This is an application (Application) originally brought by Park Regis CTC Pty Ltd (First Applicant) against 'The Owners-Strata Plan No 3397' (Respondent) pursuant to various sections of the Strata Schemes Management Act 2015 (NSW) (Act). The correct identity of the body corporate and respondent for the purposes of the Application appears to be this depiction although there have been various other iterations in correspondence, submissions and in the Application itself - see s 8 of the Act.
The Act applies to all strata applications lodged in the Tribunal after 30 November 2016. This application was lodged on or about 17 February 2017 although it relates to events which occurred before that date.
The various sections of the Act under which relief is sought in the Application include, but are not limited to, ss 149, 150 and 232.
At the commencement of the hearing clarification was sought by the Tribunal and by the Respondent as to the precise relief that the First Applicant was seeking in the Application. The Application dated 16 February 2017 had become superseded both by correspondence between the parties and by the First Applicant's written submissions dated 13 June 2017 at the hearing.
The Application itself gave little indication of the precise relief that the Applicant sought, the basis for seeking it or whether the Tribunal may have jurisdiction to provide it. The Application, under the section titled '4A What Orders Do You Want', stated 'SEE ATTACHED' and then attached approximately 200 pages of copied material including strata invoices, a Court of Appeal decision, a lift maintenance agreement, invoices purportedly issued pursuant to that agreement, communications between the parties and details of a mediation of the parties at Fair Trading in February 2017. There was little or no commentary to link these documents or highlight issues although a letter dated 16 February 2017 from StayWell Hospitality Group to NSW Fair Trading which was in that bundle provided some focus and direction.
Also, at the commencement of the hearing the Respondent raised issues about the jurisdiction of the Tribunal to provide some of the relief which the First Applicant sought, the First Applicant's standing to seek the relief that it did and clarification around the precise relief to which the First Applicant - subject to jurisdiction and standing - may be entitled.
In order to guide these Reasons for Decision, and to understand the Application as it was finally made, I first extract the relief sought in the First Applicant's written submissions dated 13 June 2017 which were handed up at the commencement of the hearing and which encapsulated the First Applicant's final relief sought at the hearing, namely:
1. a declaration that the owner of Lot 1 of Strata Plan No 3397 has paid all costs payable pursuant to Special By-Law 21;
2. a declaration that the owner of Lot 1 of Strata Plan No 3397 was financial as at the date when the annual general meeting of Strata Plan No 3397 was held on 29 November 2016 and resolutions 16.1, 16.2A, 16.3A, 16.4, 16.5A and 16.6 the subject of that meeting were validly passed;
3. that the Respondent pay to the First Applicant an amount equivalent to 19.382% of the costs the Respondent paid pursuant to order 5 of the orders made by the New South Wales Court of Appeal in the New South Wales Court of Appeal Proceedings No. 40921 of 2005;
4. that Special By-Law 21 be repealed pursuant to s 149(1)(c) of the Act on the basis that it is unjust;
5. in the alternative to paragraph 4 above, Special By-Law 21 be amended in accordance with Schedule 1 to these submissions pursuant (sic) s 149(1)(c) of the Act on the basis that it is unjust;
6. that the Respondent pay the Applicant's costs of the proceedings.
At the commencement of the hearing, the Respondent sought to be heard on the relief as it was finally formulated by the First Applicant in its written submissions as well as on the issues of jurisdiction and standing. These issues, a consideration of which occupied approximately 1-2 hours of the Tribunal's hearing time that morning with submissions from the First Applicant's solicitor and the Respondent's senior counsel, led to the outcomes listed below which were either agreed between the parties or ordered by the Tribunal as the basis upon which the hearing of the Application would proceed. For good order, the Tribunal records below a summary of those outcomes:
1. As a result of the Respondent's assertions that the First Applicant did not have standing to pursue orders (1) and (2) because it had sold its interest in Lot 1 of Strata Plan No 3397 on or about 20 December 2016, leave was given to One Funds Management Ltd ACN 117 797 403, the current and subsequent registered proprietor of Lot 1, to join in the Application as Second Applicant (Second Applicant);
2. The order in (3) regarding payment of an amount of costs in the Court of Appeal was not pressed;
3. The order in (5) to the extent it seeks an order prescribing a change to Special By-Law 21 pursuant to s.149(1) of the Act in accordance with the form of by-law in Schedule 1 to the First Applicant's written submissions was objected to by the Respondent on the basis that first, no prior notice of this form of alternative by-law had been provided to it for today's hearing and secondly, there was no explanation of the methodology or calculation of the percentage figures used in paragraphs 21(2)(a) or 21(2)(b) of that alternative form of by-law. The Respondent claimed that it could not address these issues 'on the run' and during the hearing, and ultimately the First Applicant did not press this aspect of the relief.
4. The order in (5) to the extent that it seeks an order declaring Special By-Law 21 to be invalid because it was harsh, unconscionable or oppressive pursuant to s.150 of the Act, was not pressed. I say 'to the extent' because on its face the First Applicant's written submissions do not expressly address this issue although the Respondent's written submissions do (paras. 31-33), apparently as a result of this issue being raised by the First Applicant in correspondence between the parties. The parties ultimately agreed that neither the First Applicant nor Second Applicant had standing for such relief and it was not pressed.
In order to better understand the basis of the relief sought in the Application before the Tribunal, it is necessary to review some of the previous history of Special By‑Law 21 in the Court of Appeal.
[2]
Common background
Strata Plan No 3397 comprises the whole of the building located at 27 Park Street, Sydney, NSW, 2000, being a basement, ground floor and approximately 42 upper floors. The building is served by 4 lifts. The Park Regis building is one of Sydney's older strata schemes.
Leisure Inn Hospitality Management Pty Ltd operates a 1 to 2 room private hotel occupying 10 accommodation floors (plus 2 part floors of parking, ground floor reception and some storage areas) within the Strata Plan (Hotel).
The First Applicant was the owner of Lot 1 in the Strata Plan, from which the Hotel is operated, from about 2004 until 20 December 2016 when it sold its freehold interest in Lot 1 to the Second Applicant for consideration of $38,000,000.00.
The balance of the floors in the Strata Plan contains residential strata apartments which are either owner‑occupied or tenanted.
The unit entitlement of Lot 1 in the strata scheme is 1,004 units out of the aggregate of 5,180 units which equates to 19.382% of the total unit entitlement. Lot 1 comprises:
1. a storage area at basement level;
2. an area on street level;
3. car parking spaces on levels 2 and 3; and
4. hotel accommodation on levels 6‑15.
From the Strata Plan, it is evident that Lift 4 served only the basement, ground floor, levels 2, 3 and 6‑15 of the building. In other words, the Hotel is essentially served by lifts 3 and 4.
[3]
Special By-Law 21
On 17 July 1989 the Respondent passed a resolution to make Special By‑Law 21 in the following terms:
Special By-Law 21
"The proprietor for the time being of Lot 1 shall be entitled to the exclusive use and enjoyment of the lift known as Lift No. 4 on the following terms and conditions:-
(i) the Body Corporate shall be responsible for the proper maintenance and keeping in a state of good and serviceable repair and the cleaning, replacement and running costs of the lift;
(ii) such proprietor shall pay to the Body Corporate such sums as are identified to it by the Body Corporate for the repair, maintenance, renewal, replacement and running costs of such lift such costs being:
(a) those attributed directly to Lift No. 4;
(b) one quarter of the costs attributed to the running and routine maintenance, servicing and repair of the lift system.
(iii) such proprietor shall not cause or permit any lift mechanic or maintenance contractor to interfere with the operation of the lift or carry out any repairs, maintenance, renewal or replacement unless that mechanic or contractor is approved or retained by the Body Corporate."
On 8 November 1989 Special By‑Law 21 was registered in accordance with the provisions of s 58(7) of the Strata Titles Act 1973 (NSW).
The intention of Special By‑Law 21 was to give the proprietor of Lot 1 (and therefore the Hotel) exclusive use of and enjoyment of Lift 4 on the terms and conditions set out above.
[4]
Court of Appeal
The interpretation and effect of Special By-Law 21 has already been the subject of detailed consideration by the New South Wales Court of Appeal in The Owners of Strata Plan No. 3397 v Tate [2007] NSWCA 207.
The Court of Appeal's conclusions as to the origin, reasons and practical effect of Special By-Law 21 are expressed by Harrison J (Mason P and McColl JA agreeing) in the following terms:
"120. Nothing in the terms of the by-law and nothing in the Act, relieve either the body corporate of its obligation to meet the costs of repair, maintenance, renewal, replacement and running for the remaining three lifts, or the proprietor of Lot 1 of its obligation to continue to contribute its proportionate share of such costs of the remaining three lifts, in accordance with levy notices issued by the body corporate from time to time for this purpose. In my opinion, this meant that the (proprietor of Lot 1) became and remained liable for the payment of both 25 per cent of the costs of the lift system for the building in accordance with Special By-Law 21 as well as his proportion at 19.382 per cent of the remaining 75 per cent of such costs as one of several proprietors in the Owners Corporation."
It is unusual that the precise by-law of a strata scheme which is in dispute in the Tribunal has been given consideration by an earlier decision of an appellate court. But that decision and its practical application not only guide the Tribunal but are binding upon it both in principle and in a number of material considerations in this Application.
There are also a number of statements of the Court of Appeal that are relevant to the Application. There was no evidence before the Tribunal as to the intention of the relevant parties when Special By-Law 21 was passed or of the commercial circumstances which nurtured its creation or of any benefit that it created for the then proprietor of Lot 1. No evidence of this was available in 2007 for the Court of Appeal's consideration, nor in the preceding District Court action in 2005 from which the Appeal arose. But Justice Harrison commented in the following terms:
'116. When one has regard to the circumstances in this case, in my opinion they include, and persuasively suggest, that the proprietor of Lot 1 at the time when the by-law was formulated was demonstrably intent upon converting an informal, exclusive use of Lift 4 into a legal and enforceable right to the same thing. The disadvantages of the former, and the significant advantages of the latter, seem to me to be so obvious as to require no elaboration. The readjustment and entrenchment of the right of exclusive use and enjoyment of Lift 4 by the proprietor of Lot 1 was patently valuable to that proprietor, particularly having regard to the type of business conducted at those premises (a hotel). The payment of a price to secure it, over and above the proportionate cost of maintaining Lift 4, would appear to me, as a matter of "common sense", to conform to "a commercial, businesslike" approach.'
There was no material evidence led by the First Applicant in the Application as to why this commerciality had changed since 1989. Rather the First Applicant's complaints centred around the calculation of expenses under Special By-Law 21 since Strata Plan No 3397 executed a Maintenance Agreement for Elevators, Escalators and Moving Walks dated 19 April 2006 with Otis Elevator Company Pty Ltd (Maintenance Agreement). The First Applicant claimed that Strata Plan No 3397 misapplied the Court of Appeal's judgment in the methodology of calculation of the expenses due by Lot 1.
In questioning before the Tribunal it became apparent that the First Applicant had made unsuccessful attempts to persuade the members of the body corporate to rescind or amend Special By-Law 21 at a general meeting.
For clarity and to assist in the Tribunal's consideration of this dispute, the Court of Appeal stated that as a result of Special By-Law 21, there were effectively three separate heads of payment that the owner of Lot 1 was required to make to the strata scheme:
1. First, all of those costs attributed directly to Lift No.4 - (Special By-Law 21(ii)(a);
2. Secondly, one quarter of the costs attributed to the running and routine maintenance, servicing and repair of the lift system (excluding the costs attributable to Lift No.4 which Lot 1 had already paid) - (Special By-Law 21(ii)(b)); and
3. Thirdly, 19.382% contribution to the usual statutory charges and expenses of the strata scheme in the ordinary course, as nothing in Special By-Law 21 excuses Lot 1 from its legal obligations to contribute to the costs of the strata scheme pursuant to the Strata Schemes Management Act 1996 which was succeeded by the Act in November 2016.
[5]
First Applicants' evidence
The First Applicant relied upon:
1. affidavit of Richard Robert MacFie Doyle dated 3 April 2017 (Doyle Affidavit dated 3 April 2017)
2. affidavit of Richard Robert MacFie Doyle dated 7 April 2017 (Doyle Affidavit dated 7 April 2017);
3. affidavit of Troy Derek Newton dated 10 April 2017;
4. affidavit of Terence Martin Dwyer dated 10 April 2017;
5. affidavit of Richard Robert MacFie Doyle dated 13 June 2017.
The First Applicant's affidavits were tendered without objection and there was no cross‑examination of any of the First Applicant's witnesses by the Respondent.
[6]
Respondent's evidence
The Respondent relied upon:
1. affidavit of Marion Gale dated 9 June 2017; and
1. affidavit of Colin Cussio dated 9 June 2017.
The Respondent's affidavits were tendered without objection and there was no cross‑examination of any of the Respondent's witnesses by the Applicants.
[7]
Otis Maintenance Agreement
Strata Plan No 3397 executed a Maintenance Agreement for Elevators, Escalators and Moving Walks dated 19 April 2006 with Otis Elevator Company Pty Ltd (Otis) (Maintenance Agreement). Relevantly this predates the Court of Appeal's decision referred to above but pos-tdates the purchase of Lot 1 by the First Applicant.
The Maintenance Agreement contained several parts. Clauses 1-2 related to The Parties and Scope. Clauses 3 (Duration), 4 (Maintenance Fees) and 5 (Equipment Schedule) were headed Comprehensive Maintenance. Clauses 6-23 were headed General Conditions and Clause 24 was headed Special Conditions which included a Comprehensive Specification Schedule and Fee Adjustment Schedule.
Pursuant to Clause 3, the 'initial duration' of the Maintenance Agreement was 3 years commencing on 31 March 2006, then for successive 90 day periods until terminated as provided for in the Maintenance Agreement. There was no evidence that the Maintenance Agreement has ever been terminated by either party.
Pursuant to Clause 4, Otis provided Maintenance Services (as defined) and Strata Plan No 3397 agreed to pay the Maintenance Fee which was fixed for the initial period (3 years) at $13,063.75 plus GST per quarter.
Clause 5, Equipment Schedule, provided a description and specification of each of the four lifts in Strata Plan No 3397 by type, machine number, customer number, duty or weight, speed and price per quarter. Each of the four lifts was also allocated a price per quarter. In the case of Lift 4, this was $10,455.00. This sum was cheaper than any of the other lifts as Lift 4 was apparently lighter than Lift 3 but the same weight as Lifts 1 and 2, and the slowest of all the lifts - 2.50 mps as opposed to 3.50 mps for Lifts 1, 2 and 3. For completeness, the price per quarter for the other lifts was Lift 1 - $13,060.00, Lift 2 - $13,060.00 and Lift 3 - $15,680.00.
The Maintenance Fee in Clause 4 is no more than the payment quarterly and in advance of the sum of the price per quarter of the 4 lifts, divided by 4 to achieve an average figure quarterly figure.
Clause 8 stated that if Otis provided Strata Plan No 3397 with any maintenance, repairs or other services additional to the Maintenance Services these General Conditions shall apply and Strata Plan No 3397 shall be charged additional fees.
Scope in the Comprehensive Specification Schedule to the Maintenance Agreement included (d) regularly carry out performance checks, group systems checks and re-adjustments on the equipment; (e) clean rubbish from machine rooms, secondary floors, internal ledges, sills, separating beams of hoistway and elevator pits; (f) install standard commercial light tubes and globes in the hoistway, pit and motor room; and (g) provide any necessary modifications to the control system software designed to enhance the operation of the current features of the existing equipment. This suggested that at least some of the charges related to the whole of the lift system and not to specific lifts.
[8]
Applicant's complaints
The First Applicant complains of several miscalculations in respect of the lift costs payable by Lot 1.
First, the First Applicant submits that the costs payable by it under Special By‑Law 21 are any costs attributable directly to Lift 4 plus 39.25% of the costs attributed to the running and routine maintenance, servicing and repair of the lift system. 39.25% is arrived at as being the total of 25% pursuant to Special By-Law 21 and 19.382% of the remaining 75% as owner of Lot 1 (paragraph 26, First Applicant's written submissions).
This analysis accords with the second sentence of paragraph 120 of the Court Appeal judgment. However what has occurred over a period of time is that Lot 1 has been debited for any costs attributable directly to Lift 4 plus 19.382% of 100% of costs attributed to the running and routine maintenance, servicing and repair of the lift system (including in this again the costs directly attributable to Lift 4 and paid by Lot 1). This has resulted in "double dipping".
During the hearing of the Application before the Tribunal, Mr Sirtes SC for the Respondent acknowledged that this had occurred and that it was incorrect and not in accordance with the Court of Appeal judgment. Mr Sirtes indicated that an audit had occurred of all charges since May 2009 and that for the period May 2009 - August 2016 the sum of approximately $233,000 had been charged to the Applicant when the actual sum which should have been charged was $189.316.94.
The Tribunal was informed that during this period the First Applicant had only paid the sum of $71,199.02 leaving (by the Respondent's assessment) the sum of $118,117.92 unpaid by the First Applicant and outstanding.
This aspect of the issues in dispute appeared able to be resolved between the parties in discussions that had occurred prior to the hearing in the Tribunal and in the Respondent's written submissions handed up in the Tribunal (paragraphs 14-17).
On 6 December 2016 the Respondent issued an s 184 certificate pursuant to the Act stating that the First Applicant owed the Respondent $161,253.29 (Annexure A15 of the 3 April 2017 Doyle Affidavit - pp 341-342/400). The statement of account dated 6 December 2016 with a summary table of invoices was issued by the Respondent to the First Applicant that same day (Annexure A to the 3 April 2017 Doyle Affidavit - pp 1-10/400). It is clear that even if the amount conceded by the Respondent for the miscalculation of expenses relating to 'double dipping' in the lift system are credited to Lot 1, there is still a significant dispute about the balance of expenses which remain unpaid.
A second basis of dispute was outlined by the First Applicant in its oral submissions and which relate in part to the form of invoicing of Otis under the Maintenance Agreement.
The Maintenance Agreement has been on foot between Strata Plan No 3397 and Otis since April 2006, after Mr Tate had received his District Court judgment dated 17 November 2005 and but before that decision was largely overturned in the Court of Appeal in August 2007.
The best way to illustrate the First Applicant's second line of submissions in its Application is by reference to a specific tax invoice and statement. I have taken pp 27/400 - 30/400 in the Doyle Affidavit dated 3 April 2017. These two documents indicate first, the Otis quarterly tax invoice to Strata Plan No 3397 and then, the resulting strata levy tax invoice N494259 issued by Strata Plan No 3397 to the First Applicant.
Relevantly, the Otis tax invoice No. 1242366 appears to itemise the work undertaken on the lift system at Strata Plan No 3397 by reference to each of the four lifts. At least in respect of this invoice, there is no general maintenance charge for the lift system as a whole. The First Applicant submits that, in submitting invoices in this form generally throughout the disputed period from 2009-2016, there is no work to be done by Special By‑Law 21(ii)(b) as there are no costs to be attributed to the "running and routine maintenance, servicing and repair of the lift system". All of these charges have, in the form of invoices issued by Otis, been attributed to or absorbed by the individual lifts.
It is unclear how or why the invoices issued by Otis have come to be issued in that form and whether or not that was a result of a consideration of the Court of Appeal's judgment by Strata Plan No 3397. However to attribute the meaning sought by the Applicant to these invoices is, in the Tribunal's opinion, artificial and could be seen as an attempt to usurp the interpretation of Special By-Law 21 in the Court of Appeal's judgment. And without wishing to be disrespectful, the Applicants have a financial incentive in ensuring that as much of the maintenance work that is undertaken is allocated not to Lift 4 individually (where Lot 1 will pay 100%) but to the system generally (where Lot 1 will pay 25%).
A third submission made by the First Applicant in respect of the Otis invoices was that if, as invoiced by Otis, there are no costs to be attributed to the "running and routine maintenance, servicing and repair of the lift system", then the First Applicant should only pay charges specifically itemised for Lift 4 or 25% of the total amount of the Otis invoices earmarked for the four lifts, but not both. Again, this interpretation would appear to the Tribunal to be an attempt to usurp the interpretation of Special By-Law 21 adopted in the Court of Appeal judgment. If the First Applicant's submissions in this respect were correct there would be no "lift system expenses" to which Special By‑Law 21(ii)(b) applies - only for specific lifts to which all charges could be individually attributed. The Tribunal does not accept, as a matter of practicality or of interpretation, that this submission is correct as there must be some elements of the system - power, computer controls etc. - which are be common to all 4 lifts, or at least more than one of them. And occasional Otis invoices submitted to Strata Plan No 3397 suggest that not all lift expenses fall within the Maintenance Fee but are provided on demand and can be allocated to individual lifts.
A fourth submission by the First Applicant was that the Otis tax invoices issued to the Respondent mischaracterised and incorrectly attributed expenses of the lift system between individual lifts and the lift system generally. A bundle of 6 such invoices were tendered during the hearing from material produced to the Tribunal pursuant to a summons to produce documents (Exhibit A1) which appeared to support this contention. They were dated 27 March 2016, 19 November 2010, 24 October 2014, 11 May 2015, 25 July 2016 and 14 January 2011. The Tribunal notes that on a review of these invoices, they appeared to disclose both costs that were incurred on a single lift being attributed to the lift system generally, and the converse. Overall any analysis of them was inconclusive and any attempt to recast a decade or so of Otis invoices in more precise terms that aligned with Special By-Law 21 seemed impractical and unlikely to result in agreement.
I turn now to the relief sought in the Applicant's written submissions outlined at paragraph 7 above and deal with each head of relief in turn:
[9]
A declaration that the owner of Lot 1 of Strata Plan No 3397 has paid all costs payable pursuant to Special By-Law 21
The Tribunal is unable to provide the declaration sought by the Applicants because first, the Tribunal does not possess the necessary declaratory jurisdiction required to do this and secondly, even if this is incorrect, to do so would, in the opinion of the Tribunal, usurp the judgment of the Court of Appeal already made which is not open to the interpretations of Special By-Law 21 put forward by the Applicant at this hearing.
Even if the reassessment of charges in relation to the lift system outlined in paragraphs 41-42 is correct, the calculations provided to the Tribunal during the hearing suggests that there is still a significant sum of outstanding expenses relating to the lift system in dispute and which have not been paid by the Applicant. The lack of an expert accountant's report with calculations detailing the factual assumptions that the Applicants have relied upon to arrive at a final figure - and to which the Respondent has had time to consider and respond - means that the Tribunal is unable to determine that sum with any precision.
For these reasons, the Tribunal declines to make such a declaration.
[10]
A declaration that the owner of Lot 1 of Strata Plan No 3397 was financial as at the date when the annual general meeting of Strata Plan No 3397 was held on 29 November 2016 and resolutions 16.1, 16.2A, 16.3A, 16.4, 16.5A and 16.6 the subject of that meeting were validly passed
For the same reasons as outlined in paragraphs 53-55 above, the Tribunal declines to make this declaration.
[11]
The Respondent pay to the Applicant an amount equivalent to 19.382% of the costs the Respondent paid pursuant to Order 5 of the Court of Appeal Judgment
This order was not pressed by the Applicants.
[12]
Special By-Law 21 be repealed pursuant to s 149(1)(c) of the Act on the basis that it is unjust
Relevantly, s 149(1)(c) of the Act states:
"(1) The Tribunal may make an order prescribing a change to a by-law if the Tribunal finds:
…
(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."
The Applicants sought in the Application in the alternative to Special By-Law 21 being repealed, that it be amended or varied in accordance with a draft (Schedule 1) which it has annexed to its written submissions but apparently abandoned this alternative aspect of relief early in the hearing (see paragraph 7(3) above).
Pursuant to s 149(c) of the Act, only "interested persons" can apply to a Tribunal for such an order. Section 226 of the Act defines "interested person" as:
"(a) the owners corporation,
(b) an officer of the owners corporation,
(c) a strata managing agent for the scheme,
(d) an owner of a lot in the scheme, a person having an estate or interest in a lot or an occupier of a lot,
(e) if the strata scheme is a leasehold strata scheme, the lessor of the scheme."
The First Applicant is the former owner of Lot 1 in SP No 3397. The Second Applicant is the present owner of Lot 1. Only the Second Applicant therefore has standing in respect of this aspect of the Application to seek relief.
The Tribunal does not on the evidence before it consider Special By-Law 21 to be "unjust". There are a number of reasons for this. First, the Court of Appeal in its judgment and in particular in the extract at paragraph 22 above (Justice Harrison at [120] of the Court of Appeal judgment), outlines the commercial basis upon which Special By-Law 21 was sought by a previous owner of Lot 1 in SP No 3397. No evidence has been put before the Tribunal to explain why or how that commercial basis has changed either from the time since Special By-Law 21 was passed in 1989 or since the decision of the Court of Appeal in 2007.
Secondly, the submissions of the Applicants on this issue state first, that the word does not appear to have been judicially determined in relation to the Act; and secondly, the definition of unjust relates to concepts of fairness which is defined as "treating people equally without favouritism or discrimination".
The Applicant relies upon photographs which are Annexures D, E and F to the Doyle Affidavit sworn 3 April 2017 which disclosed that Lifts 1 and 2 in SP No 3397 do not stop on the levels where Lot 1's hotel rooms are located and that there are in fact no door openings which permit Lot 1 to access Lifts 1 and 2; and that in fairness both lots in the strata scheme with the benefit of Lifts 1 and 2 would need to pay for that differential use in the same manner as Lot 1 is required to pay for Lift 4 under Special By-Law 21.
This submission overlooks and fails to explain the commercial benefit that the previous owners of Lot 1 had or sought in 1989 in agreeing to bear an additional cost for the exclusive use of Lift 4. And why this commercial benefit has stood uninterrupted since 1989. It treats Special By-Law 21 as a form of discriminatory tax and not as a commercial arrangement that the previous owner of Lot 1 voluntarily sought out and presumably negotiated for on the basis that it would bring some benefit to Lot 1.
Thirdly, there have been judicial pronouncements on the term "unjust" or "just" in recent years albeit in different contexts. In Perpetual Trustee Company Limited v Albert and Rose Khoshaba [2006] NSWCA 41 it was held that:
"When Parliament adopts general standards such as 'justness', Parliament intends courts to apply contemporary community standards about what is just. Such standards may vary over time."
In West v AGC (Advances) Ltd (1986) 5 NSWLR 610 at 621-622, McHugh JA emphasised that:
"A contract will not be unjust as against a party unless the contract or one of its provisions is the product of unfair conduct on his part either in the terms which he has imposed or in the means which he has employed to make the contract"
…
If a defendant has not been engaged in conduct depriving the claimant of a real or informed choice to enter into a new contract and the terms of the contract are reasonable as between the parties, I do not see how the contract can be considered unjust simply because it was not in the interest of the claimant to make the contract or because she had no independent advice."
Although the comments of McHugh JA are made in respect of unjust contracts and not a strata by-law, it is clear that at law the definition of "unjust" and "unfair" may not necessarily be synonymous especially where the evidence in support of such assertion comprises mainly subjective assertions of third parties without disclosing a substantive or objective basis: see paragraphs 9 and 13 of 7 April 2017 Doyle Affidavit (Zipser and Wayne).
For these reasons, the Tribunal declines to make an order pursuant to s. 149(1)(c) of the Act that Special By-Law 21 should be repealed as unjust.
[13]
Costs
Both parties sought costs in their written submissions if they were successful in the Application: paragraph 75 of the First Applicant's written submissions and paragraph 34 of the Respondent's written submissions.
Both parties had legal representation. It would have been difficult for the Application to proceed in the streamlined manner that it did at hearing without senior legal representation of the parties and without their detailed written submissions, for which the Tribunal is grateful.
The Tribunal considers that in the circumstances of this Application that costs should follow the event. Costs in the Consumer and Commercial Division of the Tribunal may be awarded pursuant to Rule 38(2)(b) of the Civil and Administrative Tribunal Rules 2014 where the amount in dispute is more than $30,000.00. This is despite s 60 of the Civil and Administration Act 2013 (NSW) which states that the Tribunal may award costs only if it is satisfied that there are special circumstances warranting an award of costs.
[14]
Conclusion
For the reasons outlined above, the Tribunal makes the following orders;
1. Leave be granted to One Funds Management Ltd ACN 117 797 403 to join in the Application as Second Applicant;
2. Application dismissed; and
3. The Applicants pay the Respondent's costs of and incidental to the Application as agreed or taxed.
S A McDonald
Senior Member
Civil and Administrative Tribunal of NSW
23 August 2017
[15]
I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.
Registrar
DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.
Decision last updated: 08 September 2017