Sydney Gold Bullion Exchange Pty Ltd v The Owners �e" Strata Plan No 34794 [2025] NSWCATCD 69 | Case summary

Sydney Gold Bullion Exchange Pty Ltd v The Owners �e" Strata Plan No 34794 [2025] NSWCATCD 69 | Case summary | Zoe

[18]

"SP 34794 was registered on 25 May 1989 and comprised two lots;

SP 35894 was registered on 29 November 1989 and is a strata plan of sub-division and created lots 3-30;

SP 37489 was registered on 19 June 1990 and sub-divided lot 26 being level eight creating lots 31-34;

The correct strata plan number is SP 34794 that entity owns the common property;

The aggregate units of entitlement [UE's] is 1000;

The only way to change UE's is by an order of the NSW Civil and Administrative Tribunal (NCAT);

Either an Owners Corporation or an individual Owner can make application for a change of UE's to NCAT;

There has been no application made by an Owner or by SP 34794 to date;

Levies can only be raised by UE's;

For a change of UE's it requires a Valuer's report and that needs to support the proposed change;

The relevant date of the valuation is not today but either one of the dates of the strata plan of subdivision (the relevant date);

A Valuer needs to inspect each and every lot and refer back to the relevant date - an expensive exercise;

The application can be opposed (if made by the Owners Corporation by individual Owners, or if made by an individual Owner by other Owners and/or the Owners Corporation);

If opposed they would need their own independent Valuer's report;

The Valuer needs to understand the condition of the lots at the relevant date;

The act says UE's are determined by value (not just size);

One cannot make changes to UE's by a resolution at a meeting;

The question of whether the tribunal can backdate the UE's if they make an order is not expressly stated in the Strata Schemes Management Act (SSMA);

If an application is made in the first six years in the life of a strata scheme then the original owner pays for the reallocation;

This strata plan is well outside the six years;

The original owner was Fobone Pty Ltd;

Any application to NCAT would also require the services of a lawyer;

A re-evaluation would affect each and every lot not just level eight;

The total of UE's for level eight when adding up the four lots is 60 which is the same as it was before the strata plan of subdivision;

Whole floors on levels nine and ten have 60 UE's;

An exercise was conducted comparing the UE's on level seven (lots 22-25) being 48 with those on level eight being 60;

This was where the anomaly was first noticed;

The discussion turned to level ground and one and the exclusive use of parts of level one for lots four and six and if any agreement is in existence;

This was considered a separate issue;

If a new plan strata plan of subdivision was created then in addition a surveyor would be required and stamp duty would be applicable;

By-Laws are never permanent Jane Crittenden advised and they can be amended or revoked;

Again, Jane Crittenden reminded those present that any Owner can make an application for a change in the UE's;

The discussion turned to the previous agent and to earlier strata committees;

Jane's recommendation is for Owners to come to an agreement on what outcome is desired and what the Owners Corporation (and individual Owners) want to achieve;

Once that is relayed along with any documents showing previous agreements) to the Strata Managing Agent then he can seek for the Owners Corporation advice from the lawyer."

[25]

"1. Pursuant to s 236 (1) of the Strata Schemes Management Act, 2015, the allocation of unit entitlements among the 4 lots in strata plan 37489 being lots 31, 32, 33 and 34 be amended in accordance with the schedule of unit entitlements in the valuation certificate as at 18 September 1990 of Simon Azar of Access Valuations Pty Ltd.

2. In consequence of order 1, the aggregate of unit entitlements in strata plan 34794, being the head strata plan, be reduced from 1000 to 986.

3. Further and in the alternative to order 2, pursuant to s 232 (1) (a), (d) or (e) of the Strata Schemes Management Act, 2015, the aggregate of unit entitlements in strata plan 34794 be reduced from 1000 to 986 and this reduction to take effect as a decision of The Owners - Strata Plan 34794 under s 245 (e) of the Strata Schemes Management Act, 2015.

4. The Owners- Strata Plan 34794 take all necessary steps to lodge with the Registrar General of New South Wales Land Registry Services and have recorded on the certificate of title of common property in strata plan 34794 the orders of the Tribunal.

5. The Owners- Strata Plan 34794 to inform all owners in writing of lodgment of these orders with the Registrar General of New South Wales Land Registry Services with this notification to be given within 7 days after lodgment.

6. Pursuant to s 232 (a), (d) or (e) of the Strata Schemes Management Act, 2015, The Owners - Strata Plan 34794 pay damages to the applicant in a sum to be assessed calculated as the aggregate of levies paid in respect of lots 33 and 34 in strata plan 37489 during their ownership by the applicant in excess of that which would have been paid if The Owners - Strata Plan 34794, in compliance with statutory and general law duties owed to the applicant, had acted on the special resolution passed on 13 June 2013 to amend the unit entitlements of lots 33 and 34 as now amended by these orders.

7. Pursuant to clause 39 of the Civil and Administrative Tribunal Rules, 2014, The Owners - Strata Plan 34794 pay interest to the applicant on damages awarded under order 6 from and including the date of these orders to and including the date of payment.

8. Pursuant to s 60 of the Civil and Administrative Tribunal Act, 2013 or clause 38 of the Civil and Administrative Tribunal Rules, 2014, The Owners Strata - Plan 34794 pay the costs of the applicant of and incidental to this application as agreed or assessed.

9. Pursuant to s 90 of the Strata Schemes Management Act, 2015, The Owners - Strata Plan 34794 must pay damages, interest and costs ordered against it in these proceedings from contributions levied only in relation to lots in the strata scheme other than lots 31, 32, 33 and 34 in strata plan 37489.

10. Further or in the alternative to order 9, pursuant to s 104 (1) of the Strata Schemes Management Act, 2015, The Owners - Strata Plan 34794 be prohibited from levying a contribution on the applicant in respect of its costs and expenses in the proceedings.

11. Further or in the alternative to order 9, pursuant to s 104 (2) of the Strata Schemes Management Act, 2015, The Owners - Strata Plan 34794 be prohibited from paying its costs and expenses in the proceedings or any part thereof from its administrative fund or capital works fund but must make a separate levy for that purpose.

12. Such further or other order as the Tribunal sees fit."

[63]

In support of the submission that the allocation of unit entitlements to Lots 31-34 was unreasonable at the time of registration of Strata Plan of Subdivision 37489, the applicant relied upon the fact that Lots 31-34 were "considerably smaller in area than Lot 26" yet were allocated the same number of unit entitlements.
Although the applicant did not expressly refer in its submissions to the propositions summarised at [17] and [18] above, its submissions concerning the appropriate allocation of unit entitlements to Lots 31-34 implicitly relied upon those matters.
The applicant suggested that the allocation of unit entitlements in Strata Plan 37489 proceeded by reference to s 10 rather than s 11 of the Strata Titles Act 1973, as in force in 1990[1].
Section 10 of the Strata Titles Act 1973, as in force in September 1990, was headed "Unit entitlement of lots created by subdivision of lots" and provided that a proposed strata plan of subdivision "altering the boundaries of one or more lots so as to create only two or more different lots" was required to include a schedule of proposed unit entitlements in which the proposed different lots were to have a total unit entitlement equivalent to the unit entitlement of the subdivided lots and each other lot was to have a unit entitlement which bore the same proportion to the aggregate unit entitlement as before the proposed subdivision.
Section 11 of the Strata Titles Act 1973, as in force in 1990, applied to proposed strata plans of subdivision (other than of development lots) not referred to in s 10. Section 11 required the plan of subdivision to include a schedule of unit entitlements, but did not impose any constraint on the proposed unit entitlements either in respect of the pre-existing lots or the proposed different lots.
The applicant also submitted that the allocation of 60 unit entitlements to Lots 31-34 by Strata Plan 37489 was "effected" by Fobone Pty Ltd, the original developer of the strata scheme for the building including the original Strata Plan 34794. The applicant submitted that for that reason, the Tribunal should be more inclined to accept that the allocation was unreasonable, citing Zhu v The Owners - Strata Plan No 51933 [2019] NSWCATCD 4 (Zhu) at [31(a)].
The applicant submitted that the history of the respondent's consideration of and ultimate failure to bring about an alteration of the unit entitlements for Lots 31-34, as outlined above, and the "deleterious financial consequences to the applicant" which the applicant asserted had followed, justified the making of an order adjusting the unit entitlements for Lots 31-34 notwithstanding the substantial delay (34 years) between the registration of Strata Plan 37489 and the commencement of the proceedings.
The applicant noted that the periods of 22 and 23 years respectively during which unit entitlements had been in place had not prevented the adjustment of unit entitlements in Zhu and in Seeto v The Owners - Strata Plan No 49458 [2019] NSWCATAP 166.

[64]

The respondent submitted that the Tribunal does not have the power to make any of the orders sought by the applicant.
The respondent submitted that the applicant sought to change the unit entitlements of each lot in the building, not just Lots 31-34.
The respondent submitted that a reduction in the aggregate unit entitlement from 1000 to 986, when the unit entitlement of each of Lots 3-25 and 27-30 was not altered, effected a change to the unit entitlement of each of those lots.
The respondent submitted that the Tribunal's power to adjust unit entitlements only arises when the Tribunal finds that the original allocation was unreasonable at the time the strata plan of subdivision was registered or became unreasonable due to a change in the permitted land use. I note that the applicant does not rely on any change in permitted land use.
The respondent submitted that, to establish that the original allocation of unit entitlements was unreasonable, the applicant must tender evidence of the value of all lots at the time of registration of Strata Plan 37489. The respondent submitted that subs 236(4) of the SSMA requires the provision of a certificate specifying the valuation at the time of registration of Strata Plan 37489 of "each of the lots to which the application relates".
The respondent submitted that Mr Azar's report cannot meet that requirement because the certificate of valuation only specifies the value as at 18 September 1990 of Lots 31-34. The respondent also submitted that Mr Azar's evidence does not provide any support for the submission that the unit entitlements of Lots 31-34 were unreasonable as at 18 September 1990.
The respondent further submitted that Mr Azar's report was deficient in: failing to identify the source or dates of photographs; failing to identify the assumptions made or facts relied upon in respect of the condition of the lots in 1990; and in failing to fully explain his reasoning in respect of what he identified as comparable sales.
The respondent also challenged the applicant's characterisation of the applicant's proposed Order 2, being the order varying the aggregate unit entitlement, as an "ancillary order", referring to the current provisions governing the allocation of unit entitlements in new strata plans and the definition of "valuation day" in Sch 2 to the SSDA.
The respondent submitted that purporting to make an order changing the aggregate unit entitlement pursuant to s 229 of the SSMA would contravene the principle expressed in Anthony Hordern & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia [1932] HCA 9; (1932) 47 CLR 1 at 7 that:

[84]

The order which the Tribunal can make is "an order allocating unit entitlements among the lots that are subject to a strata scheme in the manner specified in the order".
In making such a determination the Tribunal is required (s 236(2)) "to have regard to the respective values of the lots and to such other matters as the Tribunal considers relevant".
I accept the evidence of Mr Azar, as far as it goes. Notwithstanding its criticisms of that evidence, the respondent did not lead valuation evidence of its own or seek to cross examine Mr Azar.
However, I do not regard Mr Azar's evidence as sufficient to meet the requirements of subs 236(4) or as providing any basis for the conclusion that the allocation of unit entitlements to Lots 31-34 on the registration of Strata Plan No 37489 was unreasonable.
The requirement for a certificate of value extends to "each of the lots to which the application relates". I accept the respondent's submission that that requirement extends to all lots whose unit entitlement as a proportion of the aggregate unit entitlement will be affected. The requirement for a certificate of valuation would be pointless if it was required to certify the value of only a limited number of lots the unit entitlement of which is intended to be reduced.
I accept that, where it is suggested that a discrete group of lots the subject of a distinct strata plan of subdivision have unit entitlements allocated unreasonably between them, but it is not suggested that the total unit entitlement of those lots together, as a proportion of the aggregate unit entitlements of the strata scheme as a whole, is unreasonable, it would not be necessary to value any lots other than those within the discrete group the subject of an application for reallocation.
In other words, if the applicant's case was that the unit entitlements of Lots 33 and 34 were excessive compared to the unit entitlements of Lots 31 and 32, and the applicant only sought the adjustment of the unit entitlements of Lots 33 and 34 downwards and Lots 31 and 32 upwards by the same number, Mr Azar's valuation certificate could satisfy the requirements of s 236(4).
But that is not the application the applicant brings.
It follows that the application seeking the reallocation of unit entitlements does not comply with the requirements of s 236(4) and must therefore be dismissed.
I note that, in any event, s 236(2) requires the Tribunal, in making a determination in relation to the allocation of unit entitlements under s 236, to "have regard to the respective values of the lots". As the authorities referred to in Chehab Investments make plain, the respective values of the lots is a "fundamental element" in determining whether the application of unit entitlements is unreasonable.
If the Tribunal is to have regard to the respective values of the lots in determining the appropriate adjustment of unit entitlements it must have evidence of the value of all lots by reference to which the unit entitlement of the "affected lots" is to be assessed. The applicant relies, in arguing for the adjustment of unit entitlements for Lots 31-34, on the unit entitlements allocated to other lots in the building. Although the applicant explicitly purports to rely only on the fact that the total unit entitlement of Lots 31-34 is the same as the former unit entitlement of Lot 26, notwithstanding that the area of Lots 31-34 is less than that of Lot 26 by reason of the excision of common property, the appropriate adjustment to unit entitlements cannot be determined without reference to the value of other lots.
The Tribunal cannot consider the appropriate allocation of unit entitlements to Lots 31-34 without evidence of the value of the lots to which they are to be compared. This proposition was recognised in Gary Bugden, Strata Title Management Practice in New South Wales (6th ed,1993, CCH Australia Ltd) at par 1925:

[86]

The learned author was referring in that passage to s 119 of the Strata Titles Act 1973, as in force in 1993, but the provisions were in similar terms and the critical wording was identical.[2]
The applicant submits that the impact on other lots of the adjustment of unit entitlements which it seeks is "de minimis". It calculates that the "liability for common expenses borne by the other lot owners will increase by 1.4%". I do not accept that that adjustment is de minimis, that is so negligible that it may be ignored. It is not zero. Nor, in my view, is it trivial.
The applicant suggests no basis for determining when an increase in the proportionate interest of other lot owners ceases to be marginal, trivial or de minimis.
The applicant seeks to reduce the obligations of Lots 31-34 at the expense of all other lot owners. It cannot justify that outcome on the basis that the burden of additional expenses is not large.
The applicant's suggestion, that the allocation of unit entitlements to Lots 31-34 on the registration of Strata Plan No 34789 may have proceeded by reference to s 10 of the Strata Titles Act 1973 rather than s 11, does not advance the applicant's argument. Regardless of whether it was the case that the strata plan of subdivision was adopted on an incorrect understanding of the applicable provision, the Tribunal's jurisdiction to reallocate entitlements is governed by s 236.
The fact that the allocation of unit entitlements by Strata Plan No 37489 was effected by Fobone Pty Ltd does not establish that the original allocation was unreasonable. To establish that proposition, valuation evidence comparing Lots 31-34 to other lots would be essential.
The fact that the respondent's strata committee and general meetings of the respondent had passed resolutions consistent with the outcome the applicant now seeks does not establish that the allocation was unreasonable or that the respondent was bound to bring about the alteration of unit entitlements.
The "deleterious financial consequences" to the applicant referred to in its submissions could be established only if it were first shown that the allocation of unit entitlements is unreasonable. In the absence of the necessary valuation evidence, no deleterious financial consequences can be established.
It may also be noted that the applicant acquired Lots 33 and 34 after the registration of Strata Plan No 37489. Accordingly, it must be taken to have been fully aware of the share of the expenses of the respondent which it would be obliged to pay.
The applicant's suggested characterisation, in its reply submissions, of s 236 as "remedial or beneficial" legislation is neither accurate nor relevant to the interpretation of s 236.
In The Owners - Strata Plan 87003 v Raysons Constructions Pty Ltd [2025] NSWSC 66 at [62], Leeming JA expressed agreement with the following statement in P Herzfeld and T Prince, Interpretation (Thomson Reuters, 3rd ed, 2024) at par [10.300]:

[88]

There is no reason why s 236 should be construed beneficially in favour of any applicant for an order for the reallocation of unit entitlements. The section is intended to provide a mechanism to rectify a misallocation of unit entitlements which has occurred, for whatever reason. Any reallocation will advantage some lot owners and disadvantage others, there is no reason why the provision should be interpreted in favour of those who seek to be advantaged.
If anything, the objects of the section should require neutrality between those seeking adjustment and those opposing.
The applicant's submission in reply relying upon cl 4 of Sch 2 to the SSDA ignores the fact that the predecessor to s 236 of the SSMA, s 183 of the Strata Schemes Management Act 1996 (NSW) (SSMA 1996), was in relevant respects identical to s 236 of the SSMA. There is no reason to construe a provision which predated the enactment of the SSDA in 2015 by reference to a new provision inserted in the SSDA in 2015.
The practical issues raised by the applicant, regarding the difficulty and cost of valuing all lots, do not provide any justification for construing s 236 other than as requiring the valuation of all lots whose proportion of the total unit entitlements would be altered by a proposed reallocation. The fact that the installation of fit outs to lots other than Lots 31-34 might have affected the value of those lots by the time of registration of Strata Plan No 37489 is a reason why the valuation of all lots at that date is necessary, rather than a reason why it should not be required. The fact that Mr Azar was able to value Lots 31-34 as at September 1990 might be taken as evidence that the valuation of the other lots in the building would also have been possible.
The applicant provided no evidence of the cost of valuing all lots. Even assuming that the cost would be "prohibitive", in the sense of likely to exceed the value of the reduction in unit entitlement which the applicant seeks, s 236 does contain an answer to that difficulty. Subsection 236(6) provides that, in the event that the Tribunal makes an order reallocating unit entitlements pursuant to that section, it may also make an ancillary order that the original owner pay the applicant the costs of the application, including the costs incurred in obtaining a valuation. "Original owner" is defined in s 4 of the SSMA, in respect of a freehold strata scheme, as "the person who held the fee simple in the parcel the subject of that scheme when the strata plan for the scheme was registered". In this case that would appear to be Fobone Pty Ltd.
Contrary to the advice given to the strata committee by Ms Crittenden in March 2021, the Tribunal's power to order the original owner to pay the costs of an application is not limited to the first six years after the registration of a strata plan or strata plan of subdivision.
However, Fobone Pty Ltd is not a party to this application and it would not be appropriate to speculate further regarding its potential liability if the applicant had obtained evidence of the value of all lots in the strata scheme as at the date of registration of Strata Plan No 37489 and established that the allocation of unit entitlements at that date was unreasonable.
Because I have concluded that I should not make an order pursuant to s 236 allocating unit entitlements, it is not necessary to consider whether the Tribunal has power either pursuant to par 229(a) or par 232(1)(a) to make Orders 2 and/or 3 in the Amended Application.

[128]

I do not accept that the respondent owed the applicant a duty of care to bring about the outcomes sought to be achieved by the resolutions of 13 June 2013 and 20 April 2015, or to take steps to identify whether the resolutions were effective to achieve those outcomes and, if not, how the outcomes might be achieved.
The applicant was capable of undertaking those tasks itself, it led no evidence to suggest that it was dependent upon the respondent to do so. For that reason, the failure of the respondent to bring an application for the reallocation of unit entitlements was not a necessary condition for the applicant's payment of strata levies greater than it would have paid if unit entitlements had been reallocated: vide s 5D(1)(a) of the Civil Liability Act.
There is no good reason why, in a context where the applicant was itself capable of taking steps to avoid the economic loss it asserts the respondent caused, the respondent should bear responsibility for that loss: vide s 5D(2) and (4) of the Civil Liability Act.
I am not persuaded that a reasonable owners corporation in the respondent's position in 2013, or at any time up to 2024, would necessarily have taken the steps which the applicant suggests it should have taken to bring about a reallocation of unit entitlements or reduce the burden of strata levies on the applicant: vide s 5B(1)(c) of the Civil Liability Act.
The applicant suggested that the respondent's conduct dissuaded it from taking action itself, but the applicant led no evidence to that effect. Save in one irrelevant instance, Mr Saffo did not in his affidavit give any evidence concerning the belief or understanding of the applicant or its reasons for taking or failing to take any action. The one instance was in par 43 of Mr Saffo's affidavit where he stated that the applicant had filed an application in the Tribunal in September 2022 seeking a refund of levies pursuant to s 87 of the SSMA but had withdrawn that application upon becoming aware of the decision in Quo Warranto Pty Ltd v Goodman which had made it clear that s 87 did not empower the Tribunal to "vary contributions as between owners".

[132]

On any view, the application in these proceedings was not filed within 28 days of the applicant becoming entitled to make the application.
If I had accepted that the applicant did have a cause of action against the respondent either for breach of statutory duty or in negligence, it would have been necessary to determine whether the time for the applicant to commence proceedings in respect of that cause of action should be extended pursuant to s 41 of the NCAT Act.
The applicant did not seek an extension of time. However, it may be that, because the submissions in this matter were complete before the publication of the decision in White House Developments (on 2 April 2025), the parties did not contemplate the possibility that rule 23(3)(b) might be the relevant provision governing the time for commencement of proceedings for breach of statutory duty or in negligence.
The Tribunal may grant an extension of time of its own motion but, before doing so, procedural fairness would require that the parties have an opportunity to be heard, and it would be necessary to seek further submissions from the parties.
Because I have concluded that the respondent would have had no liability to the applicant either for breach of statutory duty or in negligence even if proceedings had been commenced within the relevant limitation period, I do not consider it necessary to give further consideration to the question whether to grant an extension of time and will not further delay the delivery of these reasons for decision by seeking submissions in that regard.
I note, nevertheless, that in my view it is clear that, if s 14(1) of the Limitation Act had been applicable, any claim by the applicant would be barred by that provision and would have been barred since six years after the meeting of 13 June 2013 (or rather the first date thereafter when a notice of strata levies was issued to the applicant, which must have occurred during 2013). Likewise, any claim arising in respect of the 2015 resolution would have been barred from six years after the first notice of strata levies issued after 20 April 2015.
I also note that, if rule 23(3)(b) were not applicable to common law claims brought in the Tribunal against an owners corporation, the fact that jurisdiction to make orders for compensation in relation to disputes arising under the strata titles legislation was only conferred on the Tribunal in 2016 would not mean that any cause of action which the applicant may have had in respect of conduct of the owners Corporation in 2013 or 2015 was not barred six years after it arose. The applicant's submissions to the contrary confuse the accrual of a cause of action with the availability of a remedy in the Tribunal.
I am not persuaded that the respondent at any time confirmed any obligation to the applicant within the meaning of s 54 of the Limitation Act. The resolution passed at the Annual General Meeting on 27 November 2019 purported to require the strata manager to invoice the owners of Lots 4 and 6 for the benefit of the owners of Lots 31-34. That was not an acknowledgment of liability on the part of the respondent. Correspondence from the chairman and treasurer could not bind the respondent unless pursuant to a resolution of the strata committee or general meeting, and the resolution of the strata committee on 30 March 2021 explicitly noted that the respondent may decide not to proceed with an application for reallocation of unit entitlements and "consideration of obtaining advice about paying compensation to Level 8 Lot Owners" was deferred. There is no acknowledgment in those resolutions of any rights of Level 8 Lot Owners to fulfilment of any obligation to seek a reallocation of unit entitlements or of any liability to compensation for not having done so.
Even if, which I do not accept, the respondent had a duty to lot owners from time to time to seek to carry out the intention of the 2013 or 2015 resolutions, that duty did not inure to the benefit of the applicant, independently of any claims the applicant might previously have had by reason of its ownership of Lot 34, upon acquisition of Lot 33 on 23 April 2021.
The fact that any cause of action would, if brought in a Court, have been statute barred by the time the applicant brought proceedings in the Tribunal would be a strong factor militating against any extension of time for the commencement of proceedings pursuant to s 41 of the NCAT Act.

Sydney Gold Bullion Exchange Pty Ltd v The Owners �e" Strata Plan No 34794 [2025] NSWCATCD 69;

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Judgment (139 paragraphs)

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