot 5 in in [sic] strata plan No 6419 and reinstate the common property; and 1b. remove all works to the fire exit door underneath Lot 5 in strata plan No 6419 and reinstate the common property."
By summons filed on 11 November 2021 the McDonnells now seek leave to appeal against the Appeal Panel decision. They also seek leave to appeal against the related costs decision of the Appeal Panel on 31 January 2020: McDonnell v The Owners Strata Plan No 64191 (No. 2) [2020] NSWCATAP 16 ("the costs decision").
This appeal is brought under s 83 of the Civil and Administrative Tribunal Act 2013 (NSW) ("the NCAT Act") which provides, relevantly: 83 Appeals against appealable decisions (1) A party to an external or internal appeal may, with the leave of the Supreme Court, appeal on a question of law to the Court against any decision made by the Tribunal in the proceedings. … (3) The court hearing the appeal may make such orders as it considers appropriate in light of its decision on the appeal, including (but not limited to) the following - (a) an order affirming, varying or setting aside the decision of the Tribunal, (b) an order remitting the case to be heard and decided again by the Tribunal (either with or without the hearing of further evidence) in accordance with the directions of the court. … (Emphasis added.)
Section 84(2) of the NCAT Act provides that an appeal under s 83 must be made: (a) within such time and in such manner as is prescribed by the rules of court for the court to which the appeal is made, or (b) within such further time as the court may allow.
Rule 50.3 of the Uniform Civil Procedure Rules 2005 (NSW) ("UCPR") provides as follows: (1) A summons commencing an appeal must be filed - (a) within 28 days after the material date, or (b) if the appeal relates to the decision of a judicial officer, within such further time as the judicial officer may allow so long as the application for such further time is filed within 28 days after the material date, or (c) within such further time as the higher court may allow. (2) An application for an extension of time under subrule (1)(c) must be included in the summons commencing the appeal.
The last day for the commencement of these proceedings was 8 August 2019. The McDonnells did not file its summons commencing this appeal until 11 November 2021, over two years later. The McDonnells seek orders under s 84(2)(b) of the NCAT Act that the time for filing the summons be extended. The OC opposes any extension of time.
In addition to needing an extension of time, the plaintiffs require the leave of the court to bring this appeal, which is confined to one or more questions of law.

[5]

Relevant legislation

It is pertinent to turn first to the relevant statutory scheme. The events the subject of this appeal occurred between 2004 (when Lot 5 was purchased) and 2019 (when the Appeal Panel made its decision). The relevant statutory scheme changed during that time. The Strata Schemes Management Act 1996 (NSW) (the "1996 Act") was the relevant legislation until 30 November 2016 at which time the Strata Schemes Management Act 2015 (NSW) (the "2015 Act") came into force.
The question of whether any special resolution was passed to permit the erection of the building on the common property is governed by the 1996 Act whereas the relevant rectification orders were made by NCAT pursuant to the 2015 Act.
I note that "common property" in relation to a strata scheme or a proposed strata scheme was at the relevant time defined in the Dictionary to the 1996 Act as meaning "so much of a parcel as from time to time is not comprised in any lot. It is now defined in s 4 of the 2015 Act as having the same meaning as it has in the Strata Schemes Development Act 2015 (NSW). Section 4 of that Act similarly defines "common property" as a part of the parcel of land in the scheme that is not comprised in a lot.
The Long title to the 1996 Act is "An Act to provide for the management of strata schemes and the resolution of disputes in connection with strata schemes and for other purposes". The Long title to the 2015 Act is "an Act with respect to the management of strata schemes and disputes related to strata schemes and other matters; and to repeal the Strata Schemes Management Act 1996. The objects of both Acts are in similar terms. In the 2015 Act, they are set out in s 3 as follows: (a) to provide for the management of strata schemes, (b) to provide for the resolution of disputes arising from strata schemes. In the 1996 Act they are set out in s 3 as follows: (a) to provide for the management of strata schemes created under the Strata Schemes (Freehold Development) Act 1973 or the Strata Schemes (Leasehold Development) Act 1986, and (b) to provide for the resolution of disputes arising in connection with the management of strata schemes.
As stated above, the 1996 Act was the relevant statute in force at the time the plaintiffs made the alterations to the common property above Lot 5. Section 65A(1) of that Act provided: 65A Owners corporation may make or authorise changes to common property (1) For the purpose of improving or enhancing the common property, an owners corporation or an owner of a lot may take any of the following action, but only if a special resolution has first been passed at a general meeting of the owners corporation that specifically authorises the taking of the particular action proposed: (a) add to the common property, (b) alter the common property, (c) erect a new structure on the common property.
Section 65A was introduced into the 1996 Act by the Strata Scheme Amendment Act 2004 (NSW) in response to the Final Report of the National Competition Policy Review 2001 of the Strata Schemes Management Act 1996. Prior to its enactment, there was no specific statutory provision allowing the OC to alter or add to the common property or give owners the permission to do so.
The 1996 Act included the following definition of "special resolution" in the Dictionary to that Act: "special resolution" means a resolution which is passed at a duly convened general meeting of an owners corporation and against which not more than one-quarter in value, ascertained in accordance with clause 18 (2) and (3) of Part 2 of Schedule 2, of votes is cast.
Section 5 of the 2015 Act similarly defines a "special resolution" in these terms: 1) In this Act, a resolution of an owners corporation is a special resolution if - (a) it is passed at a properly convened general meeting, and (b) of the value of votes cast - (i) not more than 25% are against the resolution, or (ii) if the resolution is a sustainability infrastructure resolution - less than 50% are against the resolution.
The present equivalent of s 65A is s 108 of the 2015 Act. It was common ground that s 108 of the 2015 Act is in materially the same terms as s 65A of the 1996 Act. Section 108 is in these terms: 108 Changes to common property (1) Procedure for authorising changes to common property An owners corporation or an owner of a lot in a strata scheme may add to the common property, alter the common property or erect a new structure on common property for the purpose of improving or enhancing the common property. (2) Any such action may be taken by the owners corporation or owner only if a special resolution has first been passed by the owners corporation that specifically authorises the taking of the particular action proposed. … (7) Sections 143 (2), 144 (2) and (3) and 145 apply to a by-law made for the purposes of this section in the same way as they apply to a common property rights by-law."
There are other relevant provisions concerned with changes to common property. One of those was s 62 of the 1996 Act, which is in these terms: 62 What are the duties of an owners corporation to maintain and repair property? (1) An owners corporation must properly maintain and keep in a state of good and serviceable repair the common property and any personal property vested in the owners corporation. (2) An owners corporation must renew or replace any fixtures or fittings comprised in the common property and any personal property vested in the owners corporation. (3) This clause does not apply to a particular item of property if the owners corporation determines by special resolution that: (a) it is inappropriate to maintain, renew, replace or repair the property, and (b) its decision will not affect the safety of any building, structure or common property in the strata scheme or detract from the appearance of any property in the strata scheme.
Section 62 of the 1996 Act is substantively replicated in s 106(1)-(4) of the 2015 Act, which provides: 106 Duty of owners corporation to maintain and repair property (1) An owners corporation for a strata scheme must properly maintain and keep in a state of good and serviceable repair the common property and any personal property vested in the owners corporation. (2) An owners corporation must renew or replace any fixtures or fittings comprised in the common property and any personal property vested in the owners corporation. (3) This section does not apply to a particular item of property if the owners corporation determines by special resolution that - (a) it is inappropriate to maintain, renew, replace or repair the property, and (b) its decision will not affect the safety of any building, structure or common property in the strata scheme or detract from the appearance of any property in the strata scheme. (4) If an owners corporation has taken action against an owner or other person in respect of damage to the common property, it may defer compliance with subsection (1) or (2) in relation to the damage to the property until the completion of the action if the failure to comply will not affect the safety of any building, structure or common property in the strata scheme.
The orders appealed against in this matter were made under s 132 of the 2015 Act which provides as follows: 132 Rectification where work done by owner (1) The Tribunal may, on application by an owners corporation for a strata scheme, make either of the following orders if the Tribunal is satisfied that work carried out by or for an owner or occupier on any part of the parcel of the scheme has caused damage to common property or another lot - (a) an order that the owner or occupier performs the work or takes other steps as specified in the order to repair the damage, (b) an order that the owner or occupier pay to the owners corporation or the owner of the lot a specified amount for the cost of repairs of the damage and any associated costs, including insurance and legal costs. (2) An amount payable by an owner or occupier to an owners corporation under this section is payable, and may be recovered, under this Act as if it were an amount of unpaid contributions.
Another section of interest is s 232 of the 2015 Act, which provides that NCAT can make orders to settle disputes or rectify complaints. It is in these terms: 232 Orders to settle disputes or rectify complaints (1) Orders relating to complaints and disputes The Tribunal may, on application by an interested person, original owner or building manager, make an order to settle a complaint or dispute about any of the following - (a) the operation, administration or management of a strata scheme under this Act, (b) an agreement authorised or required to be entered into under this Act, (c) an agreement appointing a strata managing agent or a building manager, (d) an agreement between the owners corporation and an owner, mortgagee or covenant chargee of a lot in a strata scheme that relates to the scheme or a matter arising under the scheme, (e) an exercise of, or failure to exercise, a function conferred or imposed by or under this Act or the by-laws of a strata scheme, (f) an exercise of, or failure to exercise, a function conferred or imposed on an owners corporation under any other Act. …

[6]

Factual overview

The factual dispute before NCAT was as to whether a "special resolution", as required by s 65A of the 1996 Act, had in fact been passed in relation to the building by the McDonnells into the common property. Although this appeal is confined to questions of law rather than fact, it is helpful to briefly state some of the relevant facts in order to understand the issues in dispute in this appeal.
After the McDonnells prepared the relevant DA in 2004 a special resolution was passed at the annual general meeting ("AGM") of the OC in the following terms: "RESOLVED that the Owners Corporation give permission to MC Design to lodge a development application to add a storey above the shop, Lot 5. NOTED: The Owners Corporation will not lodge an objection to the DA." (Emphasis added.)
That same day the Secretary of the OC sent a letter to the General Manager of Waverley Council, on the OC seal, stating: "This letter grants authority to mcdesign architects to lodge a development application for alterations and additions to lot 5 by drawings 719/1 MB and 2MB."
Although that letter specifically referred to the relevant drawings, both the Senior Member and the Appeal Panel were satisfied that the DA was not actually before the AGM at the time the special resolution was passed.
The parties joined issue before NCAT as to whether the special resolution passed at the 30 August 2004 AGM was to build the unit in the common property above Lot 5 or simply to submit the DA. No other special resolution was ever passed in relation to the 2006 works.
On 11 May 2005, Waverley Council granted the DA and issued a construction certificate.
On 13 July 2005, at the AGM, the OC resolved that the Minutes of the 2004 AGM be confirmed, noting the Lot 5 works. The plaintiffs presented the approved DA and undertook to provide a schedule of works. The works on Lot 5 were completed by early 2006.
In 2010, the plaintiffs sought consent from Waverley Council to modify the attic space (by replacing the pitched roof with a squared-off roof). On 20 September 2010, the Executive Committee of the OC: "RESOLVED that the [OC] consent to the owner of lot 5's lodgement of the attached development application to council in accordance with the Environmental Planning and Assessment Act 1979. RESOLVED that the [OC] authorise the managing agent to sign and affix the common seal on the attached development application form in accordance with the Environmental Planning and Assessment Act 1979."
This resolution was not a "special" resolution in that it was not passed at a properly convened general meeting at which not more than 25% of the value of the votes case were against the resolution.
The plaintiffs lodged a DA with Waverley Council, bearing the seal of the OC, which was granted on 5 November 2010. The works were completed by February 2012.
After these two tranches of work were completed (together, "the works"), the nature of the modifications to Lot 5 and the airspace above can be broadly summarised as the building of a two-story residence with a flat roof (not pitched like the other four lots). That building included the removal of the ground floor roof, the installation of two floors above it, the construction of a staircase, the alteration of locks on the fire exit door and the erection of a sign stating "5A" on the fire exit door. The scope of the building into the common property after the second tranche of work is best understood by reference to the photograph of the building in its current state which is annexed to this judgment as Annexure A.
In 2013, the plaintiffs attempted, unsuccessfully, to have the OC pass an exclusive use by-law for the alterations and additions to the space around Lot 5 at an AGM on 17 July. This by-law dispute was subject to an adjudication by NCAT and an appeal to the Tribunal (in 2014). The plaintiffs were unsuccessful and failed to obtain the exclusive use by-law.
Several years passed without the parties being able to resolve the dispute. The works in and above Lot 5 remained in place. It was not until 7 September 2018 that the OC filed an application to the Tribunal seeking orders for the removal of the alterations to the common property around Lot 5 the subject of the works. They were successful for the reasons provided by Senior Member on 1 April 2019.
Before turning to consider those reasons, I note that to the extent that there are gaps or unanswered questions arising from the above factual chronology those gaps were not explained before me. For example, although I was provided with a photograph depicting how the building looks now after both the 2006 and 2010 works, it is not clear what the building looked like after the first of these two developments which, as I understand it, added one floor, not two, to Lot 5.
Nor is it apparent from either of the decisions in NCAT or any of the submissions of the parties as to why, putting the scope of the August 2004 special resolution to one side, a further special resolution was not considered necessary before the extensive 2010 works could be undertaken. It seems to me that it is one matter to seek a DA to bring Lot 5 "into line" with the other four lots (which the 2006 works apparently sought to do) and quite another to approve a much larger building, which appears from Annexure A to be larger than the other four lots given its flat rather than pitched roof. It is not open to me to make any findings in relation to these issues given the limited scope of this appeal; I simply note that the reason that these matters are not explained in this judgment is that they were not explained in the appeal before me.

[7]

The Decision of Senior Member S Thode on 1 April 2019

The plaintiffs' case before the Tribunal was "that approval [for the works] was granted if not expressly then impliedly but in any event the works were approved in accordance with s 65A of the 1996 Act."
The McDonnells relied, inter alia, on the decision of Brereton J (as his Honour then was) in Stolfa v Owners Strata Plan 4366 & ors [2009] NSWSC 589 affirmed by the Court of Appeal in Stolfa v Hempton [2010] NSWCA 218 (Allsop P, Basten and Young JJA) (collectively "the Stolfa decisions").
The Senior Member articulated the issues for consideration as follows: "I have to decide whether there was a resolution passed at a general meeting that specifically authorises the taking of the particular action proposed [ie the works done by the plaintiffs in 2006 and 2010]. … In my view there was no special resolution passed at a general meeting of the owners corporation that specifically authorised the taking of the particular action proposed."
The Senior Member then summarised the evidence in respect of the OC AGM on 30 August 2004 and the executive committee meeting of the OC on 20 September 2010 and addressed the McDonnells' argument that they received specific authorisation for the purposes of s 65A to go ahead with the works on the common property above Lot 5.
The Senior Member noted the following in her reasons on this issue: "It is not controversial that the works … constitute an improvement or enhancement of the common property that requires a special resolution specifically authorising the works under s 65A (of the 1996 Act being the legislation in force at the relevant time). I am satisfied that no such resolution was passed in 2004 or at any subsequent time. Both parties have referred to the authority of Stolfa v Owners Strata plan 4366 & Ors [2009] NSWSC 589 (26 June 2009). As per his Honour Brereton J at [82], section 65A is concerned with controlling and regulating alterations and additions to common property, other than repairs and maintenance which the owners corporations are bound to affect [sic] under section 62. Its affect [sic] is to provide that alterations and additions made for the purpose of improving or enhancing, as distinct from repairing and maintaining, the common property, if and only, if specifically authorised. Absence such authorisation, alterations and additions cannot be made. … The permission to seek the grant of development consent is not the grant to perform work on common property. The lodging of a development application or the granting of development consent does not grant permission to a person to build on another person's land (see Rothwell Boys Pty Limited v Coffs Harbour City Council 2012 NSWLEC 19 at [37] to [39]). I am not satisfied as a matter of fact or law, that the authorisation to apply for a development application authorises the respondent's appropriation of common property, or the commence (sic) of work pursuant to s65A. The grant of a development consent assures compliance with the Environmental Planning and Assessment Act and is separate and distinct from approval by the owners to build in accordance with council approved plans. I am satisfied that there was no authorisation by the owners corporation to take a particular action other than to authorise the lodging of a development application with the local council. And indeed, the owners corporation reminded the respondents in writing in 2010 and 2012 that the owners corporation was yet to receive an exclusive use by-law, and that this was a prerequisite for approval by the owners corporation. The respondents could have been under no doubt that approval had not been granted. I agree with the respondents' adopted position that the imposition of section 65A for specific authorisation of the taking of a particular action proposed does not mean that such authorisation must be found in a single resolution, or that the resolution must specifically mention s65A, nor that it must relate to particular plans, or even that there cannot be variations in implementation. But just as a general authorisation to alter common property will not be sufficient to satisfy the requirements of s65A, an authorisation to lodge a DA does not authorise the particular action outlined … above. Particularly in circumstances when the plans were not submitted as and when the resolution was passed in 2004. In this respect the authority of Stolfa does not assist the respondents. It was clear from the decision at first instance and as set out by the Court of Appeal, (see Stolfa v Hempton [2010] NSWCA 218), that approvals were given for particular works, referred to on the plans in relation to the enclosure of two verandahs. The facts are distinguishable. In the case of Stolfa, not only was there a resolution approving lodgement with council, the plans were approved, as a separate and distinct part of the resolution. Such separate and distinct approval of the plans, by way of special resolution, was actual approval to act on the plans, and once council had approved them, to build to those plans. Clearly the facts in the instant case are distinguishable in this material respect, the plans were not put to the owners corporation for approval by special resolution. At [33] Stolfa v Hempton [2010] NSWCA 218, the President concludes: '… In my view, whilst the 20 December 2006 special resolution taken alone may not have been adequate authorisation for any form of enclosure of the Unit 3 verandah, it was clear authorisation to enclose it. The 15 May 2007 special resolution was authorisation to enclose in the form of the Unit 3 plans. That was sufficient, as a matter of fact, to amount to authorisation to enclose by those plans. That is what occurred. Section 65A was satisfied. The primary judge was correct so to conclude.' Having regard to the submission by the respondents, I am satisfied on the facts before me, there was no clear authorisation by way of special resolution for the works, the works are unauthorised within the meaning of the Act, and the owners corporation is entitled to have the works removed. There is no necessity for the Tribunal to make particular prescriptive orders how the work must be removed. It is sufficient to order that the common property be restored and that respondents make good the common property." (Emphasis added.)

[8]

Decision of the Appeal Panel

The McDonnells appealed against the decision of the Senior Member to the Appeal Panel. They had a right of appeal on any question of law under s 80(2)(b) of the NCAT Act which is in these terms: 80 Making of internal appeals (1) An appeal against an internally appealable decision may be made to an Appeal Panel by a party to the proceedings in which the decision is made. Note - Internal appeals are required to be heard by the Tribunal constituted as an Appeal Panel. See section 27(1). (2) Any internal appeal may be made - (a) in the case of an interlocutory decision of the Tribunal at first instance - with the leave of the Appeal Panel, and (b) in the case of any other kind of decision (including an ancillary decision) of the Tribunal at first instance - as of right on any question of law, or with the leave of the Appeal Panel, on any other grounds. (3) The Appeal Panel may - (a) decide to deal with the internal appeal by way of a new hearing if it considers that the grounds for the appeal warrant a new hearing, and (b) permit such fresh evidence, or evidence in addition to or in substitution for the evidence received by the Tribunal at first instance, to be given in the new hearing as it considers appropriate in the circumstances.
The McDonnells could also appeal, if leave was granted, on a question of fact under cl 12 of Schedule 4 of the NCAT Act which provides: 12 Limitations on internal appeals against Division decisions (1) An Appeal Panel may grant leave under section 80 (2) (b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because: (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).
The Notice of Appeal lodged on 26 April 2019 set out the following ten grounds: "1. The Tribunal erred in failing to conclude the facts as found satisfied the provisions of s 65A of Strata Schemes Management Act 1996 (the Act). 2. The Tribunal erred in failing to take into account all of the relevant circumstances in determining whether the alternations and additions to the common property carried out by the appellants (the works) had the requisite approval under s 65A of the Act. 3. The Tribunal failed to have regard to the fact that the works were carried out by the appellants in stages over a number of years, with council approval for each stage, in the full knowledge of the other lot owners in the strata scheme and without objection, prior to the completion of the works, by any of the other lot owners, the owners corporation or the strata manager. 4. The Tribunal failed to correctly apply the authorities cited in the Tribunal's decision. 5. The Tribunal erred in apparently concluding that, in the absence of an exclusive use by-law, s 65A of the Act was not satisfied. 6. The Tribunal erred in finding that the plans for the works were not before the owners corporation at the 2004 AGM, when there was no evidence to support such a finding. 7. The Tribunal denied the parties and, in particular the appellants, procedural fairness in refusing to allow oral evidence and cross-examination of the deponents to affidavit evidence read at the hearing before the Tribunal as to contested facts evident on those affidavits, which went to the issue of whether the provisions of s 65A of the Act were satisfied. 8. The Tribunal did not consider, or give reasons as to, whether it had power under s 132 of the Strata Schemes Management Act 2015 (the 2015 Act) to make the specific orders that it did. 9. The Tribunal erred in failing to give consideration to or reasons in relation to the exercise of the discretion conferred on the Tribunal by s 132 of the 2015 Act. 10. The decision of the Tribunal, including in particular the orders of the Tribunal, is so unreasonable in the circumstances that no reasonable decision maker would have made such orders."
Those grounds of appeal were amended by consent orders on 26 June 2019 and as a result, the scope of the appeal was significantly narrowed. Virtually all the grounds of appeal set out in the Notice of Appeal lodged on 26 April 2019 were abandoned. The consent orders amended the ten grounds to consist of five grounds appeal instead. Those consent orders were not before the court on this appeal but in the reasons of the Appeal Panel at [7]-[8] it was noted that during the hearing of the appeal, three of those five grounds fell away leaving only the following two grounds of appeal relied upon: "(1) The Tribunal erred in finding that the appellants did not have approval for the works pursuant to s 65A of the Strata Schemes Management Act 1996 (Ground 1). (2) The Tribunal failed to properly consider the effect and operation of the decision and orders made (Ground 2)."
Thus, although the owners initially relied on a ground that the Senior Member did not consider or give reasons as to whether she had power under s 132 of the 2015 Act to make the orders that she did; any reliance upon that ground was abandoned either before or during the Appeal Panel hearing.
The plaintiffs' argument on ground 1 before the Appeal Panel was one of mixed fact and law: it was submitted that the special resolution passed by the OC on 30 August 2004 was sufficient to satisfy the requirement for approval under s 65A of the 1996 Act in respect of the works, and that the Tribunal had erred in not reaching this conclusion. The contention on ground 2 was that the Tribunal had erred in law in failing to consider whether it should exercise its discretion under s 132 of the 2015 Act to refuse to order rectification or in failing to consider whether an order other than rectification should be made.
On 11 July 2019, the Appeal Panel, comprising Senior Members P Durack SC and D Goldstein, dismissed the McDonnells' appeal against the orders of Senior Member. In the course of setting out the relevant statutory provisions, the Appeal Panel said this at [16]-[18]: "[16] It was common ground that it was s 65A of the 1996 strata legislation that applied to the carrying out of the works and that it was s 132 of the 2015 strata legislation that applied to the making of orders in respect of such works. [17] It was also common ground that the works that had been carried out fell within the nature of works that were regulated by s 65A. [18] It was the appellants' contention in the proceedings that the works were permitted because they had been approved in accordance with s 65A." (Emphasis added.)
Thus, the McDonnells accepted before the Appeal Panel that s 132 of the 2015 Act applied to the making of orders in respect of the works.
The Appeal Panel set out the key findings of the Senior Member and the events relied on by the plaintiffs to show that authorisation of the works under s 65A had occurred. The Appeal Panel then noted the importance to the appeal of the "Stolfa decisions" (considered below at [159]-[162]) and noted this at [35]: "Importantly, for these proceedings, there was no suggestion in the Stolja [sic] decisions that approval by special resolution for the lodgement of a development application (even with associated plans) alone, without a construction approval, could satisfy s 65A."
At [38]-[39] the Appeal Panel relied upon the following passages from the Court of Appeal decision in Stolfa: "In so concluding, Allsop P also expressed the following views: (1) The 15 May 2007 resolution was not "just a resolution approving lodgement with Council". The plans were approved as a separate and distinct part of the resolution and in the context, including the resolutions passed in the months before, this was an approval to act on the plans once the Council had approved them: at [32]. [our emphasis]. (2) It will be a question of fact or mixed fact and law in each case whether any given special resolution or special resolutions is or are adequate in its or their specificity of authorisation and in its or their particularity as to the action proposed: at [30]. Additional support for a conclusion that approval from an OC to lodge a development application is distinct from approval to carry out the work is supplied by the decision in The Owners of Strat Plan No 37762 v Ding Phuong Dung Pham and Anor [2006] NSWSC 1287 at [38] - [39]."
The Appeal Panel went on to consider the McDonnells' submission on ground 1 that the Senior Member had erred in concluding that the plans for the new storey above Lot 5 were not "before" the OC when, or before, it made the special resolution on 30 August 2004. In dismissing ground 1, the Appeal Panel stated the following at [43]-[45]: "[43] … even if the plans had been before the meeting on 20 August 2004 the fact remains that there was no authorisation to do the work the subject of any such plans. There was no 'construction approval', as it was described by Brereton J on Stolfa. Nor was there any separate and distinct approval by the members of any plans, as referred to by the Court of Appeal when they discussed the resolutions made in that case on 15 May 2007. [44] As we understood it, the appellants next submission in respect of Ground 1 was that the resolution made on 20 August 2004 was sufficient to meet the authorisation requirements in s 65A. [45] We do not agree, for the reason just mentioned - approval to the lodging of a development application does not take the matter far enough to satisfy s 65A."
Ground 2 was also dismissed, principally because the Appeal Panel was satisfied that no argument about the exercise of discretion under s 132 of the 2015 Act was put by the plaintiffs at first instance, nor was there any "evidentiary basis for a discretionary refusal of s 132 relief".

[11]

Leave

As the terms of s 83(1) of the NCAT Act make clear, an appeal to this court against a decision of an Appeal Panel requires a grant of leave. The principles regarding the granting of such leave were summarised by Gleeson JA (with whom Macfarlan and Payne JJA agreed) in Secretary, Department of Family and Community Services v Smith (2017) 95 NSWLR 597; [2017] NSWCA 206 at [28] as follows: "Only if the decision is attended with sufficient doubt to warrant its reconsideration on appeal will leave be granted: Sharpe v Heywood [2013] NSWCA 192 at [34]; McMahon v Permanent Custodians Ltd [2013] NSWCA 275 at [57]. Ordinarily, leave to appeal is will only be granted concerning matters which involve issues of principle, questions of general public importance or an injustice which is reasonably clear, in the sense of being more than merely arguable: Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 at [32]-[38]; The Age Company Ltd v Liu (2013) 82 NSWLR 268; [2013] NSWCA 26 at [13]." (Emphasis added.)
The plaintiffs submitted that these proceedings were of general public importance given the error in the way NCAT applied s 65A of the 1996 Act. Although it was accepted that s 65A has now been repealed, it is submitted that s 108 of the 2015 Act is in materially the same terms and therefore the error will be replicated in future. On the plaintiff's case, NCAT misconstrued the requirements of s 65A of the 1996 Act, the scope of its power under s 132 of the 2015 Act and the relationship between the two provisions.
The defendant opposed leave being granted. It was accepted that the relevant principles were those expressed in Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164, including for matters of general public importance, but it was submitted that the issues of principle asserted by the plaintiffs are well settled.
I propose to proceed on the basis that, as with the question of any extension of time, the question of a grant of leave under s 83(1) also turns on the merits of the plaintiffs' arguments.

[16]

Ground 4

Ground 4 was expressed in the summons in these terms: "The power to make orders under s 132 of the 2015 Act to rectify 'damage to common property or another lot' does not extend to, or comprehend, an order for demolition of works constructed pursuant to a valid development consent issued in accordance with the Environmental Planning and Assessment Act 1979 (NSW) by the relevant consent authority."
That ground was re-stated in the plaintiffs' written submissions in these terms: "Did the Tribunal err in construing the 2004 Special Resolution as limited to authorising the appellants to lodge a development application?"
There is a significant difference between the ground and the question addressed in submissions. It seems to me that ground 4 in the summons is similar to ground/question 1 in that it contends that there was no power for NCAT to make orders under s 132 of the 2015 Act because it does not extend to an order for the demolition of works which have been constructed pursuant to a valid DA or approval under the Environmental Planning and Assessment Act 1979 (NSW) ("EPA Act"). The plaintiffs did not address ground 4 in their written submissions and counsel could not explain the difference between the ground and the question identified in their written submissions.
Again, the McDonnells accepted before the Appeal Panel that s 132 of the 2015 Act applied to the "making of orders" in this matter. Ground 4 is another instance of them resiling from that position and contending that s 132 does not apply in this case.
I propose to address ground 4 concurrently with ground 1 as they address the same complaint. As for question 4 in the plaintiffs' written submissions, it raises an entirely new matter not contained in the summons or ever raised before the Senior Member or the Appeal Panel, going to the Tribunal's construction of the 2004 Special Resolution. The defendant contended that question 4 in the written submissions is a question of fact that I cannot entertain.
For reasons explained below, I am satisfied that question 4 in the plaintiffs' written submissions not only does not pertain to a ground of appeal, it does not give rise to a question of law.

[22]

Consideration: Grounds 1 and 4

The nub of the complaint under these grounds is that, despite the position taken by the plaintiffs below, that there was power for the Appeal Panel to confirm the orders made "pursuant to s 132(1)(a)", the plaintiffs now argue that the power conferred under s 132 either was not enlivened or did not extend to the facts of the present case.
I am satisfied that the question of whether NCAT has power under s 132 of the 2015 Act to make a conditional order, such as those made in this case, is a question of law.
It was common ground that in order for the plaintiffs to comply with the NCAT orders they require approval under the EPA Act. Clause 4.2 of the EPA Act provides that if a development consent is required for a specified development, a person must not carry out such development unless consent is obtained and in force and the development is carried out in accordance with the consent and the instrument. Clause 1.5(1)(e) of the EPA Act provides that "development" includes "the demolition of a building or work" and cl 1.4(1) provides that "environmental planning instrument" means such an instrument (including a Local Environmental Plan ("LEP")) "made, or taken to have been made, under Part 3 and in force". Clause 2.7 of the LEP provides, "the demolition of a building or work may be carried out only with development consent."
Not only am I satisfied that, on the facts of this case, the plaintiffs would need to obtain consent from Waverley Council in order to comply with the NCAT orders, it seems to me that they would also require authorisation of the OC under s 108 of the 2015 Act. The question is whether the need to obtain consent from Waverly Council means that the orders made under s 132 were beyond power.
The defendant relied in particular upon the decisions in Krimbogiannis, Vickery and Pham and submitted that when the statutory scheme is considered in the context of those cases the Tribunal plainly had power to make the orders it did. Although I have found aspects of those decisions to be of assistance, none of them directly address the question raised under this ground.
The Court of Appeal held in Krimbogiannis that the OC has power under s 145 of the 1996 Act to enter premises that have been altered without approval in order to fulfil its obligations to repair and maintain under s 62 of the Act: that decision does not address whether council approval was required for the restoration works to be undertaken.
Pham is a decision from Rothman J which was an appeal from orders made by what is now NCAT requiring an OC to consent, retrospectively, to a DA lodged by Mr Pham in respect of works which required alteration of the common property roof. After receiving a DA from Liverpool City Council, Mr Pham proceeded with the works without consulting the OC. His Honour held that the Tribunal erred in ordering the OC to authorise the works after the fact as it was beyond power.
In that context, Rothman J observed the following at [39] and [45]: "[39] In a strata property, the Owners' Corporation is the owner of common property including roofs, the front of the outside door to the unit etc. Because of this distinction the Owners' Corporation's seal on the defendant's development application to the Council would not be consent to perform the work in question but would only be consent by the owner, to the making of the application for development: a consent which is limited to the ascertainment of compliance with planning provisions and/or the obtaining of approval from the development authority. … [45] It is for this reason that the ventilation chimneys through the common roof is contentious and it is for this reason that differentiation must be made between works that are confined to the property of the defendant and works on common property. Also there must be a differentiation between the consent required of the Owners' Corporation, as the owner of the property, for there to be a valid application for development approval and, over and above approval granted by the Council, the consent of the Owners' Corporation to the approved works being carried out. That latter consent would need to be reflected in a formal manner either by the grant of an exclusive use by-law or a licence." (Emphasis added.)
The third decision relied upon by the defendant was Vickery which addressed the extent of the power under s 232 of the 2015 Act (extracted above at [26). The defendant relied on this decision to support its argument that s 232 was another provision which would provide NCAT with the power to make the orders it did in this matter. The plaintiffs submitted that s 232 was irrelevant and would not permit the making of a demolition order in any event.
The decision in Vickery turned on the proper construction of s 62 of the 1996 Act and in particular the words, "maintain and keep in a state of good and serviceable repair the common property". But the Court of Appeal in Vickery also held that s 232 of the 2015 Act conferred on the Tribunal the jurisdiction to hear and determine a damages claim brought by an owner against an OC under s 106(5).
Basten JA stated that s 232 is "expressed in broad terms" (at [26]) and that the matters in sub-s (1) are "clearly intended to cover the full range of an owners corporation's functions in operating, administering and managing the strata scheme, and exercising or failing to exercise any function under the Act, or the by-laws of the strata scheme" (at [28]). At [166]-[167], White JA stated: "[166] In other words, I see no reason to read down the amplitude of the authority conferred on the Tribunal by s 232(1). [167] It is true that if full amplitude is given to the words of s 232(1), then the provision would cover some of the more specific powers conferred on the Tribunal by other sections of the Act. But the Act is not structured in such a way that the conferral of specific powers on the Tribunal should be seen as limiting the conferral of the general power under s 232(1). The specific powers conferred on the Tribunal do not form a class or a genus by reference to which the general power under s 232(1) is to be read down."
Although it is to be accepted that Vickery supports a conclusion that an order may have been able to be made under s 232, I am not satisfied that its existence either limits or makes clear the scope of the power under s 132. Ultimately, I do not consider to necessary to determine whether NCAT would have also had power under s 232 to make the orders they did in this matter.
No other decisions were relied upon by the parties as being relevant to the determination of this ground. The plaintiffs' argument was confined to the simple proposition that the fact that it was the local Council who has the statutory power in consent to a demolition order means that NCAT has no power under s 132 to order someone to rectify damage to the common property if to do so requires council approval.
I have considered the terms of s 132 in the context of the objects of the 2015 Act. Those objects are to provide for the management of strata schemes and to provide for the resolution of disputes arising form the strata schemes. Given the relevant provisions concerning changes to common property, it is consistent with the objects of the Act that s 132 be read to give effect to that purpose in the context of the Act overall. The enactment of s 65A was to provide NCAT with the power to make orders that would resolve a dispute arising from, inter alia, building onto common property. This is such a dispute.
Nor is there anything in the statutory language of s 132 that would preclude NCAT from making the orders it did; they are consistent with the objects of the 2015 Act and, subject to ground 2, the statutory prerequisites were otherwise met.
It is to be accepted that there is no express power in the 2015 Act to order the demolition of a building: that power rests with the relevant consent authority under the EPA Act. But that fact alone does not mean that there is no power under s 132 for NCAT to adjudicate and rule on this dispute between the OC and the plaintiffs in this matter. The relevant consent authority and NCAT have different statutory roles, as the decision in Pham makes clear. The fact that it was most likely never contemplated by the legislature that a lot owner would build a home on common property without the requisite approval from the OC that was so substantial as to require a demolition order to remove it, does not mean that the relevant power does not exist in s 132.
Although this ground is to be determined as a question of law and is confined to the facts found below, it is to be noted that nothing was put before the court to suggest that the plaintiffs could not comply with the order because a demolition order had been refused by Waverly Council. It was never explained what the impediment to obtaining such consent might be. It might be thought that the fact that the consent was necessary to comply with NCAT orders would make it highly likely that it would be granted by the relevant consent authority. Further, it was never explained why, if that unlikely scenario was to occur, the parties could not go back to NCAT for further adjudication.
The nub of the complaint is that an order which is conditional is one made without power. I do not accept that proposition. The fact that an order made by a court or tribunal is conditional on some other event is relevant to the enforcement of that order; the plaintiffs could not be held in civil contempt for breaching the NCAT orders should consent to demolish the additions be refused. But that fact does not speak to the power to make the order in the first place.
For these reasons, I am not satisfied that the fact that the plaintiffs need to obtain development consent in order to comply with the NCAT orders means that there was no power to make those orders under s 132 of the 2015 Act in the first place.
No error is established under these two grounds.

[24]

Plaintiffs' submissions

It was further submitted that the statutory language of s 132 requires there to be satisfaction that there has been "damage" to the common property before an order for rectification can be made. Correspondingly, the order is to "repair the damage" or pay to the owners corporation an amount of money covering the "cost of repairs of the damage". On the plaintiffs' submission, s 132 is enlivened only when there has been a finding of "damage" requiring and capable of "repair".
Reliance was placed on the fact that the orders of the Tribunal do not refer to "damage" and "repair", but rather to "removal" and "reinstatement", which, it was submitted, is a much broader concept encompassing the idea that the property would be returned to its former condition, regardless of whether it was damaged or not. It was submitted that there were no findings of damage, that the word "damage" does not appear in the reasons of either the Senior Member or the Appeal Panel and there is no evidence of "damage".
It was accepted that the works done around Lot 5 constituted improvements and enhancements such that s 65A of the 1996 Act applied but that an enhancement or improvement to the common property could not also be "damage" under s 132. Further, "damage" is a fact which must be found or inferred on the evidence before the Tribunal.
Reliance was placed on s 109 of the 2015 Act which introduced the concept of "cosmetic work" which a lot owner can carry out on common property in connection with the owner's lot without authorisation from the owners corporation; this means that works which could be considered 'damage' in some contexts are permissible cosmetic alterations in other contexts. It was submitted that reasoning by analogy, works could not be both an improvement and enhancement under s 65A (or s 108 of the new Act) and damage under s 132.
The plaintiffs acknowledged that a lot owner could cause damage to the common property in the course of carrying out improvements and enhancements (and see, in a different context, s 109(3)(a) of the 2015 Act) but submitted that this was not how the OC brought its complaint nor the basis on which the Tribunal exercised its power. The Senior Member stated in her reasons, "the owners corporation seeks orders for the removal of the unlawful additions and alterations to the common property carried out in 2006 and 2010 respectively" (emphasis added).
It was submitted that s 132 is not enlivened by a finding that works were unauthorised under s 65A, but by a finding of damage capable of repair. This latter point is the "jurisdictional fact" upon which the exercise of the power is conditioned: Minister for Immigration and Multicultural Affairs v SGLB [2004] HCA 32 at [37] per Gleeson CJ; and Darnell v Stonehealth Pty Ltd (No 4) [2021] FCA 823 at [26] per Logan J. It was submitted that damage and authorisation are separate matters under the statutory scheme.
It was further submitted that the 2015 Act does not envisage a circumstance like the present where a lot owner has carried out extensive works on the common property without authorisation, but also without protest from the OC who then seeks a demolition order "pursuant to s 132 under the guise of remedying "damage". And the 2015 Act does envisage other scenarios. For example, s 126(1) of the 2015 Act allows the Tribunal, on application of a lot owner, to order the OC to consent to certain works on the common property if consent has been unreasonably withheld and sub-s (2) provides the same power but where the work has already been completed. Also, if unauthorised works have commenced on the common property, the OC could seek an injunction against the lot owner.
A further analogy was drawn with a court's reluctance to grant a mandatory injunction without first considering whether other remedies, like the payment of a sum of money, would be adequate.

[26]

Consideration: Ground 2

The complaint made under this ground is that, despite the position taken by the plaintiffs below, the plaintiffs now argue that the power conferred under s 132 was not enlivened because the Senior Member did not expressly refer to there being damage to the common property, which was a jurisdictional fact. This ground, in effect, complains of the language used by the Senior Member in her reasons.
Despite the many iterations of the grounds of appeal in the internal appeal from the Senior Member to the Appeal Panel, no complaint was made to the Appeal Panel about any lack of clarity of the relevant finding by the Senior Member regarding the identified "damage".
An appeal to this court under s 83(1) of the NCAT Act can only be made from the decision of the Appeal Panel, not the Member. Although it would have been open to the plaintiffs to have sought judicial review of the Senior Member's decision in the supervisory jurisdiction of this court as regulated by s 69 of the Supreme Court Act 1970 (NSW), they did not do so. A discretionary factor militating against a grant of such relief would have been the availability of an internal appeal right to the Appeal Panel on this issue which was not exercised
It is to be accepted that alleged error in the decision of a Senior Member may be relevant to the finding of an Appeal Panel such that an appeal from a decision of the Appeal Panel would, in some cases, necessarily require this court to identify error in the decision from the Senior Member. But that is not this case. There is no discussion of this issue in the decision of the Appeal Panel either directly or by implication.
Even if I was satisfied that error was disclosed under this ground, which I am not, no error is disclosed in the decision of the Appeal Panel from which the appeal to this court is brought. Despite this, I propose to address why I am not satisfied of error in any event.
Section 132 provides for "rectification" where work carried out by or for an owner or occupier has caused "damage" to common property. An order can be made, inter alia, to take steps "to repair the damage".
The conclusion of the Senior Member was in the following terms: "… I am satisfied on the facts before me, there was no clear authorisation by way of special resolution for the works, the works are unauthorised within the meaning of the Act, and the owners corporation is entitled to have the works removed. There is no necessity for the Tribunal to make particular prescriptive orders how the work must be removed. It is sufficient to order that the common property be restored and that respondents make good the common property." (Emphasis added.)
I do not accept the plaintiffs' contention that the Senior Member did not undertake the necessary process of reasoning. I am satisfied that the references to the need for the plaintiffs to "make good" and "restore" the common property are consistent with the satisfaction that there was "damage" to the common property in the first place. If one has regard to the scope of the development into the common property (see annexure A) there can be no doubt that there has been damage to the common property. Once a finding of damage has been made, then the relief is to "repair" it consistent with the statutory language. In any event, the Senior Member clearly found that the plaintiffs had removed the roof of Lot 5 without authority, which is a clear instance of damage to the common property. It seems to me that damage (removing the roof) could only be made good by reinstating the roof which would require the demolition of the building above it.
It is to be accepted that the Senior Member had to have the necessary satisfaction as to the existence of damage before an order could be made under s 132 but, no doubt, the reason no particular focus was placed on that wording before either the Senior member or the Appeal Panel was because the McDonnells did not challenge this issue at any stage. The fact that, as the plaintiffs contend, authorisation and damage are not the same concepts does not answer the complaint as to whether any finding of damage was in fact made.
To the extent that the complaint under this ground relied upon the wording of the orders rather than the reasons, it was not suggested that they could not be complied with because they are unclear. In any event, the orders expressly refer to the source of the relevant statutory power.to make the orders as being s 132.
No error is established under this ground.

[28]

The plaintiffs' submissions

It was submitted that the Senior Member erred in not finding that the authorisation to apply for a DA also authorised the "appropriation" of the common property and the commencement of work pursuant to s 65A. The error was identified as a misapplication of the decisions in Stolfa to the extent that it was held that the grant of a development consent is separate and distinct from approval by the owners to build in accordance with council approved plans.
In particular, complaint was made regarding the following passage in the reasons of the Appeal Panel at [43]: "… the fact remains that there was no authorisation to do the work the subject of any such plans. There was no 'construction approval', as it was described by Brereton J on [sic] Stolfa."
The complaint made under this ground was put this way during oral submissions by Mr Evans and Ms Robb Vujcic: "EVANS: We say it goes to an error of law by the appeal panel who placed a construction on s 65A reliant on the decision of Brereton J in Stolfa that s 65A required construction approval when that is not the effect of the decision in Stolfa by Brereton J and it is not a requirement of s 65A itself. … ROBB VUJCIC: The essence of the argument is that we're not challenging whether or not there was approval, the finding of approval, because I accept that that's a factual matter, the question is in the reasoning process that they adopted in arriving at that decision, was invalid because a view was taken of the Stolfa decision that separate construction approval was required in order to satisfy the requirements of s 65A, and which we say is a matter of law because it falls squarely on the proper construction of s 65A, and if they have misinformed themselves as to what 65A requires, then that is a question of law that we can bring before this Court."
It was submitted that s 65A in its terms does not require a lot owner to obtain approval from the OC to lodge a DA. Nor does it distinguish between authorisation to lodge a DA and authorisation to construct approved works. It was submitted that these might be ways in which an OC can indicate its approval, but it would be wrong to import a requirement into s 65A(1) requiring one or other of these steps as, for example, not every alteration/addition/erection will require a DA. On this basis, it was submitted that the only question is whether, as a matter of fact, the taking of a particular action to alter or add to the common property is authorised.
It was further submitted that the Appeal Panel erred by focussing on the authorisation to lodge a DA in contrast with an authorisation to commence construction, rather than asking if, in the process of the plaintiffs' seeking authorisation to lodge a DA, the OC had in fact given specific authorisation sufficient for s 65A.
It was suggested that "the Tribunal" was influenced by the decision in Rothwell Boys at [37]-[39], to the effect that a DA does not carry with it permission to enter onto another's land and begin construction. It was submitted that it is an error to import the limitations that apply to DAs into s 65A in that the question is not: what does a DA allow the applicant to do but rather: did the OC authorise the particular action?
It was accepted that the Appeal Panel made no reference to Rothwell Boys, but reliance was placed on the fact that Senior Member did. It was submitted that both the Senior Member and the Appeal Panel relied on Stolfa for the proposition that specific "construction authorisation" was required to satisfy s 65A, but that in fact Brereton J "does not go so far".
In the plaintiffs' submission, on the facts in Stolfa, the OC "had a practice of authorising construction", and Brereton J found that, consistent with this practice, construction approval had been given by the OC in that case. But his Honour did not hold that s 65A itself requires "specific construction approval", and "[i]t does not follow from his Honour's reasoning that specific construction approval is required in all cases". It was submitted that to import that requirement into s 65A is an error of law.

[30]

Consideration: Ground 3

I am not satisfied that this ground raises a question of law. The plaintiffs' suggestion that the Appeal Panel erred in its reliance on Stolfa is misplaced. I do not accept that the Appeal Panel misapprehended the legal test set out in s 65A(1) of the 1996 Act by proceeding on the basis that the words "specifically authorises the taking of the particular action proposed" require the OC to authorise the commencement of construction. Rather, I am satisfied that the plaintiffs seek to relitigate the factual question as to whether a special resolution was passed at the 30 August 2004 meeting which is a question of mixed fact and law. The references to Stolfa are simply permissible factual comparisons to show that 65A was not satisfied in this case.
The dispute in Stolfa concerned a series of works carried out in relation to the common property of a three-level residential unit building in Bellevue Hill, arising out of dealings in 2006 and 2007. At the relevant time, unit 1 (the uppermost level) and unit 3 (the lowermost level) were owned by members of the same family and unit 2 (the middle level) was owned by the Stolfas, who brought proceedings against the OC and the owners of units 1 and 3 concerning works carried out on the common property by the owner of unit 3. There were two separate aspects of those works; some work was undertaken in the void and a verandah was also enclosed.
Relevantly for present purposes, Brereton J considered the scope of s 65A and its interaction with other provisions in Chapter 3 Part 2 of the 1996 Act, in particular s 62, which concerns the obligations of the OC in relation to repairs to common property (see extracted above at [23]) His Honour described the scope of s 62 at [63] and went on to describe the scope of s 65A at [65] as follows: "[65] Section 65A(1) provides that, for the purpose of enhancing or improving the common property, an owners corporation or an owner of a lot may add to or alter the common property, or erect a new structure on the common property, but only if a special resolution has first been passed at a general meeting of the owners corporation that specifically authorises the taking of the particular action proposed." (Emphasis in original.)
His Honour went on to find that the void works were "repair" for the purposes of s 62. He then considered the enclosure of a verandah located on common property at the rear of unit 3. The plaintiffs contended that the works had not been duly authorised and claimed injunctive relief to prevent further construction and to reinstate the verandah to its original state. At [93]-[97], Brereton J found against the plaintiffs in relation to the relief sought in respect of the verandah works for these reasons: "[93] … There was no construction approval given contemporaneously with, or after, approval of the final version of the plans. The earlier construction approval must therefore have been considered operative in respect of whatever plans were later approved for the subject works. This point is telling - against the Stolfas - because it is indistinguishable from what happened with the Unit 3 verandah. The 20 December 2006 resolution gave approval to Unit 3 enclosing the attached verandah. That was an approval to construct the enclosure of the verandah, in accordance with whatever plans might subsequently be approved. [94] The requirement imposed by s 65A for specific authorisation of the taking of the particular action proposed does not mean that such authorisation must be found in a single resolution, nor that it relate to particular plans, nor that it admit of no variation in implementation. It means that a general authorisation to alter common property will not suffice. But a resolution authorising enclosure of a particular verandah is a specific authorisation of particular action, even if it does not specify the precise plans and building materials to be used. … [96] Accordingly, in my view, the unanimous resolution of 20 December 2006, giving 'approval … to Lot 3 to enclose the attached verandah at a future time', provided the requisite specific authority under s 65A for the Unit 3 verandah works, particularly when coupled with the resolution of 15 May 2007 to 'approve amended plans for Lot 3 as tabled and witnessed by all persons present [and] approving their lodgement with Council'."
An appeal against the decision of Brereton J was dismissed by the Court of Appeal. Allsop P (with whom Basten and Young JJA agreed) stated this in respect of the verandah works and the construction of s 65A at [30]-[33]: "[30] Section 65A calls for a special resolution that 'specifically authorises the taking of the action proposed.' It will be a question of fact or mixed fact and law in each case whether any given special resolution or special resolutions is or are adequate in its or their specificity of authorisation and in its or their particularity as to the action proposed. There is obviously a clear policy in requiring direct and specific attention to the proposed action; at the same time, an overly pedantic attention to detail might frustrate otherwise clear authorisation. Common sense and reasonableness have their part to play in the operation of a provision intended to regulate how people go about dealing with the common property in their units in everyday life. [31] It was suggested in argument that s 65A did not permit the specific authorisation to be found in more than one special resolution. I do not agree. There is no reason why s 8(b) of the Interpretation Act 1987 (NSW) would not operate to include the plural in the singular. Of course, if a number of resolutions are relied on, that may create either confusion or lack of clarity such that it might not be able to be said that the resolutions 'specifically authorised, the taking of the particular action proposed'. [32] Without unnecessarily repeating the matters relied on by the primary judge, the following is to be noted: (a) Before 20 December 2006, Mr and Mrs Stolfa signed plans for Unit 3 that referred to 'masonry private screens' … (b) On 20 December 2006, separate resolutions concerning Unit 3 and the lodgement of DA Plans were passed. The two resolutions read: 1. Lot 3 verandah: RESOLVED that approval is given to Lot 3 to enclose the attached verandah at a future time. 2. DA Plans Lodgement: RESOLVED that the amended plans (which form part of these minutes - labelled Annexure A, B & C) showing the lengthening of the proposed balconies and the screening to same are approved for submission to Woollahra Council. Annexures A, B and C were plans for Units 2, 3 and 1, respectively. Annexures A and C (dealing with Units 2 and 1, respectively) had 'timber louvred privacy screen' typed and an arrow indicating the sides of the enclosed verandah. Annexure B (dealing with Unit 3) had no such writing and a slightly different line structure. (c) The resolutions on 20 December 2006 were in the context of the facts set out in [87] of the primary judge's reasons. (d) On 18 January 2007, an extraordinary general meeting approved plans for Unit 3 (signed by Mr Stolfa) for submission to Woollahra Council which plans had unbroken dark lines on the side of Unit 3's verandah … The special resolution on 15 May 2007 concerning Units 1 and 3 was in the following terms: 5. Amended plans Lots 1 & 3: RESOLVED that the amended plans as tabled (a copy of which form part of these minutes) are approved and are witnessed by all persons present approving their lodgement with Woollahra Municipal Council by signing all amended plan pages. This was not just a resolution approving lodgement with council. The plans '[were] approved' as a separate and distinct part of the resolution. In the context of the conduct of affairs by this owners corporation discussed by the primary judge at [90]-[93] set out above and in the context of the resolutions in the months before, this was an approval to act on the plans, once council had approved them: that is, build to those plans. Those plans were accurately described by the primary judge at [89] of his reasons. [33] In my view, while the 20 December 2006 special resolution taken alone may not have been adequate authorisation for any form of enclosure of the Unit 3 verandah, it was clear authorisation to enclose it. The 15 May 2007 special resolution was authorisation to enclose in the form of the Unit 3 plans. That was sufficient, as a matter of fact, to amount to authorisation to enclose by those plans. That is what occurred. Section 65A was satisfied. The primary judge was correct so to conclude."
In the context of these decisions, complaint is now made regarding the manner in which both the Senior Member and the Appeal Panel relied upon the Stolfa decisions. I have extracted the Senior Member's conclusion that no special resolution was made above at [141]. It was a conclusion stated to be one of both fact and law. I am satisfied that the plaintiffs have misapprehended the significance placed by her on the Stolfa decisions. In fact, her reasons (extracted above at [46]) disclose that she made her decision based on the following: 1. First, that the grant of a DA assures compliance with the EPA Act and is separate and distinct from approval by the owners to build in accordance with council approved plans. That is a correct statement of the relevant provisions. 2. Secondly, there was no authorisation by the OC to take a particular action other than to authorise the lodging of a DA. Again, on it is terms, that is a correct description of the special resolution passed. 3. Thirdly, the Senior Member noted that the OC had reminded the McDonnells in writing in 2010 and 2012 that it was yet to receive an exclusive use by-law which was a prerequisite for approval by the OC; hence the McDonnells could have been under no doubt that approval had not been granted.
After providing those reasons for her decision, the Senior Member went on to state that the authority of Stolfa relied upon by the McDonnells did not assist them as that case was factually different. It was noted that in that case clear approvals were given for particular works, referred to on the plans in relation to the enclosure of two verandahs. She then stated this: "The facts are distinguishable". Those distinguishable facts included that in Stolfa the plans were approved as a separate and distinct part of the resolution which was actual approval to act on the plans and, once council had approved them, to build to those plans. Significantly, the Senior Member then stated: "Clearly the facts in the instant case are distinguishable in this material respect, the plans were not put to the owners corporation for approval by special resolution."
The Senior Member then extracted [33] from the Court of Appeal decision in Stolfa (above at [46]).
Similarly, the Appeal Panel's reliance on the decision of the Court of Appeal in Stolfa was to distinguish it on it is facts and to note that on the facts of Stolfa, the relevant plans were approved as a "separate and distinct part of the resolution and" in the context and "including the resolutions passed in the months before". Significantly, the Appeal Panel cited [32] of the decision of Allsop P in Stolfa as follows: "It will be a question of fact or mixed fact and law in each case whether any given special resolution or special resolutions is or are adequate in its or their specificity of authorisation and in its or their particularity as to the action proposed."
The Appeal Panel went on to state that additional support for a conclusion that approval from an OC to lodge a DA is distinct from approval to carry out the work is to be found in the decision in Pham at [38]-[39]. Again, I am satisfied that the finding was one of fact made by the Appeal Panel on the terms of the resolution itself.
The only other reference to Stolfa by the Appeal Panel was in the context of addressing the McDonnells' contention under ground 1 that the Senior Member erred in making the factual finding that the plans for the new storey above Lot 5 were not "before" the OC at the relevant time. In dismissing ground one, the Appeal Panel noted (at [43]) that even if they had been there was still no authorisation to do the actual work the subject of any such plans. This is apparent from the terms of the resolution, but the Appeal Panel also noted in support of the Senior Member's factual conclusion that there was no "construction approval", as described by Brereton J in Stolfa. The Appeal Panel went on to note that there was no separate and distinct approval by the members of any plans, as referred to by the Court of Appeal when they discussed the resolutions made in that case on 15 May 2007.
Neither the Senior Member nor the Appeal Panel based their factual decision that no special resolution was passed by misreading Stolfa as being authority for the proposition that a construction certificate was required in order for there to be the relevant authorisation under s 65A. Rather, the decisions in Stolfa were distinguished on their facts and the finding that there had not been a special resolution as required under s 65A was made on a number of factual bases as set out above.
No legal or factual error is disclosed under this ground.

[31]

Ground 4: Question of fact

As stated above, I have already considered part of ground 4 with ground 1. I have also considered part of it under ground 3 to the extent that complaint is made that the Senior Member and Appeal Panel construed the special resolution as requiring a construction certificate. I do not accept that submission. "Question 4" in the plaintiffs' written submission raised a new argument which raises a question of fact.
Both the Senior Member and the Appeal Panel found, as a matter of fact, that the relevant plans were not before the OC at the 30 August 2004 meeting. Reliance was placed on the fact that on that same day the OC Secretary sent a letter to Waverley Council authorising the lodgement of "a development application for alterations and additions to lot 5 by drawings 719/1 MB and 2MB". That fact was common ground. The letter in its terms was extracted in both the reasons of the Senior Member and the Appeal Panel.
It is now submitted that the Senior Member and the Appeal Panel did not have regard to the explicit reference in the letter to the alterations and additions "by drawings 719/1 MB and 2MB", which, it was submitted must be considered specific authorisation to take particular action. It was also submitted that the OC's failure to sight the DA plans at the AGM is not legally relevant and means nothing more than that it did not avail itself of the opportunity to learn exactly what it was authorising. The plaintiff's complaint is that the OC failed to inform itself adequately of the particular action that the appellants wished to take but that in fact the building onto common property was in fact authorised.
Under this reiteration of ground 4 it was submitted that the Senior Member and the Appeal Panel erred in construing the 2004 resolution as only authorising the lodgment of a DA when it fact it also authorised the taking of action (being to "add a storey above Lot 5"). It was said that this challenge to the factual finding was a question of law as it was based on an erroneous interpretation of the requirements s 65A.
From the outset of these proceedings the central question has been a factual one: was a special resolution passed at the 30 August 2004 AGM. The Senior Member was not satisfied there was. Nor was the Appeal Panel. That was a finding of fact or arguably, one of mixed fact and law. Either way, it is not a finding that can be challenged in this court. Although that is not accepted by the plaintiffs, grounds 3 and 4 attempt to do so.
Further, this new argument suffers from the same hurdle as ground 2 in that it is a complaint about the decision of the Senior Member which was not raised in the internal appeal to the Appeal Panel. Nor was leave sought to amend the summons to add this complaint as a separate ground.
In the event that I am wrong and this new argument does in fact arise from ground 4, it raised a question of fact in any event. Both the Senior Member and the Appeal Panel were satisfied that the plans were not before the August 2004 AGM. The finding is now challenged on the basis I have just outlined. This complaint re-agitates the central dispute between the parties which concerns the scope of the 2004 special resolution.

McDonnell v The Owners - Strata Plan No 64191

At a glance

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Judgment (35 paragraphs)

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Legislation Cited (9)

Cases Cited (32)

Cited By (1)