Schrader v Owners Strata Plan No 12449

LEGISLATION CITED : Strata Schemes Management Act 1996

Administration of the Territory of Papua and New Guinea v Guba (1973) 130 CLR 353 Henderson v Henderson (1843) 67 ER 313 Plaintiff S157/2002 v Commonwealth of Australia (2005) 211 CLR 476 CASES CITED : Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 Sanofi v Parke Davis Ltd (No 1) (1982) 149 CLR 147 Somodaj v Australian Iron and Steel Ltd (1963) 109 CLR 285 Trawl Industries of Australia Pty Ltd (in liq) v Effem Foods Pty Ltd (1992) 36 FCR 406

Charles Schrader (Plaintiff) PARTIES : The Owners - Strata Plan No 12449 (First defendant) Tony Salier (Second defendant) Consumer, Trader and Tenancy Tribunal (Third defendant)

COUNSEL : Mr R Newlinds SC with Mr Jenkins (Plaintiff) Mr M Pesman (First defendant)

Andreones Pty Ltd (Plaintiff) SOLICITORS : Graham Cochrane (First defendant) Pigott Stinson (Second defendant) I V Knight, Crown Solicitor (Third defendant)

LOWER COURT JURISDICTION : Consumer Trader and Tenancy Tribunal of NSW

LOWER COURT JUDICIAL OFFICER : Tribunal Member A Borsody

IN THE SUPREME COURT OF NEW SOUTH WALES COMMON LAW DIVISION ADMINISTRATIVE LAW LIST

30087/2007 - CHARLES SCHRADER v THE OWNERS - STRATA PLAN No 12449

JUDGMENT (Appeal - CTTT - res judicata) 1 HER HONOUR: This appeal concerns whether a unit holder is entitled to bring more than one application for the reallocation of unit entitlements and the extent of the power of the Consumer, Trader and Tenancy Tribunal to consider application under Part 5 of the Strata Schemes Management Act 1996. 2 By summons filed on 17 August 2007 the plaintiff seeks firstly, that the orders made by the Consumer, Trader and Tenancy Tribunal ("CTTT") on 10 July 2007 in application SCS 06/54058 be quashed; and secondly, that the proceedings be remitted to the CTTT to be determined according to law. Section 200(1) of the Strata Schemes Management Act provides that an appeal lies to this Court. 3 The plaintiff is Charles Schrader ("Mr Schrader"). The first defendant is the owners of Strata Plan No 12449 ("the owners"); the second defendant is Tony Salier; and the third defendant is the CTTT. The owners relied on the affidavit of Graham Cochrane dated 2 October 2007. The CTTT filed a submitting appearance.

Prior proceedings in the CTTT 4 There have been three relevant decisions of the Tribunal, namely those dated 3 October 2003, 19 April 2004 and 10 July 2007.

The decision of 3 October 2003 5 On 3 October 2003, Tribunal Member A Carpentieri made orders pursuant to s 183 of the Strata Schemes Management Act that the unit entitlements of strata plan 12449 be reallocated as they were unreasonable at the time the strata plan was registered ("the first reallocation proceedings"). In these proceedings Mr Schrader was the applicant. There was no appearance on behalf of the respondent (the Owners Corporation) and no submissions before the Tribunal from interested parties. The written reasons dated 20 November 2003 disclose that submissions were received by the CTTT from Mr Salier (another owner within the block of units) after the deadline. They were received by the CTTT after the decision to reallocate the unit entitlements had been made. Hence, on 3 October 2003 when the Tribunal made it's decision it did not consider Mr Salier's submissions.

The decision of 19 April 2004 6 On 19 April 2004, Tribunal Member S Corley pursuant to s 191 of the Strata Schemes Manage Act revoked the orders made on 3 October 2003 regarding unit entitlements and affirmed the unit entitlements as set out in the registered strata plan ("the revocation proceedings"). The applicant in these 2004 proceedings was Mr Salier. At trial it was conceded by Counsel for Mr Schrader that although Mr Schrader was not a named party in the 2004 proceedings, he did in fact present evidence, had his valuer present and made submissions to the tribunal, which amounted to a hearing on the merits of Mr Schrader's claim.

The decision of 10 July 2007 7 On 10 July 2007, Tribunal Member A Borsody pursuant to s 185(4) of the Strata Schemes Management Act dismissed an application by Mr Schrader which again sought a reallocation of unit entitlements pursuant to s 183. The Tribunal Member decided that the revocation proceedings had established a res judicata to preclude proceedings on the issue of whether the unit entitlements had been reasonably allocated at the time the strata plan was registered ("the second reallocation proceedings"). 8 Mr Schrader now appeals from the Tribunal's decision in the second reallocation proceedings made on 10 July 2007.

Grounds of appeal 9 Mr Schrader submitted that the CTTT erred firstly, when it found that the doctrine of res judicata applied to the application made by the appellant for an order pursuant to s 183 of the Strata Schemes Management Act 1996 in proceedings SCS 06/54058; secondly, s 189 Strata Schemes Management Act did not displace the doctrine of res judicata in proceedings where an order pursuant to s 183 of the Strata Schemes Management Act is sought; and finally, when it did not find that the decision made in the revocation proceedings was made in jurisdictional error and of no legal effect.

Does the doctrine of res judicata apply in relation to Part 5 proceedings? 10 The main issue raised in this appeal concerns the interpretation of s 189 of the Act. However, this section must be read and understood in conjunction with other sections found in this part of the Act, namely ss 183 and 191. 11 Sections 183, 189 and 191 are all found within Part 5 of the Strata Schemes Management Act. Part 5 is headed "Order of the Tribunal". Part 5 is made up of 3 divisions that comprise ss 182 to 201. 12 Section 183 of the Strata Schemes Management Act empowers the Tribunal to vary unit entitlements. Section 183(2) reads: "…an order may be made only if the Tribunal considers that the allocation of unit entitlements among the lots: (a) was unreasonable when the strata plan was registered or when a strata plan of subdivision was registered, or

(a1) was unreasonable when a revised schedule of unit entitlements was lodged at the conclusion of a development scheme, or

(b) became unreasonable because of a change in the permitted land use, being a change (for example, because of a rezoning) in the ways in which the whole or any part of the parcel could lawfully be used, whether with or without development consent." 13 Section 189 reads: "Variation or revocation of orders by Tribunal

Unless specifically provided by this Act, an order made by the Tribunal is not capable of being varied or revoked by the Tribunal but this subsection does not prevent a subsequent order being made by the Tribunal under this Part on a fresh application." 14 Section 191 reads: "Tribunal may vary or revoke order in certain circumstances

(1) The Tribunal may, on application, make an order varying or revoking an order made by the Tribunal under this Part.

(2) An application may only be made with the approval of the Registrar and within the prescribed time.

(3) The Registrar must not give approval unless: (a) the Registrar is satisfied that there is sufficient reason to do so, or

(b) the order was made in the absence of the applicant and the Registrar is satisfied that there were reasonable grounds for that absence. (4) An application under this section may be made by any of the following persons: (a) the owners corporation,

(d) any person who made a written submission on the application for the original order,

(e) any other person who is required by the original order to do or refrain from doing a specified act. (5) An application under this section must be dealt with in all respects as if it were an application for an order under this Part required to be referred to the Tribunal.

(6) An order made under this section has effect, and the provisions of this Act apply to it, in all respects as if it were an order made under the provision of this Act under which the original order was made.

(7) However, an order made under this section may not be varied or revoked by another order made under this section." 15 Counsel for Mr Schrader submitted that the doctrine of res judicata does not apply to proceedings brought under s 183 because s 189 says that "this subsection does not prevent a subsequent order being made by the Tribunal under this Part on a fresh application". 16 Counsel for the Strata Corporation submitted that there must be "irresistible clearness" in the words used in the statute to oust the operation of the doctrine of res judicata. In support of that submission, counsel relied upon the High Court decision in Potter v Minahan (1908) 7 CLR 277, where his Honour O'Connor J at 304 stated: "It is in the last degree improbable that the legislature would overthrow fundamental principles, infinge rights, or depart from the general system of law, without expressing its intention with irresistible clearness; and to give any such effect to general words, simply because they have that meaning in their widest, or usual, or natural sense, would be to give them a meaning in which they were not really used." [citation ommited] 17 It was submitted by Counsel for the Strata Corporation that the doctrine applied but would not be offended when s 183 applications were brought on the occurrence of any one of the three events outlined in s 183. In this case the events are either in 1977 at the time of registration, or at the time of the development scheme, or at anytime there is a change of land use. It was submitted that bringing fresh proceedings under s183 outside of these points in time would offend the doctrine of res judicata. 18 The proper approach of the court is, in my view, to adopt the interpretation of the provisions that gives meaning to the plain words of the sections and operates in a manner that gives each section of the relevant legislation work to do, see - Plaintiff S157/2002 v Commonwealth of Australia (2005) 211 CLR 476 at 509-510 and Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 384. The words "this subsection does not prevent a subsequent order being made by the Tribunal under this Part on a fresh application" found in s 189 are there so to preclude repeated s 183 applications on similar grounds. The inclusion of those words in s 189 recognises that circumstances in relation to unit entitlements may change over time. Without a provision allowing for a fresh application to be brought a unit holder would, after bringing an unsuccessful application on one of the three s 183(2) grounds, be barred from bringing a later s 183(1) application on one of the other s 183(2) grounds, regardless of a future change in circumstances. The utility of s 189 is to allow further applications to the Tribunal where the circumstances of the application have changed in a way that enlivens one of the other s 183(2) grounds. The wording of s 189 is not intended to provide for repeated applications on similar grounds to be brought to the Tribunal under s 183(1). The wording of s 189 permits applications to be brought but only where circumstances have changed as outlines in s 183(2). These applications made under s 189 would not attract the doctrine of res judicata.

Res Judicata 19 It is common ground that doctrine of res judicata applies to the Tribunal. 20 The rule as to res judicata comes into operation whenever a party attempts in a second proceeding to litigate a cause of action which has merged into judgment in a prior proceeding. In the often quoted Henderson v Henderson (1843) 67 ER 313, Wigram VC said at 319: "In trying this question I believe I state the rule of the Court correctly when I say that, where a given matter becomes the subject of litigation in, and of adjudication by, a Court of competent jurisdiction, the Court requires the parties to that litigation to bring forward their whole case and will not (except under special circumstances) permit the same parties to open the same subject of litigation in respect of matter which might have been brought forward as part of the subject in contest, but which was not brought forward, only because they have, from negligence, inadvertence, or even accident, omitted part of their case. The pleas of res judicata applies, except in special cases, not only to points upon which the Court was actually required by the parties to form an opinion and pronounce a judgment, but to every point which properly belonged to the subject of litigation, and which the parties, exercising reasonable diligence, might have brought forward at the time." 21 For a party to establish that res judicata prevents litigation of a matter, the party must show. · A final judgment; · A competent tribunal; · Identity of the parties; and · Identity of subject matter. Also see Trawl Industries of Australia Pty Ltd (in liq) v Effem Foods Pty Ltd (1992) 36 FCR 406 at 412 per Gummow J. 22 To be a final judgment, a judgment must be final and not interlocutory - see Somodaj v Australian Iron and Steel Ltd (1963) 109 CLR 285 at 297-8. It was submitted by counsel for Mr Schrader that s 191 permits a decision of the Tribunal to be varied or revoked and where a decision is revoked, there is no longer any decision. It was submitted that the effect of the 2004 decision was to 'clean the slate' of all prior decisions made by the Tribunal in regard to the allocation of unit entitlements. Hence, Mr Schrader was entitled to bring fresh proceedings seeking a determination on the reasonableness of the unit entitlements. 23 If one looks at the nature of the 2004 CTTT decision and its strict legal effect on the parties, it is my view that this hearing was one that finally determined the rights between the parties. Mr Schrader was given an opportunity to be heard and a decision was made with evidence provided by parties involved in the dispute. The final determination was that the allocation of unit entitlements between the parties prior to the 2003 proceedings should be maintained. In these circumstances, the 2004 decision is a final judgment - see Sanofi v Parke Davis Ltd (No 1) (1982) 149 CLR 147 at 152. 24 In order for res judicata to apply, the 2004 proceedings must be a decision of a competent tribunal acting within its jurisdiction. It was on this point that there was a significant departure between the parties. Counsel for Mr Schrader submitted that the 2004 revocation decision of the CTTT was made beyond the jurisdiction of the CTTT for a number of reasons. They are firstly, the proceedings were purported to be conducted under s 191 but the decision went beyond the procedural matters proscribed under s 191; secondly, because the original submission of Mr Salier was received late and was not considered by the tribunal in the original proceedings, that Mr Salier did not meet the standing requirement under s191(4); thirdly, that s191 proceedings may only be brought with the Registrar's approval under s191(2) and must be brought within a proscribed time; and finally, that s191(3) limits the matters to which the registrar may exercise his or her discretion and that the 2004 decision went outside these limitations. 25 On the first point, s 191(1) provides that the Tribunal may vary or revoke an order made by the Tribunal under Part 5 of the Act. The 2004 decision revoked the orders of the Tribunal made in 2003. The 2004 decision was made within the power given under s 191(1) to the Tribunal and was not made beyond the jurisdiction of the Tribunal. In regard to the third and fourth points, no record of the Registrar's decision was on file and no written submissions were received from the plaintiff on these points. I shall now consider the second point raised by the plaintiff. 26 The 2004 proceedings were conducted by the CTTT by way of a s 191 application brought by Mr Salier (not Mr Schrader). Section 191(1) provides that the Tribunal may, on application, make an order varying or revoking an order made by the Tribunal under this Part. It was the 2003 order of the CTTT that was sought to be varied or revoked. Section 191(4) permits defined applicants with standing to make a s 191 application. Specifically, s 191(4)(d) provides that such an application may be brought by any person who made a written submission on the application for the original order. This was the only basis on which Mr Salier could have had standing to bring the s 191 application. 27 In Administration of the Territory of Papua and New Guinea v Guba (1973) 130 CLR 353 at 453 Gibbs J said that res judicata: "extends to the decision of any tribunal which has jurisdiction to decide finally a question arising between the parties, even if it is not called a court, and its jurisdiction is derived from statute or from the submission of the parties…" 28 The jurisdiction of the Tribunal to make an order varying or revoking an order under s 191(1) arises from statute where an individual with standing under s 191(4) brings the application. It is apparent that the Tribunal, in reaching the original 2003 decision, had not received Mr Salier's submissions in time and that the submissions were not before the Tribunal when the decision was made. Mr Salier did not have standing to bring the application under s 191(4). 29 The jurisdiction of the Tribunal can, however, also be derived from the submissions of the parties. As I have already mentioned, is was conceded by Counsel for Mr Schrader that Mr Schrader took the opportunity at the 2004 proceedings to present evidence and that on that occasion he was afforded a hearing on the merits. Mr Schrader submitted to the jurisdiction. Where a party submits to the jurisdiction of a court or tribunal and is provided the opportunity to present their case, as occurred here, it should not be permitted for them at a later date, to complain of the jurisdiction of the tribunal because they did not get the outcome they sought. It is my view that the 2004 decision of the Tribunal was a decision of a competent tribunal. 30 The identity of the parties in the 2003, 2004, and 2007 disputes are, in effect, the same. Although the names which appear on the record may have varied, the people who had standing to take part in the proceedings, or submitted to the jurisdiction of the Tribunal, remained the same. These parties being Mr Schrader, Mr Salier, and the owners of strata plan No 12449. 31 The subject matter in question at all three of the Tribunal hearings was the same. At each instance before the Tribunal the subject matter of dispute was whether the allocation of unit entitlements at the time of registration of the plan was unfair. 32 The four elements of res judicata were present when the Tribunal refused, in 2007, to hear the application of Mr Schrader. The Tribunal Member was entitled to make the decision that she did. There is no error of law. 33 Even if the doctrine of res judicata did not apply to the 2007 decision, the Tribunal would have had no jurisdiction to hear the application of Mr Schrader. This is because s 191(7) provides that an order made under s 191 may not be varied or revoked by another order made under s 191. The sole avenue of review under s 191 was spent by the 2004 application. Section 191(7) precludes a second order being made.

Should the Tribunal in 2007 have found the 2004 proceedings to be made in jurisdictional error and of no legal effect? 34 The second question before this Court is whether the Tribunal in the 2007 second reallocation proceedings erred when it did not find that the decision made by the CTTT on 19 April 2004, (in the reallocation proceedings) pursuant to s 191 of the Strata Scheme Management Act was made in jurisdictional error and of no legal effect. 35 The Tribunal in the 2004 proceedings by way of an application under s 191(1) brought by Mr Salier revoked the 2003 proceedings. The effect of s 191(7) is that it prevents the Tribunal from varying or revoking the 2004 revocation proceedings in the 2007 second reallocation proceedings. The Tribunal, in 2007, correctly recognised the limits of its jurisdiction, as a result of s 191(7), to set aside a previous decision (being the 2004 decision) that had been made pursuant to a s 191 application. The Tribunal in these circumstances had no jurisdiction to deal with the application brought by Mr Schrader and refused to make the orders he sought. 36 To displace the 2004 revocation proceedings on the grounds that Mr Salier did not have standing to bring the proceedings in the first place would have required an appeal to the Supreme Court under s 200(1) of the Act. The appeal brought before this court is in relation only to the 2007 proceedings. Therefore the question of whether the 2004 decision was made in jurisdictional error is not one that is before this Court for determination. The appeal fails. The order of Tribunal Member A Borsody dated 10 July 2007 is affirmed. The appeal is dismissed. The summons filed 17 August 2007 is dismissed. 37 Costs usually follow the event. The plaintiff is to pay the defendants' costs as agreed or assessed.

(1) The order of Tribunal Member A Borsody dated 10 July 2007 is affirmed.

(4) The plaintiff is to pay the defendants' costs as agreed or assessed. **********

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