The Owners - Strata Plan 11245 v Qasim - [2024] NSWDC 468 - NSWDC 2023 case summary — Zoe

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The Owners - Strata Plan 11245 v Qasim

[2024] NSWDC 468

District Court of NSW|2023-11-30

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Court

District Court of NSW

Decision date

2023-11-30

Source

Original judgment source is linked above.

Judgment (32 paragraphs)

[1]

JUDGMENT

The plaintiff, The Owners - Strata Plan 11245, seeks an order pursuant to s 86(2A) of the Strata Schemes Management Act 2015 (NSW) (the "Act") that the defendant, Shaheen Qasim, pay unpaid contributions due under the Act, together with interest on those contributions and reasonable recovery expenses.
The plaintiff is the registered proprietor of the common property in a building comprising four units at William Street, Randwick, NSW (the "Building") and manages the strata scheme in respect of the Building. The defendant is, and was at all material times, the owner of two units, being Lots (or units) 3 and 4 in the Building. She lives in unit 4.
The plaintiff and the owners of Lots 1 and 2 in the Building have been in dispute with the defendant for many years. There have been many proceedings between them conducted in this Court, the Local Court, the Supreme Court and the New South Wales Civil and Administrative Tribunal (NCAT). It is unlikely that these proceedings will be the last.
These proceedings are for the recovery of contributions pursuant to levies struck by way of resolutions passed in general meetings on 26 March 2019, 22 August 2019, 26 March 2020, 2 March 2021, 2 March 2022 and 28 June 2022 (the "Resolutions"). The defendant did not attend any of those meetings and, it was contended, would not have been eligible to vote, in any event, pursuant to cl 23(8) of Sch 1 of the Act because she had not paid contributions then due.
The aggregate contribution claimed by the plaintiff in respect of the above levies, inclusive of interest, is alleged to be $168,424.82, although this amount is impossible to reconcile with the Resolutions. It has been necessary for the Court to conduct its own calculations of the contributions allegedly due under the Resolutions, based on the evidence.
The defendant represented herself, although from time to time during the course of the proceedings she retained legal advisors, who were in court but did not appear. Although the basis on which the defendant defended the proceedings was not entirely clear, her principal defence appeared to be that she did not fail to pay contributions due by her to the plaintiff and that the meetings at which the levies were struck were invalid. She raised a large number of other allegations, which I found were irrelevant, did not disclose either a cause of action or defence, and were, on the whole, misconceived.

[2]

Evidence

The plaintiff's evidence was not well articulated and was not initially referenced to the pleaded case or chronology. Eventually, a cross-referenced chronology and schedule were provided at the request of the Court and I have had reference to it in preparing these reasons.
The plaintiff relied on affidavits from Jonathan Chew, a licensed real estate agent and strata manager employed by Supreme Strata, who manages the strata plan. It also relied on an affidavit from David Jin-Ho Oh, solicitor. Both Mr Chew and Mr Oh were cross-examined. Both witnesses gave their evidence conscientiously, and I accept them both as witnesses of truth. A substantial body of documentary material, being business records comprising notices of meeting, minutes of meetings, levy statements and correspondence were relied upon. The records were admitted without objection.
The defendant's evidence and submissions conflated evidence, submission and speculation and seemed to treat the mere making of allegations as proof of them. She relied on affidavits sworn by her on 13 February 2023, 23 February 2023, 27 October 2023 and 31 October 2023. A further affidavit from the defendant, dated 15 November 2023, was provisionally admitted. Although of dubious relevance and utility, I have admitted that affidavit as an indulgence to the defendant who appeared for herself.
While I did not find the defendant to be dishonest in her evidence, I did find her evidence to be unreliable, for reasons which I address below. In short, I consider that the defendant has come to view all matters in connection with her dispute with the plaintiff and other lot owners through a prism of her own self-interest and her hostility to them, such that she is unable to accept any evidence that contradicts her own genuine, but unsupported, beliefs.
After the hearing I asked for further submissions on the question of notice of meetings and for assistance by way of an updated and cross-referenced chronology, in identifying the sums actually sought pursuant to each Resolution and where proof of certain elements of the plaintiff's cause of action might be found. Both parties provided submissions and, in doing so, also annexed further evidence to their submissions without seeking leave to do so. I have not taken that additional evidentiary material into account in reaching my decision.

[4]

Validity of Resolutions

The plaintiff pleaded in its Amended Statement of Claim that it gave adequate notice of each meeting at which a levy on which it sues was struck, that it provided an agenda, including financials and that at each meeting a quorum was established. Accordingly, it was contended, each Resolution is valid and enforceable.
The defendant has put the plaintiff to proof on these allegations and has further alleged that the plaintiff has not complied with s 79 (relating to the provision of estimates) and s 81 of the Act (estimating contributions).
Further, as the defendant did not attend any of the meetings at which the Resolutions were passed, the question of whether she ever received notice of them was addressed by the parties.
Although I was not taken to any authority, in The Owners - Strata Plan No 2227 v Navhand Pty Ltd [2023] NSWDC 568, in which his Honour Judge Russell SC considered the question of the validity of resolutions where notices were sent, but not received, his Honour stated: "Even If the Notices Were Not Received [80] There is no obligation to ensure that the notices are received, although obviously that is the object of giving the notices. For reasons set out below, I have come to the view that even if non-receipt of notices by Navhand has legal consequences (contrary to the findings above), the resolutions in relation to the appointment of Stratamark and the ratification of that appointment, were valid. I have found that notices were given to Navhand in relation to the qualified response meeting of September 2019 and the 2019 AGM. The plaintiff submitted that even if notice was not given, or not validly given, to Navhand of either meeting involving Stratamark, that did not invalidate decisions made or resolutions passed at those meetings. This included resolutions to appoint Stratamark or ratify Stratamark's appointment. [81] The plaintiff relied upon the authority of The Owners Strata Plan No 57164 v Yau [2017] NSWCA 341; (2017) 96 NSWLR 587. The issue in that case was whether failure to give adequate notice of a meeting of the Executive Committee (the old name for a Strata Committee) invalidated a meeting or any decision made at the meeting. The decision involved the 1996 Act. However, there are cognate provisions in the Act which governs these proceedings. [82] The Court of Appeal referred to the well-known principles of statutory construction established by the High Court in Project Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355 at [69]-[70] and [91]. [83] In [106] of the Court of Appeal decision, the court said: 'In Project Blue Sky v Australian Broadcasting Authority, the High Court was specifically concerned with the consequences, as a matter of statutory construction, of a failure to comply with a condition regulating the exercise of power. The plurality observed, at [91], that: "An act done in breach of a condition regulating the exercise of a statutory power is not necessarily invalid and of no effect. Whether it is depends upon whether there can be discerned a legislative purpose to invalidate any act that fails to comply with the condition. The existence of the purpose is ascertained by reference to the language of the statute, its subject matter and objects, and the consequences for the parties of holding void every act done in breach of the condition."' [84] The Court of Appeal held that the provision in the 1996 Act regarding notice of a meeting 'was a regulating provision relating to the exercise of a power in respect of which no consequence was specified should there be non-compliance' - at [108]. [85] The Court of Appeal was also of the view that because there was a provision in the 1996 Act that the resolution of an owners corporation could be invalidated by the order of an adjudicator, this provided a forum in which unit owners could seek relief in respect of resolutions where there had been non-compliance with the Act, where the consequence of non-compliance was not otherwise specified in the Act - at [111]. [86] Section 24(1) of the Act provides as follows: '24 Order invalidating resolution of owners corporation (1) The Tribunal may, on application by an owner or first mortgagee of a lot in a strata scheme, make an order invalidating any resolution of, or election held by, the persons present at a meeting of the owners corporation if the Tribunal considers that the provisions of this Act or the regulations have not been complied with in relation to the meeting.' [87] The reference to 'Tribunal' in this section is a reference to the Civil and Administrative Tribunal as defined in s 4(1) of the Act. [88] The Act does not specify a consequence for non-compliance regarding the giving of notice for meetings. The existence in s 24 of the Act of the power for an owner to apply to the Tribunal to make an order invalidating any resolution, if the provisions of the Act or the regulations have not been complied with in relation to a meeting, are on all fours with the decision of the Court of Appeal in Yau. I therefore find that even if notice of the meeting appointing Stratamark, or notice of the AGM at which its appointment was ratified, was not given to Navhand, or was given but not received by Navhand, this does not invalidate the resolutions in relation to Stratamark. The consequence of that is that all notices of levies and meetings given subsequently by Stratamark to Navhand are not invalid. [89] To the same effect as Yau, and relied upon by the plaintiff, were the decisions of: (1) Arjunan v Neighbourhood Association DP No 285853 (No 3) [2022] NSWSC 1524 at [49]. (2) Read v The Owners-Strata Plan No 2533 [2021] NSWCATAP 218 at [38]."
I respectfully agree with his Honour's analysis and consider it applicable to the present proceedings. Accordingly, I have taken the view that any failure to prove service of notice of a meeting does not invalidate resolutions passed at that meeting.
No application was before me to invalidate any of the Resolutions. Nevertheless, some reference ought be made to s 24 of the Act, which deals with the invalidation of resolutions.
Section 24 of the Act relevantly provides: 24 Order invalidating resolution of owners corporation (1) The Tribunal may, on application by an owner or first mortgagee of a lot in a strata scheme, make an order invalidating any resolution of, or election held by, the persons present at a meeting of the owners corporation if the Tribunal considers that the provisions of this Act or the regulations have not been complied with in relation to the meeting. …. (3) The Tribunal may refuse to make an order under this section only if it considers - (a) that the failure to comply with the provisions of this Act or the regulations, or of the Strata Schemes Development Act 2015, did not adversely affect any person, and (b) that compliance with the provisions would not have resulted in a failure to pass the resolution or affected the result of the election. ...
The defendant has not made or foreshadowed any application under s 24. The plaintiff relies on the failure of the defendant to make any such application as a basis on which, it says, the Resolutions ought simply be treated as valid and enforceable.
Without prejudice to that contention, the plaintiff says that even if the defendant had pleaded s 24 and established that there was a basis to treat the Resolutions as invalid, the defendant would be required to seek an order to that effect, which she has not done. It might be added that such an application would need to be brought before NCAT, rather than the Court. In any event, the plaintiff says, in the present case, s 24 does not provide a sufficient discretionary basis not to order payment of a debt pursuant to s 86(2A) of the Act. The plaintiff further contends that it is the defendant's onus to establish the matters in sub-ss 24(3)(a) and (b) and that she had not done so.
In light of the absence of any s 24 application before me, these matters do not arise.

[5]

Notice of contributions payable

The plaintiff contended that the issues to be determined are whether the levies were validly struck and whether a notice of the action was issued under s 86(4) of the Act. The plaintiff did not address, in its submissions in chief, the question of whether there was any requirement for notices of levy to be served.
In answer to a question I raised with the parties after the hearing, the plaintiff indicated that it relied on s 83(4) with respect to the service of notices of levy.
Section 83 of the Act provides: 83 Levying of contributions (1) An owners corporation levies a contribution required to be paid to the administrative fund or capital works fund by an owner of a lot by giving the owner written notice of the contribution payable. (2) Contributions levied by an owners corporation must be levied in respect of each lot and are payable (subject to this section and section 82) by the owners in shares proportional to the unit entitlements of their respective lots. (3) A contribution levied by an owners corporation becomes due and payable to the owners corporation on the date set out in the notice of the contribution. (3A) The date set out in the notice must be - (a) for a contribution levied for the purpose of carrying out emergency repairs - at least 14 days after the day the notice is given, or (b) otherwise - at least 30 days after the day the notice is given. (4) Regular periodic contributions to the administrative fund and capital works fund of an owners corporation are taken to have been duly levied on an owner of a lot even though notice levying the contributions was not given to the owner. … [Emphasis added].
The levying of contributions, it may be seen, requires not just the passing of a resolution but, depending on the nature of the resolution and of the levy, written notice to the lot owner. As the plaintiff correctly pointed out, according to s 83(4) of the Act, the requirement of notice does not apply where the levy relates to regular periodic contributions which are taken to have been duly levied even in the absence of service of a notice of contribution.
A relevantly identical predecessor of s 83(4) of the Act, being s 78(6) of the predecessor Strata Schemes Management Act 1996 (NSW), was considered in Coshott v The Owners of Strata Plan No. 48892 [2006] NSWSC 308. In that case, both periodic levies and a special levy were sought to be recovered by an owners corporation. The defendant had put the owners corporation to strict proof of compliance with the provisions of the then Act. Cooper AJ stated, with reference to s 78(6), the analogue of the current s 83(4): "[38] In my view the phrase 'regular periodic contributions' refers to those contributions to the administrative and sinking funds which must, by virtue of section 76, be determined regularly at each annual general meeting. It is to be distinguished from those contributions authorised by section 76(4) of the Act which are not determined on a regular basis but are out of the ordinary or one-off events. This class of contribution is different in nature from the levies of contribution referred to in section 76(1). [39] Accordingly I uphold the decision of the learned magistrate that the Act casts the responsibility on the owner to pay the contributions as levied even if notice levying the contributions was not served on the owner."
It follows that periodic contributions do not require service of a notice of levy to be levied. However, where the contribution is not periodic, as understood in Coshott, a notice of levy must be served in order for the contribution to become due and payable. This is an essential step in establishing the cause of action.

[6]

Recovery of unpaid contributions, interest and reasonable expenses

Section 86 of the Act provides: 86 Recovery of unpaid contributions and interest (1) The Tribunal may order the owner of a lot in the strata scheme, or other person, to pay a contribution that is payable by the owner or other person under this Act that is not paid at the end of 1 month after it becomes due and payable, together with any interest payable on that unpaid contribution and the reasonable expenses of the owners corporation incurred in recovering those amounts. (2) The Tribunal may make an order under subsection (1) only - (a) on the application of the owners corporation, and (b) if proceedings between the owners corporation and the owner of a lot in the strata scheme or other person are pending before the Tribunal. (2A) An owners corporation may, without obtaining an order under this section, recover as a debt in a court of competent jurisdiction, a contribution not paid at the end of 1 month after it becomes due and payable, together with any interest payable on that unpaid contribution and the reasonable expenses of the owners corporation incurred in recovering those amounts. Note - Clause 6 of Schedule 4 to the Civil and Administrative Tribunal Act 2013 provides for the transfer of proceedings between the Tribunal and a court which has jurisdiction (and vice versa) if the parties to the proceedings agree or if the Tribunal or court of its own motion or on the application of a party so directs. (3) Interest paid or recovered forms part of the fund to which the relevant contribution belongs. (4) An owners corporation must not take action to recover an amount under this section unless it has given the person against whom the action is to be taken at least 21 days notice of the action. (5) The notice of the action must set out the following - (a) the amount of the contribution, interest or expenses sought to be recovered, (b) the recovery action proposed, (c) any other matter prescribed by the regulations for the purposes of this subsection.
The District Court is, in light of the sum claimed, a court of competent jurisdiction within the meaning of s 86(2A) of the Act. The Court is not, however, the "Tribunal": see s 4 of the Act.
Section 85 of the Act relevantly provides: 85 Interest, discounts on contributions and payment plans (1) A contribution, if not paid when it becomes due and payable, bears until paid simple interest at an annual rate of 10% or, if the regulations provide for another rate, that other rate. (2) Interest is not payable if the contribution is paid not later than one month after it becomes due and payable. … (8) The Tribunal or a court may, on application by an owner, order that no interest is chargeable on a specified contribution if the Tribunal or the court is satisfied that the owners corporation should reasonably have made a determination not to charge interest for the late contribution.

[9]

Whether the defendant was "unfinancial" and not entitled to vote at meetings

Some time was spent by the parties addressing the question of whether the defendant was unfinancial within the meaning of cl 23(8) of Sch 1 of the Act and, therefore, not entitled to vote on the Resolutions.
Clause 23(8) provides: (8) Voting rights cannot be exercised if contributions not paid A vote at a general meeting (other than a vote on a motion requiring a unanimous resolution) by an owner of a lot or a person with a priority vote in respect of the lot does not count if the owner of the lot was an unfinancial owner at the date notice of the meeting was given and did not pay the amounts owing before the meeting.
As indicated above, the defendant has not brought any application under s 24 of the Act with respect to the Resolutions and did not attend any of the relevant meetings. In the circumstances, whether she would have been entitled to vote, at those meetings, does not ultimately impact on determination, in these proceedings, of the validity of the Resolutions and whether the alleged debt has arisen. In her evidence, the defendant accepted that she did not attend any of the meetings, but stopped short of accepting that she had been given notice but chose not to attend.
Non-attendance is not the same thing as not being capable of exercising a right to vote. As the defendant did not purport to cast a vote or to reserve any right in that regard, whether she was entitled to do so is not in issue. However, to the extent that the factual question as to whether the defendant was unfinancial requires determination, I find that she was unfinancial as at the date of each of the meetings at which the Resolutions were passed. In respect of the AGM on 26 March 2019, I am satisfied that the defendant owed substantial moneys to the plaintiff at all relevant times. The extent of the indebtedness carried forward in the levy statements prior to 9 July 2019 ($43,993.41 in respect of Lot 3 and $44,001.09 in respect of Lot 4) significantly exceeds the contribution levied at the 2019 AGM held on 26 March 2019. While the sum carried forward does not support a claim for failure to pay levies struck by the Resolutions, it does support an inference that the defendant already owed a substantial sum to the plaintiff as at 26 March 2019.
For reasons which are set out below, I have found that each of the Resolutions was valid and created a debt, due by the defendant to the plaintiff, subject to the issue of a levy notice or otherwise in accordance with s 83(4) of the Act. As the defendant did not discharge her indebtedness at any time, the cumulative effect of her failure to discharge the debt, as it existed as at 26 March 2019, together with her failure to make any payment towards the contributions due under the Resolutions, means that she was unfinancial and could not have exercised any voting rights at any of the meetings in question.

[10]

Annual General Meeting of 26 March 2019 (the "2019 AGM")

The plaintiff says that sometime before 21 February 2019, Strathfield Partners, the then manager of the strata plan, sent a Notice of Annual General Meeting (AGM) and Agenda to the lot owners. The Notice was in evidence and attached Annual Reports for the financial year to 31 January 2018, which comprised a Statement of Financial Position, Statement of Financial Performance, Budget commencing 1 February 2018 , Budget commencing 1 February 2019, Levy Schedule commencing 1 February 2018 and Levy Schedule commencing 1 February 2019. The proposed budgets separately addressed the Administrative and Capital Works Funds.
Motion 10 proposed a levy in the sum of $23,079 in respect of the Administrative Fund ($14,800.00) and Capital Works Fund ($8,279.00). The contribution due from each Lot was $5,769.75, payable in four quarterly instalments.
The 2019 AGM was scheduled for 21 February 2019 and adjourned to 26 March 2019. A quorum was achieved. No apologies were received. The following resolution was passed: "10.1 Resolved that after the Owners Corporation consider the financial position of the Administrative Fund and Capital Works Fund Budgets as presented at the meeting, the levy contributions be determined as per Section 81, the 12 month period commencing from 01 February 2019. 10.2 Resolved that the periodic levy contribution applicable to the budget be as follows: Administrative Fund Levy: $14,800.00 per annum Capital Works Fund Levy: $8,279.00 per annum 10.3 Resolved that the levy contributions applicable to the budget be due and payable in 4 equal quarterly instalments commencing from 01 February 2019, 01 June 2019, 01 September 2019, 01 December 2019 and continue at that rate until further varied."
The defendant did not attend the 2019 AGM and has not admitted service of notice of the 2019 AGM. The evidence does not demonstrate if, or how, notice was given to the defendant. The managing agent at the time has since been replaced by the current agent, Supreme Strata, and, as such, Mr Chew could not give direct evidence of service or of any system from which service could be inferred.
The absence of evidence of service, however, is not sufficient to invalidate what is, on its face, a valid and binding resolution raising a levy in respect of which the defendant was obliged to pay contributions as owner of Lots 3 and 4. In this respect, I rely on the statement of principle in Navhand Pty Ltd, as set out above. In any event, there is no application under s 24 of the Act.
Resolution 10 of 26 March 2019 was for a regular periodic contribution to the Administrative Fund and to the Capital Works Fund to which s 83(4) of the Act applies such that evidence of service of a notice of levy is unnecessary for the contributions to be duly levied. In this respect, I rely on Coshott.
Levy contributions were due from the defendant in the sum of $5,769.75, over four instalments, in respect of each of Lots 3 and 4. The aggregate contribution due by the defendant to the plaintiff in respect of Resolution 10 of 26 March 2019, therefore, is $11,539.50.

[12]

Extraordinary General Meeting of 22 August 2019 (the "August 2019 EGM")

By email dated 5 August 2019, the plaintiff served the defendant with notice of an Extraordinary General Meeting scheduled to take place on 22 August 2019. The Notice in evidence did not include an Agenda.
On 22 August 2019 the plaintiff held the August 2019 EGM and resolved as follows: "Motion 2: Special Levy RESOLVED that the Owners - Strata Plan No. 11245 pursuant to s 81(4) of the Strata Schemes Management Act 2015 that as the owners corporation is faced with expenses referred to in the Schedule which it cannot at once meet from its administrative fund, it determined that: a contribution in the amount of money referred to in the Schedule be raised as an additional levy to meet those expenses; the proportion of the said contribution payable by the owners of each lot shall be in accordance with the unit entitlement of each lot; the contribution in respect of each lot is payable by the instalments being due and payable on or before the dates referred to in the Schedule by being paid to the owners corporation care of the Strata managing agent before or at those times; and the pursuant to 83 of the Strata Schemes Management Act 2015, the strata managing agent serve one written notice of such contributions due in respect of each lot specifying: (a) the amount of each instalment; and (b) the date of payment of each instalment. SCHEDULE (a) Expenses which the contribution is raised: To the administrative fund to cover deficit. (b) Total contribution to be raised: $10,000 (c) Date by when the contribution is payable: 1 September 2019, 1 November 2019 i. First Instalment Amount: $5,000 Due date: 1 September 2019 ii. Second instalment Amount: $5,000 Due date: 1 November 2019".
A copy of the minutes of the August 2019 EGM was sent to the defendant at the email address: shaheenqas@me.com. The minutes show that there was a quorum for that meeting.
Again, in the absence of any application under s 24, there is no basis to consider whether the Resolution ought be invalidated for failure to comply with any part of the Act or regulations. Accordingly, the resolution is to be treated as valid and the contributions lawfully raised. The sum due from the defendant was $2,500, in respect of each Lot, payable in two tranches of $1,250 per Lot, on each of 1 September 2019 and 1 November 2019.
The special levy struck on 22 August 2019 was not a regular periodic contribution to the Capital Works or Administrative Funds and, as such, s 83(4) of the Act does not apply. The plaintiff must, therefore, demonstrate service of a notice of levy for the contribution to become payable under s 83(3) of the Act.
According to the levy statements, notices of levy were served on the defendant on 28 August 2019 and 28 November 2019 in respect of these sums. I am satisfied on this basis that the notices of levy were so served.
Accordingly, Resolution 2 of 22 August 2019 is valid and the levy contributions thereunder fell due following service of notices of levy on 28 August 2019 and 28 November 2019. The contribution due by the defendant to the plaintiff in respect of Resolution 2 of 22 August 2019 is, therefore, $5,000.00.

[15]

…. Motion 25: Special Levy to Cover for Legal Fee AMENDED AND RESOLVED that the Owners - Strata Plan No. 11245 RESOLVES by ordinary resolution pursuant to s 81(4) of the Strata Schemes Management Act 2015 that as the owners corporation is faced with expenses referred to in the Schedule which it cannot at once meet from its administrative fund, it determined that: a contribution in the amount of money referred to in the Schedule be raised as an additional levy to meet those expenses; the proportion of the said contribution payable by the owners of each lot shall be in accordance with the unit entitlement of each lot; the contribution in respect of each lot is payable by the instalments being due and payable on or before the dates referred to in the Schedule by being paid to the owners corporation care of the strata managing agent before or at those times; and that pursuant to s83 of the Strata Schemes Management Act 2015, the strata managing agent serve one written notice of such contributions due in respect of each lot specifying: (a) the amount of each instalment; and (b) the date of payment of each instalment. SCHEDULE (a) Expenses which the contribution is raised: To the administrative fund to legal fee. (b) Total contribution to be raised: $10,000 (c) Date by when the contribution is payable: 1 July 2020, 1 October 2020 i. First Instalment Amount: $5,000 Due date: 1 July 2020 ii. Second instalment Amount: $5,000 Due date: 1 October 2020".

As can be seen from the resolutions themselves, there are two components: a regular periodic contribution to the Administrative and Capital Works Funds was due by the defendant in the sum of $9,616.50 (being four tranches of $1,202.06 in respect of each of Lots 3 and 4 or eight such tranches in total); and a special levy in the sum of $5,000.00 (being two tranches of $1,250.00 in respect of each of Lots 3 and 4, or four such tranches in total) was also due by her.
The regular contribution has the benefit of s 83(4) of the Act, and is taken to be duly levied without proof of a notice of levy being served on the defendant. The special levy, however, only falls due on service of a notice of levy. According to the levy statements, notices of levy with respect to the special levy were served on 2 June 2020 and 4 September 2020. I accept that they were served on or about that date.
Resolution 5 and Resolution 25 of 26 March 2020 are valid and the levy contributions thereunder fell due. In the case of Resolution 5, contributions fell due by virtue of s 83(4) of the Act. In the case of Resolution 25, contributions fell due because notices of levy were served on 2 June 2020 and 4 September 2020.
The total levies due, by the defendant to the plaintiff, under the resolutions passed at the 2020 AGM are, therefore, $14,616.50.

[21]

… Motion 24: Special Levy for Excess Fee to Strata Managing Agent RESOLVED that the Owners - Strata Plan No. 11245 pursuant to s 81(4) of the Strata Schemes Management Act 2015 that as the owners corporation is faced with expenses referred to in the Schedule which it cannot at once meet from its administrative fund, it determined that: 1. a contribution in the amount of money referred to in the Schedule be raised as an additional levy to meet those expenses; 2. the proportion of the said contribution payable by the owners of each lot shall be in accordance with the unit entitlement of each lot; 3. the contribution in respect of each lot is payable by the instalments being due and payable on or before the dates referred to in the Schedule by being paid to the owners corporation care of the strata managing agent before or at those times; and 4. that pursuant to s83 of the Strata Schemes Management Act 2015, the strata managing agent serve one written notice of such contributions due in respect of each lot specifying: (a) the amount of each instalment; and (b) the date of payment of each instalment. SCHEDULE (a) Expenses which the contribution is raised: Reimbursement of Insurance excess fee to Supreme Strata for insurance claim in administrative fund (b) Total contribution to be raised: $1,500.00 (c) Date by when the contribution is payable: 1 May 2022 i. First Instalment Amount: $1,500.00 Due date: 1 May 2022 Motion 25: Special Levy to cover the unpaid levies of lot 3 & 4 AMENDED AND RESOLVED that Strata Plan No. 11245 pursuant to s 81(4) of the Strata Schemes Management Act 2015 that as the owners corporation is faced with expenses referred to in the Schedule which it cannot at once meet from its administrative fund, it determined that: 1. a contribution in the amount of money referred to in the Schedule be raised as an additional levy to meet those expenses; 2. the proportion of the said contribution payable by the owners of each lot shall be in accordance with the unit entitlement of each lot; 3. the contribution in respect of each lot is payable by the instalments being due and payable on or before the dates referred to in the Schedule by being paid to the owners corporation care of the strata managing agent before or at those times; and 4. that pursuant to s83 of the Strata Schemes Management Act 2015, the strata managing agent serve one written notice of such contributions due in respect of each lot specifying: (a) the amount of each instalment; and (b) the date of payment of each instalment. SCHEDULE (a) Expenses which the contribution is raised: Cover the unpaid levies of lot 3 & 4 in administrative fund (b) Total contribution to be raised: $11,562.95 (c) Date by when the contribution is payable: 1 June 2022, 1 July 2022 i. First Instalment Amount: $5,781.48 Due date: 1 June 2022 ii. Second instalment Amount: $5,781.47 Due date: 1 July 2022".

Resolution 5 is in respect of regular periodic contributions to the Administrative Fund and Capital Works Fund. By reason of s 83(4) of the Act, those contributions are due irrespective of whether any notices of levy were served on the defendant.
Resolutions 24 and 25, however, require a notice of levy in order to establish an obligation to pay. According to the levy statements, a notice of levy, in respect of Resolution 24, was served on 30 March 2022 and notices of levy, in respect of Resolution 25, were served on 29 April 2022 and 30 May 2022. I am satisfied on that basis that the notices of levy were served.
Accordingly, I find that the defendant is indebted to the plaintiff in the sum of $18,094.43 in respect of Resolutions 5, 24 and 25 of 2 March 2022.

[22]

Extraordinary General Meeting of 28 June 2022 (the "June 2022 EGM")

On or about 20 June 2022, Supreme Strata sent notice of an EGM, to be held by pre-meeting vote on 28 June 2022, to the defendant at the email address: shaheenqas@me.com. Accompanying the email giving notice of the EGM was an agenda, minutes of the 2 March 2022 AGM, and documents relevant to the present proceedings, including a costs disclosure letter from counsel for the plaintiff, a court timetable, a Defence and a Notice to Admit Facts served by the defendant.
On 28 June 2022, the EGM took place by tally of votes cast. Votes were received from the other lot owners: M F McGrath & H L Mitchell (one vote) and T J Galvin and R K Deegan (one vote). The defendant did not vote. At the meeting, it was resolved inter alia: "Motion 3: Special Levy to Cover for Legal Fee AMENDED AND RESOLVED that the Owners - Strata Plan No. 11245 pursuant to s 81(4) of the Strata Schemes Management Act 2015 that as the owners corporation is faced with expenses referred to in the Schedule which it cannot at once meet from its administrative fund, it determined that: a contribution in the amount of money referred to in the Schedule be raised as an additional levy to meet those expenses; the proportion of the said contribution payable by the owners of each lot shall be in accordance with the unit entitlement of each lot; the contribution in respect of each lot is payable by the instalments being due and payable on or before the dates referred to in the Schedule by being paid to the owners corporation care of the strata managing agent before or at those times; and the pursuant to s83 of the Strata Schemes Management Act 2015, the strata managing agent serve one written notice of such contributions due in respect of each lot specifying: a) the amount of each instalment; and b) the date of payment of each instalment. SCHEDULE c) Expenses for which the contribution is raised: To cover for Legal Fees in the Administrative Fund. d) Total contribution to be raised: $25,000.00 e) Date by when the contribution is payable: 1 August 2022 i. First instalment Amount: $25,000.00 Due date: 1 August 2022".
There is no evidence of the notice of levy, specified by Resolution 3, ever having been served. As set out above, unlike regular periodic contributions, notice of a contribution under a special resolution must be served in order to establish a liability under s 83(1) and (3). No such notice is referred to in the plaintiff's affidavits or the levy schedules in evidence. Additional material provided by the plaintiff on 7 June 2024 (which does not comprise evidence in any event) does not establish any such notice was ever served and does not refer to any such notice.
In my view, the plaintiff has not established that the defendant is liable for any contribution under Resolution 3 of the EGM of 28 June 2022, which would have amounted to $12,500.00.

[25]

The defendant's affirmative case

The defendant, who appeared for herself at the hearing, had put the plaintiff to proof on its Amended Statement of Claim. She also raised a number of serious allegations against the plaintiff, other lot owners, the strata managers and the plaintiff's legal representatives. The allegations were neither clear nor coherent and frequently related to grievances which disclosed neither a cause of action nor any defence known to law. The earliest allegations date from 2003 and appear to have been litigated, without success, on many occasions.
In summary, the allegations appear to be that the defendant has been funding certain repairs and maintenance of the Building and that the sums she has spent have not been accounted for by the plaintiff. She claims that she has, therefore, never been in arrears, is entitled to be compensated for the moneys she has expended on the repair and maintenance of the Building, and is entitled to a set-off in respect of any moneys for which she may be found to be liable.
This position is overlaid with allegations of mistreatment, disrespect, fraud and misconduct on the part of the strata managers, lot owners and the legal advisors to the plaintiff in the conduct of the affairs of the plaintiff and the Building. There are further allegations of misconduct by the plaintiff, lot owners and legal advisors in the conduct of these, and earlier, proceedings in which the defendant has consistently been unsuccessful.
In assessing the defendant's evidence and submissions, I do not consider her to be dishonest. Nevertheless, her evidence and submissions suffer from the conflation of allegations with proof, a refusal to acknowledge facts which are not supportive of her claim and a capacity to construe evidence in such a way as appears only to support her allegations. There can be no doubt as to the strength of her conviction that she is right, however, this is an unreliable basis on which to make any factual findings.
Other than putting the plaintiff to proof and generally denying any liability, the defendant's pleaded case is, in summary: 1. She is up to date with her levy contributions and, indeed, the plaintiff is in debt to her; 2. The plaintiff is in breach of s 106 of the Act in that it has failed to maintain the common property and failed to provide estimates prior to each AGM in accordance with s 79 of the Act; and 3. The plaintiff has failed to comply with s 81 of the Act in determining the amount of levy contributions.
In her submissions, the defendant contended that the plaintiff had not complied with s 103 of the Act with respect to those Resolutions which were for the purpose of raising funds to conduct the present litigation. Section 103(b) of the Act provides that no resolution is required in order to take legal action to recover unpaid contributions, interest on unpaid contributions or related expenses. The allegation of breach is not made out.

[27]

Alleged breach of s 106 of the Act

Section 106 of the Act provides: 106 Duty of owners corporation to maintain and repair property (1) An owners corporation for a strata scheme must properly maintain and keep in a state of good and serviceable repair the common property and any personal property vested in the owners corporation. (2) An owners corporation must renew or replace any fixtures or fittings comprised in the common property and any personal property vested in the owners corporation. (3) This section does not apply to a particular item of property if the owners corporation determines by special resolution that - (a) it is inappropriate to maintain, renew, replace or repair the property, and (b) its decision will not affect the safety of any building, structure or common property in the strata scheme or detract from the appearance of any property in the strata scheme. (4) If an owners corporation has taken action against an owner or other person in respect of damage to the common property, it may defer compliance with subsection (1) or (2) in relation to the damage to the property until the completion of the action if the failure to comply will not affect the safety of any building, structure or common property in the strata scheme. (5) An owner of a lot in a strata scheme may recover from the owners corporation, as damages for breach of statutory duty, any reasonably foreseeable loss suffered by the owner as a result of a contravention of this section by the owners corporation. (6) An owner may not bring an action under this section for breach of a statutory duty more than 2 years after the owner first becomes aware of the loss. (7) This section is subject to the provisions of any common property memorandum adopted by the by-laws for the strata scheme under this Division, any common property rights by-law or any by-law made under section 108. (8) This section does not affect any duty or right of the owners corporation under any other law.
The allegations of breach of s 106 of the Act have no bearing on whether the Resolutions are valid and whether the defendant has paid any sum towards the contributions due by her. The defendant has annexed to her affidavit a page extracted from an engineering report by Sydney Facades Pty Ltd, the purpose and date of which are unknown. The report noted that concrete in two balconies at the Building was degraded and recommended further testing. It noted that demolition and rebuilding or structural restoration would be expensive. This extract does not establish breach of s 106.
Similarly, the defendant annexed to her affidavit a report prepared by Jones Nicholson Pty Ltd, Consulting Engineers, dated 8 October 2012, with respect to ceilings in units 3 and 4. This report appears to have been evidence in Consumer Trader and tenancy Tribunal (CTTT) proceedings, responding to reports served on behalf of the plaintiff. The report discloses a dispute as to the extent of ceiling repairs which may have been necessary some 12 years ago. It does not establish a breach of s 106 and is not otherwise relevant to any issue in these proceedings.
A report from BTS Building and Consulting Pty Ltd was apparently prepared for the purpose of these proceedings. The report did not comply with Sch 7 of the Uniform Civil Procedure Rules 2005 (UCPR). It noted a number of defects in the Building and repeated an allegation made by the defendant that she had spent $20,000 on repairs to the Building. To the extent that the report is relied on as corroborating the defendant's allegations as to expenditure by her, I do not accept that it has that effect. It merely repeats what the defendant told the author. It might also be noted that the sum allegedly spent by her is significantly less than that claimed by the plaintiff in these proceedings in any event. To the extent that it asserts a breach of s 106, I am not satisfied that it establishes any such breach.
The defendant's objective evidence concerning breach by the plaintiff of s 106 of the Act does not establish any such breach. It is, in any event, irrelevant to the plaintiff's claim in these proceedings.

[28]

Allegations of payment of levy contributions

In her evidence, the defendant contended that she personally paid for certain items of repair and maintenance, such as painting in 2000. The question of whether any moneys were spent by the defendant towards the upkeep or repair of the Building is irrelevant to determining the validity of the Resolutions.
Insofar as the evidence of expenditure by the defendant is raised by way of set-off, I am not satisfied that it either establishes expenditure by her on the Building or that any such expenditure has not already been taken into account in the finances of the plaintiff. With respect to the painting of the Building in 2000 - some 24 years ago - the objective evidence only establishes that she obtained a quote on that occasion and is silent on who paid for it.
The defendant also relied on General Meeting and Executive Committee Meeting minutes from 2010 and 2011 and correspondence, invoices and strata accounts from 2000, 2011 and 2015. None of that material was relevant to the matters before me and it did not establish that the defendant made the contributions she alleges she made.
The defendant relies heavily on a document described as an "Accountants review letter" prepared by Derek Gardis dated 20 March 2023. That document purports to record a review of Macquarie Bank statements and an Excel spreadsheet which indicate that $226,028 was paid to Strathfield Partners and other expenses, but no amounts were paid for capital works or repairs. It goes on to say that there is a claim for misappropriation of funds totalling $313,945, although no assistance is provided as to whom that claim might be against. Finally, the letter states that all levies have been paid by the defendant from 2010 to 2023 and that she paid higher amounts in 2015, 2016 and 2018.
The "Accountants review letter" is abject. It carries no weight at all in establishing any of the matters for which the defendant relies on it, and I reject it in its entirety. It shows no analysis, does not set out the evidence on which it relies and does not show how the evidence supports its conclusions. It makes a bare assertion that levies have been paid, which, on its face, is contradicted by the defendant's own case that she is entitled to a set-off and not that she paid levies in response to notices issued to her pursuant to resolutions of general meetings as alleged. It is a wholly unsatisfactory piece of evidence and does not assist the defendant in establishing any matter raised by her by way of defence.
Finally, the defendant relies on Macquarie Bank statements with respect to the plaintiff's trust account for the period 31 October 2015 to 31 August 2018. Those statements show deposits, which the defendant says were made by her, in the sum of $10,000 in November 2015 and a deposit made by the defendant in the sum of $16,867 on 27 August 2018. The payments, the last of which was in settlement of earlier bankruptcy proceedings against her, are irrelevant to whether she paid contributions in respect of the levies struck from 2019 to 2022. They are also irrelevant to the question of whether she was in arrears from 2019. The defendant says that these statements disclose that she paid "double if not triple the levies" paid by the owners of Lots 1 and 2. I do not agree that the statements show anything of the kind.
Taking into account all of the defendant's evidence, I do not accept that she was ever up to date with her levy contributions and do not accept that she was up to date as at March 2019. I do not find any basis to conclude that she had made the payments alleged or that she is entitled to set-off any payments against her liability for contributions due pursuant to the Resolutions.

[29]

Allegations of misconduct

The defendant's allegations concerning the conduct of the plaintiff, other lot owners, strata managers and legal advisors are serious. They extend to allegations of misconduct in the conduct of the present proceedings. Given the seriousness of the allegations, which include fraud, theft and perjury, the higher standard of proof described in Briginshaw v Briginshaw (1938) 60 CLR 336 at 362 is engaged. Even on the ordinary civil standard of proof, however, the defendant's allegations are unsupportable. Dealing with those allegations specifically: 1. The defendant used the process of making submissions to record longstanding grievances and personal resentment against the other lot owners and strata managers, alleging mistreatment and disrespect. In doing so, she did not identify any actionable complaint or any basis for a defence. The plaintiff did not engage with most of the allegations, which were plainly irrelevant to the issues to be determined. These proceedings are an inappropriate forum for the ventilation of such issues, which are not supported by the evidence. 2. I reject the serious and unfounded allegation that the owners of lots 1 and 2 embezzled funds from the strata scheme's trust account. This is a serious allegation, made without any proper basis on the evidence. I reject the allegations that the plaintiff and the other lot owners have generally conducted themselves with bad faith, have committed perjury, abused the process of the Court, have been caught lying under oath and have made vexatious threats to and bullied the defendant. 3. I reject the allegation that the defendant was wrongly declared to be unfinancial. For reasons already discussed, this was not dispositive of the plaintiff's claim in any event. 4. I reject the serious and unfounded allegation that Mr Chew or Mr Oh gave dishonest evidence in their affidavits or in their oral evidence before me. I reject the allegation that Mr Oh misconducted himself in the conduct of these proceedings (with reference to any subpoena issued to Macquarie Bank or otherwise). I reject the allegation that the plaintiff's legal advisors acted in bad faith or bullied the defendant.
As indicated above, the present proceedings are but one episode in a long running dispute between the defendant and the other lot owners. There have been numerous decisions of other courts and tribunals, which the plaintiff took me to, including bankruptcy proceedings, which were only settled by reason of a payment by the defendant of $16,867 in August 2018. The defendant criticised some of those findings, such as the findings of Adamson J (as her Honour then was) in Qassim v Mitchell [2022] NSWSC 698, and attacked the basis for the issue of the Bankruptcy Notice. These are not capable of review in these proceedings and are irrelevant. The issue before me was only whether the defendant was liable to the plaintiff in respect of sums levied pursuant to the Resolutions.
Ultimately, I have rejected the factual allegations relied on by the defendant by way of defence. In any event, the defendant's contentions are largely misconceived. The question of whether moneys were spent by either party on repairs, whether the plaintiff has failed to maintain and repair the Building and how the litigation has been conducted does not affect the defendant's liability to pay contributions pursuant to the Resolutions.

[30]

Conclusion

The plaintiff has made out its case with respect to all of the Resolutions other than Resolution 3 at the June 2022 EGM. There being no application before me under s 24 of the Act, there has been no occasion to consider whether there is any basis to invalidate any of them, although the defendant did put the plaintiff to proof, particularly with respect to compliance with ss 79 and 81 of the Act. I am satisfied that the plaintiff has complied with those sections.
Nevertheless, the quantum of the claim, as articulated in the Amended Statement of Claim, includes claims for sums that appear to predate, and do not arise from, the pleaded Resolutions. As allegations in relation to those sums were not properly before me, I make no findings in respect of them.
With respect to Resolution 3 at the June 2022 EGM, on the evidence before me, I have not found the levy to have ever been properly due. That levy, however, was in respect of costs. As the plaintiff has been largely successful, it is entitled to its costs of these proceedings in any event, either as reasonable expenses under s 86 of the Act or as costs under UCPR r 42.1.
The plaintiff asked me to reserve the question of costs of the proceedings on the basis that it proposes to seek a lump sum costs order. It foreshadowed it would seek an order for costs assessed on the basis of recovering 80% of its actual costs. In light of the failure of the plaintiff to make out a monetarily significant part of its claim, I do not consider such an order would be appropriate. In my view, the appropriate order is that costs be as agreed or assessed on the ordinary basis.
The plaintiff is entitled to interest under s 86 of the Act, calculated from the date on which each contribution instalment, under each Resolution on which it succeeded, fell due. As this is a matter of computation only, there should be no real dispute as to the calculation. Nevertheless, I will give the defendant an opportunity to review the calculations before I make any order as to interest. Unless I decide otherwise, the question of interest will be determined on the papers.

The Owners - Strata Plan 11245 v Qasim

At a glance

Court

Decision date

Source

Judgment (32 paragraphs)

Parties

Legislation Cited (2)

Cases Cited (10)