The Owners Strata Plan 50276 v Thoo

Lin v The Owners - Strata Plan No 50276 [2004] NSWSC 88; (2004) 11 BPR 21,463 Lubrano v The Proprietors of Strata Plan No 4038 (1993) 6 BPR 13,308 MacLeod v Proprietors of Strata Plan No 6544 [1980] 2 NSWLR 691 Martin v Western District of the Australasian Coal & Shale Employees' Federation Workers' Industrial Union of Australia (Mining Department) (1934) 34 SR (NSW) 593 Miller v Miller [2011] HCA 9; (2011) 242 CLR 446 Ngurli Limited v McCann (1953) 90 CLR 425 Nicita v Owners of Strata Plan 64837 [2010] NSWSC 68 Peters' American Delicacy Co Ltd v Heath (1939) 61 CLR 457 O'Connor v SP Bray Ltd (1937) 56 CLR 464 Platt v Ciriello [1998] 2 Qd R 417 Proprietors - Strata Plan No 30234 v Margiz Pty Ltd (1993) 32 NSWLR 294 Proprietors of Strata Plan No 159 v Blake (1986) CCH Strata Titles Cases 30-068 Proprietors of Strata Plan No 464 v Oborn (1975) 1 BPR 9623 Proprietors of Strata Plan No 6522 v Furney [1976] 1 NSWLR 412 Proprietors of Strata Plan No 30234 v Margiz Pty Ltd (Supreme Court of New South Wales, Brownie J, 30 June 1993, unreported) R v Connell; ex parte The Hetton Bellbird Collieries Limited (No 2) (1944) 69 CLR 407 Re the Mayor etc. of the City of Hawthorn; Ex parte Co-operative Brick Co Ltd [1909] VLR 27 Re Christchurch Inclosure Act (1888) 38 Ch D 520 Ridis v Strata Plan 10308 [2005] NSWCA 246; (2005) 63 NSWLR 449 Seiwa Pty Ltd v The Owner of Strata Plan 35042 [2006] NSWSC 1157; (2006) 12 BPR 23,673 Select Plant Hire Pty Ltd v John Holland Construction and Engineering Pty Ltd [1998] VSC 102 Sovar v Henry Lane Pty Ltd (1967) 116 CLR 397 Stolfa v Hempton [2010] NSWCA 218 The Owners - Strata Plan No 43551 v Walter Construction Group Limited [2004] NSWCA 429; (2004) 62 NSWLR 169 The Owners SP 35042 v Seiwa Australia Pty Ltd [2007] NSWCA 272; (2007) 13 BPR 24,789 Trevallyn-Jones v Owners Strata Plan No 50358 [2009] NSWSC 694; (2009) 14 BPR 27,113 Vatcher v Paull [1915] AC 372 Young v Owners - Strata Plan No 3529 [2001] NSWSC 1135; (2001) 54 NSWLR 60 Texts Cited: Macquarie Dictionary, 5th Edition Category: Principal judgment Parties: The Owners - Strata Plan No 50276 (First Appellant/First Cross-Respondent) E & M Partners Pty Ltd (Second Appellant/Third Cross-Respondent) The Rose Chang Investments Pty Ltd (Third Appellant/Eleventh Cross-Respondent) Thakrar Nominees Pty Ltd (Fourth Appellant/Twelfth Cross-Respondent)

Chee Min Thoo (First Respondent/Cross-Appellant) Perry Kritselas Trustee for the MR Investments Trust (Second Respondent/Second Cross-Respondent) Katsuo Raimoto (Third Respondent/Fourth Cross-Respondent) Agnes Raimoto (Fourth Respondent/Fifth Cross-Respondent) Sheng Yang Wang (Fifth Respondent/Sixth Cross-Respondent) Ji Ping Wang (Sixth Respondent/Seventh Cross-Respondent) Shain-John Chang (Seventh Respondent/Eighth Cross-Respondent) Chung Lin Hsueh Chang (Eighth Respondent/Ninth Cross-Respondent) Mrs Rebecca Huang (Ninth Respondent/Tenth Cross-Respondent) Jimmy Lee (Tenth Respondent/Thirteenth Cross-Respondent) Fiona Lee (Eleventh Respondent/Fourteenth Cross-Respondent) Cu Phat Huynh (Twelfth Respondent/Fifteenth Cross-Respondent) Hao Huynh (Thirteenth Respondent/Sixteenth Cross-Respondent) Kim Leong (Fourteenth Respondent/Seventeenth Cross-Respondent) David Leong (Fifteenth Respondent/Eighteenth Cross-Respondent) Australian Postal Corporation (Sixteenth Respondent/Nineteenth Cross-Respondent) Pak Lim Cheng (Seventeenth Respondent/Twentieth Cross-Respondent) Lai Fon Kwok (Eighteenth Respondent/Twenty-first Cross-Respondent) Representation: Counsel: Mr JC Kelly SC with Mr VF Kerr (Appellants) Mr AJ McInerney SC with Mr BK Koch (First Respondent) Solicitors: Rutland's Law Firm (Appellants) Sarvaas Ciappara Lawyers (First Respondent) Submitting appearances by Second to Fifteenth, Seventeenth and Eighteenth Respondents Holding Redlich (Sixteenth Respondent) File Number(s): CA 2008/277829-005 Decision under appeal Jurisdiction: 9111 Citation: Thoo v The Owners Strata Plan No. 50276 [2011] NSWSC 657; Thoo v The Owners Strata Plan No. 50276 (No 2) [2012] NSWSC 1313 Date of Decision: 2011-06-28 00:00:00 Before: Slattery J File Number(s): SC 2008/277829

Judgment 1BARRETT JA: I have had the advantage of reading in draft the judgment to be delivered by Tobias AJA. I respectfully agree with everything his Honour has written. The orders Tobias AJA proposes should be made for the reasons he states. I add the following observations merely by way of confirmation and emphasis.

Sections 62(2) and 65A 2As Tobias AJA points out, the interaction between s 62 and s 65A of the Strata Schemes Management Act 1996 was dealt with by this Court in Stolfa v Hempton [2010] NSWCA 218; (2010) 15 BPR 28,253 (at [10]) in this way: "The primary judge concluded at [68] of his reasons that being work falling within s 62, the work was not covered by s 65A or by the relevant by-law. This was challenged. It was submitted that even though s 62 required repair and maintenance to be done, because the work in fact improved or enhanced the common property, a special resolution was required. The judge was correct to reject that submission. If, as a matter of fact, all the works satisfied the description in s 62 as repair and maintenance, they were not subject to any requirement of a special resolution in s 65A. The statute should not be construed so as to require the owners corporation to act, but then to place a voting barrier in its path in complying with the statute." 3Section 65A is concerned with forms of activity undertaken "for the purpose of improving or enhancing the common property". Two of the relevant forms of activity are adding to the common property and altering the common property. Section 62(2), by contrast, creates a duty to "renew or replace any fixtures or fittings comprised in the common property". 4Replacement is a large concept. If a modest single-bulb light fitting is removed and a grand crystal chandelier is installed in its place, the former has obviously been replaced by the latter. There is also replacement if a substantial brick wall is erected on a site previously occupied by a flimsy brushwood fence. Replacement connotes no more than the installation of one thing in the place of another to achieve functional equivalence. 5While s 65A does not curtail the duty imposed by s 62(2) or impede performance of that duty, the existence of s 65A does serve to shape the s 62(2) duty so that, in the ordinary course, anything amounting to alteration or addition for the purpose of improving or enhancing is beyond the concept of renewal or replacement with which s 62(2) is concerned. 6In determining how s 62(2) and s 65A apply at any particular time, regard must be had to the attributes of the common property at some earlier reference point. The question of what amounts to renewal, replacement, alteration or addition must be answered by a process of comparison with the position that prevailed at the earlier reference point. The first such reference point is the time at which the strata plan is registered and the common property comes into being. The initial attributes are fixed at that time; and it is from that base that characterisation as renewal, replacement, alteration or addition is to be approached. Once any addition or alteration is made in accordance with the Act, the attributes of the common property are changed, a new reference point is identified and future questions of renewal, replacement, alteration and addition fall to be assessed by reference to the changed state at that new reference point. 7Generally speaking, renewal or replacement of fixtures or fittings will, of its nature, involve improvement because old will be superseded by new. It may also entail alteration or addition, in that the new or replacement item may be larger than or otherwise different from the old. To the extent that alteration or addition is, in that way, incidental to renewal or replacement, s 62(2) both requires and allows it. But s 62(2) does not, at a particular time, impose a positive requirement for superior functionality, compared with that inherent in the nature and quality of the relevant part of common property as most recently fixed in the way I have mentioned. 8In the present case, the duty imposed by s 62(2) in relation to the mechanical exhaust ventilation system did not require, at any given time, any alteration or addition for the purpose of improvement or enhancement. The duty was discharged by renewal or replacement that produced performance and functional efficiency at least equivalent to those that had pertained at the time that was, in the sense to which I have referred, the then most recent reference point. While the degree of performance and functional efficiency as at that most recent reference point continued, s 62(2) was not the source of any duty to act.

Resolutions under s 62(3) 9Section 62(3) causes s 62(2) not to require renewal or replacement of a particular item of property "if the owners corporation determines by special resolution that" such renewal or replacement is "inappropriate" and that a decision not to renew or replace will not have certain results in terms of reduced safety or impaired appearance. 10This specification is made in a context making it clear that an owners corporation is a body corporate and that the members who constitute the body corporate are the lot owners. This is the effect of s 11 of the Strata Schemes Management Act. 11Section 62(3) contemplates a process of evaluation - as to what is or is not "inappropriate" and what will or will not affect safety or appearance. A body corporate is incapable of judging such matters. The obvious intention is that the body's judgment should be taken to be that reflected by a special resolution resulting from the votes of such of the members as choose to vote. 12It is significant that a special resolution is identified as the relevant method of determination. A special resolution comes into existence merely because positive votes are cast by members accounting for at least 75 per cent of the voting power exercised. The passing of a special resolution is not accompanied by any requirement that a member state reasons for voting. Nor are reasons that individuals may happen to state afforded any weight or significance. The holding of any particular opinion by a member is not relevant to the question whether a special resolution has been passed. That is determined solely by seeing who voted and how they voted. 13When a proposal for renewal or replacement is under consideration, it is quite possible that the views of individuals will differ widely, even among those who are of the same view on the ultimate issue. One person might think that a particular renewal or replacement is "inappropriate" because the existing item of property works quite satisfactorily. Another might reach the same conclusion because of a view that, although the existing article does not work satisfactorily and renewal or replacement would be beneficial, the cost is too high and money should be spent in other ways. 14Each individual who chooses to participate in the process of determination by special resolution will, by voting, endorse a positive or negative answer to the question whether the particular course is "inappropriate". The reason why a particular individual chooses to give a positive answer or a negative answer and the content of the individual's own evaluative judgment are irrelevant in deciding whether the owners corporation has, by special resolution, made the determination reflected by the answer implied by the positive votes of members accounting for the majority necessary for the passing of a special resolution. 15It follows, in my opinion, that a s 62(3) resolution cannot be impugned on the basis that the subjective views or beliefs of some or all of the members who voted in favour of it were, as a matter of fact, not consistent with the evaluation expressed in the resolution. There is no indication in the statute that a necessary condition of a valid resolution is that those who vote in favour should conscientiously (and on objectively supportable grounds) subscribe to that evaluation. 16This does not mean that improper purpose of individuals can never operate as a vitiating factor. But the relevance of any such purpose will go not to the question whether the s 62(3) process has been duly implemented but to the quite separate issue of fraud on a power and whether the power to prevent particular renewal or replacement has been exercised "for a purpose, or with an intention, beyond the scope of or not justified by the instrument creating the power": Vatcher v Paull [1915] AC 372 at 378. 17I refer, in that connection, to the following passage in the judgment of Cussen J in Re the Mayor etc. of the City of Hawthorn; Ex parte Co-operative Brick Co Ltd [1909] VLR 27 at 51 and 52 (approved by Dixon J in Arthur Yates & Co Pty Ltd v Vegetable Seeds Committee [1945] HCA 55; (1945) 72 CLR 37 at 82), on whether a municipal council had passed a by-law in bad faith: "Each councillor may be actuated by many reasons, each having some different reasons from the others, and it seems to me almost, if not quite, impossible to penetrate into their minds. It must at least be necessary to show that the improper motive was the sole or dominant one, and that but for it a majority would have voted against adopting the by-law." 18In the way just mentioned, a special resolution under s 62(3) resulting from the votes of members of an owners corporation might, in theory, be invalid because the power to pass such a resolution had been abused in the sense of being deployed for a purpose foreign to that for which it was created by the statute. The motives and purposes of individuals voting in favour would be relevant to that inquiry but, as Cussen J said, "it must at least be necessary to show that the improper motive was the sole or dominant one, and that but for it a majority would have voted against . . .". 19The evidence in the present case did not disclose any improper motive on the part of any of the lot owners who voted in favour of the s 62(3) resolution.

The proprietary right argument 20A statute may cause property to be held upon trust, including "trusts unlike any previously known" and which "cannot be held invalid on the ground of perpetuity or on any other ground": Re Christchurch Inclosure Act (1888) 38 Ch D 520 at 530. In the present context, it is the statutory designation of the owners corporation as an "agent" holding the common property "on behalf of" the lot owners that leads to the conclusion that an owners corporation is a trustee. 21That designation is made in a statute that imposes positive duties with respect to the trust property but says little about prohibitions. The prohibitions are left to be derived mainly from the fiduciary quality of the relationship that the Act creates between the corporation and the lot owners. The relationship imports, by necessary implication, the proscriptive duties of fiduciaries but creates no basis for the imposition of prescriptive duties independent of those the legislation creates. 22TOBIAS AJA: The first appellant is the Owners Corporation constituted pursuant to s 11 of the Strata Schemes Management Act 1996 (NSW) ("the 1996 Act") upon the registration of Strata Plan 50276 ("the Strata Plan"). The latter is a freehold strata scheme comprising 58 lots over five floors in a building known as the Hunter Connection, located near the corner of Hunter and George Streets, Sydney ("the Building"). 23A pedestrian tunnel under George Street connects the basement of the Building with the Wynyard Station pedestrian ramp on the western side of George Street. During peak commuting hours, large numbers of pedestrians use the basement of the Building to access and exit Wynyard Station. 24The first respondent, Dr Chee Min Thoo ("Dr Thoo"), is the registered proprietor of several lots in the Strata Plan, including Lot 17 at the northern end of the basement level of the Building. He acquired that lot in February 2006, at which time it was (as it still is) used for retail purposes not involving the commercial cooking and retailing of hot food. 25Shortly after acquiring Lot 17, Dr Thoo submitted plans to the Council of the City of Sydney ("the Council") to subdivide the lot into three separate retail tenancies. That application was duly approved, subject to a condition that the specific use of each tenancy be the subject of a further development application to the Council and that the premises be ventilated in accordance with the Building Code of Australia and the Council's Ventilation Code. 26Dr Thoo's intention was to lease each of what then became known as Shops 1, 2 and 3 for the commercial cooking and selling of hot Asian food. However, the Council's condition required that before the shops could be used for that purpose, each must be provided with an adequate exhaust ventilation system to extract cooking fumes and vapours from the shop. 27In February and March 2007 Dr Thoo submitted plans for the fit-out of Lot 17 to the Owners Corporation and applied to connect the lot to the existing mechanical exhaust ventilation system ("the MEVS") which constituted part of the common property of the Building. In December 2007 he requested that the Owners Corporation guarantee Lot 17 an exhaust ventilation capacity of 3,600 litres per second (l/s) or 1,200 l/s per shop. 28Ultimately, whilst accepting that Lot 17 could be physically connected to the existing MEVS, the Owners Corporation maintained that the system was already being fully utilised to the limit of its available design capacity by lots already connected thereto. However, in July 2007 it engaged an exhaust ventilation expert, Mr Warwick West, to investigate whether it was feasible to install a supplementary MEVS system to increase the existing system's capacity. In September 2008 Mr West advised that installing an additional system would involve significant cost, would interfere with the existing retail operations in the Building and would only be achievable after meeting a number of third party requirements outside the control of the Owners Corporation. Accordingly, the Owners Corporation declined to give Dr Thoo the guaranteed exhaust capacity that he had requested. 29In the meantime, Dr Thoo had commenced proceedings in the Equity Division of the Supreme Court on 19 March 2008 in which he sought a number of remedies including, relevantly, a mandatory injunction that the Owners Corporation repair and/or replace the MEVS so as to allocate and/or make available to him 3,600 l/s exhaust capacity from the MEVS to service Lot 17. A number of consequential orders were sought, including damages. 30The primary legal basis relied upon by Dr Thoo in support of his claim for a mandatory injunction was s 62(2) of the 1996 Act as construed by Gzell J in Lin v The Owners - Strata Plan No 50276 [2004] NSWSC 88; (2004) 11 BPR 21,463. The Owners Corporation responded to Dr Thoo's reliance on this provision at its Annual General Meeting held on 5 August 2009 ("the 2009 AGM") when it was unanimously resolved pursuant to s 62(3) of the 1996 Act that it was "inappropriate for the Owners Corporation to renew or replace the mechanical exhaust ventilation system of the common property" ("Resolution 7"). Dr Thoo then claimed that Resolution 7 was invalid. 31The representatives of the second, third and fourth appellants voted in favour of Resolution 7 and gave evidence at trial as to their reasons for doing so. The second to eighteenth respondents were represented at the meeting in person or by proxy and also voted in favour of Resolution 7, which, as I have observed, was passed unanimously. Although the second, third and fourth appellants were represented on the appeal by the legal representatives of the Owners Corporation, the second to eighteenth respondents took no part in the proceedings either at first instance or on the appeal. 32It was in the foregoing context that the primary judge, Slattery J, determined that the following three questions required resolution: (1) Has the Owners Corporation breached its Management Act ss 62 (1) and (2) duties to maintain and repair the mechanical exhaust ventilation system in the common property of Strata Plan 50276?; (2) Is Special Resolution 7, passed at the Annual General Meeting of the Owners Corporation held on 7 August 2009, invalid, void and of no effect?; and (3) If Special Resolution 7 was validly passed at the Owners Corporation Annual General Meeting on 5 August 2009, is the Resolution liable to be set aside as a fraud on the minority or under the Gambotto doctrine (Gambotto v WCP Limited (1995) 182 CLR 432)? 33The proceedings were heard by the primary judge on 16, 17, 18 and 24 August 2010. Early in the hearing his Honour determined that he would resolve the three questions referred to above and that, if those questions were answered in favour of Dr Thoo, a further hearing in relation to the issue of damages would be held separately. 34In his judgment published on 28 June 2011 ("the first judgment") his Honour answered each of the questions referred to affirmatively in favour of Dr Thoo (although he did not consider that the Owners Corporation had breached s 62(1) of the 1996 Act). In particular, he held that the Owners Corporation had been in breach of its statutory duty since 1 July 2007 to renew or replace the MEVS so as to provide a reasonable level of exhaust ventilation capacity to Lot 17. Accordingly, his Honour ordered that an inquiry be held as to the damage, if any, suffered by Dr Thoo as a result of that continuing breach: Thoo v The Owners Strata Plan No 50276 [2011] NSWSC 657; (2011) 15 BPR 29,309. 35On 22 August 2011 the primary judge relevantly made the following declarations and orders: Declarations 1. The Court declares that The Owners - Strata Plan No. 50276 (Owners Corporation) has breached s62(2) of the Strata Schemes Management Act 1996 (NSW) (Strata Schemes Act) by denying Lot 17 in Strata Plan No. 50276 (Lot 17) exhaust ventilation capacity of 3600 litres per second (l/s) from the mechanical exhaust ventilation system in the common property (MEVS) since December 2007. 2. The Court declares that 3600 l/s was, and is, a reasonable level of exhaust ventilation capacity to Lot 17 from 1 December 2007. 3. The Court declares that Resolution 7 passed at the Annual General Meeting of the Owners Corporation held on 5 August 2009 was invalid, null and void. 4. The Court declares that, at the Annual General Meeting of the Owners Corporation held on 5 August 2009, the Owners Corporation did not comply with s62(3) of the Strata Schemes Act in respect of Resolution 7. 5. The Court declares that there was not a quorum present to consider and vote on Resolution 7, within the meaning of clause 12(2) of Schedule 2 of the Strata Schemes Act, at the Annual General Meeting of the Owners Corporation held on 5 August 2009. 6. The Court declares that the exercise by the owners of lots in Strata Plan No. 50276 of their powers to vote in favour of Resolution 7 at the Annual General Meeting of the Owners Corporation held on 5 August 2009 was a fraud on the minority of owners of lots in the Strata Scheme not connected to the MEVS, including the Plaintiff as owner of Lot 17. Orders 7. The Owners Corporation is ordered to modify, or add to, repair, or replace the MEVS to ensure that Lot 17 receives a reasonable supply of exhaust ventilation capacity from the MEVS of not less than 3600 l/s. 8. The Owners Corporation is ordered to report to the Court on or before 30 September 2011 with respect to the steps taken and decisions made by it to ensure that Lot 17 receives a reasonable supply of exhaust ventilation capacity of not less than 3600 l/s from the MEVS by filing an affidavit with the Court, which affidavit is to be served on the Plaintiff. 36His Honour stayed Order 7 for a period and, as I have indicated, directed that there be an inquiry as to damages. The hearing of that inquiry took place on 15 September and 4 and 5 October 2011 before his Honour and was decided on 29 October 2012 ("the second judgment"). The primary judge held that Dr Thoo was entitled to claim damages for breach of s 62(2) on the basis that pursuant to that provision a duty was owed by the Owners Corporation to each lot owner and any breach thereof gave rise to a private cause of action pursuant to which damages could be awarded to a lot owner. 37His Honour then assessed the damages allegedly sustained by Dr Thoo from 6 June 2008 until the date of the second judgment at the rate of $14,800 per annum and thereafter on the basis that Dr Thoo was entitled to be paid $1,233.33 per month until such time as the already ordered mandatory injunction (Order 7) to provide him with the necessary exhaust capacity to enable the shops to be used for the commercial cooking and sale of hot food had been implemented: Thoo v The Owners Strata Plan No. 50276 (No. 2) [2012] NSWSC 1313. 38The Owners Corporation appeals against Declarations 1-6 and Orders 7-19 made on 22 August 2011 and against the orders for damages made by the primary judge on 4 December 2012.

The statutory regime 39Pursuant to s 18(1) of the Strata Schemes (Freehold Development) Act 1973 (NSW) ("the 1973 Act"), upon registration of a strata plan any common property in that plan vests in the body corporate (since 1996 called the owners corporation) for the estate or interest evidenced by the folio of the Register comprising the land the subject of that plan. By s 20 of that Act, the estate or interest of a body corporate in common property vested in it is held by the body corporate as agent for, relevantly, the proprietors (where different persons are proprietors of each of two or more lots) of the lots in the strata plan as tenants in common in shares proportional to the unit entitlement of their respective lots. 40Section 24(2) of the 1973 Act provides that the beneficial interest of a proprietor of a lot in the estate or interest in the common property held by the body corporate as agent for that proprietor shall not be capable of being severed from, or dealt with except in conjunction with, the lot. 41As will appear, of some significance is s 21 of the 1973 Act which provides as follows: Common property shall not be capable of being dealt with except in accordance with the provisions of this Act and the Strata Schemes Management Act 1996. 42In Ridis v Strata Plan 10308 [2005] NSWCA 246; (2005) 63 NSWLR 449 at [104]-[114] McColl JA summarised the scheme of the 1996 Act in a manner which I gratefully adopt and to which I shall return. Her Honour (at [104]) observed that the long title to the Act described it as "an Act to provide for the management of strata schemes and the resolution of disputes in connection with strata schemes; and for other purposes". She noted that the objects of the Act set out in s 3 reflected the long title. 43Chapter 2 of the 1996 Act is headed "Management of strata schemes" and comprises ss 8 to 60. Relevantly, s 12 provides that "[a]n owners corporation has the functions conferred or imposed on it by or under this or any other Act". 44Chapter 3 of the 1996 Act sets out the "Key management areas" of an owners corporation for a strata scheme and comprises ss 61 to 115A. Relevantly, the owners corporation has the management and control of the use of the common property of the strata scheme concerned for the benefit of the owners: s 61(1)(a). It also has responsibility for maintaining and repairing the common property of the strata scheme as provided by Pt 2 of Ch 3: s 61(2)(a). 45It is appropriate to set out s 61 of the 1996 Act in full: What are the key management areas for a strata scheme? (1) An owners corporation has, for the benefit of the owners: (a) the management and control of the use of the common property of the strata scheme concerned, and (b) the administration of the strata scheme concerned. (2) The owners corporation has responsibility for the following: (a) maintaining and repairing the common property of the strata scheme as provided by Part 2, (b) managing the finances of the strata scheme as provided by Part 3, (c) taking out insurance for the strata scheme as provided by Part 4, (d) keeping accounts and records for the strata scheme as provided by Part 5. (3) Other functions of an owners corporation are included in Part 6. 46Part 2 of Ch 3 is headed "Maintenance, repairs, alteration and use of common property and fire safety inspections". Section 62, the pivotal provision in this appeal, is headed "What are the duties of an owners corporation to maintain and repair property?" It provides as follows: (1) An owners corporation 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 clause 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. 47Sections 65A, 65B and 65C were inserted into the 1996 Act by the Strata Schemes Management Amendment Act 2004 (NSW). Section 65C deals with the duties of an owners corporation in relation to fire safety inspections and is not presently relevant. However, s 65A is of some significance to the issues in the present appeal and relevantly provides as follows: 65A Owners corporation may make or authorise changes to common property (1) For the purpose of improving or enhancing the common property, an owners corporation or an owner of a lot may take any of the following action, but only if a special resolution has first been passed at a general meeting of the owners corporation that specifically authorises the taking of the particular action proposed: (a) add to the common property, (b) alter the common property, (c) erect a new structure on the common property. (2) A special resolution that authorises action to be taken under subsection (1) in relation to the common property by an owner of a lot may specify whether the ongoing maintenance of the common property once the action has been taken is the responsibility of the owners corporation or the owner. (3) If a special resolution under this section does not specify who has the ongoing maintenance of the common property concerned, the owners corporation has the responsibility for the ongoing maintenance. 48Part 3 of Chapter 3 deals with the finances of a strata scheme. They were described by McColl JA in Ridis in the following terms: [108] ... Section 68(1)(a) relevantly provides that an owners corporation must not pay money from its administrative fund except for payments of the kind for which estimates have been made under s 75(1). Section 75(1)(a), which appears in Div 2 (Levy of Contributions) requires an owners corporation not later than fourteen days after its constitution, and at each annual general meeting thereafter, to estimate how much money it would need to credit to its administrative fund for actual and expected expenditure "to maintain in good condition on a day-to-day basis the common property and any personal property vested in the owners corporation ...". The note to s 75 (which does not form part of the Act: s 7) states: Recurrent expenses would include such regular expenses as ... carpet cleaning, lawn mowing services and the like and minor expenses relating to maintenance of the common property. [109] Section 69(1) requires an owners corporation to establish a sinking fund. Section 71(1)(a) provides that an owners corporation must not pay any money from its sinking fund except for the purpose of making payments of the kind for which estimates have been made under s 75(2). Section 75(2) provides: 75 Estimates to be prepared of contributions to administrative and sinking funds ... (2) An owners corporation must, at each annual general meeting, estimate how much money it will need to credit to its sinking fund for actual and expected expenditure: (a) for painting or repainting any part of the common property which is a building or other structure, and (b) to acquire personal property, and (c) to renew or replace personal property, and (d) to renew or replace fixtures and fittings that are part of the common property, and (e) to replace or repair the common property, and (f) to meet other expenses of a capital nature. Note: Expenses of a capital nature would include expenses in relation to major repairs or improvements to the common property or personal property of the owners corporation, such as painting of a building or replacement of roofing, guttering or fences and the like. (Emphasis added). I note that s 75(2)(d) reflects the content of s 62(2).

The structure of the first judgment 49After referring at [15] of his reasons to the three questions which required resolution, the primary judge recited the applicable legislative provisions. He then set out in some detail the nature of the existing MEVS and its relationship to Lot 17. He then determined whether the Owners Corporation had breached s 62. Having set out the principles applicable to s 62, to which I shall return, he made findings that there had been no breach by the Owners Corporation of its obligations under s 62(1) but that there had been a breach of its obligations under s 62(2). It will be necessary to deal with the latter issue in some detail. 50His Honour then dealt with an argument advanced by the Owners Corporation based on s 65A of the 1996 Act, finding (at [76]) that if additions or alterations to the common property are required in the exercise of the duty to repair and maintain under s 62(1), then they need not be specially authorised under s 65A. However, his Honour accepted that once additions or alterations can no longer be justified as a discharge of a s 62 duty, a special resolution under s 65A is required for them to proceed. This analysis of the relationship between the two provisions was clearly correct: Stolfa v Hempton [2010] NSWCA 218 at [10] per Allsop P, with whom Basten and Young JJA agreed. 51The primary judge then considered the issue as to whether Dr Thoo was seeking reasonable access to the MEVS. He ultimately held that Dr Thoo's application for 3,600 l/s of exhaust capacity was a reasonable request for access to the system in the circumstances. Of course, this finding assumes that the Owners Corporation had a duty to meet that request. That was the primary issue argued on the appeal. 52The final issue in the first judgment concerned the validity of Resolution 7. A number of grounds of invalidity were found by the primary judge. Two of them may be mentioned at this point. At [144] of his reasons his Honour observed that the "particular item of property" the subject of a s 62(3) resolution was required to be defined with some precision for a special resolution pursuant to that provision to be valid. Because s 62(3) was providing an exclusion from what were otherwise absolute statutory duties, any "carve out" from that obligation would be ineffective unless there was sufficient certainty about the item of common property to be excluded. Where the property concerned was part of a system, as in the present case, this requirement for certainty had special difficulties. 53His Honour returned to the issue at [153]. Having noted the terms of Resolution 7, he considered that it applied to every part of the MEVS, as a consequence whereof the Resolution exempted the whole system from the operation of ss 62(1) and (2). His Honour considered it doubtful whether such a complex system, without closer definition of the relevant part the subject of the Resolution, answered the description of a "particular item of property". He noted that the primary meaning of "item" is "a separate article or particular". 54In its written submissions on the appeal the Owners Corporation (at [65]) submitted that this ground of invalidity adopted by his Honour was based on the assertion that Resolution 7 referred only to "the mechanical exhaust ventilation system" as a whole and not to particular components of it. It was contended that the system itself was a particular item of common property and that Dr Thoo's submission, accepted by the primary judge, was that that item needed renewal or replacement so as to provide him with the exhaust ventilation capacity that he sought. 55Neither Dr Thoo's written submissions nor his oral submissions on the appeal addressed those of the Owners Corporation on this issue. Furthermore, although those submissions directly addressed Grounds of Appeal 11, 12, 14, and 16 and purported to address Ground 15, they addressed neither Ground 13 nor Ground 15, which were the only grounds which challenged his Honour's finding on this issue. Nor did Dr Thoo's submissions address [151] or [153] of his Honour's reasons. In my view the Owners Corporation's submissions should be accepted and his Honour's finding that Resolution 7 did not identify a "particular item of property" within the meaning of s 62(3) cannot be sustained. 56A further issue with respect to Resolution 7 was whether or not it had been framed as a special resolution. This relevantly raised the issue of whether there was a quorum at the 2009 AGM. The primary judge held that there was not such a quorum. That finding was challenged in Grounds of Appeal 17, 18 and 18A. However, in his written submissions on the appeal Dr Thoo conceded that a quorum was present, although the reasons for that concession are no longer relevant. Accordingly, there was no issue on the hearing of the appeal that Resolution 7 was validly passed as a special resolution.

The mechanical exhaust ventilation system and its inability to service Lot 17 57A number of the 58 lots that comprise the Strata Plan retail cooked food. These lots are principally located on Level 1, or the Food Court area, of the Building as well as at the basement level. Some but not all of these food shops are connected to the MEVS installed within the common property. 58The MEVS comprises two discrete systems denoted as System A and System B. System A, comprising a series of rigid ducts, a riser and a fan, was originally installed in the Building in 1982 or 1983. The ducts are installed in the common property ceiling spaces of the basement, ground and first floor levels of the Building. They connect to a common riser which rises outside the Building to a plant room on Level 20. Located in the plant room is a single inlet fan which draws air from the connected shops through the hoods over the cooking facilities in those shops and then, via the ducts and risers, discharges the air to the outside atmosphere through the roof of the plant room. 59The primary judge described what he regarded as the important characteristic of System A at [34] of his reasons, where he observed: ... it operates as a kitchen exhaust system to allow various kinds of kitchen exhaust hoods installed in shops to be connected by sub-ducts to a rigid branch system located in the ceiling space of retail lots, especially the basement and the first level. The associated ground floor branch ducts of this same system are also used for smoke spill purposes as part of the fire control system within the building and not for kitchen exhaust. 60System B was installed as a consequence of an order made by Gzell J in Lin, a decision upon which Dr Thoo and the primary judge heavily relied, particularly as that case concerned the Strata Plan and the Building and raised similar issues to the present case. That system also comprises a series of rigid ducts, a riser and a fan, which were installed in February 2005. The ducts are installed in the ceiling space above Lot 55 and the central common area at the south end of Level 1. They then rise to a centrifugal exhaust fan located in the plant room on Level 2a of the Building. System B services predominately Lots 63, 64, 36, 37 and 55 on Level 1. Air extracted through System B is discharged to the outside atmosphere through the Level 2a roof. 61As the primary judge noted at [35] of his reasons, System B was specifically designed to serve only lots on Level 1 that required increased exhaust ventilation capacity, including the lot owned by Mr Lin. There are some connections between the systems, but they essentially operate separately. The System A fan delivers 12,614 l/s of exhaust capacity, whereas the System B fan delivers 6,541 l/s, a total of 19,155 l/s. The experts engaged by the parties in the present litigation measured the airflow at the hoods of the shops which utilised the systems, finding that it totalled approximately 17,200 l/s. 62His Honour noted at [36] that the experts called in the proceedings, Mr West (for the Owners Corporation) and Mr Laffer (for Dr Thoo), agreed upon the current operating characteristics of the MEVS and upon the consequences of connecting Lot 17 thereto. As his Honour observed, the issues on which they agreed provided a clear picture of the technical difficulties that would exist in connecting Lot 17 to the MEVS and then trying to use the system to provide an additional 3,600 l/s of exhaust ventilation capacity to service that lot. 63At [37] his Honour adopted the conclusion of the two experts as his findings. As the Owners Corporation contended, their evidence went relevantly to three issues. The first was the position of Lot 17 with no modification or additions to the system. The experts agreed that the existing MEVS was operating at its full capacity, and that if Dr Thoo was to connect Lot 17 to the system without any changes, he would receive at most 620 l/s of exhaust capacity, while other basement level lots connected to the system would have their exhaust capacity reduced by about 14%. It appears to have been common ground that 620 l/s of exhaust airflow to Lot 17 would not be sufficient for the effective operation of the exhaust hoods required to be fitted over cooking facilities in that lot based on the fit-out plans for the three tenancies contemplated by Dr Thoo. Simply rebalancing airflow in the system, so that the airflow received by other lots was reduced, would not generate the 3,600 l/s demanded by Dr Thoo. At most, according to Mr West, a rebalancing might achieve up to 1,400 l/s, although Mr Laffer considered that rebalancing was unlikely to achieve much of an increase because of the distance of Lot 17 from the System A fan. 64Secondly, the experts assessed the scope for enhancing the performance of the system by means of modifications. In their joint report they agreed that certain improvements to System A might increase overall performance by 10%, although in cross-examination they retreated from that conclusion, agreeing that no improvement of any significance was possible to System A. Although they had not assessed any modification of the fan and duct work of System B, the experts surmised that some improvements might be possible, but were not likely to lead to any major increase in capacity and, in any event, would be limited by the availability of space in the ceiling on Level 1. 65The third issue related to the scope for providing additional exhaust capacity by installing a new exhaust system to provide a dedicated exhaust service to Lot 17. This was referred to in the evidence as System C. The Owners Corporation submitted that on the evidence of Mr West, System C involved a myriad of potentially fatal problems, including the necessity to intrude into space outside the common property owned by the Council or other lot owners. Mr Laffer proposed several other possibilities, but these were at the highest conceptual level. Both experts agreed that further investigations were required to assess the viability of the options and the extent of any increase in capacity they might achieve. 66The consequence of the proposed tenancies in Lot 17 having insufficient exhaust airflow was, first, that an occupation certificate would likely not be granted, as a consequence whereof those tenancies would not be permitted to trade as intended, namely, as cooked food outlets. Secondly, if the tenancies did operate as such outlets in accordance with the proposed fit-out plans, the exhaust hoods would not effectively capture all convected heat fumes and other aerosols as required by the relevant Australian Standard, with potential health and safety consequences for the occupants that could lead to the authorities requiring corrective action to be taken. I interpolate that it would be reasonable to infer that the Council would not grant development consent to the use of any of the three tenancies for the purpose of a cooked food outlet unless that tenancy was connected to an exhaust ventilation system which had the necessary capacity to comply with the Australian Standard referred to in the Building Code of Australia and the Council's Ventilation Code. 67In this context, although Dr Thoo had sought a total kitchen exhaust airflow of 3,600 l/s for the three proposed tenancies comprising Lot 17, the evidence established that, by using side draft hoods as distinct from canopy hoods, the total capacity required for compliance with the Australian Standard could be reduced from 3,600 l/s to 2,950 l/s. However, even if Mr Thoo's requested capacity was reduced to that figure, the expert evidence established that there was no certainty that it could be provided. In this respect, his Honour accepted the joint view of the experts that to achieve 3,600 l/s in total exhaust ventilation capacity for Lot 17 (and, I would infer, 2,950 l/s), it would be necessary to either substantially modify Systems A and B or provide a supplementary system.

The expert evidence in more detail 68Since June 2007 the Owners Corporation had sought and received advice from air conditioning engineers to the effect that Systems A and B had reached their maximum limit of airflow delivery, with the consequence that the provision of additional airflow capacity to meet the anticipated demands of lot owners not then connected to the system would require either an extensive upgrade of the existing system (if this was possible) or the installation of a totally new system. In this context, at [86] of his reasons the primary judge noted that as at 6 September 2007 the Owners Corporation had received requests from lot owners for additional exhaust capacity of at least 6,000 l/s. In May 2008 the lot owners of shops in the Food Court requested additional exhaust capacity totalling 2,940 l/s. Additional capacity was sought by other shops in the Food Court in 2008 and 2009. These requests were rebuffed on the ground that the existing system had reached its capacity. 69As at May 2008 By-law 30.1 had been amended so that Lots 31 to 48 on Level 1 could only be used for the provision of food (take away and eat in) and services (specifically excluding fashion but including a supermarket) whereas Lots 1 to 18 in the basement level could only be used for the provision of food, services and retailing. This by-law was repealed at the 2009 AGM and replaced with a new by-law whereby Lots 31 to 46 on Level 1 had a nominated permitted use category of "A Use", which was defined to mean a retail shop business in Schedule 1 to the Retail Leases Act 1994 (NSW) with an exception not presently relevant. As to Lots 1 to 18 in the basement level, Lots 1, 2, 4, 10, 11, 16, 17 and 18 were also nominated as having a permitted use category of "A Use", whereas the balance of those lots had a permitted use category of "B Use", which was defined to mean a retail shop business in Schedule 1 to the Retail Leases Act other than, in effect, food related uses including take away or fast food shops. Accordingly, the by-laws imposed no restriction of any relevance on the use of Lot 17. 70The issue of the capacity of the MEVS was the subject of three reports by Mr West. In his report of 8 October 2007, he noted not only that the system had been at the centre of a dispute for several years, but that engineers had already upgraded the system to the point that the ducts and fans were at the limit of their capacity. He identified a possible option for a new kitchen exhaust system, noting that, based on allowing an additional seven tenancies on the basement level to be connected to the new system, a further four on the ground floor and five on Level 1, the total exhaust requirement would be 12,800 l/s. At the same time he observed that there were a number of significant issues with any such new system which would need to be resolved. 71On 30 April 2008 Mr West provided a further report addressing the possibility of servicing the shops in Lot 17 with 3,600 l/s of exhaust capacity. He observed that Lot 17 was located the furthest from the riser and on the most distant floor of the existing system and that it would thus be the most difficult lot to supply with the requested exhaust quantities by means of "straight duct balancing", which apparently involved adjustment to dampers installed in the exhaust ducts attached to each lot to control airflow from the lot. Accordingly, an air balance solution alone would not assist in providing Dr Thoo with 3,600 l/s exhaust capacity. 72Mr West then considered other options. The first involved removing a large portion of the current ducting and replacing it with a larger duct so as to handle the increased capacity. This would involve removing and replacing part of the ceilings located over some shops and the walkway area. It would also be necessary to increase the ability of the overall exhaust system to extract and discharge the amount of exhaust air corresponding to current demand plus the additional demand, which would involve replacing either the original or supplementary exhaust fan with a larger unit to provide the additional capacity. His preliminary budget for the mechanical services (kitchen exhaust and supply air systems) component of the work was $200,000. However, the changes proposed would necessitate, in Mr West's opinion, a redesign and upgrade of the existing smoke spill system which, on a preliminary basis, would involve further expenditure of $400,000. In any event, he considered that the work required to increase the capacity of the original system (System A) and its existing supplementary system (System B) would be so extensive as not to be practical. 73An alternative to carrying out a major refurbishment of the original exhaust system was to disconnect Lot 17 from the original system and provide a supplementary exhaust and supply air system to serve Lots 16 and 17 only. However, such a system, although supplying 3,600 l/s of exhaust capacity to Lot 17, involved a number of problems, not the least of which was that part of the ducting system would be outside the boundaries of the common property and would occupy airspace owned by the Council. Not only would it be necessary to reach agreement with the Council to sell airspace to the Owners Corporation, but also it would be necessary to reach agreement with the owner of Shop H12 to sell space to accommodate the exposed supply and kitchen exhaust air ducts. Mr West proffered a preliminary budget of $200,000, which did not include payments to third parties or work required in other disciplines, such as structural work and hydraulic (sprinkler) work. 74Mr West provided a third report to the Owners Corporation dated 1 September 2008. Pursuant to a resolution of the Executive Committee of the Owners Corporation of 5 August 2008, it had been resolved that Mr West, in conjunction with Trevor Howse and Associates (fire engineers), should prepare specifications and a budget for upgrade works to be staged over approximately three years. It is appropriate to set out parts of that report, which was in the form of a letter: SUBJECT: HUNTER CONNECTION - MECHANICAL SERVICES Further to your email request dated 26/08/08 regarding the budget and details of disruptions to undertake the MAV works relating to the Kitchen exhaust system, we confirm the following: Previous B18 and B19 Upgrade Report We previously gave an estimate of the costs of works to provide the 3,600 l/s of exhaust as requested by Shop B18/B19 in our letter dated 30/04/2008 at $200,000. This work included disconnecting the existing exhaust ducts to B17, B18 and B19, providing a new exhaust and make up air system to be located on the roof of the link building to serve these 3 shops only. In that report we listed many independent variables that would first need to be satisfied before this work could proceed. Current Upgrade Inclusions Because we had a meeting with Rutland's Law Firm on 6/08/08 regarding how much exhaust air should [sic] each shop should be allocated, we presume Clisdells want a budget to upgrade the system so as all legal exhaust allocations can be met. As discussed at that meeting, such a major exhaust upgrade would prompt Council to require a Smoke Spill system upgrade with which Trevor House & Associates [sic] would need to be involved. We prepared 3 XLS sheets nominating various combinations of exhausts quantities on 15/08/2008. Should Sheet 3 results be close to the final air distribution, the resultant exhausts would be as shown below. We note that these air flows are only suggestions by us and not signed off as there is a discrepancy between unit allotments that needs to be resolved by yourselves, refer to our email dated 18/8/08.

(Emphasis in original.) 75Mr West's suggested program extended over a period of 18 months. The letter also pointed out that approval from the Council for the installation of plant on what was referred to as the link building and the sale of airspace for ducts was required. 76On 9 December 2008 the Owners Corporation accepted a quote from Trevor R Howse and Associates Pty Ltd to undertake an assessment of the smoke extraction requirements of the arcade space within the Building. However, that assessment had not been completed by May 2009 and was ultimately abandoned, apparently after the Owners Corporation at its 2009 AGM passed Resolution 7 pursuant to s 62(3) of the 1996 Act. 77At [70] of his reasons the primary judge acknowledged that detailed evidence was tendered as to the technical difficulties in overcoming what he found to be a breach by the Owners Corporation of its duty under s 62(2). However, having asked himself the question, "What work has to be done to satisfy that duty?", his Honour considered that it was not one which he need determine. He continued: There are technical difficulties associated with trying to upgrade both System A and System B. And such upgrade is likely to cause very substantial inconvenience to existing lot owners in Hunter Connection. The alternative solution of adding a supplementary system has the attendant difficulty of requiring negotiations with third parties to require [sic] rights of access outside the common property. 78Accordingly, it was submitted by the Owners Corporation that there was insufficient evidence before his Honour as to whether or not the Owners Corporation could remedy the breach of its duty under s 62(2) which he had found. The only factual issue which his Honour considered required resolution was whether the demand of Dr Thoo for 3,600 l/s of exhaust capacity to service his three tenancies was reasonable, a question his Honour answered in the affirmative but which is subject to challenge on the appeal. 79His Honour seems to have assumed that the system could be renewed or replaced in a manner which would service the exhaust needs not only of Dr Thoo but also of any other lot owner on Level 1 and/or the basement who in the future might reasonably require the provision of exhaust capacity or an increase thereof to service that owner's needs. What was not answered is the scenario whereby a supplementary and/or replacement system cannot be provided to meet those needs by any means short of wholesale demolition of the whole or part of the Building. One possibility is that the Owners Corporation could apply to discharge the injunction upon the ground that it was practically impossible to comply with it. However, as will appear, this would seem to be at odds with what his Honour determined to be a mandatory and absolute duty to renew or replace the MEVS, given its inability to service effectively and efficiently more lots within Level 1 and the basement than it did in its existing form. 80There was some evidence from Mr West that the exhaust air currently being extracted from the basement level exceeded the theoretical capacity of the system, such that the ducts at that level were already overloaded. It follows, if that evidence was accepted, that any additional connections to the system such as that sought by Dr Thoo would add to its current overload. However, no case was sought to be made by Dr Thoo that the system needed to be renewed or replaced so as to enable it to meet the needs of the lots which it currently serviced. His case was that it required renewal or replacement to enable it to service his needs, as well as those of any other lot owner not currently accessing the system but who may wish to do so in the future, notwithstanding the expert evidence to which reference has been made. 81The primary judge considered that the authorities on which he relied as to the true extent of the obligation of the Owners Corporation under s 62(2) to renew or replace the MEVS left no doubt that, if the only way that that duty could be fulfilled and a breach thereof remedied was to substantially modify Systems A and B or to add a supplementary system, the Owners Corporation was required to act accordingly, notwithstanding that, as his Honour accepted, there were "technical difficulties" associated with each of those proposals. 82Before leaving this aspect of the matter, one further finding of his Honour needs to be recorded. At [67] his Honour observed: The technical evidence is clear that the discrete supply system in the common property, the exhaust ventilation system is not "efficient and effective". It is not "capable of servicing" all lots. And it is "operating inadequately". 83As such this finding is not challenged by the Owners Corporation, or at least not directly. Its correctness depends upon his Honour's use of the phrases in quotation marks, which he distilled from the authorities on which he relied. Given the evidence of the experts to which reference has been made, in my view his Honour's statement that the system was not "efficient and effective", was not "capable of servicing" all lots and was "operating inadequately" was a reference to the acknowledged fact that the existing system was not capable of servicing the needs of all lots which either then or in the future might seek to access it. I do not accept (and the contrary was not suggested by Dr Thoo) that his Honour was asserting that the expert evidence established that the system was not operating efficiently and effectively in terms of servicing those lots which at the time were connected to it.

The primary judge's reasoning that there was a breach of s 62(2) 84The primary judge's reasoning with respect to the nature of the Owners Corporation's obligations under s 62(2) is to be found at [53]-[62]. At [54] his Honour dealt with its obligation under s 62(1) to "properly maintain and keep in a state of good and serviceable repair the common property". It was not in dispute that, as McColl JA noted in Ridis at [158], s 62(1) is directed to keeping the common property operational and to restoring something which is defective. 85At [53] his Honour dealt with the common features of the duties imposed by ss 62(1) and (2) which he considered were not relevantly in dispute. Each imposed an absolute duty compliance with which was mandatory. Furthermore, each duty was necessarily owed to each and every proprietor: The Proprietors of Strata Plan 159 v Blake (1986) NSW Strata Title Cases 30-086 at 50,654; Ridis at [166]. Thus, it mattered not that compliance by the Owners Corporation with its duties under s 62(1) and (2) would not be for the benefit of the proprietors of the lots in the strata scheme as a whole. It followed that the issue of reasonableness, in the sense of whether it was reasonable for the duty to be performed, was irrelevant. Given the existence of s 62(3) I agree that the issue of reasonableness does not arise under s 62(2). 86His Honour summarised this aspect of his reasoning in the last sentence of [53] in the following terms: Under both ... ss 62(1) and (2), breach of the absolute duty occurs as soon as something in the common property is no longer operating effectively or at all, or has fallen into disrepair: Ridis v Strata Plan 10308 (2005) 63 NSWLR 449 at [177] per McColl JA; Seiwa Pty Ltd v Owners Strata Plan 35042 [2006] NSWSC 1157 at [5] per Brereton J. 87At [55] the primary judge examined the differences between s 62(1) and s 62(2). This was of some relevance given that in Ridis (at [4]) Hodgson JA, who formed the majority with McColl JA although stating his own reasons, observed that his preferred view was that s 62(2) must be read together with s 62(1) ... to the effect that renewal or replacement must be undertaken whenever appropriate in the course of properly maintaining the common property and keeping it in a state of good and serviceable repair, as required by subs (1). 88In my dissenting judgment in Ridis at [51] I noted that the approach to the issue there under consideration (whether the owners corporation had been negligent at common law) was consistent with that of Gzell J in Lin at [47]-[48], where his Honour rejected a submission that the obligation to renew or replace under s 62(2) was limited to renewing or replacing those parts of the common property that were no longer in a state of good and serviceable repair. McColl JA also rejected any such link at [170] of her reasons, although she noted in the last sentence of that paragraph that Gzell J had applied the decision of Needham J in Proprietors of Strata Plan No 6522 v Furney [1976] 1 NSWLR 412 and that of McLelland CJ in Eq in Proprietors - Strata Plan No 30234 v Margiz Pty Ltd (1993) 32 NSWLR 294 ... to conclude that s 62(2) extended to obliging an owners corporation to upgrade an exhaust ventilation system which was incapable of servicing all lots in the strata scheme. 89At [57] the primary judge observed that the content of the duty under s 62(2) "has become well established by authority". Citing Margiz, his Honour stated that the ... duty to "renew or replace" fixtures or fittings in common property imposed by s 62(2) includes the replacement of a discrete system forming a part of common property, such as an air conditioning system by a new or different system. 90The primary judge then summarised what McColl JA had said at [169] of Ridis, which I record in full: Turning to s 62(2), it is apparent that it conveys the sense of repairing fixtures or fittings which have deteriorated, are damaged or are operating inadequately. "Renew" as relevantly defined by the Macquarie Dictionary means "to make new, or as if new, ... restore to a former state", while "replace" carries both the connotation of providing a substitute or equivalent or restoring or making good (Macquarie Dictionary). 91His Honour went on to observe (at [58]): An important element of the content of the duty to 'renew or replace' emerges when s 62(2) is applied to a discrete system within common property, which has the function of providing services to lot owners in the strata scheme. If the system is not operating efficiently/effectively/adequately or it does not have the capability to serve the (reasonable) needs of the lot owners who wish to make use of the system, then the Courts have consistently found a breach of s 62(2).

The primary judge's misplaced reliance on the authorities 92His Honour referred to three authorities as establishing the proposition at [58] of his reasons. The first (referred to at [59]) was the decision of McClelland CJ in Eq in Margiz where the learned Chief Judge (at 298) stated that a breach of the then equivalent of s 62(2) in the Strata Titles Act 1973 (NSW) would occur unless the required service (in that case an air conditioning system) was delivered "efficiently and effectively". The primary judge continued: His Honour considered that where the 'efficient and effective provision' of the services of a discrete system within common property required replacement of the whole system (such as for example an air conditioning system) there would be a breach of s 62(2) justifying installation of the replacement system. 93The Owners Corporation submitted that when taken in context, the statement of the Chief Judge in Margiz at 298 is not authority for the proposition that a breach of s 62(2) would occur in circumstances where the relevant system or service, which otherwise met its designed capacity, was incapable of servicing every lot that in the future wished to access the system. Rather, the Owners Corporation submitted that what the Chief Judge said was accurately summarised by McColl JA in Ridis at [168]: In Proprietors - Strata Plan No 30234 v Margiz Pty Ltd (1993) 32 NSWLR 294 at 297, McLelland CJ in Eq held a body corporate had failed to fulfil its s 68(1)(b) obligation in relation to an air-conditioning system in the common property which provided an inadequate supply of "comfortable and cool air" to the lower floors of a strata scheme and frequently delivered dirty air. However he also concluded (at 297) that the replacement of an air-conditioning system which was operating inadequately by a new or different system was governed by s 68(1)(c) rather than s 68(1)(b). In his view, "the installation of a replacement system would go beyond keeping the air-conditioning system in a state of good and serviceable repair within the meaning of s 68(1)(b)". 94It is noteworthy that the Chief Judge was there referring to s 68(1)(b) of the Strata Titles Act 1973, which is now reflected in terms in s 62(1) of the 1996 Act. His Honour held that a breach of s 68(1)(b) had occurred. However, as the system may have required replacement by a new or different system, it was necessary to determine whether the then equivalent of s 62(2) was engaged and had been breached. The appeal to the Chief Judge was from a decision not of the Owners Corporation but of the Strata Titles Board constituted under the Strata Titles Act 1973. Having determined that the Board had failed to consider whether the system was required to be replaced under the then equivalent of s 62(2), the Chief Judge referred the matter back to the Board for reconsideration of that issue. 95Accordingly, the Owners Corporation submitted that, at its highest, Margiz was authority for the proposition that the issue of the renewal or replacement of common property is governed by s 62(2) rather than s 62(1). It provides no guidance as to the circumstances in which an owners corporation is required to renew or replace common property, much less whether it is required to install new equipment to provide improved or enhanced functionality to lot owners. In other words, the Chief Judge did not decide (it being a matter for the Board) that on the facts of the case before him the subject air conditioning system was required to be replaced. Of course, it would be required to be replaced if it was not providing the service for which it was designed, which appears to have been the case. That is an entirely different situation to that the subject of the present litigation. 96That this is so was acknowledged by the primary judge at [68] of his reasons, where he noted that the present case was not one where the exhaust ventilation system had fallen into disrepair. His Honour accepted that the system was operating according to its original design capacity after System A was added to System B (or, more accurately, System B was added to System A). His Honour acknowledged that the system could continue to operate for many years if properly maintained. 97In other words, it must be the case that the existing MEVS operated "efficiently, effectively and adequately" in providing sufficient exhaust capacity to the lots which had access to it as at the date of the hearing. Dr Thoo's complaint was that it did not have the capacity to meet either his demand or the demand of lot owners who had not previously accessed the system but who desired to do so. His Honour 's error, in my respectful view, was to construe the Owners Corporation's obligation in s 62(2) as requiring renewal or replacement of the MEVS so that it could provide sufficient capacity to all lots which, under the by-laws, were entitled to be used for the purpose of retailing cooked food, whether that capacity was required at the time or at some indeterminate point in the future. His Honour referred to this concept at [65] of his reasons where he stated: ... when complying with s 62(2) an owners corporation may not just have to have regard to the plaintiffs concerned but may need to act so as to "keep the common property operational" and "operating effectively" per McColl JA in Ridis. This may involve the owners corporation exercising judgment so the planned capacity of the system within the common property meets the expected future needs of lot owners in the strata scheme". I pause to observe that his Honour's observation may be relevant when a developer is in the planning or design stage of a proposed strata development and anticipates that all lots on particular levels of the proposed building may need or wish to access an exhaust system or air conditioning system. In these circumstances an appropriately designed system with the capacity to service all the lots capable of accessing it should be adopted. If the system failed in that objective after the building had been constructed and occupied, then s 62(2) would be triggered and the system would need to be replaced if the carrying out of repairs under s 62(1) was insufficient. 98But that is not the present case, where no complaint is made that the existing MEVS should have been designed with a larger capacity than was adopted at the time of its construction. The complaint is that a system which had an appropriately designed capacity at that time is now deficient as it cannot adequately service lots which, as far as one knows, it did not have in contemplation as requiring access to the system at the time of its design. As will be seen, the second case upon which his Honour relied, Ridis, is not authority for the proposition that a breach of duty occurs in such circumstances. It is therefore necessary to understand the context in which McColl JA referred to a system "operating inadequately" (at [169]) or "no longer operating effectively" (at [177]). 99Ridis was a case in which the front door of an apartment block comprised two doors, each containing a single pane of ordinary annealed (as distinct from safety) glass, which had been etched. The building was a security block requiring keyed entry or the use of an intercom. On the relevant day, Mr Ridis and his partner had left the building to farewell some friends who had been visiting. After doing so Mr Ridis' partner, who had the key to the front door, opened it and proceeded into the entrance lobby. Mr Ridis was walking about two metres behind her when he saw the door closing very quickly. He instinctively extended his right arm towards the glass pane with fingers flexed in order to prevent the door from closing and locking. As his fingers came into contact with the closing door, it shattered, causing severe lacerations to his right forearm as it passed through the doorframe. Mr Ridis sued the owners corporation for damages, asserting that it had failed in its common law duty of care to him and in its statutory duties under s 62 of the Act by failing to replace the existing glass with safety glass. By majority, this Court held that the owners corporation had not breached its duty of care. 100In my dissenting opinion, I held that s 62(2) required the owners corporation to assess the risk of the glass shattering due to its antiquity and the fact that it did not conform or comply with current safety standards which, if adopted, would have avoided the risk that manifested itself in Mr Ridis' injuries. At [51] I stated that my approach was consistent with that of Gzell J in Lin at [47]-[48] ... where his Honour rejected a submission that the obligation to renew or replace in s 62(2) was limited to renewing or replacing parts of the common property that were no longer in a state of good and serviceable repair. 101At [56] I concluded that s 62(2) obligated the owners corporation to replace the ordinary annealed glass panes in the front doors unless, by special resolution pursuant to s 62(3), it determined that it was inappropriate to do so and that its determination not to do so would not affect the safety of that item of property. 102McColl JA, who formed the majority with Hodgson JA, rejected s 62(2) as providing a standard of care of the nature of that the subject of my dissent. After analysing ss 62(1) and (2) at [168]-[170] of her reasons, her Honour held (at [171]) that neither s 62(1) nor s 62(2) imposed an obligation on the owners corporation to insert new glass in a door which was relevantly operating as intended and therefore did not require maintenance or repair. After referring at [177] to her view that ss 62(1) and (2) were directed to circumstances where something in the common property "to put it shortly, is no longer operating effectively or at all, or has fallen into disrepair", her Honour concluded at [178]: The obligation on the owners corporation to maintain the common property and to keep it in a state of good and serviceable repair and renew or replace any fixtures or fittings which have fallen into disrepair is not, therefore, attracted by a glass door which was otherwise in good repair and operating as intended, albeit that the glass in it did not accord with that used in contemporary buildings. (Emphasis added.) In my opinion, the decision of the majority in Ridis and, in particular, that of McColl JA is antithetical to the proposition that the existing MEVS, which was otherwise in good repair, was not "operating as intended". 103I turn then to the decision of Gzell J in Lin. The primary judge observed (at [60]) that in Lin: ... Gzell J reasoned (at [46]) that a breach of s 62(2) would occur if such a system "was incapable of servicing the plaintiff's lots". His Honour said that to the extent that the Owners Corporation contended that the "exhaust ventilation system [in Strata Plan 50276] was incapable of servicing the plaintiff's lots, the defendant was in breach of its duties to maintain and replace the system and cannot be heard to pleads [sic] its own default in answer to the plaintiff's claim". As will be appreciated, McColl JA in Ridis referred to Lin without criticism (see [68] above). It is thus necessary to analyse Lin in more detail. 104As already noted, the strata scheme in Lin was the same strata scheme as in the present case. The plaintiffs in that case acquired three contiguous lots in the Strata Plan in the Food Court on Level 1 of the Building. Two of the lots were subdivided into two further lots or tenancies. The plaintiffs applied to connect improvements in the shops as fitted out to the MEVS. That application was rejected by the Owners Corporation. The plaintiffs thus sought injunctive relief and an enquiry as to damages. As recorded by Gzell J at [2] of his reasons, the plaintiffs argued that they had a right in common with other lot owners to the use and enjoyment of the MEVS and that their exclusion from the common property should be remedied by the relief claimed. 105Having referred to ss 18(1), 20(b) and 24(2) of the 1973 Act, which I have summarised at [39] and [40] above, Gzell J (at [8]) concluded that it was not surprising that the nature of the interest of a lot owner in the common property had been described as an equitable interest as a tenant in common with other lot owners (Houghton v Immer (No 155) Pty Ltd (1997) 44 NSWLR 46 at 56) and as a proprietary right (Young v Owners - Strata Plan No 3529 [2001] NSWSC 1135; (2001) 54 NSWLR 60 at [14]). After referring to the 1996 Act in some detail, his Honour observed at [27]: Implicit in that decision [Young] is the proposition that an owners corporation's power of management and control of the use of common property does not extend to overriding the proprietary right that a lot owner has in that common property. That proposition is also implicit in the court's conclusion that the doctrine of fraud on the minority was capable of application in relation to the contemplated expropriation of minority rights to a shared use of a relevant part of the common property. 106At [38] Gzell J noted that the injunctive relief claimed in the amended summons by Mr Lin sought to restrain the Owners Corporation from preventing the connection of Mr Lin's lots to the exhaust ventilation system. This was the issue which his Honour had to determine. In support of the Owners Corporation's case that it was entitled to prevent any such connection, it was argued (see at [44]) that the MEVS was overloaded and that to allow the plaintiffs to connect to it would adversely affect the system and the use and enjoyment by other lot owners of the system and their lots. 107Gzell J continued: 45 A great deal of time at the hearing was devoted to tracing the history of alterations to the exhaust ventilation system, the use made of it by other lot owners and proposals for up-grading the system. There were contradictions in this evidence and a disparity of view between the experts called on both sides as to its capacity. 46 The resolution of those conflicts is immaterial to this issue. If, as the defendant contends, the exhaust ventilation system was incapable of servicing the plaintiffs' lots, the defendant was in breach of its duties to maintain and replace the system and cannot be heard to plead its own default in answer to the plaintiffs' claim that they were wrongly excluded from enjoyment of their proprietary right. 108There seem to be two separate issues involved in his Honour's remarks. The first was that because the system was already overloaded the plaintiffs should not be permitted access to it, as that would adversely affect the use and enjoyment by other lot owners of the system. His Honour considered that denial of access was a denial of the proprietary right of a lot owner to use and enjoy the common property. The second, and in my opinion separate, issue related to the capacity of the system in terms of its inability to service more lots than it was designed to service. It is only this issue with which the present case is concerned because at no time did the Owners Corporation purport to deny Dr Thoo access to the system. It was simply not prepared to guarantee that it would provide him with the exhaust capacity (3,600 l/s) that he sought. 109At [47] and [48] Gzell J dealt with an argument by the Owners Corporation concerning the relationship between s 62(1) and s 62(2), noting that it was submitted that the obligation to renew or replace was limited to parts of the system that were no longer in a state of good and serviceable repair, a submission his Honour rejected: cf. Hodgson JA in Ridis, cited at [87] above. Thus at [50] his Honour referred to the decision of McClelland CJ in Eq in Margiz where the Chief Judge contrasted the duty to renew or replace with the duty to repair. Gzell J then observed: His Honour concluded that the latter duty did not extend to replacement of a discrete system forming part of the common property, such as an air conditioning system, by a new or different system. Such a replacement as that, his Honour concluded, would be governed by the duty to renew or replace. Of course, whether the duty is engaged in a particular case is another matter. 110Gzell J then referred to the decision of Yeldham J in Blake. However, that was a case where an air conditioner that serviced the ground floor of a shopping arcade had ceased to function at all. It was costly to repair or replace and the owners corporation resolved not to do so. It was held that it had a duty pursuant to s 62(2) to replace a system which had ceased to function, that duty being mandatory. Again the present case is not one where the MEVS has ceased to function. 111Gzell J then continued: 52 The plaintiffs, in common with other lot owners, have a right to use and enjoy the exhaust ventilation system. The only way in which that can be done in all but one of the shops in the lots owned by the plaintiffs is to install a hood in or below the ceiling of the lots and to install ducting in the common property connected to the existing ducting of the system. That is the way in which the defendant has provided access to the exhaust ventilation system to other lot owners. To suggest that the defendant is under no duty to provide such access because it involves additions to the common property is specious. 53 The cost of such a connection might be charged by an owners corporation to the lot owner concerned, but to deny access is not only in breach of the Strata Schemes Management Act 1996, s 62(2) under which the duty to renew or replace extends to the addition of new parts, but it also infringes the proprietary right of a lot owner to have possession of the common property. 54 In my opinion, the defendant had a duty to add new ducting, fans and risers to the exhaust ventilation system in the Hunter Connection to increase its capacity to service all lot owners in the Food Court area who might seek reasonable access to the system. And the defendant had a duty to have installed additional ducting in the common property to link new hoods in those lots to the exhaust ventilation system. 112It is apparent from Gzell J's remarks at [53] of his reasons that he considered that the Owners Corporation's duty under s 62(2) to renew or replace extended to the provision of new ducting, fans and risers sufficient to enable a lot owner to access the common property, which it had a proprietary right to do. I have some doubt as to whether s 62(2) can be used for that purpose. I can accept that a lot owner has a proprietary right to access the relevant part of the common property, in the present case the exhaust system. But that is not as a consequence of the Owners Corporation's duty under s 62(2) to renew or replace the common property, but rather is an exercise of a lot owner's proprietary right which the Owners Corporation cannot deny. 113Be that as it may, [54] of Gzell J's reasons is the critical paragraph for the purposes of the present case. The second sentence assumes that access to the exhaust system was to be provided by installing additional ducting to link new hoods to the existing system. But that is an entirely different issue to that referred to in the first sentence to the effect that s 62(2) imposes a duty on the Owners Corporation to renew or replace the system so as to increase its capacity to a level that will enable it to service "all lot owners in the Food Court area who might seek reasonable access to the system". 114In the last sentence of [54] Gzell J referred to the real issue in Lin, namely, that the Owners Corporation could not refuse access altogether to the common property. He thus concluded (at [56]): In my view, the plaintiffs have made out a case of wrongful interference with their proprietary right to the use and enjoyment of the exhaust ventilation system as common property. A mandatory injunction of the enforcing kind requiring the defendant to connect exhaust hoods in their shops to the exhaust ventilation system is an appropriate remedy. 115Gzell J then turned to the question of the grant of a mandatory injunction. It would appear that there was already a proposal to upgrade the system, although there was a conflict between the experts as to whether the existing system could accommodate the increase in capacity sought by the plaintiffs in that case. At [67] his Honour expressed the view that it was inappropriate to impose a mandatory injunction upon the Owners Corporation with the exhaust ventilation system "in its current state". He thus granted a stay of execution of the order he proposed to make for a reasonable period "to enable the proposed upgrade of the system to be carried out". 116His Honour made final orders on 24 March 2004. Order 3 required the Owners Corporation to connect the exhaust hoods as shown in the relevant shop fit-out plans at the plaintiffs' or their lessees' cost to the operating common property exhaust ventilation system serving the Food Court level within the Building. However, Order 4 was in the following terms: Order that the Defendant by itself, its servants and agents add such ducting, fans and risers to the exhaust ventilation system serving the Food Court in the Hunter Connection as may be necessary to ensure the system's capacity to serve all lot owners (and their lessees) who might seek reasonable access to that system. (Emphasis added.) 117It is apparent from the subsequent history of this matter that the addition of System B satisfied, in terms of capacity, the requirements of the plaintiffs in Lin. However, as the facts of the present case demonstrate, the upgrade by the addition of System B was insufficient to comply with Order 4, which was so general in its terms that it imposed a duty upon the Owners Corporation to provide sufficient exhaust capacity to serve all lot owners whose lots could be used for the retailing of cooked food in the Food Court as and when they might seek access to the exhaust system, provided only that that access was reasonable. By way of contrast, Order 7 made by the primary judge in the present case is limited to providing exhaust capacity to Lot 17 only.

The parties' submissions on s 62(2) 118The Owners Corporation made a number of further submissions on this issue, which may be summarised as follows: (a) Both Gzell J in Lin and the primary judge imported into s 62(2) the concept of reasonableness with respect to the desire of a lot owner to access the system. Their Honours further introduced the concept of "meeting the expected future needs of lot owners". Thus at [80] of his reasons, the primary judge accepted that s 62 should not be construed to accommodate capricious or unreasonable requests for services from what he acknowledged to be a "limited capacity system such as that installed at Hunter Connection". He called in aid of this proposition s 117(1) of the 1996 Act which relevantly provides: 117 Owners, occupiers and other persons not to create nuisance (1) An owner, mortgagee or covenant chargee in possession (whether in person or not), lessee or occupier of a lot must not: ... (b) use or enjoy the common property in such a manner or for such a purpose as to interfere unreasonably with the use or enjoyment of the common property by the occupier of any other lot (whether that person is an owner or not) or by any other person entitled to the use and enjoyment of the common property, or (c) use or enjoy the common property in such a manner or for such a purpose as to interfere unreasonably with the use or enjoyment of any other lot by the occupier of the lot (whether that person is an owner or not) or by any other person entitled to the use and enjoyment of the lot. (b) However, that section relates to the conduct of a lot owner and not to the conduct of the owners corporation. The duty in s 62(2) is expressed in terms of renewing and replacing fixtures or fittings comprised in the common property: it does not speak in terms of meeting or failing to meet needs or demands, reasonable or otherwise; (c) Although the primary judge acknowledged (at [70]) that there were "technical difficulties" in attempting to upgrade the MEVS, he declined to determine what needed to be done to enable the Owners Corporation to fulfil its duty. Dr Thoo submitted that that consideration was not relevant to breach, but I interpolate that in my opinion it is. As a matter of logic, it is necessary to decide what needs to be done or what is required to be done in order to ascertain whether, if it is not done, there is a breach; (d) The effect of the construction of s 62(2) adopted by the primary judge is that if a lot owner demands a level of operation or use of the fixtures or fittings comprising the common property and that demand is reasonable, the owners corporation breaches its duty to "renew or replace" those fixtures or fittings if it fails to meet the demand, and may be ordered to do whatever is necessary to upgrade the fixtures and fittings to meet the demand if ever and whenever it is made. Yet there is nothing in s 62(2) which conditions the obligation to "renew or replace" by reference to the making of a demand, be it reasonable or unreasonable, or by way of meeting the needs of lot owners, be they actual or anticipated. The purpose of the subsection is to require the owners corporation to renew or replace fixtures and fittings when they are defective or worn out or cannot operate efficiently and effectively for the purpose for which they were designed; (e) The way to test the matter is to ask whether the Owners Corporation was in breach of s 62(2) before Dr Thoo demanded a guaranteed supply of 3,600 l/s. If the answer to that question is in the negative, as it must be given that the system was working perfectly well, there was no breach. If the primary judge's formulation is correct, then an owners corporation is in breach if, at the time a demand is made, the system is incapable of meeting that demand. It could not have been the intention of the legislature that an owners corporation must have the prescience to anticipate each future demand by a lot owner so that it has in place the equipment to meet the demand at the instant a lot owner makes it; (f) The only consequence of Dr Thoo connecting to the system is that all of the lot owners who will then be sharing the system will suffer a reduction in the volume of exhaust air which they are able to use. It will then be a matter for the Owners Corporation to decide whether to enhance or improve the system to meet the needs of all lot owners, not just Dr Thoo. Whether that enhancement and improvement is appropriate, and the manner in which it is to be achieved, are matters for the Owners Corporation to determine in general meeting pursuant to s 65A of the 1996 Act; (g) Turning to the various expressions used by McColl JA in Ridis upon which the primary judge relied, the concept of "no longer operating effectively" contains a temporal element in that it looks backwards and compares the status quo with the status quo ante. It does not look forward to enhancement and improvements. So much can be gained from consideration of [169] and [170] of her Honour's reasons (see, respectively, [90] and [88] above). It is clear that McColl JA was not considering whether a failure to meet a demand for future performance gave rise to a breach of s 62(2). (h) The effect of what her Honour said at [168]-[170] of her reasons in Ridis supports the proposition that it is necessary to link the duty to renew or replace back to the manner in which the fittings or fixtures have operated in the past in order to engage the Owners Corporation's duty. Accordingly, that obligation is not attracted by an exhaust system which was operating as intended. (i) Gzell J in Lin was therefore in error when at [54] of his reasons he construed s 62(2) as requiring the Owners Corporation not only to take steps to provide ducting connecting the plaintiffs' lots to the existing exhaust system but also requiring it to increase the capacity of the system to service all lot owners in the Food Court who might seek reasonable access to the system. Where a system is operating as expected and a new user demands a level of future performance which an owners corporation cannot guarantee, that is not a case in which the system is no longer operating efficiently or effectively. It is in substance a demand for an improvement or enhancement of the system and is more akin to the demand for a better and safer pane of glass in the front door of the apartment building which was in issue in Ridis. (j) Accordingly, mere incapacity to service future lot owners over and above the capacity of the system as designed is insufficient to engage the duty in s 62(2). The critical question is: "why is it incapable?" If the "incapability" is caused by a demand for extra use of a system by an individual lot owner, or indeed lot owners generally, as distinct from the system having been allowed to run down, fall into disrepair or otherwise become inefficient by the owners corporation, it would be a strange result for the owners corporation to be held to have breached s 62(2). That is not the effect of what was said in Ridis, although it is the effect of what happened in Lin. Lin should, therefore, either be confined to its own facts or be held to have been wrongly decided, at least in part. 119Dr Thoo's written submissions on this issue may be summarised thus: (a) It is clear from the judgment of McClelland CJ in Eq in Margiz, which was referred to without disapproval both by Gzell J in Lin and McColl JA in Ridis, that the duty of replacement imposed by s 62(2) includes the replacement of a discrete system forming part of the common property (in that case an air conditioner) by a new and different system; (b) The references by McColl JA at [169], [171] and [177] of her reasons in Ridis to s 62(2) imposing an obligation or duty on the owners corporation to renew or replace an item of common property where it is "operating inadequately" or "no longer operating effectively" support the proposition that if an exhaust ventilation system is incapable of servicing all lots [presumably as and when required], it must be considered to be "operating inadequately", not "operating as intended" or "no longer operating effectively"; (c) Questions of a "temporal element" in comparing "the status quo with the status quo ante" are not to the point for the reason that, if an item of common property is incapable of servicing a strata lot, it is operating inadequately and the duty in s 62(2) is breached unless the relevant item is renewed or replaced; (d) If an owners corporation installs a system that is insufficient to meet the reasonable needs of all lot owners, it is not an answer for the owners corporation to say that the system is "working perfectly" to that insufficient extent. In other words, the mere fact that the existing MEVS is operating to its designed capacity and is efficiently and effectively providing sufficient exhaust capacity to those lots which it was intended to service does not relieve the owners corporation of its duty to renew or replace the system with one that has sufficient capacity to meet not only current demand but also any reasonable future demand. Thus the duty extends to obliging an owners corporation to upgrade an exhaust ventilation system which is incapable of servicing all lots in the strata scheme which are entitled to access it. 120In oral argument, Dr Thoo submitted as follows: (a) Although the Macquarie Dictionary definition of "renew" is to "to make new ... restore to a former state" and that of "replace" is "to provide a substitute or equivalent in the place of", those expressions are sufficiently wide to encompass the provision of an exhaust system with an enhanced capacity; this is so notwithstanding McColl JA's comment in Ridis at [169] that "replace" carries the connotation of providing a substitute or equivalent or restoring or making good; (b) Strictly speaking, Dr Thoo does not need to rely on s 62(2) given his proprietary right to use and enjoy the common property. However, Dr Thoo accepted that such a right probably could not be grafted onto s 62(2). (c) Nevertheless, s 62(2) obliges the Owners Corporation not only to provide sufficient exhaust capacity to meet the reasonable needs of Lot 17 but also any lot owner on Level 1 or in the basement who seeks at any time in the future to access the system; (d) As the MEVS is at its peak capacity, and as Dr Thoo has a proprietary right to his "fair share" of that capacity, then that right works in conjunction with s 62(2) to mandate the upgrading of the MEVS to enable all lot owners who seek to use the system to use and enjoy it to the extent necessary to meet their reasonable needs (I note that this submission is inconsistent with that in (b) above).

Was the Owners Corporation in breach of s 62(2)? 121In my opinion, the Owners Corporation's submissions should be accepted and those of Dr Thoo rejected. Unlike Order 4 made by Gzell J in Lin, Order 7 made by the primary judge in the present case was framed narrowly, mandating that the Owners Corporation "modify, or add to, repair, or replace the MEVS to ensure that Lot 17 receives a reasonable supply of exhaust ventilation capacity from the MEVS of not less than 3,600 l/s". However, there is no doubt from any number of statements contained in his Honour's detailed reasons that the duty of the Owners Corporation under s 62(2) was to provide an exhaust ventilation system which had the capacity to meet the reasonable demands for access of all lots on Level 1 (the Food Court) and in the basement. 122I have already referred to the Owners Corporation's submission that the duty imposed by s 62(2) is confined to the renewal or replacement of an exhaust system which is not operating in a manner sufficient to service the lots which it was designed to service. As the primary judge recognised at [64] and [65] of his reasons, s 62(2) in a case such as the present imposes on an owners corporation the duty to make the system efficient and adequate. His Honour recognised that for that purpose the work may be quite extensive, although he acknowledged that s 62(2) would not necessarily justify the replacement of an existing system which only serviced one floor of a building with another system that also serviced other floors of the building. Having said that, his Honour considered that an owners corporation may be required to exercise judgment so that the planned capacity of the system within the common property meets the expected future needs of all lot owners in the relevant part of the strata scheme. 123However, no case was put by Dr Thoo that notwithstanding the addition of System B to System A as a consequence of the decision in Lin, the Owners Corporation was in breach of Order 4 made by Gzell J in that case (see paragraph [116] above). The upgrading works undertaken pursuant to that order were only designed to provide sufficient capacity for the plaintiffs in Lin. 124Although the primary judge acknowledged that any renewal or replacement of the MEVS mandated by s 62(2) could be confined to the areas serviced by the system so renewed or replaced, in my view that provision does not require the Owners Corporation to redesign the system so that it has the capacity to meet the reasonable demands of all lots within the areas of the Building which the system currently services. In the present case, the by-laws permit the basement to be used for any retail purpose. If the primary judge is correct, it follows that the MEVS must be re-designed so as to have the capacity to service each and every lot within the basement upon the assumption that the owner of each such lot may at some indefinite point of time wish to use his or her lot for the retailing of cooked food, thus requiring access to an exhaust system with sufficient capacity to service his or her needs. In my view, s 62(2) does not so require. In this context it is noteworthy that in oral argument Dr Thoo conceded, correctly in my view, that the renewal or replacement of a modest, limited system would only involve the substitution of another modest, limited system. If this be so then Dr Thoo's case based on s 62(2) is undermined. 125At [71]-[78] of his reasons the primary judge referred to s 65A, which was added to the 1996 Act by the Strata Schemes Management Amendment Act 2004, which commenced on 7 February 2005, some ten months after Gzell J gave judgment in Lin. As I have noted at [50] above, it is now well established that where the duty of an owners corporation under s 62(1) or (2) is engaged, s 65A does not require the passing of a special resolution notwithstanding that the relevant work to be performed in compliance with the owners corporation's duties under s 62(1) and (2) involves an addition to the common property which improves or enhances it: Stolfa v Hempton [2010] NSWCA 218 at [9] and [10] per Allsop P, with whom Basten and Young JJA agreed. On the other hand, where the duties under s 62(1) and (2) are not engaged, then any additions to the common property for the purpose of improving or enhancing it must comply with the requirements of s 65A. 126Reliance was thus placed on s 65A by the Owners Corporation to demonstrate that s 62 looks backwards, requiring that existing common property be returned to a previous state of proper performance, whereas s 65A looks forwards and is concerned with improving or enhancing the common property beyond its current level of performance. The real distinction between ss 62(1) and (2) on the one hand, and s 65A on the other, is in my opinion dependent upon the purpose or objective of each provision. Subsections 62(1) and (2) are engaged if the proposed work is for the purpose of maintaining and keeping in a state of good and serviceable repair the common property or when any fixtures or fittings in the common property are required to be renewed or replaced. The purpose of s 65A, as its opening words reveal, is to provide for the improvement or enhancement of the common property where otherwise that objective could not be achieved. 127In the present case, as the Owners Corporation correctly submits, the renewal or replacement of the existing MEVS for the purpose of enhancing its capacity to the point where it will be capable of servicing the anticipated reasonable demands of all lots within the Food Court and/or the basement area of the Building, goes beyond the requirements of s 62(2) and thus cannot proceed without compliance with the requirements of s 65A. 128There is a clear relationship between subsections 62(1) and (2). The former applies to any part of the common property; the latter to any fixtures or fittings comprised in the common property. However, it does not follow that a fixture or fitting that is not in a state of good and serviceable repair must be renewed or replaced. 129The first obligation on the owners corporation is to keep the fixtures and fittings in such a state. But if that cannot be achieved, then the defective fixture or fitting must be renewed or replaced subject, of course, to s 62(3). The point is that s 62(3) is only engaged when the fixture or fitting can no longer be kept in a state of good and serviceable repair. This is consistent with McColl JA's dicta in Ridis that both subsections are directed and, I would add, only directed, to the circumstances where a fixture or fitting is no longer operating effectively or at all, or has fallen into disrepair. 130I would therefore accept the submission of the Owners Corporation that common property fixtures or fittings must be renewed or replaced under s 62(2) only when they are no longer operating effectively or have fallen into disrepair to the point where their renewal or replacement is called for as they can no longer be kept in a state of good and serviceable repair pursuant to s 62(1). Once it was found, as his Honour did, that the system had not fallen into disrepair but was operating according to its original design capacity, there could be no breach of s 62(2) by reason of the refusal of the Owners Corporation to replace the system. Accordingly, in my respectful opinion the statement by his Honour at [115] of his reasons that there was a specific duty on the Owners Corporation under s 62(2) to keep common property operating efficiently so it could be used and enjoyed by all lot owners, subject only to the passing of a special resolution for its exclusive use, is too broad. 131Accordingly, in my opinion the primary judge erred in holding that the Owners Corporation was in breach of its duty under s 62(2) of the 1996 Act. It follows that Declaration 1 and Orders 7 and 8 made by his Honour on 22 August 2011 must be set aside.

The proprietary rights argument 132As an alternative to his case based upon s 62(2), Dr Thoo relied upon his equitable interest as a tenant in common with other lot owners to use and enjoy the common property. In paragraph 6 of his Third Further Amended Statement of Claim, Dr Thoo pleaded that he had and continued to have the right in common with other lot owners in the Building to use and enjoy the common property, including the mechanical ventilation system, in accordance with the by-laws. 133The primary judge found at [100] of his reasons that this claim had been abandoned during the hearing, a finding challenged by Dr Thoo in a Notice of Cross Appeal. Nevertheless, his Honour dealt with the issue at [101] et seq. Dr Thoo relied upon s 24(2) of the 1973 Act and [52] of Lin. It was submitted that Dr Thoo had the right to apply to the Court for an injunction in respect of the Owners Corporation's infringement of his right as an equitable tenant in common with other lot owners entitled to possession of the common property on the ground that an equitable tenant in common with another is entitled, concurrently with the other, to possession of the property and neither is entitled to turn the other out: Bull v Bull [1955] 1 QB 234 at 238, cited by Gzell J in Lin at [9]. 134The difficulty with this proposition is that, whereas Dr Thoo as a lot owner has a right as an equitable tenant in common with other lot owners, the Owners Corporation is not such an owner. It is therefore erroneous to fasten upon the interest of a lot owner as one of several equitable tenants in common of the common property and to seek to construct on that basis some positive general law duty on the part of the owners corporation. 135The interest of a lot owner as an equitable tenant in common is a product of the statutory provisions concerning the relationship of the owners corporation to the common property. Because it holds the common property as "agent" in the manner specified in s 20(b) of the 1973 Act, the owners corporation holds it upon trust for the several lot owners from time to time in proportion to their unit entitlements - albeit on the footing that a lot owner's equitable interest cannot be dealt with except in conjunction with the lot: s 24(2). 136It is because the owners corporation holds the common property as trustee under a statutory trust that it is possible to identify the equitable interests of the lot owners in the common property. And it is the owners corporation's status as trustee that may be regarded as the source of general law duties additional to the statutory duties to which it is subject: cf The Owners -Strata Plan No 43551 v Walter Construction Group Limited [2004] NSWCA 429; (2004) 62 NSWLR 169 at [42]-[48] per Spigelman CJ, with whom Ipp and McColl JJA agreed. 137However, those general law duties do not include positive duties or, more precisely, duties to act in any positive way. They are negative duties not to profit or benefit from the trust, not to prefer one's own interests, not to allow one's own interests to come into conflict with those of the beneficiaries, not to impeach the title of the beneficiaries, not to depart from the terms of the trust and not to delegate the trust except as permitted by its terms. 138Thus the general law duties are necessarily confined so that they do not conflict with any of the statutory duties of the owners corporation. To put this another way, the general law duties complement the statutory duties but cannot modify them. 139The statutory duties of an owners corporation are, by and large, concomitants of its statutory functions. The general nature of the functions is suggested by s 61 of the 1996 Act, which I have recorded at [45] above. As they relate to the common property, the functions defined by the 1996 Act are principally to manage and control that property for the benefit of the owners (s 61(1)(a)); to repair and maintain the property (s 62); to add to or alter the property (or erect a new structure on it) if so authorized under s 65A; to license a lot owner to use common property in a particular manner if so authorized under s 65B; and to grant access to the common property for fire safety inspection purposes (s 65C). 140Some of the functions necessarily imply concomitant duties. The functions under ss 61(1)(a), 62 and 65C are of this kind. Others, such as those under ss 65A and 65B, entail a discretion exercisable if and when the necessary authorization has been given. Functions of the latter kind are also created by the 1973 Act (see, for example, ss 25, 26 and 27). These statutory functions and duties with respect to the common property are concerned with that property as it exists from time to time. The duty to repair, for example, will become exercisable periodically as deterioration occurs or defects arise. 141The negative quality of such general law duties as arise from the trustee status of the owners corporation with respect to common property is emphasized by s 21 of the 1973 Act: "Common property shall not be capable of being dealt with except in accordance with the provisions of this Act and the Strata Schemes Management Act 1996." 142The expression "deal with", used in relation to property, is wide. It would clearly include any action required to be taken by the owners corporation pursuant to ss 62(1) and (2), subject to the passing of a special resolution pursuant to s 62(3). In that respect any equitable right of a lot owner to require the owners corporation to replace the MEVS, as Dr Thoo seeks, would be trumped by a valid special resolution passed pursuant to s 62(3). The purpose of s 21 is clearly to preclude any form of action by the owners corporation in relation to the common property that is not contemplated and expressly permitted by the strata titles legislation. 143Thus, the circumstance that the lot owners have equitable interests as tenants in common of the common property does not of itself impose any duty upon the owners corporation. Rather, it has significance as among the owners themselves. It is their status as equitable tenants in common that gives them rights of enjoyment of the common property. In Bull v Bull at 237, Denning LJ suggested that the rights of equitable tenants in common are the same as those of legal owners in common so that "[e]ach of them is entitled to the possession of the land and to the use and enjoyment of it in a proper manner. Neither can turn out the other; but if one of them should take more than his proper share the injured party can bring an action for an account." 144As the discussion by Meagher JA in Forgeard v Shanahan (1994) 35 NSWLR 206 at 222-223 demonstrates, the concept of "proper share" and a common law action for account relates to rents and profits; while a case of ouster attracts common law liability in ejectment and for mesne profits: see also Biviano v Natoli (1998) 43 NSWLR 695 at 700 per Beazley JA, with whom Powell and Stein JJA relevantly agreed. Equity will no doubt award like remedies in the case of a dispute between equitable tenants in common. 145The important point for present purposes is that the rights and obligations of equitable tenants in common as regards the use and enjoyment of land exist only among themselves. Their status as equitable owners is not the source of any right against or obligation of the trustee who holds the land upon trust for them. The rights that they have against the trustee and the obligations the trustee owes to them derive from the trust and the relationship of trustee and beneficiary. It follows that if the owners corporation, duly and faithfully performing the terms of the trust as embodied in the 1973 and 1996 Acts, acknowledges the interests of the lot owners as a body in the common property and performs the functions otherwise imposed upon it by statute, any complaint that the activities of one owner impair another owner's enjoyment of the common property is a dispute to which the owners corporation, as trustee, is a stranger. 146Furthermore, it is not the case in any event that the lot owners as tenants in common of the common property would be entitled at any time to enjoy the use of that property equally or in the proportion of their unit entitlements or to the extent necessary for them to carry out a particular use of their lot: Platt v Ciriello [1998] 2 Qd R 417 at 432 per Ambrose J. As indicated above, a lot owner cannot be excluded from the common property, but the owner is not entitled to require the owners corporation in its capacity as a trustee to provide the owners with any particular share of the common property (subject only to the owner's ability to obtain exclusive use rights pursuant to and in accordance with the provisions of ss 51 and 52 of the 1996 Act). 147For the foregoing reasons, Dr Thoo's case stands or falls on the application of s 62(2) of the 1996 Act. It gains no foothold against the Owners Corporation outside its statutory remit. In any case, as stated at [142] above, in my view Dr Thoo's case based on his alleged equitable right to access the MEVS and to require the Owners Corporation to upgrade the system to meet his reasonable needs would be trumped by a valid resolution passed pursuant to s 62(3). It is to that issue that I now turn.

Resolution 7 148Resolution 7 was purportedly passed pursuant to s 62(3) of the 1996 Act. Its validity was the subject of challenge before the primary judge. His Honour held that the Resolution, which was passed at the 2009 AGM, was invalid. The appellant challenges that finding. Given that in my opinion his Honour erred in finding that Dr Thoo had a right to exhaust ventilation capacity from the MEVS sufficient to meet the reasonable needs of Lot 17 and that the Owners Corporation was in breach of its duty under s 62(2) in declining to provide him with that capacity, strictly speaking it is unnecessary to determine whether his Honour was in error in finding that Resolution 7 was invalid. However, in the event that I am wrong with respect to the issue arising out of s 62(2), it is appropriate to consider the issue raised by Resolution 7. 149Resolution 7 was in the following terms: Proposed Special By-law-Mechanical Ventilation System (MEVS): (Special Resolution) Unanimously resolved that the Owners Corporation determine by special resolution pursuant to s62(3) of the Strata Schemes Management Act 1996 that it is inappropriate for the Owners Corporation to renew or replace the mechanical ventilation exhaust system (MEVS) of the common property and such 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. (See attached report from West & Associates dated 5 August 2009 that was provided to owners present at the meeting and before the motion was put.) (Also attached, as supporting documents to Warwick West's comments, the fire safety statements for the years 2008 and 2009 confirming that the owners corporation is submitting certification to the authorities). (Emphasis in original). 150As recorded by the primary judge at [121]-[124] of his reasons, Dr Thoo contended that Resolution 7 was invalid on three grounds. First, it was submitted that the Owners Corporation was not entitled in the circumstances to resolve that the renewal or replacement of the MEVS was "inappropriate" within the meaning of s 62(3)(a) because it had not formed that opinion and because it had no proper basis to form such an opinion. Secondly, it was contended that the Owners Corporation was not entitled to resolve that its decision "[would] 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", as required by s 62(3)(b), as it did not form that opinion and had no proper basis for the formation of such an opinion. Thirdly, it was contended that there were voting irregularities which resulted in Resolution 7 not being passed as a special resolution. The primary judge upheld all three grounds of invalidity, although on the appeal it was accepted by Dr Thoo that he was in error with respect to the third ground: see [56] above. 151In his reasons the primary judge acknowledged that s 62(3) introduced for the first time into the statutory scheme a means for the owners corporation to limit the application of the otherwise absolute duties in ss 62(1) and (2). At [106] of her reasons in Ridis McColl JA also acknowledged that s 62(3) qualified the otherwise mandatory obligations contained in ss 62(1) and (2). However, his Honour considered (at [133]) that the attempted utilisation of the s 62(3) exemption by the Owners Corporation at the 2009 AGM raised four legal issues relating to its operation. The first was whether the Owners Corporation must have a proper basis for the resolution, given that it "determines" the specified matters under s 62(3). Secondly, if a proper basis was required beyond the mere fact of the determination, it would be necessary to determine what may constitute a determination that renewing or replacing common property is "inappropriate". Thirdly, his Honour considered it necessary to identify what constitutes a determination that a "decision" that "will not affect the safety of any building, structure or common property in the strata scheme". The fourth matter related to what was meant by a "particular item of property", an issue with which I have dealt at [52]-[55] above.

The requirements of a valid s 62(3) resolution 152At [134] the primary judge noted Dr Thoo's contention that the use of the word "determines", coupled with the two criteria prescribed in s 62(3)(a) and (b), requires an owners corporation to form an opinion about those two criteria. It was then argued that unless there is a proper basis to form that opinion, the owners corporation is not making a "determination" under s 62(3). His Honour accepted that argument on the basis that it conformed with such authority as there was on that aspect of s 62(3). 153The primary judge then cited [58] of my reasons in Ridis, asserting that what I said there was not inconsistent with the judgments of the majority and, relevantly, that my reasoning was inconsistent with the contention that s 62(3) is enlivened by the mere formality of the resolution, whatever the true facts might be. With respect, what I said at [58] in my dissenting opinion in Ridis is not consistent with the judgments of the majority and in particular with that of McColl JA. The approach that I adopted in that paragraph was, I acknowledge, decisively rejected by her Honour. I do not propose to attempt to resurrect it now. 154The primary judge then held at [137] that s 62(3) does not confer an uncontrolled discretion on an owners corporation and that the form of the resolution prescribed by that provision infers that each of the criteria referred to in subclauses (a) and (b) is a mandatory consideration in the owners corporation's "determination". His Honour considered that the taking into account of those mandatory considerations required that the owners corporation have before it material that provided a rational basis for its determination. 155Although at [138]-[140] of his reasons the primary judge considered the principle expounded by Latham CJ in R v Connell; ex parte The Hetton Bellbird Collieries Limited (No 2) (1944) 69 CLR 407 at 432, as the passages cited from Connell by his Honour at [138] and [140] make clear, the principle expounded by the Chief Justice only has application when the statute makes the existence of a particular opinion (or a state of satisfaction) a condition of the exercise of the relevant power. 156Accordingly, before considering the adequacy of the basis upon which the Owners Corporation made its determination, it is necessary to construe the word "determines" in the chapeau to s 62(3). In this context the Court was referred by Dr Thoo to some remarks of O'Bryan J in City of Heidelberg v McPherson [1964] VR 783 at 785 where his Honour held that the word "determines" in s 588 of the Local Government Act 1958 (Vic) "means no more than decides or forms the opinion". Although in that case his Honour found that a resolution of the City to the effect that it was "of the opinion that the following works [were] necessary..." satisfied the requirement of the section that the Council "determines" that the works are necessary, his Honour referred to the fact that the City had expressed its opinion by resolution through its councillors. It is apparent that that formality of expression was clearly relevant to his decision. 157The second authority referred to was the decision of Balmford J in Select Plant Hire Pty Ltd v John Holland Construction and Engineering Pty Ltd [1998] VSC 102 at [32]-[34] where, having referred to McPherson, his Honour said: While accepting the conclusion reached by [O'Bryan J] on the question before him, I would, with respect, be of the view that the word "determines", in the relevant sense, connotes something more formal than "decides" and significantly more formal than "forms the opinion". A decision of a municipal council by resolution of its councillors is formal in that way. This statement is consistent with the meaning of "determine" in the Macquarie Dictionary, 5th Edition: "to decide a question by an authoritative decision". The passing of a special resolution fulfils that requirement. 158In a further decision of Balmford J in Freeman v Medical Practitioners Board of Victoria [2000] VSC 547; (2000) 17 VAR 106 at [24]-[26], his Honour referred to the decision of O'Bryan J in McPherson and his own decision in Select Plant Hire. However, in Freeman his Honour was concerned with the distinction between a "determination" and a "decision". It suffices for present purposes to adopt what his Honour said in Select Plant Hire, namely, that to "determine" a matter requires a high degree of formality and that a decision of a municipal council by resolution of its councillors meets such a requirement. So also in the present case does a special resolution passed at a duly convened meeting of the Owners Corporation have the necessary degree of formality to constitute a determination by the Owners Corporation within the meaning of s 62(3). 159Dr Thoo submitted that the primary judge was correct in finding that the use of the word "determines" in the chapeau of s 62(3), together with the criteria set out in the subclauses (a) and (b), had the consequence that the Owners Corporation was required to form an opinion in respect of each of those matters. Reliance was placed upon what I said in Ridis at [57]-[58] and on what McColl JA said at [174] and [186]. In the latter paragraph her Honour said: It is true that it requires a special resolution for the owners corporation to reach a conclusion that a particular act of maintenance is inappropriate. That reinforces the importance of the decision being taken. When it is appreciated, however, that such a resolution is equally required in relation to safety as well as aesthetic issues, the significance of the special resolution requirement is, in my view, to indicate the issues which must be addressed before the owners corporation may decline to act and the weight of opinion which must be marshalled in favour of a decision to decline to act. The marshalling of the opinion of three-quarters of the members of the owners corporation would, no doubt, be considered significant in any challenge under Ch 5 to its decision. 160It was therefore submitted that the word "determines" conveyed a sense of something more than a mere procedural formality. As McColl JA had observed, it was necessary for the Owners Corporation to address the issues referred to in ss 62(3)(a) and (b) before it could decline to act. 161Accepting the correctness of her Honour's statement, there is nevertheless nothing in s 62(3) that requires an owners corporation to do anything other than pass a special resolution in such terms as those of Resolution 7. In particular, there is nothing in the subsection that required the owners corporation to provide reasons for its determination. There is thus no reason to construe the sub-section other than in accordance with its text, which requires a high standard of formality in the form of a special resolution determining, relevantly, that it is inappropriate to renew or replace the relevant item of property, but no more. In my view, it is clear that s 62(3) does not, either expressly or implicitly, require as a pre-condition to an owners corporation making a determination that it specifically form an opinion as to the two matters referred to in sub-clauses (a) and (b). 162Of course, the exercise of a statutory discretion such as that in s 62(3) by an owners corporation may be challenged on administrative law grounds such as Wednesbury unreasonableness (Associated Provincial Picture Houses Ltd v Wednesbury Corporation [1948] 1 KB 223 as recently discussed by the High Court in Minister for Immigration and Citizenship v Lin [2013] HCA 18), the failure to take into account a relevant consideration or the taking into account of an irrelevant consideration. It is not suggested in the present case that the Owners Corporation's determination by Resolution 7 that to renew or replace the MEVS was inappropriate could be challenged on any of those grounds. 163In relation to what constitutes a decision that it is "inappropriate" to renew or replace an item of common property, at [141] the primary judge relied upon the following passage at [54] of my reasons in Ridis: Thirdly, and in furtherance of the views expressed above, subs (3) provides an exception and, in my opinion, the only exception to the absolute and unconditional duties imposed by subs (1) and subs (2). It requires the owners corporation by special resolution to determine that it is inappropriate, for instance, to renew or replace a particular item of property provided that that decision not to renew or replace that item will not affect the safety of the building or the common property. In my opinion, the word "inappropriate" is sufficiently broad to cover a situation where any such renewal or replacement is unnecessary provided that the safety of the item is not compromised. 164In particular, his Honour relied upon the last sentence of those remarks. However, although I accept that the word "inappropriate" is a broad concept and covers the situation referred to, it is not confined to a situation where the relevant renewal or replacement is unnecessary. The renewal or replacement may be still be "inappropriate" even if it is necessary. 165According to the Macquarie Dictionary, 5th Edition, "inappropriate", not surprisingly, means "not appropriate". "Appropriate" is relevantly defined as meaning "suitable or fitting for a particular purpose". In its context in s 62(3), it refers to a determination by the owners corporation that, relevantly, the renewal or replacement of a particular fitting or fixture comprised in the common property is not suitable in the circumstances. The latter may include such considerations as the expense involved, whether the relevant objective can be usefully or practicably achieved, whether proceeding with the work may cause unacceptable and/or extensive interference with the businesses of other lot owners and whether there has been a sufficient investigation as to any of the foregoing considerations. 166I would thus agree with the following remarks of McColl JA in Ridis at [174]: I do not accept that the s 62(3) requirement that an owners corporation considering not to take action under either s 62(1) or s 62(2) determine by special resolution that that decision is "inappropriate" and "will not affect the safety of any building, structure or common property in the strata scheme..." impose the duty for which the appellant contends. Considering whether an action is "inappropriate" requires the owners corporation to determine, in the circumstances, that it is unsuitable to undertake an item of maintenance etc. Considerations relevant to this decision may include the expense of the item of maintenance or repair. 167I now turn to the question of the basis upon which the Owners Corporation made its determination.

The determination that the decision would not affect safety 168At [143] the primary judge turned to the issue raised by s 62(3)(b). He concluded that the subsection did not limit the words "the safety of ... common property in the strata scheme" to structural safety. Thus any effect upon the safety of lot owners or their visitors fell within the subparagraph. 169Dr Thoo submitted that the difficulty that the primary judge identified was that there was no evidence of any consideration before or at the 2009 AGM of the potential of the MEVS to fail effectively to capture all fumes and aerosols as required if any further lots obtained access to it in its present state. However, although the ducts at the basement level were already overloaded, there was no evidence that that overload was causing any safety issue. Furthermore, as the Owners Corporation submitted, it was part of Dr Thoo's case that unless the system was replaced so as to provide the capacity he sought, then neither he nor any other lot owner who was not already connected to the system would be able to do so, for they would not be able to comply with any conditions of consent imposed by the Council requiring compliance with the relevant Australian Standard, the Building Code of Australia and the Council's Ventilation Code with respect to exhaust capacity. They therefore could not trade and if that was so, no issue could arise with respect to any generation of escaped fumes from those lots. 170In my view, the Owners Corporation's submissions should be accepted. In the present case, it was self-evident that the determination of the Owners Corporation that it was inappropriate to renew or replace the MEVS could not possibly affect the safety of the Building or the common property. There was no suggestion that, provided that the existing system was properly maintained, its renewal or replacement was required for the purpose of ensuring the safety of the Building or the common property or, for that matter, any occupiers thereof or visitors thereto. The fact of the matter was that neither Dr Thoo nor any of the other lot owners who were not currently utilising but wished to utilise their lots for the purpose of the commercial cooking and retailing of fast food would be able to proceed with that use unless and until appropriate exhaust capacity was provided to their lots. This was a Council requirement: see [25] above. 171So far as fire safety was concerned, the report of Mr West presented at the 2009 AGM was to the effect that if no subsidiary kitchen exhaust system was installed, then providing that the existing system continued to be maintained to function in the manner for which it was originally designed, it would continue to provide the same level of fire safety and egress as was required at the time of its original design. 172Accordingly, his Honour's observation at [156] that the safety issue related to the safety of persons working in Lot 17 in food preparation and service if the exhaust ventilation system did not provide more than 620 l/s to the whole of the lot is beside the point. There was no such safety issue so long as no more than 620 l/s could be provided to Lot 17, for that was insufficient to enable that lot or any of its three subdivided tenancies to lawfully pursue a cooked food related use. As that use could not proceed unless and until the necessary exhaust capacity was provided, it must follow that no relevant safety issue of the nature of that identified by the primary judge could arise. There was therefore a proper and rational basis for the Owners Corporation's determination with respect to s 62(3)(b).

The basis of the Owners Corporation's determination under s 62(3)(a) 173At [145] his Honour turned to the question of whether there was any material before the meeting that could rationally support a determination that the renewal or replacement of the MEVS was "inappropriate". The notes to Resolution 7 referred to a report from West & Associates dated 5 August 2009 that was provided to owners present at the meeting and before the motion was put, as well as some further documents relating to questions of fire safety. At [148] his Honour stated that Mr West's report of 5 August 2009 offered no view as to whether it was inappropriate to replace or repair the exhaust system. That is so. His Honour therefore considered that but for the bare declaration of Resolution 7 itself, there was no evidence before the Court as to the basis upon which the Owners Corporation (or those voting) determined that it was inappropriate to renew or replace the MEVS. 174Furthermore, at [151] his Honour noted that Mr West's opinion was not sought in relation to the obligations of the Owners Corporation under s 62(2), so that the material put before the meeting was wholly inadequate to determine the appropriateness or inappropriateness of determining whether both ss 62(1) and (2) should "not apply to a particular item of property". 175The Owners Corporation submitted that the primary judge failed to make any express finding concerning the purpose for which the owners who voted in favour of Resolution 7 exercised their vote, and that this was so notwithstanding that at [185] he found that the owners were "seeking to entrench a denial to Lot 17 of its rights to reasonable exhaust ventilation capacity from a system designed to serve all retail lots within the [B]uilding". As a matter of fact, this last statement was in error, as the system was not so designed. 176It was submitted by the Owners Corporation that his Honour should have found that both the subjective purpose of those owners who attended the meeting and who gave evidence (to which his Honour did not refer) and the objective purpose of the owners who voted in favour of the resolution which could be inferred from the relevant surrounding circumstances, was to prevent the Owners Corporation being required to incur significant future expenditure in installing a supplementary exhaust system for the benefit of only some lot owners when there was significant uncertainty that such a system could be installed or would meet future demands. 177Eight persons attended the 2009 AGM either in person or by proxy, representing 15 separate lots. All voted in favour of Resolution 7. The Owners Corporation accepts that it is reasonable to assume that different reasons motivated the various attendees to vote as they did. 178The only evidence of the subjective purpose of those who voted at the meeting in favour of Resolution 7 came from three lot owners, being Rose Chang, who represented the third appellant, Min Soo Jang, who represented the second appellant, and Helen Hiten Thakrar, who represented the fourth appellant. Rose Chang had attended the 2008 AGM on 26 November 2008, when a representative of the strata manager, who chaired the meeting, circulated the West Report of 1 September 2008 amongst those present. When the discussion came to the proposed resolution with respect to the MEVS, the strata manager stated that Mr West estimated costs of $800,000 for the new system and a time frame of 18 months. Further, the proposal would require approval from the Council for the installation of plant on the link building and the purchase of airspace for ducts. The issue was adjourned to the 2009 AGM. 179At that meeting, according to unchallenged affidavit evidence of Ms Chang, no one spoke against the motion to pass Resolution 7. She said that she voted in favour of it because, first, no one could guarantee that a new or supplementary system would be able to satisfy future demands that might arise upon the MEVS and, secondly, even if the Owners Corporation had the funds to pay for a new or supplementary system, she was concerned about the disruption to the Building and resultant claims of the nature of those made due to the installation of the supplementary system mandated by the orders of Gzell J in Lin. She also had other reasons relating to issues of fairness. 180In her affidavit, Min Soo Jang stated that she voted in favour of Resolution 7 as she did not believe it was in the interests of the lots in which she had a stake for the Owners Corporation to upgrade or build a new or further kitchen exhaust system. 181Hiten Thakrar also attended the 2008 AGM. She read Mr West's report during the meeting and became aware, and remembered, that the budget was close to a million dollars for an upgrade and that there were preconditions that needed to be satisfied, including with respect to the purchase of airspace from the Council. She was also a member of the Executive Committee of the Owners Corporation and had read several reports from Mr West concerning the MEVS. Although she did not attend the meeting of the Executive Committee held on 10 March 2009, she read the minutes of that meeting which related to the proposal for installing a supplementary system to the MEVS. Ms Thakrar was unable to attend the 2009 AGM and gave her proxy to Ms Kritselas to vote on her behalf not to renew or replace the system. Amongst other reasons to which she swore in her affidavit for voting in favour of Resolution 7 was that she was concerned about the variables and uncertainties which might affect the cost of any new system, including the physical limitations of the Building, as well as the disruption to both her and other businesses that would be caused by the installation of a new system. Furthermore, she was concerned that there could be no certainty that any new system could meet all the demands of owners in the future, particularly if they partitioned their lots and sought exhaust allocation for each partitioned shop. 182The Owners Corporation submitted, and it would be reasonable to infer from the unanimity of those present either in person or by proxy in favour of Resolution 7, that each of those persons who attended the meeting and gave evidence understood that Resolution 7 would excuse the Owners Corporation from installing a supplementary exhaust system but would require it to continue to maintain the existing system. It further submitted that the contemporaneous evidence established that the objective purpose of Resolution 7 was to the same effect as the subjective purpose to which Mses Thakrar and Chang deposed. By September 2008 the Owners Corporation had obtained advice that a supplementary system would cost $800,000 and take 18 months to install, even assuming a myriad of engineering, regulatory and third party consent issues could be overcome. 183Accepting that, as McColl JA stated in Ridis (see [159] above), the Owners Corporation was required to address the issues referred to in ss 62(3)(a) and (b), it is noteworthy that her Honour in the last sentence of [186] observed that the marshalling of the opinion of three-quarters of the members of the Owners Corporation would be considered significant in any challenge under Chapter 5 of the 1996 Act (which deals with disputes) to its decision. Her Honour was obviously referring to the 75 per cent of those present in person or by proxy necessary for the passing of a special resolution. In the present case there was unanimity. Furthermore, the matter had been adjourned from the 2008 AGM, no doubt so that the matter could be subject to more mature consideration. Provided the existing system was properly maintained, no safety issue could arise. It is reasonable to infer from the unanimous vote that those present in person or by proxy bona fide considered, for reasons that were both rational and understandable, that, at least at that time, and without further investigation, it would be inappropriate to replace or supplement the existing system. 184In my view, there was a clear determination with respect to those issues and the unanimous vote evidenced as strong an opinion as could have been obtained that it would be "inappropriate" to proceed to replace the MEVS so as to provide a system which would meet the reasonable demands of all lot owners on Level 1 and in the basement of the Building, then or in the future, who sought to utilise their lots or any part thereof for the commercial cooking/selling of hot food. Such an obligation would be so open-ended and its ramifications, both financial and otherwise, so uncertain that it is hardly surprising that Resolution 7 was passed unanimously. 185Furthermore, in my view no proper contextual basis existed for requiring as a precondition to the Owners Corporation making its determination by the passing of a special resolution for the purposes of s 62(3)(a) and (b) that it should specifically form an opinion as to the matters referred to therein and, in particular, as to the reasons for determining that it was inappropriate to renew or replace the MEVS. In any event, the terms of the resolution itself were sufficient for that purpose once it was formally put to the vote and passed.

Fraud on the minority 186The final attack by Dr Thoo on Resolution 7 was the contention that it was a fraud on the minority notwithstanding that it was valid. At [177]-[183] of his reasons, his Honour accurately summarised the principles relating to the doctrine of fraud on a power. Relevantly for present purposes, he noted that the power must be exercised bona fide having regard to the purposes for which it was created and the rights of the persons affected by its exercise. In addition, reliance was placed upon the decision of the High Court in Gambotto v WCP Ltd [1995] HCA 12; (1995) 182 CLR 432, which related to the exercise of a power which had the actual or effective result of appropriating a valuable proprietary right. 187Applying those principles, his Honour held (at [184]) that the passing of Resolution 7 was a fraud upon the minority of proprietors whose lots were not connected to the MEVS, including Lot 17. Furthermore, he found that Resolution 7 in substance expropriated Dr Thoo's right to reasonable access to that system. His Honour also considered that even if the defects which he had identified did not otherwise invalidate Resolution 7, they tended to show that it was not passed for the purpose contemplated by the legislation, namely, where it is "appropriate [sic] and where safety concerns are fully excluded". 188At [185] his Honour stated that the present case was in this respect no different from Lin, in that the Owners Corporation in the general meeting was seeking to entrench a denial to Lot 17 of its proprietary right to reasonable exhaust ventilation capacity from a system designed to serve all retail lots within the Building. 189The Owners Corporation submitted that his Honour had erred (at [180]) insofar as he had stated that a fraudulent exercise of a power may be inferred without analysis of the individual motives and intentions of those voting. It was submitted that the right of a proprietor to vote at general meetings is not fiduciary and, within limits, may be exercised by the proprietor for his or her own benefit: Houghton v Immer (No 155) Pty Ltd at 52-53; Peters' American Delicacy Co Ltd v Heath (1939) 61 CLR 457 at 504. 190It was further submitted that the doctrine of fraud on the minority allows the Court to invalidate a decision of the majority of members voting in a general meeting if they voted for a purpose outside the implied range of purposes for which the power was conferred. Put another way, the vote can be invalidated where it was really " a means of securing some personal or particular gain, whether pecuniary or otherwise, which does not fairly arise out of the subjects dealt with by the power and is outside and even inconsistent with the contemplated objects of the power": Peters' American Delicacy Co Ltd at [511]; Ngurli Limited v McCann (1953) 90 CLR 425 at 438-9; 447-8. 191The Owners Corporation then submitted as follows: (a) The primary judge's characterisation of Resolution 7 as an expropriation of the right to access the MEVS was in error, as it did not prevent Dr Thoo or any other lot owner from accessing the existing system. That the system did not provide the "reasonable" level of exhaust ventilation demanded by Dr Thoo was the consequence of the limited capacity of the system and the physical characteristics of Lot 17 (that is, its location at the far extremity of the basement). (b) His Honour failed to address the relevant issue, namely, whether the voting power of the lot owners at the 2009 AGM had been exercised for a purpose outside those for which the power had been granted. The object of s 62(3) is to enable an owners corporation to determine that it is inappropriate to renew or replace a particular item of common property otherwise required by s 62(2) to be renewed or replaced. Considerations relevant to this decision may include the expense of renewing or replacing the item: Ridis at [174]. (c) His Honour should have found that the purpose of those owners who voted for Resolution 7, whether determined subjectively or objectively from the surrounding circumstances, was to excuse the Owners Corporation from being required to incur significant further expenditure in installing a supplementary exhaust system for the benefit of only some lot owners, when there was significant uncertainty as to whether such a system could be installed or would be able to meet future demands. That purpose was entirely consistent with the purpose for which s 62(3) provides the power. No element of expropriation of property or personal gain, other than the saving of costs which would otherwise be involved in meeting the Owners Corporation's obligations under s 62(2) as found by the primary judge, was involved in the vote by the relevant owners. 192Dr Thoo submitted that the individual motives of those lot owners who attended the 2009 AGM and voted were irrelevant, as a fraudulent exercise of power occurs if it is exercised for a purpose or with an intention beyond the scope of the power: Lin at [86]. However, as already noted, in Lin the Owners Corporation sought to exclude the plaintiffs from the use and enjoyment of the common property by denying them access to the MEVS. In the present case there was no such denial, as the primary judge recognised and acknowledged at [10] of his reasons. 193It was further submitted that the evidence of the subjective intention of those who gave evidence before the primary judge simply did not go far enough to displace the objective inference that in substance Resolution 7 expropriated Dr Thoo's right to reasonable access to the system. In this respect the evidence was that the three persons present at the meeting who gave evidence did not consider that it was in their individual interests that there should be an upgrade or replacement of the system, either because they already drew sufficient exhaust capacity from it for the purposes of their lot or because their lot was not connected to the system and did not require connection for its operation. Further, they desired to minimise the amounts paid by lot owners by way of contribution to expenses and they were concerned about possible disruption to businesses in the Building arising from the work to upgrade or replace the system. 194It was therefore submitted that, whether assessed subjectively or objectively, the purpose of the lot owners upon which the Owners Corporation relied was to preserve the status quo in which, amongst other matters, Dr Thoo, if he accessed the system, would not receive sufficient exhaust capacity to enable him to use Lot 17 for its permitted use of the commercial cooking and selling of hot food. 195It was not suggested by Dr Thoo that in voting for Resolution 7 those present in person or by proxy acted otherwise than bona fide. It is true that the precise effect of Resolution 7 was that the Owners Corporation was relieved of any obligation to replace and, in the course of doing so, upgrade the existing MEVS, with the result that Dr Thoo would not be able to utilise Lot 17 for the permissible purpose of the commercial cooking and selling of hot food. But it must be remembered that s 62(3) proceeds on the assumption that there is an obligation under s 62(2) to renew or replace the relevant item of common property. A determination by special resolution of the owners corporation in general meeting that it is inappropriate to replace or renew that item will inevitably have a negative impact upon those who would otherwise benefit from that renewal or replacement. 196In the foregoing circumstances, in my opinion the structure of s 62 leaves very little room for the operation of the doctrine of fraud on the minority. None of the authorities to which the Court was referred dealt with a situation such as that presently under consideration. Certainly there are authorities where the doctrine has been applied to invalidate by-laws made pursuant to the 1996 Act and its predecessor. But a determination by special resolution that it is inappropriate to renew or replace an item of common property, in my opinion, falls into an entirely different category. The negative impact that such a determination may have upon the minority, if otherwise the resolution is valid, is, at least inferentially, contemplated by s 62(3) itself, as it has the effect of negativing what would otherwise be a breach of duty on the part of an owners corporation in declining to renew or replace an item of common property that would no doubt benefit lot owners otherwise entitled to its use and enjoyment. But that is the nature of the legislation. 197For the foregoing reasons, in my respectful opinion the primary judge's findings on the issue of fraud on the minority as well as on the issue of expropriation cannot be sustained.

Dr Thoo's claim for damages for breach of s 62(2) 198The primary judge held (at [90] of the second judgment) that Dr Thoo could claim damages for breach of s 62(2) as the s 62 duty was owed to each lot owner and its breach gave rise to a private cause of action under which damages could be awarded to a lot owner for breach of statutory duty. So much was decided by Young J (as he then was) in Lubrano v The Proprietors of Strata Plan No 4038 (1993) 6 BPR 13,308. 199In Lubrano, Young J was dealing with the equivalent provision of the Strata Titles Act 1973. After citing the relevant principles for determining whether breach of a statute gives rise to a private cause of action for damages, his Honour referred to various provisions of that Act, including those which empowered the Strata Titles Commissioner to make an order where there was a complaint, inter alia, that there had been a non-performance of a duty imposed by the Act. He then referred to the decision of Brownie J in Proprietors of Strata Plan No 30234 v Margiz Pty Ltd (30 June 1993, unreported) where his Honour said: ... once it is recognised that the Act imposes a duty on the plaintiff, and that the defendant is one of the class of persons for whose benefit the duty was created ... there does not seem to be any reason why the ordinary rules of the common law would not give the Court jurisdiction to award the defendant damages, upon proof of breach of duty and consequential damage. His Honour cited, inter alia, O'Connor v SP Bray Ltd (1937) 56 CLR 464 at 477-8. 200In Lin, Gzell J (at [90]) referred to Lubrano as holding that the duty of the Owners Corporation under s 62 was owed to each lot owner and that its breach empowered the Court to award damages to that owner. In Seiwa Pty Ltd v The Owner of Strata Plan 35042 [2006] NSWSC 1157; (2006) 12 BPR 23,673, Brereton J (at [6]) also held that the duty of an owners corporation under s 62 was owed to each lot owner and that its breach gave rise to a private cause of action under which damages could be awarded to a lot owner for a breach of statutory duty. Brereton J observed that that conclusion was reached by Young J in Lubrano "upon a thorough consideration of earlier authorities to like effect". Those authorities were Jacklin v Proprietors of Strata Plan No 2795 [1975] 1 NSWLR 15 at 24 (Holland J); Proprietors of Strata Plan No 464 v Oborn (1975) 1 BPR 9623 at 9624 (Holland J); and Proprietors of Strata Plan No 159 v Blake (1986) CCH Strata Titles Cases 30-068 at 50,654 (Yeldham J). Although it was held in each of those cases that a body corporate owes a duty to each proprietor to maintain the common property, none of their Honours addressed the present issue of whether a breach of that duty gave rise to a private cause of action for damages. They therefore do not support the general proposition for which they were apparently cited. 201There was an appeal from Brereton J's judgment in Seiwa, which originally included the claim that his Honour had erred in holding that s 62(1) imposed a statutory duty which gave rise to a private cause of action sounding in damages. However, that claim was abandoned two days before the hearing of the appeal and the Court of Appeal therefore did not deal with that aspect of the matter: The Owners SP 35042 v Seiwa Australia Pty Ltd [2007] NSWCA 272; (2007) 13 BPR 24,789 at [15]. 202In Trevallyn-Jones v Owners Strata Plan No 50358 [2009] NSWSC 694; (2009) 14 BPR 27,113 Ward J (as she then was) referred (at [134]) to Lubrano and Seiwa, but noted that the owners corporation in that case did not dispute that a private right to damages could arise by reason of a breach of s 62. 203Finally, in Nicita v Owners of Strata Plan 64837 [2010] NSWSC 68 Bryson AJ at [13] stated that it was well established, and was clearly stated in Seiwa, that s 62 creates a duty owed to each lot owner, breach of which gives rise to a private cause of action for damages for breach of statutory duty. 204At [91], the primary judge acknowledged that this line of first instance authority may be contrary to the following observations of McColl JA in Ridis at [115]: This review of the scheme of the Strata Schemes Management Act indicates that, as its name indicates, the Act is concerned to allocate responsibilities for the strata scheme between the owners corporation and lot proprietors, to set out the functions of the owners corporation and to establish a regime to enable the enforcement, without recourse to courts, of a function conferred or imposed by or under the Strata Schemes Management Act in relation to a strata scheme. Significantly, too, there are some matters the legislature considered so significant as to create a liability in damages for exercise of the function (s 65) or to create an offence by the owners corporation for their breach (ss 65C, 83, 84 and 87). A "breach" of s 62 does not sound in damages nor constitute an offence under the Strata Schemes Management Act. Rather, it is apparent, in my view, that the legislature intended the system of adjudication established under Ch 5 to be the vehicle through which the owners corporation's discharge of its s 62 functions could be regulated. 205As McColl JA herself noted at [87] of her reasons, Mr Ridis did not assert that s 62 gave rise to a statutory cause of action. He relied solely on a claim for common law negligence on the part of the defendant owners corporation. Both before the primary judge and in this Court the Owners Corporation emphasised her Honour's remark that "a 'breach' of s 62 does not sound in damages". The primary judge noted (at [92]) that her Honour's observations were obiter, which clearly they were, and remarked that it was not evident from the judgments of the other members of the Court that there was a contest as to whether cases such as Seiwa and Lin were wrong when each held that a breach of s 62 did give rise to a claim for damages for breach of statutory duty. That is also correct. In these circumstances, his Honour considered that McColl JA's observations were not an impediment to his finding in the present case that the Owners Corporation's breach of s 62(2) in relation to Lot 17 did give rise to a right to recover damages. 206The Owners Corporation submitted that his Honour ought to have followed McColl JA's views in Ridis which, it was submitted, were to the contrary of those of Brereton J in Seiwa, Ward J in Trevallyn-Jones and Gzell J in Lin. 207It was common ground that whether a breach of a statutory duty gives rise to a civil remedy is a question of ascertaining the legislature's intention as a matter of construction of the relevant legislative language. In Sovar v Henry Lane Pty Ltd (1967) 116 CLR 397, which involved an action for damages for personal injuries brought by the plaintiff for breach of a provision of the Factories, Shops and Industries Act 1962 (NSW) relating to the fencing of dangerous machinery, Kitto J said, relevantly (at 404-405): In the case of an enactment ... prescribing conduct to be observed by described persons in the interests of others who, whether described or not, are indicated by the nature of a peril against which the prescribed conduct is calculated to protect them, the prima facie inference is generally considered to be that every person whose individual interests are thus protected is intended to have a personal right to the due observance of the conduct, and consequently a personal right to sue for damages if he be injured by a contravention : see Whittaker v. Rozelle Wood Products Ltd (1936) 36 SR (NSW) 204; 53 WN 71. ... But at the outset of every inquiry in this field it is important, in my opinion, to recognize ... that the question whether a contravention of a statutory requirement ... is actionable at the suit of a person injured thereby is one of statutory interpretation. ... The legitimate endeavour of the courts is to determine what inference really arises, on a balance of considerations, from the nature, scope and terms of the statute, including the nature of the evil against which it is directed, the nature of the conduct prescribed, the pre-existing state of the law, and, generally, the whole range of circumstances relevant upon a question of statutory interpretation ... It is not a question of the actual intention of the legislators, but of the proper inference to be perceived upon a consideration of the document in the light of all its surrounding circumstances. ... This passage was referred to with approval in Byrne v Australian Airlines Ltd [1995] HCA 24; (1995) 185 CLR 410 at 460-461; Miller v Miller [2011] HCA 9; (2011) 242 CLR 446 at [29]; Field v Dettman [2013] NSWCA 147 at [39]. 208It was submitted by the Owners Corporation that one of the most important indicia as to whether a breach of a statutory duty gives rise to a private cause of action for damages is whether or not the legislation provides an alternate remedy, such as administrative or quasi-judicial machinery through which an aggrieved person can pursue a complaint: Martin v Western District of the Australasian Coal & Shale Employees' Federation Workers' Industrial Union of Australia (Mining Department) (1934) 34 SR (NSW) 593 at 596 per Jordan CJ, referred to with approval by Dixon J in O'Connor v SP Bray Ltd (1937) 56 CLR 464 at 478. Thus it was submitted that it was the existence of Chapter 5 of the 1996 Act, referred to by McColl JA at [115] of her reasons in Ridis, that caused her Honour to express the view that a breach of s 62 did not sound in damages. It was submitted that her Honour's reasoning was correct and as a consequence the first instance decisions which held to the contrary should be overruled. This was so notwithstanding that she did not refer to the principles of construction to which I have referred at [207] above, although it was asserted that her Honour's reasoning was consistent with those principles. 209The Owners Corporation then summarised the relevant provisions of the 1996 Act, which were referred to by McColl JA at [104]-[114] of her reasons in Ridis. Without repeating that analysis, attention should be drawn to two aspects of the structure of the Act. The first is s 3, which sets out its objects, which are, first, to provide for the management of strata schemes created, relevantly, under the 1973 Act and, secondly (and significantly), to provide for the resolution of disputes arising in connection with the management of strata schemes. 210Chapter 5 extends from ss 123 to 210. It is headed "Disputes and orders of Adjudicators and Tribunal". Section 138 contains the general power of an Adjudicator to make an order to settle a dispute or complaint about, inter alia, "an exercise of, or a failure to exercise, a function conferred or imposed by or under this Act". The word "function" is defined in the Dictionary to the Act to include a "power, authority or duty". Section 138 thus encompasses the failure of the Owners Corporation to exercise its duty under s 62(2). The regime set out in Chapter 5 is, to say the least, detailed and extensive. It provides (s 177) for appeals to the Consumer, Trader and Tenancy Tribunal established by the Consumer, Trader and Tenancy Tribunal Act 2001 from orders made by an Adjudicator. There is an appeal to the District Court from orders of the Tribunal (s 200). Part 6 of Chapter 5 relates to the enforcement of orders of Adjudicators and the Tribunal. 211Section 207 in Part 7 of Chapter 5 provides, relevantly, that an order under s 138 in which an Adjudicator declares that the order is to have effect as a decision of the owners corporation is to take effect as a resolution of the owners corporation to do what is needed to comply with any requirement imported by that order. In other words, an order made by an Adjudicator under s 138 that the owners corporation perform its duty under s 62(2) to renew or replace a particular part of the common property takes effect as a resolution of the owners corporation with which it is bound to comply. If it fails to do so, the obvious remedy would be a mandatory injunction. However, it is to be noted that by operation of s 138(3)(d) an Adjudicator cannot make an order under subs (1) for the settlement of a dispute or complaint that includes the payment by a person to another person of damages. In my opinion, that provision is some indication of an intention on the part of the legislature that disputes relating to the owners corporation's duties under the 1996 Act, as well as disputes as to the strata scheme generally, are to be resolved in a manner which does not involve the payment of damages. 212I have not attempted an exhaustive analysis of the provisions of Chapter 5. However, the Owners Corporation submitted that Chapter 5 establishes a detailed and comprehensive scheme for non-judicial resolution of disputes arising from the management of strata schemes. In short, it provides a comprehensive regime by which a lot owner who is dissatisfied with the performance by an owners corporation of its role to maintain, renew or replace common property can seek redress from a specialist tribunal. If the complaint is justified, then the owners corporation can be ordered to carry out such work as is necessary to fulfil its role. 213It was further submitted that any damages awarded against an owners corporation would be at the expense of the lot owners (including the lot owner claiming the damages), since it is only from them that funds can be raised, if necessary by special levy, to meet any award of damages. That can occur in circumstances where there has been no investigation into the personal responsibility of any particular lot owner for the breach. Indeed, it may well be that some, or perhaps all, lot owners have also suffered loss from the relevant breach. 214In the light of the foregoing considerations, it was submitted that it was not necessary to supplement the express statutory right conferred on lot owners to compel an owners corporation to fulfil its statutory duties through the Part 5 machinery of the 1996 Act with the additional right to claim damages from the owners corporation for breach of those duties. 215Dr Thoo submitted that, when read in context, the observation made by McColl JA at [115] of her reasons that a breach of s 62 does not sound in damages was directed to the absence of an express provision in the 1996 Act (such as s 65(6)) conferring a statutory right to damages for breach of s 62. It was contended that her Honour's statement was not directed to, and says nothing in respect of, a private right of action in tort for breach of a statutory duty sounding in damages. This was because the appellant in Ridis did not assert that s 62 gave rise to any such cause of action, but rather relied on a breach of s 62 as evidence of negligence: Ridis at [90]. 216I would not accede to the foregoing submission. It is contrary to the last sentence of [115]. The submission is suggestive of her Honour using loose language, which I do not perceive. Her Honour had reviewed the scheme of the 1996 Act and it was as a result of that review and analysis that she concluded, albeit obiter, that a breach of s 62 did not sound in damages for the reason that the legislature intended the system of adjudication established under Chapter 5 to be the vehicle through which the owners corporation's discharge of its s 62 functions should be regulated. 217Dr Thoo then submitted that no error had been identified in the decisions of the single judges of the Supreme Court who had held that breach of the predecessor of s 62(2) gave rise to a statutory cause of action sounding in damages. However, in my opinion the answer to that contention is to be found in the difference of opinion at the appellate level as to the intention of the legislature in the light of the proper construction of the 1996 Act. It is simply a preference for the view of McColl JA over that of the learned judges upon whose decisions Dr Thoo relies. 218It was next submitted that the Owners Corporation's submissions did not address the application of the re-enactment presumption of statutory interpretation where the identical statutory expression "renew or replace any fixtures or fittings comprised in the common property" was employed in s 68(1)(c) of the Strata Titles Act 1973 before being deployed again in s 62(2) of the 1996 Act. It is true that Part 5 of the Strata Titles Act 1973 dealt comprehensively with disputes from ss 97-145. Section 105 was the equivalent of s 138 of the 1996 Act. However, there are some differences between the two provisions. Relevantly, s 105(1A) empowered the Commissioner, when making an order under subs (1), to include provision for the payment by one person to another person of damages not exceeding $500. This provision, as I have indicated, is not repeated in s 138, which prohibits the payment of such damages. 219In Proprietors of Strata Plan No 30234 v Margiz Pty Ltd, Brownie J referred to s 105 of the Strata Titles Act 1973 and to the decision of Kearney J in MacLeod v Proprietors of Strata Plan No 6544 [1980] 2 NSWLR 691 at 694, where his Honour held that s 146 (now s 226) had been carefully and deliberately drafted so as not to exclude the concurrent jurisdiction of the Court, (that is, the jurisdiction of the Court which was concurrent with the jurisdiction of the Commissioner to resolve disputes under the Strata Titles Act 1973). However, the concurrent jurisdiction to which his Honour was referring, and which was applied by Needham J in Proprietors of Strata Plan No 6522 v Furney [1976] 1 NSWLR 412, was the jurisdiction of the Court to make a declaration in the latter case or a mandatory injunction in the former case. Neither case dealt with the issue of whether a breach of s 68(1)(b) or (c) (now s 62(1) and (2)) gave rise to a private right of action for damages. Nevertheless, as I have noted in [199] above, Brownie J in Margiz did hold that there was such a right of action. 220In my view there is a distinction to be made between, on the one hand, the preservation of the concurrent jurisdiction of the Court pursuant to the old s 146 and the current s 226, and, on the other, the question as to whether a breach of a duty imposed by the legislation on an owners corporation gives rise to a private cause of action for damages for breach of statutory duty. In Lubrano Young J also referred to s 105 of the Strata Titles Act 1973 as well as to s 146, holding that the plaintiff owner did have an action for a breach of statutory duty, basing his decision upon the reasoning of Brownie J in Margiz. 221However, as I have indicated, ultimately I prefer the reasoning of McColl JA in Ridis where her Honour, after a careful analysis of the provisions of the 1996 Act, made it clear that in her view a breach of s 62 did not sound in damages. In this respect her Honour took into account many of the same matters that were considered by Brownie J in Margiz and by Young J in Lubrano, but came to a different view which I respectfully consider to be correct. 222Although his Honour was entitled not to adopt the views of McColl JA in Ridis, as they did not command a majority in that case for the reason that there was no claim of a breach of statutory duty sounding in damages, nevertheless it is open to this Court to decline to follow the first instance decisions relied upon by Dr Thoo and by the primary judge and to now determine on the basis of the obiter observations of McColl JA in Ridis that a breach of s 62 by an owners corporation does not give rise to an action for damages for breach of statutory duty.

Conclusion 223There were a number of other issues argued on the appeal, which included the following:

• whether Dr Thoo's demand for 3,600 l/s was reasonable;
• whether, if damages were available, they were an adequate remedy, as a consequence whereof his Honour ought not to have granted a mandatory injunction;
• whether Dr Thoo was the proper plaintiff, given that he had leased shops 1, 2, and 3 in Lot 17 to Teplano Pty Ltd in June 2007 for a term of two years with a three year option. 224As noted at [133] above, there was also a cross-appeal by Dr Thoo against a finding by the primary judge that he had abandoned his claim for breach of his proprietary right to use the common property in the Strata Plan. A notice of contention was also filed by Dr Thoo to the effect that, if it was found that his demand of 3,600 l/s was unreasonable, the Court should determine what was reasonable, four different figures being nominated. However, in the light of the findings I have made, it is unnecessary to deal with these issues. 225In the result, the Owners Corporation has established first, that it did not breach its duty under s 62(2); secondly, that if it did, it was not required to comply with that duty, as Resolution 7 was valid; and thirdly, that in any event Dr Thoo was not entitled to damages for breach of statutory duty. It follows that the Owners Corporation's appeal has been successful and that the declarations and orders (other than Orders 2 and 9) made on 22 August 2011 and the Orders made by his Honour on 4 December 2012 (other than Order 8, which has now expired) must be set aside. The only reservation I have is with respect to Orders 6 and 7 made on 4 December 2012. The parties are at liberty to seek an order different from that which I propose by the filing of submissions within 14 days of the publication of these reasons. 226I would therefore propose the following orders:

1. Appeal allowed.
2. Cross-Appeal dismissed.
3. Set aside Declarations 1, 2, 3, 4, 5 and 6 and Orders 7 and 8 made by Slattery J on 22 August 2011 and Orders 1 to 5 made by his Honour on 4 December 2012.
4. Order that the Third Further Amended Statement of Claim be dismissed.
5. Order that the First Respondent pay the Appellants' costs of the proceedings before Slattery J and of the Appeal but have with respect to the latter a certificate under the Suitors' Fund Act 1951, if otherwise qualified.

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