Read v The Owners - Strata Plan No. 5362

The applicants' case

1. The applicants' evidence is in exhibits A and B. The documents in these folders do not follow an obvious sequence, evidencing discrete points relevant to their case. I have found that the way in which the documents are organised is not conventional, hard to follow and make them difficult to navigate. A paginated bundle as referred to at order 8 of the 12 May 2023 orders which was cross referenced by page number to the applicants' submissions would have avoided this problem.
2. The applicants allege that the strata scheme is dysfunctional. They also refer to s106 of the SSMA. The applicants state that the dysfunction that they refer to: 'has developed due to four Respondents Bonello, Munayer, Withers and Wynne, who, by the evidence presented in this application, display no compulsion or ability to act harmoniously, in an open and transparently manner with fifty percent of owners or display ANY ability or desire to respect the requirements of the SSMA. Their ability to achieve the power to inflict this behaviour on other complex owners has been achieved by the use of various "Blind Proxies" issued to them for convenience by 2 lots who are Non-English speaking, cannot read or interpret relevant strata documentation and are either uninterested or unable to understand that their proxies are being used contrary to the best interests of the strata plan or in compliance with the SSMA'
3. So far as the removal of the second, third, fourth and fifth respondents from the strata committee is concerned, the applicants state that the evidence demonstrates that the strata committee members are heavily complicit with the second respondent in preventing appropriate strata committee response and finalisation for the lot 13 proxy fraud allegations and numerous by law breaches involving the second respondent that were resolved for action in the March 6 2023 extraordinary general meeting, but remain unactioned and ignored by them.
4. Section 238 of the SSMA deals with the strata committee. In connection with the removal of a person from the strata committee, sub-section 2 states: 'Without limiting the grounds on which the Tribunal may order the removal from office of a person, the Tribunal may remove a person if it is satisfied that the person has - (a) failed to comply with this Act or the regulations or the by-laws of the strata scheme, or (b) failed to exercise due care and diligence, or engaged in serious misconduct, while holding the office.'

Strata Meetings

1. At an Annual General Meeting held on 22 November 2022, among other things, at item 12 of the agenda, the second, third, fourth and fifth respondents were elected to the strata committee for one year.
2. On 6 March 2023 at an Extraordinary General Meeting ('EGM') it was resolved under item 7 that: 'due to the alleged fraudulent proxy complaint related to the SP53262 AGM held on 22 November 2022 received by Michael Roberts Strata Management Services from the owner of Lot 13 and the subsequent revocation of that lots previously submitted proxy, that the Owners Corporation now revoke Motions l, 2, 3, 4, 5, 6, 7,8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24 and 25. that were previously resolved at that meeting, including the appointment of the current strata committee, pending an NCAT application to review the running of the subject meeting and other issues including, but not limited to, the authenticity of proxies submitted to the chairman of that meeting.'
3. Pursuant to that resolution the appointment of the second, third, fourth and fifth respondents to the strata committee by reason of motion 12 of the 22 November Annual General Meeting ('AGM') was revoked.
4. The effect of the 6 March EGM was that the motions passed at the 22 November 2022 AGM were revoked.
5. On 9 August 2023 at an EGM the following motions were passed, among others: 'MOTION 1: CONFIRMATION OF MINUTES The Owners Corporation RESOLVED to confirm the minutes of the last general meeting held on 6 March 2023 as a true and accurate record of the account of the proceedings in that meeting. Votes: YES: 7 No:6 MOTION 5: AFFIRMATION OF MOTIONS (10 May 2023 strata committee meeting) THAT the Owners Corporation RESOLVES to affirm the following resolutions passed at the strata committee meeting held on 10 May 2023, namely: RESOLVED that the strata committee ratify its decision to defend the proceedings in the New South Wales Civil and Administrative Tribunal (file nos. SC 23/and SC 23/16911) initiated by Kevin Read and Leonie Palmer for orders (being interim and substantive orders for the compulsory appointment of a strata managing agent, report proxy fraud allegation and comply with maintenance obligation RESOLVED that the strata committee ratify the appointment of IA McKnight Solicitor, to act for the Owners Corporation in taking all necessary steps to prepare evidence and submissions in response to the applications by Read and Palmer referred to in the previous motion) AND THE accept a costs disclosure dated 23 April 2023 from him in the sum of $13,500.00 (excl GST) Votes: YES: 7 No: 6 MOTION 6: APPROVAL OF LEGAL SERVICES THAT the Owners Corporation RESOLVES, pursuant to section 103 of the Act, to ratify the appointment of IA McKnight Solicitor, to provide further legal services for the Owners Corporation in taking all necessary steps to prepare evidence and submission in response to the amended application by Read and Palmer (in Tribunal proceedings SC 23/16911) AND to accept a costs disclosure dated 13 June 2023 from him in the sum of $13,500.00 (excl GST). Votes: YES: 7 No: 6 MOTION 7: REVOCATION OF RESOLUTION THAT the Owners Corporation RESOLVED to revoke resolution 7 passed at the extraordinary general meeting held on 6 March 2023, namely: RESOLVED THAT due to the alleged fraudulent proxy complaint related to the SP53262 AGM held on 22 November 2022 received by Michael Roberts Strata Management Services from the owner of lot 13 and the subsequent revocation of that lots previously submitted proxy, that the Owners Corporation now revokes Motions 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20, 21, 22, 23, 24, and 25 that were previously resolved at that meeting, including the appointment of the current strata committee, pending an NCAT application to review the running of the subject meeting and other issues including, but not limited to, the authenticity of proxies submitted to the chairman of that meeting. Votes: YES: 7 No: 6'
6. The effect of the 9 August EGM was, among other things, that Motion 7 passed at the 6 March EGM 22 was revoked. The appointment of Mr McKnight to represent the first respondent was confirmed in accordance with s103 of the SSMA.

Approach taken to voluminous documents and submissions

1. In Velastegui v Chan [2021] NSWCATCD 98 Senior Member Ellis SC stated at [29 and [30] 'In reaching a decision in relation to this application, the Tribunal has considered the entirety of the documents admitted as evidence and the submissions. These reasons focus on the material central to the issues but, to the extent that any evidence or a submission is not referred to, it should not be assumed that evidence or submissions has been ignored. That approach is consistent with what was said by Allsop P in Mitchell v Cullingral Pty Ltd [2012] NSWCA 389 at [2]: [A] judge may, in dealing with large bodies of evidence, be forced to economise in expressions and approach in order to be coherent in resolving the overall controversy. The need for coherent and tolerably workable reasons sometimes requires a truncation of reference and expression. Judgement writing should not become a process that is oppressive and produces unnecessary prolixity. Not every piece of evidence must be referred to. That said, central controversies put up for resolution by the parties must be dealt with. The competing evidence directed or relevant to such controversies must be analysed or resolved …'
2. I will adopt a similar approach, bearing in mind that not every piece of evidence must be referred to nor I would add, not every submission must be addressed. This is relevant in these proceedings when the applicants raise numerous issues in their endeavour to obtain orders under ss237 and 238 of the SSMA. The third respondent's evidence which I accept as she was not cross examined, is that as the chairperson of the strata committee she has been 'bombarded' by emails from the applicants which she considers to be disproportionate to a strata scheme of 13 lots. She states that: 'The constant barrage of emails directed at me has caused disquiet and disruption to my role as a mother and business owner of an architecture practice. I am of the further opinion that the actions of Palmer and Read are highly disruptive of the administration and management of the strata scheme.'
3. The applicants' approach to these proceedings is in a similar vein as regards the number of issues they have raised in their endeavour to obtain the orders referred to above.
4. Nonetheless, the entirety of the evidence has been considered as well as the parties' submissions.

Proxies

1. On numerous occasions in their submissions the applicants refer to 'alleged proxy fraud' or 'possible proxy fraud'. It is clear that the applicants are alleging that there was a 'proxy fraud' and that such allegations are directed against the second respondent. I regard such allegations as a serious matter. Given the gravity of the allegations I find that the applicants bear the burden of proving the matters that they assert. It is appropriate to consider the standard of proof that the applicants must satisfy. I find that the appropriate description of the standard of proof may be obtained from the decision of Dixon J. in Briginshaw v Briginshaw (1938) 60 CLR 336, where his Honour stated: 'The truth is that, when the law requires the proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence before it can be found. It cannot be found as a result of a mere mechanical comparison of probabilities independently of any belief in its reality…. Except upon criminal issues to be proved by the prosecution, it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters "reasonable satisfaction" should not be produced by inexact proofs, indefinite testimony, or indirect inferences'
2. Of particular importance in this aspect of the applicants' case relating to an allegation of proxy fraud is that the 'seriousness of an allegation made' and the 'gravity of the consequences flowing from a particular finding' are considerations which must affect the answer to the question 'whether the issue has been proved to the reasonable satisfaction of the tribunal.' (italics added).
3. I find that an allegation of proxy fraud is a serious allegation and that the gravity of a finding of proxy fraud is substantial, as it will be with the person impugned forever. As a result, these matters affect the answer which I must provide to question of whether the applicants' allegation of proxy fraud has been proved to my reasonable satisfaction. Dixon J. in Briginshaw v Briginshaw gave an example of this when, after the passage cited, he stated: 'Thus, Mellish L.J. says: "No doubt the court is bound to see that a case of fraud is clearly proved, but on the question at what time the persons who have been guilty of that fraud commenced it, the court is to draw reasonable inferences from their conduct" (Panama and South Pacific Telegraph Co. v. India Rubber, Gutta Percha, and Telegraph Works Co)'
4. In his article 'Burdens and Standards in Civil Litigation' [2003] Sydney Law Review 165, CR Williams expanded on this matter at pages 9 and 10 as follows, citations omitted: 'The courts have had regard to 'the nature and consequence of the fact or facts to be proved' in determining whether they 'feel an actual persuasion' of those facts in a variety of circumstances. In Wilicox v Sing the Supreme Court of Queensland held a trial judge had been entitled to comment that the jury should not lightly find against a surgeon where negligence was alleged of such a character as to put his reputation and earning capacity at risk. In Re Jane the Family Court took the view that a finding that it is in the best interests of a physically and mentally disabled woman to order sterilisation requires 'something more than a mere tipping of the balance in favour of the proposal.' In Shaw v Wolf Merkel J held the court should 'not lightly make a finding on the balance of probabilities' that persons were not aboriginals where such finding would result in their election to an ATSIC regional council being held invalid. In G v H however, the High Court held that in maintenance proceedings, where it was established that a particular person could be the father of a child, the question of actual paternity should not be approached on the basis that it involves a grave or serious allegation in the Briginshaw sense. In Clark v NZI Life Ltd Thomas J held that while a finding of suicide should not be made lightly, it was not so inherently unlikely or grave as to bring it to the top of the range of the Briginshaw test.'
5. Based on the authorities that I have referred to, a finding of proxy fraud should not lightly be made. Given the gravity of the finding, I will adopt the position stated by Mellish L.J. that the allegation should be clearly proved.
6. The applicants rely on two statutory declarations of Mrs Vanos in relation to a proxy form dated 15 September 2022 which on its face appoints the third respondent as her proxy. Mrs Vanos was not cross examined on her evidence. She is described by the applicants as an 'elderly lady'.
7. Mrs Vanos' evidence in her statutory declaration dated 18 April 2023 is that the proxy for lot 13 was signed by her, but had been altered from a form of proxy which she had completed for a previous meeting for a different person, Mr St. Eain who has since died. She does state that it was the second respondent who had approached her with the proxy for Mr St. Eain which she had signed. That proxy is not in evidence in these proceedings. The effect of her statutory declaration is that her proxy for Mr St. Eain had been changed without her consent to name a new proxy, namely the fifth respondent. In this statutory declaration Mrs Vanos does not explain how it was that her proxy had been changed. She does however state that the second respondent had approached her to sign a new form which she declined to do. I understand this evidence to be that the second respondent had approached her with a new form of proxy after the death of the previous proxy holder, Mr St. Eain, but she did not sign it.
8. The applicants have given hearsay evidence of what Mrs Vanos told them about this issue. Although I am not bound by the rules of evidence, I do not accept their hearsay evidence in circumstances where Mrs Vanos provided statutory declarations and has had the opportunity to say whatever she thought relevant about her proxy. There is also the issue that a decision about what is a serious matter, the alleged changing of a proxy form, should not in my view be decided on hearsay evidence.
9. The respondents deal with this issue by referring the affidavit of the second respondent affirmed on 27 April 2023 which is in exhibit 1. In this affidavit Mr Bonello gives a detailed explanation of the facts and circumstances which he states occurred leading to Mrs Vanos to sign a proxy in favour of the fifth respondent. He states that he met Mrs Vanos in late August 2022 when she had just moved in to the strata scheme. He states that he discussed with her whether she would give him her proxy in the context of a discussion between them regarding the strata committee and that she agreed to. His evidence is that on the 15 September 2022 he met with Mrs Vanos and he gave her a proxy and that he filled it out for her by completing all of the relevant details and writing the name Mr David Withers as the proxy. Mr Bonello states that he saw Mrs Vanos sign and initial the proxy form
10. The second respondent was cross examined at the hearing, but he was not cross examined on the relevant paragraphs of his affidavit, [16] - [32].
11. Mr Wynne who is the fourth respondent, provided an affidavit dated 5 July 2023 which is in exhibit 1. He refers to a conversation with Mrs Vanos on 20 November 2022 in which he states that the AGM to be held on 22 November 2022 was discussed and that Mrs Vanos stated that she had given a proxy requested by the second respondent. After some discussion he states that Mrs Vanos said that she did not want to attend the meeting and that she was happy with her proxy stating: 'Let it stand'
12. Mrs Vanos filed a statutory declaration dated 10 May 2023 in response to the second respondent's 27 April 2023 affidavit. In that affidavit Mrs Vanos refers to a number of matters which tend to contradict the second respondent's evidence. First, she states that she was in Greece and did not return until 8 September 2022. This contradicts the second respondent's assertion that he had conversations with her in late August 2022. However, the second respondent states that he met with Mrs Vanos on 15 September when he filled out the proxy form as described in his affidavit, and she signed it. The second respondent states that he filled out the date of 15 September which is on the proxy form. This evidence makes Mrs Vanos' evidence of the date of her return from Greece irrelevant because her proxy was signed on 15 September when she was in Australia and that the second respondent asserts that he met with her on that date.
13. Mrs Vanos disputes other aspects of the second respondent's evidence. The most material discrepancies between their evidence is that Mrs Venos states: 1. she did not have any conversation with the second respondent about the strata committee as described at [23] - [24] of his affidavit; 2. she had provided a proxy to the second respondent naming John St Eain as her proxy before June 2022, when she left for Greece; 3. after her return to Australia in September 2022, she refused the second respondent's approach for a new proxy after John St Eain had died, as she had developed a 'deep concern' over these approaches; 4. she did not have conversations with the second respondent about the proxy being in the name of Mr Withers; and 5. The second respondent's statements about the proxy are not true as she did not meet with him at the times stated.
14. The second respondent affirmed an affidavit on 6 July in which he provided a short response to Mrs Vanos' statutory declaration, the effect of which was that he confirmed the evidence that he gave in his 27 April affidavit.
15. Also of relevance is an email from Mrs Vanos dated 29 November 2022 to the strata managing agent in which she stated: 'As we discussed the AGM proxy form submitted to you for the final 2022 AGM by David Withers was not the same as the proxy form that I signed as follows. The only proxy form that I have ever signed was in the name of John St Eain which of course became invalid on his death. This form was requested by and passed to Peter Bonello of lot 4. I was then approached by Peter Bonello again for a second proxy because of John St.Eains death and the new meeting agenda which I very clearly refused. The original form was not returned to me. I have never met David Withers or ever completed a proxy form in his name. I have looked closely at the form supplied to the meeting and notice that the date has been altered. My name at the top and the signature at the bottom are my original handwriting. The Print Name and Dainne Vanos at the bottom right of the form are not my handwriting but attempt to poorly copy my handwriting from my name at the top. All small hand writing including David Withers name and his address are not my handwriting. This proxy is a fake and is a very big worry and issue for me. I need to urgently hear what you will do to investigate this meeting and this incorrect use of my name and proxy form.'
16. Also of relevance is an email from Mrs Vanos dated 6 December 2022 to the strata managing agent, in which she revoked the proxy provided by Mr Bonello. She stated: 'Please formally revoke the proxy provided to you by Peter Bonello as it was not the form I signed including a different date and person as discussed.'
17. Mrs Vanos' evidence as referred to above is that she signed a proxy in favour of Mr St Eain, but that proxy was altered after he passed away. It is the applicants' case that the second respondent altered that proxy so that it named the fifth respondent as the proxy. The second respondent's evidence provides a clear account of how the proxy dated 15 September was filled out and signed. This evidence is denied by Mrs Vanos. There is also Mr Wynne's evidence that he met with Mrs Vanos who told him that she had met with the second respondent and that she had said in relation to her proxy 'Let it stand'. There is also the fact that the proxy which Mrs Vanos stated that she had signed in favour of Mr St Eain is not in evidence, but is in my view an important document as it is the proxy form which Mrs Vanos and because they rely on her evidence, the applicants, assert has been altered.
18. Because:

• there is a contest between the applicants' evidence and the respondents' evidence concerning the proxy dated 15 September 2022;
• of the absence of the proxy which Mrs Vanos stated that she had signed in favour of Mr St Eain;
• neither Ms Vanos, Mr Bonello or Mr Wynne were cross examined on the subject of alleged 'proxy fraud' I find that the applicants have not clearly proved that the proxy Mrs Vanos states that she gave to Mr St Eain was altered by Mr Bonello without her consent to name the fifth respondent as her proxy and to be dated 15 September 2022.

1. The applicants also rely on hearsay evidence to assert that the owner of lot 12 did not know the person appointed as her proxy. In that regard a proxy dated 7 October 2022 in exhibit B is referred to as the proxy given by the owners of lot 12. These owners have not given evidence in these proceedings about the proxy for their lot or in whose favour it was made.
2. The applicants have provided statutory declarations in which hearsay evidence is given about what the owner of lot 12 said about the proxy, which has been referred to.
3. As stated above, in circumstances where the applicants allege that proxies provided by lot owners have been altered, which is a very serious matter, I am not inclined to accept their hearsay evidence in support of a case of 'proxy tampering'. Given my rejection of their hearsay evidence, I reject the applicants' submission that the proxy given by the owner of lot 12 was irregular. In the absence of evidence which is not hearsay, I find that the allegation regarding the lot 12 proxy has not been clearly proved.
4. I find that due to the controversy regarding Mrs Vanos' proxy purportedly given to Mr Withers, that proxy was revoked by her on 6 December 2022.
5. It follows from the reasons in the preceding paragraphs that the applicants have not discharged the burden of proof in connection with their allegations of proxy fraud or proxy tampering. They have not clearly proved these issues to my reasonable satisfaction.

The AGM of 22 November 2022

1. The applicants' submissions refer to this AGM and repeat the submissions made about proxies. As I have referred to above, the motions passed at the 22 November 2022 AGM were revoked on 6 March 2023. So far as the proxies were concerned, I have found that I have found that the applicants have not discharged the burden of proof in connection with their allegations of proxy fraud or proxy tampering in that they have not clearly proved these issues to my reasonable satisfaction.

The strata committee is dysfunctional

1. The applicants also contend that the strata committee is dysfunctional.
2. There needs to be compelling reasons to justify the Tribunal's intervention in the democratic processes of an Owners Corporation to remove an officer of a Strata Committee elected by lot owners: Lockrey v Rosewal [2022] NSWCATCD 27 at [15]; Linney v The Owners - Strata Plan No. 11669 [2021] NSWCATCD 123 at [94]. In Lockrey v Rosewal Senior Member D Moujalli stated at [15]: 'It necessarily follows that the approach identified in Velastegui v Chan to an application for an order under s 237 should also be taken in respect of an application for an order removing a person from a strata committee under s 238 of the SSMA. Section 9 of the SSMA provides that the owners corporation for a strata scheme has the principal responsibility for the management of the scheme. The regime for self-management of strata schemes established by the SSMA involves the ability of an owners corporation to elect the members of its strata committee: see ss 29(1) and 30(4) of the SSMA. Compelling circumstances would need to be demonstrated to justify the intervention of the Tribunal to override the democratic wishes of the owners corporation by making an order under s 238 of the SSMA. The decisions of the Tribunal establish that such an order should only be made in the clearest of cases.'
3. In Linney v The Owners - Strata Plan No. 11669 Senior Member Sarginson stated at [94]: 'Further, even if any of the matters set out in s 238 (2) are established, the applicant must additionally satisfy the Tribunal that the matters are of sufficient magnitude to justify exercising its discretion in favour of removing the strata committee member from office.'
4. Pursuant to motion 12 at the 22 November AGM the second, third, fourth and fifth respondents were elected to the strata committee.
5. Following the appointment of the strata committee on 22 November 2022, a meeting of that committee occurred on the same day where procedural matters only were attended to. I find that the strata committee meeting held on 22 November addressed conventional matters that were not controversial.
6. A further meeting was held on 28 November 2022 which is referred to in Mr Bonello's 27 April affidavit, but is not annexed. The minutes of that meeting which is at page 89 of exhibit 1 dealt with the following matters: 1. A Christmas gathering; 2. Selection of a new Strata Manager; 3. the point of contact for communications with gardeners and contractors; 4. Cleaning of garden beds and removal of spare roof tiles and ridge capping/relocation to a more suitable area on the complex; 5. Removal of tree at the east boundary fence (rear of property); 6. Repair of landscape border edging; 7. Cleaning of roof tiles; and 8. Porch columns unit 9.
7. I find that the strata committee meeting held on 28 November 2022 dealt with conventional matters that are non-controversial.
8. The status of the strata committee as a result of motion 7 of the 6 March 2023 EGM was that the motion appointing its members, namely the second to fifth respondents was revoked as from that date.
9. The respondents assert in their submissions of 6 July 2023 that the resolution passed at the EGM is of no effect. This submission is not repeated in their later submissions filed after the hearing.
10. Whether or not an ordinary or a special resolution was required to revoke motion 12 of the 22 November AGM as referred to by the respondents in their 6 July 2023 submissions, the position is that there is no record of the votes cast in the evidence, such that I am not in a position to know or find that motion 7 was not properly resolved. On that basis I reject the respondent's assertion that motion 7 was of no effect.
11. A strata committee meeting was held on 10 May 2023. A poorly copied set of documents which appear to relate to the 10 May 2023 meeting are at pages 54 - 56 of exhibit A. A clean copy is at page 96 of exhibit 1. At this meeting the strata committee purported to ratify a decision for the first respondent to defend these proceedings and to appoint Mr McKnight to act for the first respondent in these proceedings in accordance with a costs disclosure agreement that he had provided.
12. By an undated letter the owners of lots 1, 2, 3, 11, 10 and 13 opposed the motions referred to in the strata committee agenda for 10 May 2023. Quite possibly the letter was sent on 11 May 2023. Importantly, the signatories to that letter rejected the validity of the meeting and pointed out that the strata committee members appointments had been revoked. They stated: 'We, the signatory owners to this document reject the validity of this meeting and maintain it has no effect or authority to appoint solicitor Ian McKnight to act on behalf of the Owners Corporation with an accepted Costs disclosure of $13,500 or in any capacity as described in motion 4. for the following reasons. The members of the strata committee ceased to hold strata committee delegations as a result of the revocation of all motions in the AGM of 22 November 2022 by way of the resolution of Motion 7. by a majority of owners at the EGM of 6th March 2023.'
13. I find that on 10 May 2023 the motion appointing the strata committee members had been revoked by reason of motion 7 of the 6 March 2023 EGM.
14. The applicants have not persuaded me that the strata committee is dysfunctional. As I have stated there were 2 meetings of the strata committee before the resolution appointing its members was revoked. I find that the minutes of those meetings indicate that the committee was dealing with orthodox matters, and do not provide evidence which would support a finding of dysfunction. Moreover, I have had regard to the matters referred to at 1 - 5 at page 4 of the applicants' 18 September 2023 submissions. The matters referred to are not matters that would conventionally form part of a strata committee's functions and are in my view more in the nature of matters which the applicants wish to address in an adversarial context in contested proceedings. The suggestion that the strata committee should have addressed the matters referred is in without a basis given that the strata committee, except on 10 May which will be addressed later in these reasons, effectively stopped meeting by reason of motion 7 of the 6 March 2023 EGM.
15. The applicants refer to an exchange of emails on 14 January when one of the applicants asked the third respondent when the next strata committee meeting would be. The third respondent replied stating that: 'Our meetings are best just with the committee and will be minuted.'
16. The applicant replied on 15 January pointing out various requirement of the SSMA as regards strata committee meetings. The third respondent replied the following day noting that the applicants wanted to attend the next strata meeting. The applicants' submissions point out that minutes of the 28 November strata committee meeting were distributed on 2 February 2023.
17. In the submissions there is assertion and cross assertion regarding the issues of whether notice of the strata committee meetings was given and whether the minutes of the meetings were provided in the time required by the SSMA. I am not persuaded that the strata committee had a working knowledge of that part of Schedule 2 of the SSMA and followed it as regards the strata committee meetings of 28 November 2022 or 10 May 2023. Nonetheless, I do not regard that as a sufficient reason to remove the second to fifth respondents from the strata committee, as there is no suggestion that they have repeatedly and purposively failed to give notice of and provide minutes of strata committee meetings.
18. The applicants have made what I consider to be extravagant claims as regards the strata committee meetings. That they are were 'fabricated and retrospectively documented to legitimise various informal actions'. I reject those submissions and consider that there is no basis on which they could be made. The fact that the applicants hold such extreme views and animosity toward the members of the strata committee is not a reason in itself to make an appointment under s237 of the SSMA. Given that there were only 3 meetings of the strata committee and my finding I reject the applicants' submission that the strata committee is dysfunctional.

The EGM of 20 December

1. The minutes of this meeting indicate that the lots that voted were lots 2, 3, 9, 10 & 11. A resolution that confirmed the minutes of the previous meeting was defeated. A resolution that dealt with 'Budget & Levies' was passed. The applicants submit that the second, third and fourth respondents did not provide an electronic vote.
2. The applicants' submissions state that the failure of the second, third and fourth respondents to provide an electronic vote in connection with this EGM is a basis for removing them from the strata committee. They state: '1. The applicants allege, that by collectively failing to participate in the Budget Approval EGM of 20th December 2022, that then Strata Committee Members Wynne, Bonello and Munayer acted in a collusive manner to avoid attesting to various motions in the meeting and in doing so did not act in the best interests of the owner's corporation. * The applicants request that, reliant on the above, SSMA Part 12 Division 4 Sect 238 (2) (b) be established when considering the Section 238 application related to respondents Bonello, Wynne and Munayer.'
3. The applicants have not established that the second, third and fourth respondents acted in a collusive manner in not voting at the 20 December EGM and did not act in the best interests of the first respondent. Voting at an EGM is not compulsory. In any even the applicants base this submission on 'collusion' of which there is no evidence. I reject the applicants' submissions that because the second, third and fourth respondents did not vote at the 20 December EGM they should be removed from the strata committee. I find that the fact that the second, third and fourth respondents did not vote at the 20 December EGM does not engage any of the matters referred to at s238(2) of the SSMA.

EGM of 6 March 2023

1. The applicants have made long submissions about the period between 22 November 2022 to 6 March 2023 which they say resulted in the resolutions passed at the 6 March EGM. No submission is made about the significance to be given to the 7 matters referred to other that they lead to the outcome of the 6 March EGM. I find that none of the 7 matters referred to were of a sufficient magnitude either individually or collectively justify the removal of strata committee members, namely the second to fifth respondents.

Specific grounds for an order under s237 of the SSMA

1. Section 237(3) of the SSMA states that an order may be made under s237(1) and (2) if the Tribunal is satisfied of any of the following matters: '(a) the management of a strata scheme the subject of an application for an order under this Act or an appeal to the Tribunal is not functioning or is not functioning satisfactorily, or (b) an owners corporation has failed to comply with a requirement imposed on the owners corporation by an order made under this Act, or (c) an owners corporation has failed to perform one or more of its duties, or (d) an owners corporation owes a judgment debt.'
2. At pages 10 - 13 of their submissions the applicants state the matters they rely on.
3. The first matter relied on is that motion 7 was resolved at the 6 March 2023 EGM. I reject the applicants' submission that passing of that motion indicates that the management of the first respondent was not functioning or was not functioning satisfactorily. I find that the lot owners' resolution 7 as set out at [14] demonstrates a democratic system of management which was the object of the SSMA. As stated in Foo v Frew: 'The aim of SSMA s 237 and its predecessors in the 1996 Act is, where possible, to maintain a democratic system which the legislative scheme has established, rather than substitute a compulsory appointment: Kahn at [30]. It is not enough that the owners simply do not get along: Bischoff v Rita Sahade [2015] NSWCATAP 135. The evidence may show a properly functioning strata scheme in all practical respects despite any personal animosities or disagreements on the decisions made.'
4. Secondly, as part of the submission regarding motion 7 of the 6 March 2023 EGM, the applicants refer to the fact that the second, third, fourth and fifth respondents ignored motion 7 because they convened a strata committee meeting on 10 May 2023 which I have referred to, at which they purported to ratify a decision for the first respondent to defend these proceedings and to appoint Mr McKnight to act for the first respondent in these proceedings in accordance with a costs disclosure agreement that he had provided.
5. While that conduct may have consequences for the second, third, fourth and fifth respondents, I find that the strata committee meeting on 10 May 2023 is not a reason to appoint a compulsory strata managing agent under s237 of the SSMA. The reason for this is that this was in my view an isolated incident which in any event was addressed at the 9 August 2023 EGM, some three months after the 10 May strata committee meeting. The way in which this was addressed was by the revocation of the motion which revoked the appointment of the second, third, fourth and fifth respondents to the strata committee and the confirmation of the appointment of Mr McKnight to represent the first respondent in accordance with s103 of the SSMA. It would be of no purpose in my view to make an appointment under s237 of the SSMA when the issue of the 10 May 2023 Strata Committee meeting had been resolved by the democratic system of strata management provided by the SSMA.
6. The applicants refer to Motion 8 which was resolved at the 6 March EGM. That Motion stated: 'Financials - Ordinary Resolved that a detailed schedule of all financial Administration Fund and Capital Works Fund transactions, including payment descriptions and payees, occurring since the 2022 ACM, be supplied to all owners to assist them to understand why the Strata Plan's Administration Fund is now in excess of $1,600 in arears.'
7. I find that Motion 8 which was resolved at the 6 March EGM also demonstrates a democratic system of management which was the object of the SSMA and is not an indication that the management of the first respondent was not functioning or was not functioning satisfactorily.
8. The applicants also refer to Motion 10 which was resolved at the 6 March EGM. That Motion stated: 'Resolved that the serious SF53262 By-Law 3, 6 ,32 and 35 (a) complaint letter sent to Michael Roberts Strata by Kevin Read on 16/1/2023 related to witnessed intimidation, harassment and interference with common property by resident of Lot 4 Peter Bonello (SecretaryITreasurer) that remains unacknowledged and unactioned be properly attended to by the owners corporation without delay.'
9. While this motion indicates the breakdown in personal relations between Mr Read and Mr Bonello, I find that this is not a proper reason for an appointment under s237 of the SSMA. As stated in Foo v Frew: 'The evidence may show a properly functioning strata scheme in all practical respects despite any personal animosities or disagreements on the decisions made'
10. While the matters referred to in Motion 10 do not wholly relate to personal animosities on the decisions made, by parity of reasoning it is my view that an appointment under s 237 of the SSMA ordinarily is not justified because of personal animosities between lot owners or in this case, a lot owner and the husband of a lot owner.
11. Next the applicants submit that because the fourth and fifth respondents did not vote at the 6 March EGM, that is a matter that should be taken into account. As I have stated previously there was no obligation on the fourth and fifth respondents to vote at the 6 March EGM. The fact that they did not vote, when the 6 March EGM proceeded in a regular way, is not in my view a relevant factor to be taken into account in the applicants' application for orders under s237 of the SSMA.
12. For the reasons provided I find that the applicants have not established any of the grounds referred to in s237(3) of the SSMA such as to justify an order under ss237(1) or (2) of the SSMA.

Specific grounds for an order under s238 of the SSMA

1. The applicants at item 5 on page 11 of their submissions and onward identify the issues which in their submissions should lead to the removal of the second to fifth respondents from the strata committee.
2. First it is submitted that the second to fifth respondents did not take action to resolve Mr Bonello's alleged long standing by law breaches. In the period 6 March to 9 August 2023 the second to fifth respondents' appointments to the strata committee were revoked because of motion 7 of the 6 March EGM. In that context the second to fifth respondents were formally in no position to take the actions the applicants say they should have and criticize them for not taking.
3. Secondly, the applicants raise motion 11 of the 6 March EGM which required action by the owner of lot 4, the second respondent's spouse. This issue is long standing going back to 2017. Motion 11 resolved that an illegally installed garden grade border transfer pipe installed by lot 4 which is associated with Mr Bonello be removed in accordance with a with correspondence dated 5 December 2017.
4. The respondents submit that in his affidavit of 6 July 2023 Mr Bonello addresses this issue. The submissions state that a by-law giving lot 4 consent to install the relevant irrigation system is special by-law 5 a copy of which is at page 40 of exhibit 1. On 26 February 2021 a Consolidation/Change of By-Laws was filed in the Land Registry which included special by-law 5 which granted exclusive use rights to the proprietors of that lot as required to install various additions including skylights and irrigation to the common property. Given the apparent conflict between Motion 11 and special by-law 5, I find that non-compliance with motion 11 is not a matter which would justify an appointment under s237 of the SSMA, or the removal of a strata committee member under s238 of the SSMA.
5. In these circumstances I am unable to find that non-compliance with motion 11 to be a 'Compelling circumstance' as referred to in Lockrey v Rosewal or a matter 'of sufficient magnitude' as referred to in Linney v The Owners - Strata Plan No. 11669.
6. Thirdly, the applicants raise motion 13 of the 6 March EGM which was defeated. I find that reference to a motion directed to the owner of lot 4, the second respondent's spouse which was defeated cannot be a reason for finding of a 'Compelling circumstance' or a matter 'of sufficient magnitude' that would justify an order under s 238 of the SSMA.
7. Fourthly, the applicants state that the second to fifth respondents did not provide lot owners with 3 days notice and the agenda of the 10 May 2023 strata committee meeting as required by the SSMA. Even if this is correct, I find that such a procedural failure which is an isolated incident, is not a 'Compelling circumstance' or a matter 'of sufficient magnitude' that would justify an order under s 238 of the SSMA. In addition the subject matter of the meeting, the legal representation of the first respondent in these proceedings, was regularized at the EGM of 9 August 2023 by the confirmation of the appointment of Mr McKnight to represent the first respondent in accordance with s103 of the SSMA. In addition the case cited by the respondents, The Owners Strata Plan No 57164 v Yau [2017] NSWCA 341 at [116- 117] is sufficient to reject this submission.
8. At item 3 on page 13 of their submissions the applicants state: 'The 10 may SC meeting was illegal and should have no effect at it as it was conducted without the required 3-day Strata Committee Meeting Notice to owners required under SSMA Schedule 2 Part 2 Section 5 (1), was conducted by the respondents while their strata committee delegations were revoked (Refer Motion 7. Ap Appendix UU) by owners and the case law it was purportedly reliant on, as published on the agenda, was irrelevant to the circumstances of that meeting'
9. The most critical aspect of this submission is in my view that the 10 May 2023 Strata Committee meeting was held when the second to fifth respondents knew or should have known that by reason of motion 7 of the 6 March EGM their 22 December 2022 AGM appointments to the strata committee had been revoked. Nonetheless they proceeded with the strata committee meeting with that knowledge, either from attending the meeting or from reading the minutes of that EGM. I find that I must consider whether the second to fifth respondents breached s238 of the SSMA in so doing. That section states: 'Without limiting the grounds on which the Tribunal may order the removal from office of a person, the Tribunal may remove a person if it is satisfied that the person has - (a) failed to comply with this Act or the regulations or the by-laws of the strata scheme, or (b) failed to exercise due care and diligence, or engaged in serious misconduct, while holding the office.'
10. I find that s238(2)(b) does not fall for consideration since as at 10 May 2023, the second to fifth respondents did not hold office. Section 238(2)(b) requires the conduct referred to in that sub-section to have taken place while the strata committee members were 'holding office'.
11. Section 238 of the SSMA commences with the wide words 'Without limiting the grounds on which the Tribunal may order the removal from office of a person'. In addition to the width of the grounds that may justify a removal from office, the Tribunal has a discretion whether an order will be made to remove a person from office.
12. The reference to the strata meetings earlier in these reasons establishes to my satisfaction that the second to fifth respondents held office from 22 December 2022 to 6 March 2023 and then retained their appointments to the strata committee on 9 August 2023. The evidence at page 157 of exhibit 2 establishes that a strata committee meeting was held on 18 August 2023.
13. Mr Bonello affirmed affidavits on 27 April 2023, 6 July 2023 and 20 August 2023. He does not address the 10 May 2023 strata committee meeting, except at [42] - [44] of his 6 July 2023 affidavit. Mr Withers refers to a 10 March strata committee meeting. I assume that he intended to refer to the 10 May meeting. Mr Wynne has also provided an affidavit dated 5 July in which he does not refer to the 10 May 2023 strata committee meeting. The same may be said in connection with Ms Munayer's affidavit. Neither in their evidence nor in their submissions, have the second to fifth respondents addressed why it was that they convened a strata committee meeting when their appointments to the strata committee had been revoked.
14. In connection with the 10 May strata committee meeting, the respondents in their submissions refer to The Owners Strata Plan No 57164 v Yau, but only in connection with the giving of notice.
15. I find that the conduct of the second to fifth respondents when they purported to convene a strata committee meeting on 10 May 2023 and pass resolutions which were binding on the first respondent when they had no authority to do so was a failure to comply with the SSMA. I find that the SSMA operates on the basis that only duly elected persons may act on the strata committee and pass strata committee resolutions. I also find that a ground for removal of a person from the strata committee is when the second to fifth respondents convened a strata committee meeting and voted at such meting to bind the owners corporation when their appointments to the strata committee had been revoked, and there is no explanation at all from them for such an action.
16. I find that the conduct of the second to fifth respondents as referred to above would qualify as a 'compelling circumstance' as referred to in Lockrey v Rosewal or a matter of a 'significant magnitude' as referred to in Linney v The Owners - Strata Plan No. 11669.
17. The respondents' submissions refer to Senior Member Burton's comments at [53] of his reasons in Crespel v The Owners - Strata Plan No 66165: 'Conversely, the nature and duration of the conduct and whether steps are under way to remedy past inadequacy, non-compliance or dysfunction may lead to refusal of an order: Maple v Owners SP 8950 [2021] NSWCATCD 108 esp at [21]-[22].
18. The comments quoted related to proceedings for an order under s237 of the SSMA and have been considered in that context.
19. I am of the view that those comments may also be relevant to an application under s238 of the SSMA. The fact is that as I have stated at [18] and [89] the resolution revoking the appointments of the second to fifth respondents was in itself revoked on 9 August 2023, thereby reinstating their appointments to the strata committee. In addition, the appointment of Mr Mcknight which was the subject of the resolutions on 10 May 2023 was regularized on 9 August 2023.
20. Importantly, I have a discretion about whether or not to remove a person from the strata committee. Of significance to me in exercising my discretion are the matters referred to in the preceding paragraph. Also, I find that the first respondent has not suffered a financial detriment because of the 10 May 2023 strata committee meeting.
21. Another matter which is relevant to the exercise of my discretion is that the second to fifth respondents were placed in a unique position in that they were not experienced strata committee members and were faced with a situation where the applicants had instituted proceedings against the first respondent. I infer that their actions were to arrange for it to be represented in circumstances where, as a result of the 6 March EGM, the status of the management of the first respondent was not clear.
22. By reason of the matters that I have referred to in the preceding paragraphs, I have decided to exercise my discretion by not making the orders sought by the applicants, namely removing the second to fifth respondents from the strata committee of the first respondent. I have had regard to what I consider to be the most substantial of the matters raised by the applicants, or to refer to what was stated by Allsop P. in Mitchell v Cullingral Pty Ltd [2012] NSWCA 389, the most central controversies.

Other matters relied on by the applicants

1. The applicants have referred to a number of other matters which they submit should lead to an order under s237 or 238 of the SSMA. I would observe that an application for such orders should not be an opportunity to air every grievance that a lot owner may have in the hope that it may contribute to such orders being made.
2. As from page 14 of the applicants' submissions, reference is made to alleged by law breaches by the second respondent, which relate to irrigation systems, use of common property bore water, trees, excessive garden growth and the restriction of access to a fire hydrant installation.
3. Reliance is placed on the 6 March EGM and several unidentified motions. Motion 9 which appears to be directed toward Mr Bonello as regards citrus trees was defeated.
4. Motion 10 which was directed against Mr Bonello was passed. That motion required a letter written by one of the applicants on 16 January 2023 to be attended to by the first defendant. This letter apparently refers to a letter written on 19 December which refers to a number of matters including a confrontation between one of the applicants and Mr Bonello about watering using bore water. Mr Read states that Mr Bonello was the aggressor. Mr Bonello states that Mr Read was the aggressor. Mr Bonello states that the police were notified but took no action. I find that a dispute between a lot owner and an occupier of a lot over watering a garden should not be a matter which would justify an appointment under s237 of the SSMA or the removal of a strata committee member under s238 of the SSMA.
5. Motion 11 of the 6 March EGM is also referred to and is addressed in the reasons above. To repeat those reasons, motion 11 resolved that an illegally installed garden grade border transfer pipe installed by lot 4 which is associated with Mr Bonello be removed in accordance with a with correspondence dated 5 December 2017.
6. The respondents submit that in his affidavit of 6 July 2023 Mr Bonello addresses this issue. The submissions state that a by-law giving lot 4 consent to install the relevant irrigation system is special by-law 5 a copy of which is at page 40 of exhibit 1. On 26 February 2021 a Consolidation/Change of By-Laws was filed in the Land Registry which included special by-law 5 which granted exclusive use rights to the proprietors of that lot as required to install various additions including skylights and irrigation to the common property. Given the apparent conflict between Motion 11 and special by-law 5, I find that non-compliance with motion 11 is not a matter which would justify an appointment under s237 of the SSMA, or the removal of a strata committee member under s238 of the SSMA.
7. The applicants also refer to motion 12 of the 6 March EGM which was defeated. By reason of the defeat of this motion I do not regard the applicants' submissions on this issue to be a matter which would justify an appointment under s237 of the SSMA, or the removal of a strata committee member under s238 of the SSMA.
8. Finally the applicants refer to Motion 15 of the 6 March AGM which requires immediate compliance with a direction from Phoenix Fire Services dated 8 November 2022 to clear foliage from an area adjacent to the complex's fire hydrant stand pipe. Mr Bonello has annexed a photograph at page 114 of exhibit 1 which shows the area in question. The photograph was stated to be taken on 25 April 2023. The photograph depicts a clear area around the fire hydrant stand pipe. Based on the photograph, I infer that even if there is some foliage not shown in photograph referred to, it is highly probable that the work required to clear the relevant foliage would not be substantial. Based on the photograph annexed by Mr Bonello and the inference that I have drawn I find that motion 15 has been complied with or substantially complied with and is not a matter which would justify an appointment under s237 of the SSMA, or the removal of a strata committee member under s238 of the SSMA.
9. Having regard to all of the reasons referred to above I have decided that I will not make orders for the appointment of a strata managing agent or the removal of the second to fifth respondents from the strata committee. If follows that the applicants' application is dismissed.

Costs

1. In the event that a party wishes to bring a costs application, such application must be lodged in the Tribunal and served on/given to the costs respondent within 14 days of the date of the orders in these proceedings either attaching or referring to the documents relied upon in support of the application.
2. The costs respondent will have 14 days after the date it or they receives the application to lodge in the Tribunal and serve on/give to the costs applicant its or their submissions, if any, in response to the costs application, such submissions either attaching or referring to the documents relied upon.
3. The parties must state in their submissions whether or not they consent to the costs application being determined on the basis of the parties written submissions and attached documents, if any, without the need for a hearing.
4. Subject to the parties' submissions, the Tribunal will determine any costs application made on the basis of the papers lodged in the Tribunal.

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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: 11 October 2024