Owners Corporation Strata Plan 7596 v Risidore & Ors

LOWER COURT Consumer, Trader & Tenancy Tribunal JURISDICTION : LOWER COURT SCS 03/10030 FILE NUMBER(S) : LOWER COURT Member Moore JUDICIAL OFFICER :

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION

11129 of 2003 Owners Corporation Strata Plan 7596 v Neil Risidore & Ors

JUDGMENT 1 MASTER: These proceedings were commenced by Summons filed on 9 May 2003. The plaintiff seeks to bring an appeal against an interim finding made by the Consumer, Trader and Tenancy Tribunal (the Tribunal). The finding was as follows:- " 1. The applicant is not entitled to rely on additional expert evidence which was not available to the owners corporation at the time of it refusing the respondent's application to carry out certain alterations to the common property. "

The finding was made at a directions hearing held in an appeal brought to the Tribunal against an order made by an adjudicator. The plaintiff had sought directions for the filing of two expert reports which were then being obtained. The defendants opposed the admissibility of such expert evidence. 2 It is common ground that an appeal lies by way of leave where there is error of law. By consent, the application for leave and the appeal itself were heard together. 3 The defendants are the owners of Lot 14 in the relevant Strata Plan. There are 64 lots. The building is known as Gainsborough. It is at Kirribilli. 4 The defendants wish to make alterations to their lot. The question of the making of the proposed alterations was considered at an Extraordinary General Meeting of the plaintiff held on 7 August 2002. The motion was overwhelmingly defeated. The end result was that it was not specially resolved to make the proposed additional by-law. This has been treated as a refusal of consent to the proposed alterations. 5 A request was made for an order by an adjudicator pursuant to Pt 4 Div 1 of the Strata Schemes Management Act 1996 (the Act), (which is headed "General power of Adjudicator to make orders") and subsequently an adjudication took place. 6 The defendants put before the adjudicator certain expert material (four documents) which came into being after the meeting. Three of those documents did not come to the attention of the plaintiff until after the adjudicator had made his decision. Accordingly, it was not afforded an opportunity to put its case in relation to that material. It is not in dispute between the parties that the adjudicator took this material into account in reaching his decision. 7 The adjudicator found that the refusal of the plaintiff to the defendant's proposal was unreasonable. He then made orders pursuant to s 140 of the Act. 8 The plaintiff then brought an appeal pursuant to Pt 4 Div 12 of the Act (which is headed "Appeals against orders of Adjudicator"). The Tribunal was asked to set aside the decision that was made by the adjudicator. This relief was sought on grounds which asserted that the plaintiff did not unreasonably refuse consent. 9 Subsequent to the making of the interim finding in that appeal, the plaintiff brought the proceedings in this Court. The plaintiff cannot bring an appeal unless leave to do so is first granted. 10 Before determining whether or not leave should be granted, it is convenient to first look at the question of the merits of the proposed appeal. This is a question that has been argued at some length and has seen the court being taken to various provisions of the Act and certain decided cases (including Paris v The Owners Strata Plan 16973 [1998] NSWSSB 12; Chomyn v Owners Corporation SP 14801 [2001] NSWRT 194 and McCann v The Owners SP 11318 [1998] NSWSSB 44). 11 The orders that may be made by an adjudicator in relation to property are set forth in s 140. For present purposes subs (1) thereof is the relevant provision. It enables an adjudicator to order an Owners Corporation to consent to work proposed to be carried out by an owner if the adjudicator considers that the Owners Corporation has unreasonably refused its consent. 12 In my view, this provision makes it clear that the question for determination by the adjudicator in the present case was whether or not he considered that the Owners Corporation had unreasonably refused its consent. 13 It seems to me that that is a question which falls to be determined having regard to the state of affairs in existence at the time of the refusal of consent. In considering that question, regard should not be had to material that came subsequently into existence. The taking into account of the subsequent material would involve the adjudicator in embarking on a fresh consideration in the light of material that was not before the decision maker. The adjudicator would not then be addressing the relevant question. 14 It is common ground that appeals against orders made by the Tribunal are governed by Part 5 Division 3 of the Act and not the appellate provisions contained in the Consumer, Trader and Tenancy Tribunal Act 2001. 15 For present purposes, the plaintiff places stress on provisions contained in ss 181 and 186 of the Act. Section 181 enables the Tribunal to admit new evidence. Section 186 contains inter alia the following provisions:- " 186. Investigations and proceedings before the Tribunal

(1) Before making an order (except an order for a stay of proceedings), the Tribunal must investigate the application for the order or, in the case of an appeal, the grounds for the appeal.

(2) In any such investigation or in any proceedings before it for an order, the Tribunal: (a) is not bound by the rules of evidence and may inform itself on any matter in such manner as it thinks fit, and (b) must act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms. (3) The Tribunal need not hold a hearing in order to decide an application or appeal unless there is an appearance by a person entitled or required to appear before it.

(4) A hearing need not be formal." 16 Considerable argument has been devoted to questions touching on the nature of the appeal before the Tribunal. For the purposes of this case, it does not seem to me to be necessary to embark on a determination of all these matters. 17 It is common ground that it is an appeal de novo. What that means may be the subject of debate. The plaintiff sees this appeal as being wider in scope than the adjudication. It contends that the jurisdiction of the Tribunal is to conduct a review on the merits of the question of whether or not the defendants should be allowed to carry out the proposed alterations. The defendants say that this appeal is limited to the question that was before the adjudicator. 18 In my view, the latter approach is the correct one. What is before the Tribunal is an appeal from the adjudication. The relief sought by the plaintiff in the appeal was the setting aside of the decision of the adjudicator. This relief was sought on the basis that the plaintiff did not unreasonably refuse its consent. 19 It seems to me that the question which is the subject of the appeal in this case is determinative of the ambit of the evidence that may be placed before the Tribunal. 20 The Tribunal has a discretionary power to admit new evidence. This is a power exercised having regard to the issues that are before it and the other particular circumstances of the case. 21 Appellate and reviewing bodies usually have a power to admit further evidence (either expressly or by implication). There is a body of case law dealing with the question of what may be received. 22 The plaintiff relies on observations to be found in McCann. They relate inter alia to the provisions of s 186. They were said to reflect a change in approach to that taken in the earlier decisions of Paris and Chomyn (which had been followed by the Tribunal). 23 It does not seem to me that such is the case. Be that as it may, the provisions of s 186 make it clear that investigation must take place before the making of an order and that a hearing must be had where there is the requisite appearance. 24 Subsection (2) of s 186 enunciates how the Tribunal may or must apply itself in the course of dealing with the appeal before it. 25 The defendants concede that the fresh material should not have been placed before the adjudicator and that to such extent his decision is thereby flawed. The plaintiff may well have a good case for the setting aside of the adjudicator's decision on the basis that he took into account extraneous material and that he did not afford procedural fairness. I say no more on these matters as they remain for determination by the Tribunal. 26 As earlier said, I am of the view that the additional expert evidence sought to be relied on by the plaintiff was not relevant to the question before the Tribunal. Accordingly, the plaintiff has failed to satisfy the court that there was error made in respect to the interim finding. 27 This decision means that the appeal must fail. Therefore, it would be futile to grant leave. 28 The prospects of the granting of leave are also beset by other problems. The finding made by the Tribunal came at an early stage in the appellate process and was restricted to a question of the admissibility of evidence. Instead of bringing the present proceedings, it was open to the plaintiff to bring an appeal on all grounds after the Tribunal had made its final decision. 29 A large body of appellate work comes to this Court both from the Tribunal and other bodies. It is experiencing great difficulty in handling the present volume of work. The volume has been increasing and is expected to continue to do so unless legislative changes are made. In this context, the court is loath to exacerbate these problems by granting leave to appeal on interim questions or questions concerning rulings on the admissibility of evidence during the conduct of an appeal. 30 The application for leave is refused. The Summons is dismissed. The plaintiff is to pay the costs of the proceedings. The Exhibit may be returned.

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