The Owners of Strata Plan 56117 v Drexler

District Court of NSW|2013-04-10|Before: Mr J, Member J, French CJ, Bell JJ

EX TEMPORE Judgment 1Brian and Leonie Drexler live in an apartment in Pyrmont with their Jack Russell terrier named Larry. The owners corporation passed a by-law prohibiting the keeping of animals on the premises but Mr and Mrs Drexler say the by-law has no application to them because Larry is used as a hearing dog. 2An adjudicator determined that Larry was not a hearing dog and ordered that he be removed. Mr and Mrs Drexler successfully appealed, the Consumer, Trader and Tenancy Tribunal ("the Tribunal") deciding that Larry was a hearing dog. The significance of whether Larry is a hearing dog arises from s 49(4) of the Strata Schemes Management Act 1996. Section 49(4) provides: "49 Restrictions on by-laws ... (4) By-law cannot prevent keeping of guide dog A by-law has no force or effect to the extent to which it purports to prohibit or restrict the keeping on a lot of a dog used as a guide or hearing dog by an owner or occupier of the lot or the use of a dog as a guide or hearing dog on a lot or common property." 3The owners corporation appeals to this Court under s 67 of the Consumer, Trader and Tenancy Tribunal Act 2001. Under that provision, the appeal is limited to "questions with respect to a matter of law". Whatever be the precise ambit of this phrase (see Kostas v HIA Insurance Services Pty Ltd [2010] HCA 32 at [88]) it is "wide enough to encompass a question of mixed law and fact" (Kostas at [25] per French CJ) and includes a "no evidence ground" (see Kostas at [90] per Hayne, Heydon, Crennan and Bell JJ). As the plurality stated at [91]: "Whether there was no evidence to support a factual finding is a question of law, not a question of fact...What amounts to material that could support a factual finding is ultimately a question for judicial decision. It is a question of law." 4Although the amended summons lists a number of grounds of appeal, essentially the owners corporation's challenge is two-fold. First, the Tribunal failed properly to construe s 49(4) of the Strata Schemes Management Act 1996, deriving a meaning which the subsection did not bear. Secondly, there was no evidence to support a finding that Larry was used as a hearing dog within the proper meaning of s 49(4). 5It seems to me, and I did not understand it to be disputed, that these decisions of the Tribunal were decisions on questions with respect to matters of law - one, the construction of a statutory provision, the other a "no evidence" ground - within the meaning of s 67 of the Consumer, Trader and Tenancy Tribunal Act 2001 as explained in Kostas. 6Mr and Mrs Drexler raised another issue before consideration on this appeal. They say that the appeal must fail because of s 80D of the Strata Schemes Management Act 1996. S 80D provides: "80D Legal action to be approved by general meeting (1) An owners corporation or executive committee of an owners corporation must not seek legal advice or the provision of any other legal services, or initiate legal action, for which any payment may be required unless a resolution is passed at a general meeting of the owners corporation approving the seeking of the advice or services or the taking of that action. (2) The regulations may make provision for or with respect to exempting any type of legal service or legal action from the operation of this section." 7It is not in contest that prior to the commencement of this appeal no resolution was passed at a general meeting of the owners corporation approving the taking of the appeal. However, the owners corporation relies upon regulation 15 made under section 80D(2) of the Strata Schemes Management Act 1996. Reg 15 of the Strata Schemes Management Regulation 2010 provides: "15 Exemptions from need for approval for certain legal action (1) The seeking of legal advice, the provision of legal services or the taking of legal action is exempt from the operation of section 80D of the Act if the reasonably estimated cost of seeking the legal advice, having the legal services provided or taking the legal action would not exceed: (a) an amount equal to the sum of $1,000 for each lot in the strata scheme concerned (excluding utility lots), or (b) $12,500, whichever is the lesser. (2) In a case where the cost, or estimated cost, of seeking legal advice, having legal services provided or taking legal action has been: (a) disclosed by the Australian legal practitioner concerned in accordance with the Legal Profession Act 2004, or (b) set out in a proposed costs agreement under that Act, the reasonably estimated cost of seeking the legal advice, having the legal services provided or taking the legal action is taken, for the purpose of this clause, to be the cost or estimated cost so disclosed or set out. (3) The seeking of legal advice, the provision of legal services or the taking of legal action is exempt from the operation of section 80D of the Act if its purpose is to recover unpaid contributions and interest under section 80 of the Act." 8Accordingly, the matters for decision involve: (a) the proper meaning of s 49(4) of the Strata Schemes Management Act 1996; (b) whether there was no evidence to support the Tribunal's finding that Larry was "used as a hearing dog"; (c) the proper meaning of reg 15 in the context of s 80D of the Strata Schemes Management Act 1996; (d) whether the evidence established that the owners corporation was entitled to the exemption in reg 15; and (e) if the reg 15 exemption was not established, did s 80D on its proper construction preclude a successful appeal. 9Although it is possible that a decision on one of these matters might impact on whether decisions on the others are necessary, the parties agreed at the outset of this appeal and also at the conclusion of submissions that they wished for the Court to determine all of the issues.

A. The proper meaning of section 49(4) 10Crucial to the meaning of s 49(4) of the Strata Schemes Management Act 1996 is the meaning of "hearing dog". The term is defined in the Macquarie Dictionary as "a dog which is trained to aid people with a hearing disability by alerting them to such noises as the doorbell or the telephone ringing, fire or burglar alarms, et cetera" and in the Oxford English Dictionary as "a dog trained to alert the deaf or hard of hearing to such sounds as the ringing of an alarm, doorbell, or telephone". 11These definitions recognise three components of a hearing dog: it is "trained", it assists persons with a hearing disability, and it provides this assistance by alerting the disabled person to household noises such as doorbells, telephones and alarms. 12It can be noted that the detail of the first and third components is not identified in the dictionaries. Neither the type or scope of training, nor the manner of alerting the disabled person, is defined. 13The owners corporation sought to narrow the ambit of the meaning of "hearing dog", submitting that the term had a technical meaning and applied only to dogs which had a particular period of training (six to eight months), which provided a particular level of assistance (alerting the disabled person to smoke alarms, door knocks, doorbells, alarm clocks, oven times, microwaves, a baby's cry, telephone, telephone typewriter and whistling kettles) and utilized a particular manner of alerting the disabled person (by touching the disabled person and leading them to the source of the sound, except in the case of a smoke alarm where the hearing dog would drop to the floor). The owners corporation relied for this submission on what appeared to be two brochures supplied by the organisation known as Lions Hearing Dogs Inc. 14In my view, the content of these brochures cannot properly be regarded as evidence of a technical meaning of the term "hearing dog". I do not propose to set out the brochures in full. It suffices to say that their content comprises an explanation of the features and training of a Lions hearing dog. They do not purport to indicate anything about other hearing dogs, nor do they contain anything resembling a purported definition of a "hearing dog". 15According to the analysis contained in paragraphs 4.15 and 4.18 of Statutory Interpretation in Australia, (D C Pearce and R S Geddes, 7th ed (2011) LexisNexis) the technical meaning of a term can only be established by evidence of trade usage. There was no relevant evidence before the Tribunal, nor is there any before me. Further, it is more difficult, according to Pearce and Geddes, to confine the ordinary meanings of words by trade usage (which is what is proposed by the owners corporation here) than to extend the ordinary meaning. The brochures supply no evidence of how the term is used in the industry. Rather, they detail the features of a particular type of hearing dog, a Lions hearing dog. 16The Tribunal considered the Lions Hearing Dog Inc material at paragraphs 28 and 54 (Red Appeal Book pp 28 and 36), noted that there was no relevant legislation in New South Wales providing for the accreditation of animals as hearing dogs (at [37] and [54]) and declined to define "hearing dog" in s 49 of the Strata Schemes Management Act 1996 in accordance with the features of a Lions hearing dog. I can find no error in this approach. 17The owners corporation also relied on certain dictionary meanings of "trained" in the Macquarie Dictionary, including "18 to subject to discipline and instruction, educate, drill", "19 to make proficient by instruction and practice as in some professional work" and "21 to discipline and instruct (an animal) to perform specified actions" and also relied on definitions in the Oxford English Dictionary, perhaps the most analogous of which is "to teach (an animal) a particular behaviour, especially to obey orders". 18Neither of these references indicate a narrower, more specific or technical meaning of "hearing dog". If anything, they confirm the ordinary meaning of the phrase indicated earlier that a hearing dog is a dog trained to assist persons with a hearing disability by alerting them to some common household sounds, such as a doorbell or a telephone. 19The owners corporation, before the Tribunal and perhaps to a lesser extent before this Court, relied upon the provisions of s 9(2) of the Disability Discrimination Act 1992 (Cth). Mr and Mrs Drexler disputed the relevance of this provision. 20Section 9(2) of the Disability Discrimination Act 1992 (Cth) provides: "... (2) For the purposes of this Act, an assistance animal is a dog or other animal: (a) accredited under a law of a State or Territory that provides for the accreditation of animals trained to assist a persons with a disability to alleviate the effect of the disability; or (b) accredited by an animal training organisation prescribed by the regulations for the purposes of this paragraph; or (c) trained: (i) to assist a person with a disability to alleviate the effect of the disability; and (ii) to meet standards of hygiene and behaviour that are appropriate for an animal in a public place. Note: For exemptions from Part 2 for discrimination in relation to assistance animals, see section 54A." 21Section 54A of the Disability Discrimination Act 1992 (Cth) makes specific provision in respect of assistance animals and discrimination. 22The Tribunal accepted the relevance of the definition in s 9 (at [41], Red Appeal Book p31 N-Q and at [46]-[47], Red Appeal p34 G-N and see generally Red Appeal Book pp31-34). The Tribunal considered the authorities dealing with s 9 of the Disability Discrimination Act 1992 (Cth). The provision and the related authorities led the Tribunal member to conclude (at [46], Red Appeal Book p34) that: "I am satisfied that it is appropriate to invoke the provisions of s 9(2)(c) of that Act to assist in determining appropriate formal requirements to be applied to a hearing dog in circumstances where there is no provision for the accreditation of a hearing dog under New South Wales law nor is there any provision for accredited animal trainer organisations within New South Wales". 23There is a problem with this approach. Section 9(2)(c) was not enacted until 2009. All of the authorities considered by the Tribunal concerned an earlier version of s 9. In 2009, the Commonwealth Parliament enacted amendments to the Disability Discrimination Act 1992 (Cth) to include a definition of "assistance animal" and replaced s 9 with the current provision. Previous to that date, s 9 provided (see Forest v Queensland Health [2007] FCA 936 at [87]): "9 Disability Discrimination - Guide dogs, Hearing Assistance Dogs and Trained Animals: (1) For the purposes of this Act, a person (discriminator) discriminates against a person with: (a) a visual disability; or (b) a hearing disability; or (c) any other disability; (aggrieved person) if the discriminator treats the aggrieved person less favourably because of the fact that the aggrieved person possesses, or is accompanied by: (d) a guide dog; or (e) a dog trained to assist the aggrieved person in activities where hearing is required, or because of any matter related to that fact; or (f) any other animal trained to assist the aggrieved person to alleviate the effect of the disability, or because of any matter related to that fact; whether or not it is the discriminator's practice to treat less favourably any person who possesses, or is accompanied by, a dog or any other animal. (2) Subsection (1) does not affect the liability of a person with a disability for damage to property caused by a dog or other animal trained to assist the person to alleviate the effect of the disability or because of any matter related to that fact." 24The previous provision contains references in its title to "hearing assistance dogs" and also contained references to a "hearing disability" in s 9(1)(b), to "a dog trained to assist the aggrieved person in activities where hearing is required" in s 9(1)(e) and to "any other animal trained to alleviate the effect of the disability" in s 9(1)(f). These references tend to indicate that, at least until 2009, the legislation regarded a "hearing assistance dog" as a dog trained to assist a person with a hearing disability to alleviate the effect of the disability. That definition replicates precisely the definition contained in the current version of s 9(2)(c)(i). This definition is similar to but perhaps more general and of broader scope than the definitions derived from the dictionaries: the latter confine the assistance to alerting the hard of hearing to normal household sounds, the former contemplates potentially a wider range of possible assistance. This difference is of no practical significance in the present case. 25What is of significance, however, is the Tribunal's decision to include in the definition of hearing dog the requirement stated in s 9(2)(c)(ii) of the current provision - that the dog be "trained to meet standards of hygiene and behaviour that are appropriate for an animal in a public place" (see the Tribunal's findings at, for example, [47] Red Appeal Book p34 and [56] Red Appeal Book p37). 26The meaning of s 49(4) of the Strata Schemes Management Act 1996 prior to 2009 must have been uninformed by the un-enacted content of s 9 of the Disability Discrimination Act 1992 (Cth) and, in particular, s 9(1)(c)(ii) of that Act. The provision, as it formerly existed, did not contain any reference to hygiene or behaviour in a public place so there was no scope to construe s 49(4) of the Strata Schemes Management Act 1996 as embracing this requirement. 27Moreover, it might be doubted whether a Commonwealth enactment changing the definition of a term could properly influence the definition of a related but not identical term in a State Act. 28It may be that the common law can be influenced by the "gravitation pull" of statutes (see Pilmer v The Duke Group Ltd (in liq) [2001] HCA 31, (2001) 207 CLR 165 at 230 [170]), but it seems less likely that the meaning of statutory terms in one jurisdiction would be affected by later enactments in another. Nor is it likely that principles that might allow constitutional meanings to change over time would have any application to a State Act dealing with a subject so prosaic as dogs (compare Baker v R [2004] HCA 45, (2004) 223 CLR 513 at [56]). 29In these circumstances, I do not accept that the requirement in s 9(1)(c)(ii) of the Disability Discrimination Act 1992 (Cth), by its enactment in 2009, can impact on or be incorporated in the meaning of "hearing dog" in s 49(4) of the Strata Schemes Management Act 1996. In my respectful view, the Tribunal was in error to find otherwise. 30But the question still remains as to whether the ordinary meaning of "hearing dog" embraces a requirement of public behaviour similar to that included in s 9(1)(c)(ii) of the Strata Schemes Management Act 1996, even though no such requirement is found in dictionaries. For what it is worth, there is little reference to this sort of training in the Lions Hearing Dog Inc brochures which, on the subject of alerting the hard of hearing to household sounds, go into great detail. One brochure (Blue Appeal Book p100 R) speaks of the dog being "entitled to enter any public place and use all forms of public transport" which, of course, says nothing of training. The other brochure (Blue Appeal Book p101 R) goes a little further, referring to "other training includes obedience and extensive socialisation...accompanying their owners into public areas such as supermarkets...transport". The brochure does not indicate how the hearing dog might, if at all, alleviate a hearing disability in public. 31I think the Court can take judicial notice of the fact that guide dogs often accompany their owners in public places and there provide assistance to them. That circumstance may support a requirement for "training to meet standards of hygiene and behaviour ... in a public place" in respect of guide dogs. But I am not persuaded that the same requirement applies to a hearing dog. The primary, perhaps exclusive role, of a hearing dog is to assist the hard of hearing to respond to some normal household sounds. The benefit of a hearing dog seems essentially to be "in the home", which is quite different from the place of the benefits, or at least some of them, provided by a guide dog. 32Further, the use of s 49(4) of the Strata Schemes Management Act 1996 is confined to the "keeping on a lot" of the dog, or the "use" of a dog "on a lot or common property". That is, s 49(4) is focused on the presence of the dog in and around the home of the owner and not in a public place. This may provide some further support for the conclusion to which I have come. 33For these reasons, I conclude that the proper meaning of a hearing dog in s 49(4) is a dog trained to assist a person with a hearing disability by alerting them to some normal household sounds, such as a telephone or a doorbell. It is not, in my opinion, necessary that the dog meet some standard of hygiene and behaviour in a public place in order to be a hearing dog under s 49(4). Of course, many hearing dogs may meet such standards. There is some evidence that Lions hearing dogs have obedience training in public places and I consider later in these reasons whether, in any event, there was evidence that Larry satisfied such behavioural standards. But if a dog is trained and able to alert the hearing impaired owner to a range of household sounds, that dog, in my view, does not cease to be a "hearing dog" if it, for example, tends to bark in public. It may just be a poorly behaved hearing dog. 34The next question that arises is whether the ambit of s 49(4) is affected by the use of the words "dog used as" a hearing dog. Mr and Mrs Drexler submitted that this broadened the scope of s 49(4), that it applied to more than just hearing dogs but includes also dogs used for that purpose. 35On the other hand, the owners corporation submitted that these words narrowed the range of dogs falling within the protection of s 49(4). It submitted that the phrase "dog used as a ... hearing dog" means "a hearing dog used as a hearing dog" so that the particular animal needed to be both a hearing dog and so used. 36In my view, the presence of these words "dog used as" do not work a substantial change to the range of animals falling within s 49(4). I accept that it is not enough that an animal be a trained hearing dog to fall within s 49(4) if it is not being used to assist the hearing impaired person. But on the other hand, the words seem to focus on the use being made of the dog, rather than its training, description, title or status. If a dog is doing the job of a hearing dog, that is sufficient. Of course, without training, a dog is unlikely to be able to perform the function of assisting the hearing impaired to respond to normal household sounds. Further, evidence of training would indirectly support the conclusion that a dog is being so used. Nevertheless, the phrase "used as a hearing dog" directs attention not directly to the training the dog has received but, rather, to the activities and functions the dog performs. The object of the provision supports a focus on the substance of what the dog does, rather than the formal nature of its training (see for example, Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355, 381 at [69]). 37In my view, a dog is "used as a hearing dog" if a not insignificant part of its function is to alert a person with a hearing disability to normal household sounds. A dog with this quality is a dog that falls within the ambit of s 49(4) of the Act. 38During the course of this appeal, the owners corporation sought to draw a distinction between a person hard of hearing and a person with a hearing disability. I do not think any such distinction should be drawn and, in any event, I understood that this distinction was not pressed by the end of the submission. If such a difference exists, it is not material to the matter before me as will appear. 39The owners corporation also made the related submission that a hearing dog needed to be trained to deal with a profoundly or totally deaf person, as well as a person hard of hearing. The use of the disjunctive in the Oxford definition and the reference to "hearing disability" in the Macquarie definition does not support this submission. In my view, a dog can be a hearing dog if the dog is trained to alleviate the disability of the hearing impaired person even if that training would not enable a dog to assist a person who is profoundly deaf. The definition of "deaf" in the Macquarie Dictionary is "wholly or partially unable to hear" which also does not assist the owners corporation's submission. 40The Tribunal appeared not to distinguish between a "hearing dog" and a "dog used as a hearing dog" (cf paragraphs 46 and 47). For reasons that I have given, in my view, there is little practical difference between the two. The former is concerned principally with the training of the dog, the latter with its use. But as a practical matter, it is necessary that a dog, to be used as a hearing dog, be trained so that it can provide the assistance that a hearing dog is trained to provide. In these circumstances, I do not regard the attention the Tribunal gave to training as an error: the training was appropriately part of the method of identifying whether the dog was genuinely being used as a hearing dog.

B. Evidence of Larry being used as a hearing dog 41The owners corporation submitted that there was no evidence that Larry was used as a hearing dog. This submission was based on the lack of evidence that Larry was able to perform all the functions of a Lions hearing dog or perform them in the manner adopted by a Lions hearing dog. This fact is of no significance if a dog need not possess all the features of a Lions hearing dog in order to be a hearing dog. 42The owners corporation also submitted that there was no evidence that Larry met the second requirement adopted by the Tribunal (for a dog to be used as a hearing dog) namely, that Larry was trained to meet standards of hygiene and behaviour that are appropriate for an animal in a public place. 43As I have found this requirement to not be part of the definition of a hearing dog, this submission also falls away. 44However, lest I be incorrect in this view, I propose to consider whether there was any evidence that Larry was so trained. Section 28 of the Consumer, Trader and Tenancy Tribunal Act 2001 provides: "28 Procedure of Tribunal generally (1) The Tribunal may, subject to this Act, determine its own procedure. (2) The Tribunal is not bound by the rules of evidence and may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of procedural fairness. (3) The Tribunal is to act with as little formality as the circumstances of the case permit and according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms. ..." 45As the Tribunal is not confined to informing itself by "evidence", consideration of the "no evidence" ground is perhaps more appropriately described as an absence of any material before the Tribunal to support the finding. 46In the present case, Mr and Mrs Drexler principally relied on two certificates as evidence of Larry's training to meet public hygiene and behaviour standards. The first is an "Intermediate Obedience Training" "Certificate of Participation" conducted at Rushcutters Bay Park. The certificate indicated the recognition or approval of the City of Sydney (see Blue Appeal Book p 57). 47In my view, this is some, though slight, evidence that Larry was trained in public hygiene and behaviour. It was relied upon by the Tribunal at paragraph 56 (Red Appeal Book p37). 48The Tribunal also repeatedly noted the absence of any real challenge to the reliability of the evidence of training (see [50] at Red Appeal Book p35, [55] at Red Appeal Book p37). 49The other matter of significance relied upon by the Tribunal ([17] at Red Appeal Book p26) was certificate evidence that Larry was registered as an assistance animal under the Companion Animals Act 1998. The certificate of registration (see Blue Appeal Book p55) expressly states that Larry was registered as an "assistance animal" and that the registration cost was nil. 50Section 72(3) of the Companion Animals Act 1998 provides: "(3) The certificate of registration is evidence that the animal is registered and that the registration information shown on the certificate is that entered on the Register. Information entered on the Register is presumed (in the absence of evidence to the contrary) to be correct." 51Regulation 18 of the Companion Animals Regulation 2008 provides: "18 Registration fee exemption for assistance animals (1) There is an exemption from payment of a registration fee for the registration of an animal that is an assistance animal or is undergoing training to be an assistance animal. (2) The exemption ceases to apply if the animal ceases to be an assistance animal or ceases training without becoming an assistance animal. (3) If the exemption ceases, the registration fee for the animal's registration must be paid within 28 days after the exemption ceases. (4) If the registration fee is not paid within that time, the council of the area in which the animal is ordinarily kept may cancel the registration of the animal by noting the cancellation on the Register. (5) Before cancelling the registration of an animal under subclause (4), the council must notify the owner of the animal in writing of the proposed cancellation and of any associated action proposed to be taken (including subsequent prosecution of the owner for being the owner of an unregistered animal). (6) A council that cancels the registration of an animal under this clause must notify the Director-General of the cancellation within 7 days. (7) The council or the Director-General may reinstate the registration of an animal that was cancelled under subclause (4) by noting the reinstatement on the Register." 52In these circumstances, the reference to Larry as an "assistance animal" on the certificate of registration is information on the register and presumed to be correct. The reference to a nil fee, by the same presumption, also indicates that Larry is an assistance animal or is training to be one. 53Under the Companion Animals Act 1998, an assistance animal is defined as follows: "assistance animal means an animal referred to in section 9 (Disability discrimination-guide dogs, hearing assistance dogs and trained animals) of the Disability Discrimination Act 1992 of the Commonwealth, but does not include a working dog. ..." 54It was common ground between the parties that, there being no relevant accreditation, Larry was not "accredited" under s 9(2)(a) or 9(2)(b) of the Disability Discrimination Act 1992 (Cth) and thus Larry could only be an "assistance animal" if he satisfied s 9(2)(c) of that Act (the provision is quoted at [20] above). 55It follows that the certificate of registration is material which evidences that Larry satisfies the s 9(2)(c) definition of an assistance animal, namely that he is trained to alleviate a disability and that he is trained to meet appropriate standards of hygiene and behaviour in a public place. 56Thus, in my view, there is evidence that Larry satisfies the definition of a "dog used as a hearing dog" as that term has been defined by the Tribunal and this ground must fail. 57These findings are sufficient for me to determine that I should not interfere with the decision, that is, the orders made by the member contained in Red Appeal Book p21. It is true that, in one respect, I have disagreed with the reasons of the Tribunal, finding a broader definition of hearing dog than the Tribunal found, but this variance does not require this Court to make any additional findings of fact in order to affirm the orders of the Tribunal. The orders proposed fall "within the mandate in s 67(3)(a) of the Act" (see Edyp v Brazbuild Pty Ltd [2011] NSWCA 218 at [139]). The Tribunal has found in favour of Mr and Mrs Drexler in respect of both items of the definition of "use as a hearing dog" that it adopted, see Red Appeal Book pp34-37 at [47] to [56]. I have found that only the first aspect is necessary and thus, the Tribunal's decision would not have been different under the definition I have determined. 58I should note that there was no real challenge to the other elements of s 49(4), that Mr Drexler had a hearing disability and that Larry provided assistance to alleviate that disability by being trained to alert and, in fact, alerting, Mr Drexler to the telephone and intercom buzzer, and that Larry had other related training. In any event, there is clearly evidence that allowed the Tribunal to make these findings, as set out at [48] to [55] of the Tribunal's reasons.

C. The proper meaning of regulation 15 59The proper meaning of reg 15 made under the Strata Schemes Management Act 1996 is informed by the provisions of s 80D. As reg 15 exempts certain matters from the operation of s 80D both provisions must be read together. 60One aspect of s 80D is that it operates to prohibit an owners corporation: (a) seeking legal advice; or (b) seeking the provision of legal services; or (c) initiating legal action, unless a resolution is passed approving the: (d) seeking of legal advice; or (e) seeking of the provision of legal services; or (f) taking of legal action. 61The form of the provision appears to equate initiating legal action with taking the legal action. This is a matter of some significance to reg 15, which allows an exemption if the cost of the "taking" of legal action is under a specified amount. In my view, the word "taking" should be read as bearing the same meaning in both s 80D and reg 15 (see, eg, Craig Williamson Pty Ltd v Barrowcliff [1915] VLR 450, 452). The more significant question is whether "taking" in reg 15 (and s 80D) means initiating. The equating of these two terms in s 80D might suggest the same meaning but, alternatively, the use of a different word might indicate that a different meaning was intended (see eg Bell v Day (1886) 2 QLJ 180). 62In considering this question, I noted that one dictionary defined "proceedings" in legal context as alternatively "the institution of a legal action" and "any step taken in a legal action". This rather highlights the uncertain meaning of the phrase "taking proceedings". 63With some initial hesitation, I have come to the view that s 80D does not compel "taking" to be read as "initiating" rather than "conducting". 64It is unexceptional that s 80D might require approval for the conduct of the proceedings before a corporation is permitted to embark upon them. Approval of the mere initiation of the proceedings seems less sensible, and less consistent with the object of the provision manifest by the title "Legal action to be approved by general meeting". 65On the other hand, s 80D appears to contemplate approval of the mere "seeking" of legal advice or services rather than the obtaining of them. This may provide some support for a narrower meaning of "taking". 66Regulation 15 creates an exemption from s 80D if certain costs are relevantly under $12,500. The items covered by the exemption in reg 15 do not correlate precisely with the items addressed in s 80D. Rather, the items addressed in reg 15 are the seeking of legal advice (the same as s 80D), the provision of legal services (of wider scope than in s 80D) and taking the legal action. Regulation 15 directs a focus on the cost of "having the legal services provided" rather than on the cost of "seeking provision of legal services", which indicates that the inquiry concerns the ultimate cost to be incurred not merely the initial cost. 67It would seem unlikely that Parliament intended that the owners corporation could incur substantial legal costs without any approving resolution, merely because the costs of requesting (or "seeking") an advice are minimal. Similarly, it would seem unlikely that merely because an originating process would be filed inexpensively, that an owners corporation could, without approval by resolution, incur very substantial costs of litigation. The object of the provision seems to be defeated by such a construction, contrary to the principles in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355. 68This construction becomes untenable where an exemption from a general resolution of unit holders is only available in respect of seeking legal services, if the cost of "the legal services provided" (not merely the cost of "seeking" the provision of those services) is below the statutory amount. It would be inconsistent to require approval if the provided legal services are estimated to be above $12,500, but not require approval if the legal advice or legal action is above $12,500 so long as the cost of "seeking" the advice or the "initiating" of the action is below that amount. The fact that the meaning of "provision of legal services" ordinarily embraces both the provision of legal advice and the conduct of litigation serves to underline the inconsistency of adopting the narrow meaning of "taking" (or for that matter, "seeking"). 69A related matter is whether each of, or (the relevant) one only of, the cost of "seeking the legal advice", "having the legal services provided" and "taking the legal action" needs to be no more than $12,500 in order for the reg 15 exemption to apply. The presence of the disjunctive "rule" might indicate that only one is required. But the matter is complicated by the negative "would not exceed" and the fact that there is an obvious overlap between legal advice, legal services and taking legal action. 70In the circumstances of this case, I do not think I need to resolve this final issue. In my view, the proper construction of reg 15, taking into account the object of precluding owners corporations from incurring substantial legal costs without the approval of the lot owners, is that the cost of "seeking the legal advice" includes the cost of the advice, and the cost of "taking the legal action" includes the cost of conducting a legal action. The discussion in Owners SP No 46528 v Hall [2009] NSWSC 278 at [36], [47]-[48] per Kirby J supports this approach. 71The approach is also supported by reg 15(2) which deems a disclosure in accordance with the Legal Profession Act 2004 to represent the "reasonably estimated costs". The Legal Professional Act 2004 disclosure is not concerned with disclosure of such narrow matters as the mere request for advice, or the mere initiation of process. Rather, Part 3.2 of the Act, see especially s 309, requires a full disclosure of the estimated costs of the whole action. That these costs are deemed to be costs of "taking the legal action" makes no sense unless this phrase embraces the entire costs of the action, rather than merely the initiating process. 72The owners corporation sought to rely on the term "for which payment may be required" in s 80D. This phrase does not appear in reg 15. The owners corporation submitted that if payment is set at a maximum of $12,500, in the absence of an approval by resolution of members at a general meeting, then the exemption under reg 15 should still be available. In other words, if there was an undertaking by the legal representatives to limit costs to $12,500 in the absence of an approving resolution of the lot owners (and presumably a discontinuance of proceedings if no resolution was forthcoming) then the owners corporation would be entitled to commence proceedings without a resolution. There is a question whether, in those circumstances, an estimate of $12,500 is properly the reasonably estimated costs of the action. This is a matter to which I shall return.

D. Evidence supporting the exemption 73In view of my findings that reg 15 is concerned with the reasonably estimated costs of the action, not merely the reasonably estimated costs of the filing of originating process, there is little content left in this issue. However, lest I be incorrect I propose to deal with the factual matters that were canvassed on this appeal in respect of this matter. 74As stated earlier, it is common ground that the owners corporation did not pass any resolution prior to initiating this appeal. It submits it is entitled to the benefit of the exemption in reg 15 because the solicitor for the owners corporation, Ms Beverley Hoskinson-Green, gave an estimate in accordance with the regulation. Ms Hoskinson-Green deposed to having said to the executive committee or members of it the following words: "You could obtain counsel's opinion and prepare the summons for somewhere in the range of $6,000 to $8,000 so that we could actually file a statement of claim to protect the owners corporation's rights within the limit of the exemption and the regulation of section 80D of the Strata Schemes Management Act 1996. The matter could then be put before the owners at an extraordinary general meeting and if owners voted against the motion the proceedings could be discontinued with relatively minor costs to the owners corporation because it would be in the early days of the proceedings." 75Ms Hoskinson-Green prepared, at the time of this conversation, a file note dated 3 September 2012 contained at p 70 of her affidavit which recorded the following matters: "Me - costs - QC $20,000 + us abt same + if lose - other side's costs. Helen - Sounds like costs of abt $60,000." "SB/BHG - Yes." [There was then reference to consideration at the executive committee level about lodging an appeal, the 28 days to appeal and reference to] "the [illegible] decision to proceed with appeal for OC for then determination in general meeting". [The note continued:] "Me - costs of prepn of summons by QC $6-8,000 + Transcript $2,000 + Filing fees $1,100-$1,300. Our brief costs relatively minor because will consist of decision + transcript." 76Proceedings were commenced on 8 October 2012 on instructions of the executive committee. On 8 November 2012, Ms Hoskinson-Green sent a letter to the owners corporation in the following terms: "We refer to our costs disclosure letter dated 10 April 2012 for the provision of advice and services generally to the Owners Corporation and to the decision of the Consumer, Trader & Tenancy Tribunal made on 28 August 2012 overturning the Adjudicator's decision of 4 January 2012 requiring the removal of the dog being kept in Lot 84 in breach of the by-laws. On the instructions of the Executive Committee and in reliance upon our general engagement costs disclosure letter dated 10 April 2012, we note that we have: (a) briefed Counsel and obtained Counsel's opinion as to the likely prospects of success in appealing against the Tribunal's decision (the Appeal); (b) filed and served a Summons Commencing an Appeal and Amended Summons Commencing an Appeal; and, (c) attended the first directions hearing in the Appeal proceedings. The costs in progressing the matter now, in our opinion, will exceed the exemption set out in Regulation 15 of the Strata Schemes Management Regulation 2010 and the limit set out in our costs agreement dated 10 April 2012. Accordingly, if the Owners Corporation wishes to maintain the Appeal proceedings, our instructions to do so will need to be confirmed by resolution of owners in general meeting. We set out our estimated costs of proceeding with this matter below. Estimate of Further Costs in this matter In view of your instructions, we envisage that the work that now needs to be done and our estimate of costs in carrying out that work (bearing in mind that we have already briefed Counsel and attended the directions hearing on 30 October 2012) are as follows:

Obtaining any further instructions;
Liaising with Counsel;
Compiling Appeal Book;
Correspondence with the Owners Corporation;
Correspondence with solicitors for Mr & Mrs Drexler;
Preparation for hearing;
Attendance at hearing; and,
Advising generally in the matter Professional Fees Estimate: $16,500 to $21,500 (plus GST) We estimate that Counsel's costs will be: $16,500 to $20,000 (plus GST) External Expenses Estimate: $TBA (but charged to you at the same rate as is charged to us) Internal Expenses Estimate: $100 (plus GST) Persons Responsible for the Work: Beverley Hoskinson-Green Beverley Hoskinson-Green will be assisted by Hope Brett-Bowen.

We are required by the provisions of the Legal Profession Act 2004 (NSW) to advise you of the following: (a) our charge-out rates have increased with effect from 1 July 2012 so that Beverley Hoskinson-Green's charge-out rate is now $495 per hour (plus GST) and Hope Brett-Bowen's charge-out rate is $339 per hour (plus GST); and, (b) the Cash Rate Target set by the Reserve Bank of Australia is now 3.25% and therefore the rate of interest we may presently charge on overdue accounts is 5.25% In all other respects the terms and conditions of this engagement will be as set out in our letter dated 10 April 2012." 77On 6 December 2012, an extraordinary general meeting passed two resolutions that purported to: "authorise, approve and ratify the decision of the Executive Committee to instruct Makinson & d'Apice Lawyers, in accordance with the Owners Corporation's cost agreement with Makinson & d'Apice Lawyers dated 10 April 2012 to obtain counsel's advice as to the grounds of, and the prospects of success of, an appeal, and file a summons commencing an appeal, against the decision of Member Ringrose of the Consumer, Trader and Tenancy Tribunal made on 28 August 2012 (the Appeal)" and also to: "authorise, approve and ratify the maintenance of the Appeal proceedings, and all necessary and appropriate legal advice, services or action taken or to be taken to defend the interests of the Owners Corporation in or in respect of the Appeal authorised from time to time by the Executive Committee in accordance with the costs agreement with Makinson & d'Apice Lawyers dated 10 April 2012 and the costs disclosure update from Makinson & d'Apice Lawyers dated 8 November 2012". 78Although Ms Hoskinson-Green was cross-examined, there was no challenge to her awareness of the provisions of reg 15. This awareness is apparent not only from the content of her affidavit in paragraph 20 but also other documents which refer to the $12,500 limit on costs and the effect of s 80D (see, for example, Black Appeal Book pp 15, 17, 23 and 24). 79The owners corporation, in these circumstances, asserts that the costs were reasonably estimated at, and were limited to, $12,500, and therefore it is submitted that the exemption in reg 15 applies. 80Whilst I have some reservations about the effect of this evidence, on balance I am persuaded by the quote in paragraph 20 of Ms Hoskinson-Green's affidavit that she did in effect estimate to the executive committee a cost of commencing the proceedings of no more than $12,500. Further, the evidence of the actual cost for the commencing of proceedings was approximately this figure, perhaps a little more. In these circumstances, I think I should conclude that there was a reasonable estimate of the costs of commencing proceedings and that the reasonably estimated cost was not more than $12,500. 81However, I do not think this is sufficient to enliven the exemption for two reasons which follow from my earlier findings. 82First, the estimate is of the cost of commencement, not an estimate of the cost of taking the legal action. I have already found that reg 15 requires an estimate of the cost of a legal action not merely its commencement. 83Admittedly, the action could be discontinued if no approving resolution was passed, but there is no monetary estimate of the cost of ending the proceedings. Nor is there an estimate of the costs between commencement and the approving resolution or, alternatively, the discontinuance of the proceedings. In my view, the mere estimate of the cost of commencement is insufficient to enliven the exemption. There must be an estimate of the entire costs of the action. The action might be cut short by a discontinuance but then the estimate need take account of that matter. The present estimate relied upon takes no account of the costs after commencement including the costs up to and including the discontinuance. There was no assurance by the legal representatives that those costs after commencement would be nil. In those circumstances, reg 15 does not assist the owners corporation. 84The second reason is that there is an estimate of the costs of the action in accordance with the Legal Profession Act 2004. It is dated 8 November 2004 and it estimates the cost at a minimum of $33,000 plus GST. In these circumstances, there is a cost disclosure which satisfies the requirements of reg 15(2) and thus, by that sub-regulation, "it is taken" to be the reasonably estimated costs of taking the legal action. Reg 15(2) does not require the disclosure to be prior to the commencement of proceedings. 85For these two reasons, I am not persuaded that the reg 15 exemption applies.

E. The effect of section 80D 86It follows that s 80D applies so "the owners corporation must not ... initiate legal action". Yet it has done so. 87The effect of s 80D on legal action commenced without an approving resolution was considered in Owners SP No 46528 v Hall [2009] NSWSC 278. In that case Kirby J considered authorities such as the Australian Broadcasting Corporation v Redmore Pty Ltd [1989] HCA 15; (1989) 166 CLR 454, Project Blue Sky, Master Education Services Pty Ltd v Ketchell [2008] HCA 38; (2008) 82 ALJR 1322 and also considered what would be the sanction for the breach if the requirement in s 80D was not mandatory (see Hall at [46]-[65]). Kirby J concluded that the provision is mandatory and that the proceedings which were commenced without complying with s 80D should be dismissed (see Hall at [66]). 88The owners corporation submitted that I should not follow this decision. I have some reservations about its conclusion and application. First, it might be argued that the object of s 80D is satisfied if after commencement of the action an approving resolution is passed. Whether this occurred in Hall, as it did in the present case, is unclear (compare Hall at [27]). Secondly, s 80D uses the word "unless" which might be read as including a temporal element requiring the resolution to precede the initiating of the action, although not necessarily. Thirdly, a court could stay or dismiss an action if the requirements of s 80D remained unsatisfied (if no approving resolution had been passed) when the matter came before the court. 89Ratification did not seem to be at the forefront of the decision in Hall. Nor is it clear that the doctrine of ratification has application: the decision of the executive committee is that of the owners corporation under s 21 of the Strata Schemes Management Act 1996. The real question seems to be whether the condition in s 80D is a mandatory precondition to the power to commence proceedings. 90While the owners corporation has raised some interesting questions, they do not lead me to conclude that the decision in Hall is wrong. The decision of Hall has been followed in this Court in Owners of Strata Plan 2187 v Astoria Asset Management Limited, 14 October 2011, unreported, Olsson SC DCJ (see especially at 70) and in other cases. 91In the decision in Keramaniakis v Wagstaff [2005] NSWDC 14, Rein SC DCJ, as his Honour then was, reviews the authorities relevant to the question of whether a judge of this Court is bound as a matter of precedent to follow a decision of a judge of the Supreme Court of this State and concluded that he was not so bound (see at [59]). However, cases such as the decision of the High Court in Farah Constructions Pty Ltd v Say-Dee Pty Ltd (2007) 230 CLR 89; [2007] HCA 22 suggest to me, by analogy, that I should follow the decision unless I am convinced it is clearly wrong. I am not so convinced. 92Also, there has been amendment of s 80D since the decision of Hall to add subs (3). That amendment may indicate that (other than the matter dealt with by the amendment) the reasoning and decision of Hall were correct. 93For these reasons, I would be minded to follow the decision of Kirby J in Hall, although a decision on this issue is not determinative because of my earlier findings. 94Accordingly, the orders of this Court shall be that:

The appeal is dismissed.
The orders of the Consumer, Trader and Tenancy Tribunal dated 24 August 2012 (at Red Appeal Book p21) should be affirmed.
The plaintiff should pay the defendant's costs.

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: 23 May 2013

Legal Profession Act 2004(NSW)

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