The Owners - Strata Plan No 30691 v Pickard - [2024] NSWCATAP 126 - NSWCATAP 2024 case summary

NCAT Appeal Panel|2024-05-06|Before: Re J

Background

This appeal concerns the proper construction of s 106 of the Strata Schemes Management Act 2015 (NSW) (the Strata Act) and, in particular, whether the Tribunal may hear and determine an application brought by a lot owner for damages for breach of statutory duty under s 106(5) outside the two year time period imposed by s 106(6).
The decision under appeal was published on 29 January 2024 (the Decision) and the Tribunal had before it an application brought by the Respondent to this appeal (a lot owner in the strata scheme constituted by the Appellant). The Respondent's application sought orders that the Appellant pay for and repair the Respondent's property and an order for damages. The Tribunal was purportedly exercising the jurisdiction granted to it under the Strata Act.
By the Decision, the Tribunal made orders for experts to conduct investigations concerning the appropriate means of rectification of defects to the common property and for remediation work to be undertaken. Order 6 was an order that the Appellant pay damages to the Respondent in the amount of $35,990. This appeal only concerns order 6. By consent, the operation of order 6 has been stayed until further order of the Tribunal or finalisation of the appeal.
The relevant factual background recorded in the Decision is as follows: 1. In around February 2020 the Respondent observed water leaking from the shower recess in her living room in lot 2 and reported the leak to the maintenance liaison person for the Appellant, who responded by stating that the tiles in the shower were not the original tiles, and that it was not the Appellant's responsibility to repair the waterproofing to prevent water penetration [33]. 2. At the same time (February 2020) the Respondent formed the intention to rent out her second bedroom to a nephew, but the water leak caused the Respondent to revoke the offer as the bathroom had become unusable. The Respondent moved out of her lot in May 2020 [65]. 3. The Tribunal found that it was satisfied that the Respondent became aware of the potential loss of rent when she formed the intention to rent her second bedroom to her nephew in February 2020 and further in February 2020 when she formed the opinion that the loss of the use of the bathroom through the Appellant's failure to carry out remediation works caused her to lose enjoyment of the use of her lot [66]. 4. The Respondent's application was lodged in the Tribunal on 1 April 2022 [67] and the Tribunal found that the application had not been brought within time as prescribed under s 106(6) [69].

Notice of Appeal

The grounds of appeal stated in the Notice of Appeal lodged on 23 February 2024 may be summarised as follows: 1. Ground 1: the Tribunal erred in law in holding that s 41 enabled it to extend the period under s 106(6) within which the Respondent could bring her action for damages. 2. Ground 2: the decision that s 41 enabled time to be extended was erroneous because on the proper construction and application of s 41 and ss 106, 106(6) does not prescribe a period of time for doing anything under the Strata Act within the meaning of s 41, but rather, operates like most limitation periods, that is, by creating a potential defence to an action for damages under s 106(5) should the Respondent, to such a claim, avail itself of that defence. This ground described as ground 2(a)) was not pressed. Secondly, the Strata Act postdated s 41 of the NCAT Act and the prescription in s 106(6) of a limitation specific to the cause of action under s 106(5) requires that the specific limitation prevail over, and apply unaffected by, the pre-existing general provisions of s 41. Thirdly, s 106(5) is a substantive provision creating a statutory cause of action which is subject to a substantive condition in the form of a limitation period and enforceable in jurisdictions other than just the Tribunal and, in these circumstances, it should not be inferred, absent the clearest textual indication, that the limitation period was intended to be defeasible in the Tribunal but indefeasible in the courts. Fourthly, the effect of s 106(6) was jurisdictional, vis-à-vis the Tribunal, such that the Tribunal had no authority to award damages in circumstances where the Respondent had been aware of the relevant loss more than two years prior to the bringing of the action and could not be vested with such authority by way an enactment permitting it to extend time for doing something under relevant legislation. 3. Ground 3: if it is held that s 41 enabled the Tribunal to extend time, the Tribunal erred in law in its exercise of its discretionary power to do so by failing to take into account material considerations, namely the absence of any explanation for the Respondent having brought the action after 8 February 2022 rather than before that date, and the fact that the Respondent was legally represented for more than two years prior to her bringing the action and can be presumed to have been aware of the provisions of the legislation under which she brought the action. In these circumstances the discretionary power should be re-exercised by the Appeal Panel against the extension sought by the Respondent. 4. Ground 4: in the alternative, the Tribunal erred in law in the exercise of its discretionary power by awarding damages which were manifestly excessive and should be reduced in the exercise of the Appeal Panel's discretionary power.

Appellant's Submissions

The thrust of the Appellant's submissions is that the decision of the Appeal Panel in Hua Nan Trading Pty Ltd v Owners Strata Plan No 32396 (the Hua Nan case) was wrong and that we should not follow it.
The Appellant submitted that the proper construction and application of s 41 of the NCAT Act and s 106 of the Strata Act is as stated in the Notice of Appeal but can be summarised again as follows: 1. having regard to the Strata Act postdating the enactment of s 41, the prescription in s 106(6) of a limitation period specific to the cause of action under s 106(5) requires that the specific limitation period prevail over, and apply unaffected by, the pre-existing general provisions of s 41, 2. s 106(5) is a substantive provision creating a statutory cause of action which is subject to a substantive condition in the form of a limitation period and is enforceable in jurisdictions/fora other than just the Tribunal. In these circumstances, it should not be inferred, absent the clearest textual indication that the limitation period was intended to be defeasible in the Tribunal but indefeasible in the courts, 3. the effect of s 106(6) is jurisdictional vis-à-vis the Tribunal, such that the Tribunal had no authority to award damages in circumstances in which the Respondent had been aware of the relevant loss more than two years prior to the bringing of the action and could not be vested with such authority by way of an enactment permitting it to extend the time for doing something under relevant legislation.
The Appellant submitted that a very similar construction issue was dealt with in the judgment of the High Court in David Grant & Co Pty Ltd v Westpac Banking Corporation (1995) 184 CLR 265; [1995] HCA 43 (the David Grant case).
Before discussing the David Grant case, the decision in the Hua Nan case deserves close examination. The Appellant in that case had alleged that it had sustained loss and damage to its lot and alleged breach by the Owners Corporation of its obligations under s 106(1) and (2) of the Strata Act to maintain and repair common property. The Tribunal had found at first instance that the Appellant was first aware of its loss on 10 February 2020 or alternatively 2 March 2020. On 2 February 2022 the appellant filed proceedings in the Tribunal but the Registrar did not accept the appellant's application because (perhaps erroneously) there had been no prior mediation as required by s 227 of the Strata Act. Mediation subsequently took place but was unsuccessful. On 28 April 2022 the appellant commenced proceedings in the Tribunal (for the second time). It was accepted that those proceedings had been commenced later than the time required by s 106(6). The Tribunal, at first instance, had held that it could not extend time exercising the power granted by s 41 of the NCAT Act and the Appeal Panel held that the Tribunal had erred in that regard. The Appeal Panel stated that the issue is one of statutory interpretation [47], namely whether s 41 can be applied to extend the time stipulated in s 106(6).
The Appeal Panel referred to the High Court decision in the David Grant case. We will say more about that case later in these reasons, but for present purposes it is only necessary to say that the High Court, in considering provisions of the Corporations Law, determined that the time required under one section (s 459G(2)) could not be extended through the use of another section (s 1322(4)(d)).
From [77] the Appeal Panel referred to and subsequently applied principles of statutory construction derived from the High Court decision in Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28. In particular, the Appeal Panel referred to paragraphs [69] and [70] of that judgment which read as follows: [69] The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole"[46]. In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed". Thus, the process of construction must always begin by examining the context of the provision that is being construed. [70] A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions. Reconciling conflicting provisions will often require the court "to determine which is the leading provision and which the subordinate provision, and which must give way to the other". Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme.
At [78] the Appeal Panel noted that the David Grant case concerned one statute (and the operation of two sections within that statute) whereas the case before the Appeal Panel involved two statutes and how they operate together. The Appeal Panel stated that "we have applied the same principles as are applied when different provisions of the same statute are being examined" [78].
At [81] the Appeal Panel noted that s 232 of the Strata Act confers functions in the Tribunal and that this includes jurisdiction to make an order for the payment of damages (relying upon Vickery v The Owners - Strata Plan no 80412 (2020) 103 NSWLR 352; [2020] NSWCA 284. The Appeal Panel concluded that it had general jurisdiction in relation to the Appellant's application.
From [83] the Appeal Panel stated that the Tribunal is expressly given jurisdiction to make interlocutory decisions in proceedings over which it has general jurisdiction: see s 29(2)(a) of the NCAT Act. An interlocutory decision includes a decision for the extension of time (s 4 of the NCAT Act).
At [86] the Appeal Panel held that the effect of the provisions referred to together with s 232 of the Strata Act is that the Tribunal is given general jurisdiction over a matter involving the Strata Act including jurisdiction to make an interlocutory decision to extend the period of time for the doing of anything under the Strata Act despite anything to the contrary under that legislation.
From [87] the Appeal Panel held that s 41 is expressed in broad language and there is no warrant to read its provisions down.
From [94] the Appeal Panel stated that there are no express words in s 106(6) which had the effect of limiting the Tribunal's powers (as distinct from being directed to lot owners).
At [95] the Appeal Panel stated that the language of s 41 is expressed as overriding any provision to the contrary in the legislation which confers general jurisdiction on the Tribunal. The Appeal Panel went on to say that s 41 is to be treated as the "dominant provision and any limitation in the legislation which confer general jurisdiction is to be treated as the subordinate provision".
The Appeal Panel found at [105] that the words of s 106(6) convey that an owner must do something (bring an action) within two years. These words are referring to the doing of something within two years and this interpretation brings coherence and harmony to the relationship between s 106(6) and s 41.
At [107] the Appeal Panel stated that its interpretation "produces a just result for the users of the Tribunal who are not legally trained or qualified and would know little, if anything, of time limitations. It allows for extensions of time in circumstances where the two year time period is affected by the preconditions to commencing proceedings set out in s 227 of the Strata Act". The Appeal Panel explained that it was referring to the time taken to attempt a mediation. We note that section 227 of the Strata Act provides as follows: 227 CERTAIN APPLICATIONS CANNOT BE ACCEPTED WITHOUT PRIOR MEDIATION (1) A registrar must not accept an application made to the Tribunal under this Act unless-- (a) mediation by the Secretary under Division 2 or otherwise has been attempted but was not successful, or (b) a party refused to participate in the mediation, or (c) the registrar considers that mediation is unnecessary or inappropriate in the circumstances. (2) The registrar must inform an applicant that the applicant should arrange for mediation if the registrar rejects an application under this section. (3) The applicant may arrange for mediation under Division 2 or otherwise. (4) This section does not apply to applications for the following orders-- (a) an order to appoint, or requiring the appointment of, a strata managing agent, (b) an order varying or revoking an order that varies or revokes another order by the Tribunal, (c) an order with respect to waiving, varying or extinguishing a restriction relating to the initial period, (d) an order allocating unit entitlements, (e) an order with respect to access to a lot by the owners corporation to inspect or repair common property, (f) an order seeking provision of records to an owners corporation by a former strata managing agent for the strata scheme, (g) an order with respect to the inspection of records of an owners corporation, (h) an order imposing a monetary penalty and any associated order as to the payment of costs.
The Appellant's submissions placed emphasis on the High Court decision in the David Grant case. In that case the respondent issued statutory demands under the Corporations Law upon the appellant companies. The appellants filed and served applications under s 459G of the Corporations Law to set aside those statutory demands. The applications were filed and served after the expiring of the 21 day period referred to in s 459G. In summary s 459G stated that a company may apply to the court for an order setting aside a statutory demand and that such an application "may only be made within 21 days after the demand is so served".
Section 1322(4) of the Corporations Law provided (in summary) that "without limiting the generality of any other provisions of this Law, the Court may" make orders set out in the balance of this section, including an order extending the period "for doing any act, matter or thing or instituting or taking any proceeding under this Law".
The judgment of the court was delivered by Gummow J who stated that the difficulty in construing s 459G and s 1322 arises from the interrelation between the two provisions in circumstances where the enactment of s 1322 preceded that of S459G, and the earlier section is general and the later section specific in its operation. His Honour also stated: "As a general precept, it is inappropriate to read provisions which confer jurisdiction or grant powers to a court by the making of implications or imposition of limitations not found in the express words of the legislative provision. Here, however, by a later and more specific provision inserted in the Law… provision is made with respect to a particular class of application and there is attached a specific limitation as to the time within which an application may be made."
The Appellant relied upon a further statement made by his Honour Gummow J as follows: "In providing that an application to the court for an order setting aside a statutory demand "may only" be made within the 21 day period there specified and that an application is made in accordance with s 459G only if, within those 21 days, a supporting affidavit is filed and a copy thereof and of the applications are served under sub-ss (2) and (3) of s 459G attach a limitation or condition upon the authority of the court to set aside the demand."
His Honour went on to say that the use of the term "may" does not give rise to the considerations which apply where legislation confers upon a decisionmaker an authority of a discretionary kind and the issue is whether "may" is used in a facultative and permissive sense or an imperative sense. His Honour held that the force of the term "may only" is to define the jurisdiction of the court by imposing a requirement as to time as an essential condition of the new right conferred by s 459G. An "integer or element of the right created by s 459G is its exercise by application made within the time specified."
The Appellant relied upon the references referred to above in support of its contention that the time under s 106(6) cannot be extended. In the David Grant case Gummow J said that the words "may only" must mean what they say or be given no effect at all. Requiring strict compliance with the temporal limitation under S 459G is consistent with both the general scheme of the new pt 5.4 of the Corporations Law and other specific provisions identified in the judgment of his Honour. The Appellant's submissions also relied upon the approval of Gummow J to comments made by Sheller JA in Re J&E Holdings Pty Ltd (1995) 36 NSWLR 541 where Sheller JA said, in respect of the same issue that was being considered by Gummow J, that unless the Court has a power to extend time within which the application to set aside the statutory demand can be made, the plaintiff has no right to make it. The Appellant submitted that an application purporting to seek relief under S 459G(1) which failed to comply with the time limitation imposed within that section was simply a nullity.
The Appellant further submitted that s 106 creates a right to damages enforceable by way of the Tribunal's exercise of its powers under s 232 of the Strata Act. The right requires an action to be brought seeking such orders to enforce the asserted right. Any such action must be brought in the time and in the manner prescribed in the enabling legislation or procedural rules. Section 40 of the NCAT Act requires an application to the Tribunal to be made in the time and manner prescribed by enabling legislation or the procedural rules. The Appellant contended that compliance with the enabling legislation's prescription as to the time for bringing the action is essential to the Tribunal's jurisdiction to enforce the right and absent such compliance there is no jurisdiction in the Tribunal to do so.
The Appellant submitted that in the David Grant case, the timing of the making of the application was constrained by the use of the words "may only be made within 21 days after the demand… is served". Similarly, in the case of the right to recover damages under s 106(5) the words of constraint are in s 106(6). They are that the relevant lot owner "may not bring an action" outside the prescribed timeframe. The Appellant submitted that the word "may" in this context is to be read in the same imperative sense as it was in s 459G(2) of the Corporations Law. It amounts to a prohibition against seeking to enforce the right without compliance with the temporal requirements.
The Appellant submitted that the enactment in the Strata Act of a new cause of action in s 106(5) conditioned in the same enactment by a strongly worded prospective prohibition against asserting it beyond its limitation period points strongly to the absence of jurisdiction in the Tribunal to entertain a claim for damages under s 106(5) absent compliance with s 106(6) and, further, the timely bringing of the application for damages being an essential element of the claim under s 106(5), failing which it cannot be pressed.
The Appellant submitted that the substantive character of the temporal requirement in s 106(6) is underlined by the fact that jurisdiction over the cause of action under s 106(5) is not exclusive to the Tribunal but is shared with the courts.
The Appellant referred to and relied upon the decision of the Court of Appeal in Vickery v Owners - Strata Plan No 80412 [2020] NSWCA 284. That case concerned an application brought to the Tribunal by the owner of a lot in a strata scheme who claimed that the respondent owners corporation breached its obligations to maintain the common property resulting in his apartment leaking with water. The owners corporation agreed that it had breached its obligation, that the breach had caused loss to Mr Vickery and the amount of the loss. The sole issue in the appeal was whether the language of s 232 of the Strata Act providing that the Tribunal may "make an order to settle a complaint or dispute" included an order for payment of damages. By majority the court held that s 232 confers jurisdiction and power upon NCAT to hear and determine a claim for damages under s 106(5) and the language of s 232 to make "an order to settle" a complaint or dispute should not be read down to preclude an order to pay damages. The Appellant submitted (as stated above) that the substantive character of the temporal requirement done in s 106(6) is underlined by the fact that jurisdiction over the cause of action under s 106(5) is not exclusive to the Tribunal but is shared with the courts. As Basten JA pointed out in Vickery "(w)herever the claim is brought, it is subject to the limitation period contained in s 106(6); the Local Court, for example, has no equivalent limitation provision" [40].
The Appellant submitted that a construction of s 106(6) as subject to s 41 of the NCAT Act would result in a situation in which an applicant for relief in the Local Court could automatically be denied such relief on limitation grounds, but an identical claim could succeed in the Tribunal if the power to extend the limitation period were successfully invoked. Such a result could not have been intended by the legislature. Rather the substantive character as an element of the right under s 106(5) of the temporal limitation under s 106(6) should be recognised, by holding it to be outside the scope of the phrase "period of time for the doing of anything under any legislation".
Further, the Appellant contended that once the limitation period under s 106(6) has passed the Tribunal no longer has jurisdiction in respect of the cause of action. That negates an essential condition of s 41's application, the condition being that the Tribunal has jurisdiction under the legislation providing for the doing of the relevant thing.
The Appellant's submissions noted that the correctness of its contentions as to jurisdiction was specifically rejected in the Hua Nan case, as was the general reconciliation of s 106(6) as subservient to s 41.
The Appellant referred to the reasoning in Hua Nan case where the Appeal Panel at [94] stated that there are no express words in s 106(6) which have the effect of limiting the Tribunal powers (as distinct from being directed to lot owners). In response, the Appellant contended that the absence of express words directed towards limiting the Tribunal's powers is not determinative of the existence of such a limitation. There were no such express limitations upon the powers of the court in the legislation considered by the High Court in the David Grant case but the construction placed upon the temporal limitation was held to be jurisdictional nonetheless. In the Hua Nan case, the Appeal Panel compared and contrasted the powers of the Tribunal under s 232 of the Strata Act with that conferred on the Tribunal in respect of home building claims under sections in Pt 3A of the Home Building Act 1989, which confers limited jurisdiction on the Tribunal. The Appellant contended that the comparison made by the Appeal Panel with respect to both pieces of legislation was not apposite.
With respect to s 41 of the NCAT Act, the Appellant contended that the power under that section to extend time is predicated on the Tribunal having jurisdiction in respect of the doing of the relevant thing under the legislation. Determination of the Tribunal's jurisdiction in respect of the relevant thing to be done is therefore paramount. That requires determination of the jurisdictional fact or facts. Failing satisfaction of the jurisdictional facts, there is no jurisdiction.
With respect to ground 3, the Appellant contended that the Tribunal erred in law in its exercise of its discretionary power under s 41 by failing to take into account material considerations, namely, the absence of any explanation for the Respondent having brought the action after 8 February 2022 and the fact that the Respondent was legally represented for more than two years prior to her bringing the action and can be presumed to have been aware of the provisions of the legislation under which she brought the action. In those circumstances the discretionary power should be exercised by the Appeal Panel against the extension sought by the Respondent.
The Appellant submitted that the explanation for the delay in commencing action which was accepted by the Tribunal was not an adequate explanation and that the exercise of the discretion miscarried.
For reasons which will become apparent, it is not necessary for us to determine this ground of the appeal or ground 4.

Respondent's Submissions

The Respondent submitted that there is no appeal from the finding that the doctrine of precedent applies to the Tribunal being bound by the decisions of the Appeal Panel on questions of law. The Respondent relied upon the decision of the Appeal Panel in Lam v Steve Jarvin Motors Pty Ltd [2016] NSWCATAP 186 at [189]-[196].
The cited paragraphs from the Lam case are summarised below.
The Appeal Panel in that decision stated that it is not necessarily correct to say that the Tribunal is not bound by the doctrine of precedent [190]. This statement was made in response to a statement made by the Tribunal at first instance to the effect that the Tribunal is not bound by the doctrine of precedent, but should ordinarily follow decisions of the Appeal Panel and decisions of the Tribunal as constituted by the President or a Deputy President, relying upon earlier decisions of the Administrative Decisions Tribunal.
The Appeal Panel stated that the doctrine of precedent or stare decisis may apply to the Tribunal even though the Act by which the Tribunal was created does not explicitly recognise that the Tribunal has the status of the court [191]. The doctrine of stare decisis applies to decisions of Tribunals which exercise judicial power [191].
The question of whether the doctrine of precedent applies generally to decisions of the Tribunal was not argued and, therefore, the Appeal Panel stated that it would not express any final definitive view upon the matter. Nevertheless, the Appeal Panel stated that: "We think that it is appropriate for any member sitting at first instance in the Tribunal to consider themselves bound, at least, to follow decisions of the Appeal Panel on questions of law" [196].
The Respondent further submitted that the Appeal Panel should only depart from a previous decision if it is plainly wrong and there are compelling reasons to do so. The Respondent relied upon the judgment of the New South Wales Court of Appeal in Gett v Tabett [2009] NSWCA 76. There, the Court of Appeal stated that intermediate appellate courts are not legally bound by their own earlier decisions, but should only depart from such authority if they are of the view that the decision is "plainly wrong" and, such an error having been identified, there are "compelling reasons" to depart from the earlier decisions. The court stated that "plainly wrong" speaks to the strength of the conviction of the later court that the earlier judgment was erroneous. It is not sufficient for the court to merely conclude that the earlier approach was open, but is no longer preferred. Further, the nature of the error should be able to be demonstrated with a degree of clarity by the application of correct legal analysis.
The Respondent submitted that the finding that the prior decision is "plainly wrong" is a necessary but not a sufficient basis for departing from the earlier decision. Once that hurdle has been overcome, additional issues should be considered including, but not limited to, whether earlier decisions had achieved no useful result but, on the contrary, had led to considerable inconvenience or whether the consequences of the prior decision would extend beyond that question - see [297]-[298] of the Gett judgment.
The Respondent submitted that the considerations referred to above are properly invoked because they are relevant to the underlying principles of certainty, predictability and transparency upon which the theory of precedent is founded. Here, there is no identified inconvenience arising from the decision in Hua Nan. Indeed, it would be in the interests of justice to grant an extension.
Additionally, the Respondent submitted that the decision in Hua Nan is not plainly wrong, and is correct on an application of orthodox principles of interpretation.
The Respondent submitted that the use of the word "anything" in s 41 of the NCAT Act includes the bringing of an action. The phrase "under any legislation" used in s 41 directs attention to s 29 and of the NCAT Act. Section 29 provides that the Tribunal has general jurisdiction over a matter if legislation (other than the NCAT Act or the procedural rules) enables the Tribunal to make decisions or exercise other functions of a kind specified by the legislation in respect of that matter.
The Respondent submitted that s 106 of the Strata Act read with s 232 of the same Act falls within the definition of legislation that enables the Tribunal to make decisions of a kind specified by the legislation. The Respondent submitted that it is relevant that legislation conferring jurisdiction should be construed broadly. Further, the phrase "despite anything to the contrary under that legislation" used in s 41 means what it says.
The Respondent submitted that the David Grant case is distinguishable for a number of reasons. First, s 41 is in a different instrument, unlike s 1322(4) which was in the same instrument. Secondly, s 41 includes the words "despite anything to the contrary under that legislation" whereas no equivalent expression was to be found in s 1322(4). Thirdly, there was an express power to extend time in s 459G but there is no such analogous power in s 106. Fourthly, the High Court attached significance to the scheme of which s 459G was a part and the anomalous consequence that a company could be deemed insolvent and then later not be, or be deemed, insolvent. No such scheme or consequence arises in this case. The Respondent submitted that there is nothing in The Owners-Strata Plan No 74232 v Tezel [2023] NSWCA35 or any other of the decisions considering the operation of s 106(5) that articulate any reason why the time for bringing an action should not be extended in appropriate circumstances. Fifthly, the Respondent submitted that the words "may only" (being the words considered in the David Grant case) connote that there was no alternative manner in which the application to set aside could be made. There is no such provision in s 106(6).
The Respondent submitted that the Appellant's construction of ss 106(6) and 41 should not be accepted and is an inappropriate attempt to read those sections by the conferral of powers and the imposition of limitations not found in the express words of the legislative provision. The Appellant's argument involves saying that s 106 is a provision conferring jurisdiction and that s 106(6) is a provision imposing limitations on the jurisdiction. These words are not found in the express words of the legislative provision.
The Respondent submitted that the Appellant's submission that the temporal element of s 106(6) does not represent a period of time for the doing of anything should not be accepted. It is clear from the judgment of the Court of Appeal in Tezel, particularly at [39] and [41] which refer expressly to a "short limitation period" that s 106(6) constitutes a period of time for the doing of something.
It is not necessary to set out the Respondent's submissions with respect with ground 3 and 4 of the grounds of appeal.
The Respondent submitted that the appeal should be dismissed with an order for costs in favour of the Respondent.

Appellant's Submissions in Reply

The Appellant submitted that High Court authority concerning that Court's approach to reconsidering its own decisions are not relevant when one considers the position of an intermediate appellate Tribunal. The Appellant submitted that it is quite common for different Appeal Panels to take different views on the same issue. The Supreme Court is able to rule on contentious issues of principle and thereby clarify applicable law.
One of the submissions of the Respondent (not included in the above summary) is that the ability to extend time by virtue of s 41 was intended by the legislature. Pt 12 of the Strata Act provides that the Tribunal is the primary jurisdiction for the determination of strata disputes. Whilst proceedings can be brought in other jurisdictions, such as a court, cost consequences can follow that choice of forum. The legislature has evinced an intention to discourage strata disputes being brought outside of the Tribunal. The Respondent submitted that the Appellant's submission that the legislature never intended to confer greater powers on the Tribunal than on a court is without substantiation and ought to be disregarded. This submission was founded upon the basis (agreed by both parties) that there is no provision equivalent to s 41 that would enable time to be extended in proceedings commenced in a court. In response to these submissions, the Appellant submitted in reply that the Respondent's submissions do not detract from the force of the Appellant's submissions that s 106(6) is excluded from the reach of s 41. The Appellant submitted that although the Strata Act operates as a disincentive to litigate strata issues in the courts, such litigation is nevertheless commonplace because matters involving issues under the Strata Act also involve other unrelated issues in respect of which the Tribunal's jurisdiction is lacking or is uncertain.

Section 35 of the NCAT Act

At the conclusion of the hearing of the appeal we invited the parties to make post hearing submissions on the role that s 35 of the NCAT Act may have on our determination of the issues raised in the appeal.
The Appellant's submissions in this respect may be summarised as follows: 1. Section 35 provides that the provisions in Pt 4 of the NCAT Act (which includes s 41) are subject to enabling legislation (which includes the Strata Act). However, s 41, on its face, purports to empower the Tribunal to extend the time period fixed by enabling legislation regardless. If ss 35 and 41 are construed so that s 41 prevails, then it is submitted that the reach of the power under s 41 is qualified by Pt 4's heading - "Practice and Procedure". The power is to extend "the period of time for the doing of anything" only where such period operates as a procedural rather than substantive constraint upon the exercise of rights. 2. "Procedural" constraints include the timeframe for filing applications or appeals per se, but not necessarily constraints upon the existence or enforceability of causes of action. 3. The right to lodge an application or appeal per se is procedural. The Appellant contended, in its principal submissions, that compliance with s 106(6) is integral to the right to damages under s 106(5) and is therefore substantive. 4. Only where the period of time for doing anything under enabling legislation is properly characterised as procedural is the power to extend it under s 41 enlivened. Section 41 does not enable extension of the limitation period under s 106(6). 5. Similar constraints operate under the making of "procedural rules" within the meaning of that expression in s 4 of the NCAT Act. The power to make procedural rules under s 25 is conditioned by the requirements that the rules regulate the practice and procedure of the Tribunal and that they not be inconsistent with enabling legislation. A rule purporting to interfere with, or permit the Tribunal to interfere with, a substantive limitation period in enabling legislation (such as s 106(6)), would be ultra vires on both counts. The Tribunal's rule making power could not be exercised in such a way as to alter the period of time in which a claim for damages under s 106(5) could be made.
The Respondent's submissions with respect to s 35 may be summarised as follows: 1. Section 35 is not of assistance in determining the issue to be resolved in this appeal. It addresses conflicts in provisions that address practice and procedure. 2. Section 106(6) does not provide for applications or appeals to be made to the Tribunal or otherwise enable the Tribunal to exercise functions. Because s 35 relates to matters of practice and procedure, rather than substantive issues, it does not engage s 106 of the Strata Act which is addressed to substantive issues. 3. There is no inconsistency or repugnancy between the relevant provisions of the Strata Act and the NCAT Act given the words "despite anything to the contrary, under… legislation" in respect of which the Tribunal has jurisdiction appearing in s 41.

Consideration

We are of the view that the appeal should be upheld and that order 6 should be set aside. Our reasons follow.
Grounds 1 and 2 of the Notice of Appeal concern the proper construction of the time limit prescribed in s 106(6) of the Strata Act and its relationship with s 41 of the NCAT Act.
In Hua Nan, the Appeal Panel considered and distinguished the judgment of the High Court in David Grant and the decision of the Appeal Panel in S&G Homes Pty Ltd t/as Pavilion Homes v Owen [2015] NSWCATAP 190. In S&G Homes the Appeal Panel held that s 41 of the NCAT Act did not empower the Tribunal to extend the time for bringing proceedings under s 48K(3), (4), (6) and (7) of the Home Building Act 1989 (NSW). The language used in s 48K is to the effect that the Tribunal "does not have jurisdiction" if the application is brought outside the specified timeframe. The Appeal Panel held that the facts referred to in the relevant subsections of s 48K (to the effect that the Tribunal does not have jurisdiction in respect of a building claim lodged more than three years after the date specified in the subsections of s 48K) are preconditions to the exercise of the Tribunal's jurisdiction [52] and are thus jurisdictional facts. The Appeal Panel held that therefore s 41 did not give the Tribunal power to extend time.
At [62] the Appeal Panel in Hua Nan indicated its disagreement, or potential disagreement, with the reasoning in S&G Homes. The Appeal Panel stated that if the Appeal Panel in S&G Homes should be understood as deciding that the temporal element was a jurisdictional fact and if it was then s 41 could not apply, the Appeal Panel in Hua Nan would disagree with that conclusion. At [63] the Appeal Panel in Hua Nan said that if the Appeal Panel in S&G Homes could be interpreted as holding that the Tribunal had no jurisdiction to even consider whether an extension of time should be granted because of the terms of s 48K(3), (4), (6) and (7) of the Home Building Act then the Appeal Panel (in Hua Nan) would respectfully disagree.
It is ironic that the Respondent's submissions seek to invoke the doctrine of precedent and stare decisis (also sometimes referred to as the rule of comity ) for the purposes of submitting that we should follow the Hua Nan decision in circumstances where the Appeal Panel in Hua Nan did not feel similarly constrained. However, it needs to be acknowledged that in both Appeal Panel decisions the issue for determination involved statutory interpretation. The language of the statute in S&G Homes was different to the language of the statute being considered by the Appeal Panel in Hua Nan.
As the Appeal Panel said in Hua Nan there are established principles to be applied when interpreting statutes: see Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28. These principles, summarised at [77] of the Hua Nan decision can be briefly recorded thus: 1. The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all of the provisions of the statute. 2. The process of construction must always begin by examining the context of the provision that is being construed. 3. A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions.
The ratio decidendi of the Appeal Panel decision in Hua Nan is contained in [87] and in [95]. At [87] the Appeal Panel held that s 41 is expressed in broad language and there is no warrant to read its provisions down. At [95] the Appeal Panel held that the use of the phrase in s 41 that the Tribunal may extend time "despite anything to the contrary under that legislation" indicates that s 41 is a provision which overrides anything to the contrary in legislation which confers general jurisdiction on the Tribunal.
However, that Appeal Panel did not consider s 35 of the NCAT Act, a matter to which we will return later.
Section 106(5) provides that an owner of a lot in a strata scheme may recover from the Owners Corporation, as damages for breach of statutory duty, any reasonably foreseeable loss suffered by the owner as a result of a contravention of this section by the owners corporation. The provisions of s 106(1), (2) (3) and (4) provide that the 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. Section 106(6) provides that an owner "may not bring an action under this section for breach of statutory duty" more than two years after the owner first becomes aware of the loss. The phrase "may not bring" was considered by the Appeal Panel in Hua Nan and at [105] the Appeal Panel held that it should take a purposive rather than literal approach to the meaning of that phrase and that, by necessary implication, the words refer to the doing of something within two years which, if not done (or if time were not extended) will prevent the owner seeking damages. We respectfully disagree with the Appeal Panel and take a different view.
The phrase "may not bring" is not substantially different to the relevant phrase considered in the David Grant case. In that case, the phrase was that an application "may only be made" within the relevant period of 21 days.
Following the approach of the High Court in the David Grant case, we are required to consider whether the phrase "may not bring" is to be construed prohibitively or only conditionally prohibitively in the sense that an application brought outside the relevant time may not be brought unless the Tribunal extends time. The provisions of s 106(5) and (6) are to be read together, and the right to bring the action under s 106(5) is available only if brought within the time required by s 106(6). To use the language of the High Court in the David Grant case, the time limit in s 106(6) is an integer or element of the right created by s 106(5). The phrase "may not bring" defines the scope of the cause of action and thus precludes the Tribunal from having jurisdiction to apply s 41 to the question of an extension of time.
A similar conclusion was reached by the Court in R v McNell [1922] HCA 33; (1922) 31 CLR 76, where the Court construed s 37 of the Crown Suits Act 1898 (WA) where the provision stated that "[n]o person shall be entitled to prosecute or enforce any claim or demand under this Part of this Act unless the petition setting forth the relief sought is filed within twelve months after the claim or demand has arisen" and found that: "Sec. 37 differs fundamentally from our ordinary Statute of Limitations. The latter finds a person in possession of a right and a remedy. In some cases it abolishes the right, in others it simply bars the remedy. But in both cases it takes from the person something he already has independently of that statute. In Hurrinath Chatterji v Mohunl Mothoor Mohun Goswami] Sir Richard Couch in the Privy Council said: "The intention of the law of limitation is, not to give a right where there is not one, but to interpose a bar after a certain period to a suit to enforce an existing right." Sec. 37 is a condition of the gift in sec. 22, and unless that condition is satisfied the gift can never take effect. Non-compliance with its terms is not a matter in bar of the claim as in the case of the Statute of Limitations: it is an objection which goes to the foundation of the procedure, and shows that the petitioner is not "rectus in curiâ."" (citations omitted)
We are thus in agreement with the Appellant's submissions in respect of the meaning of s 106(6).
The consequence of this view is that an application brought outside the time required by s 106(6) cannot be prosecuted and must be dismissed.
In this respect we are largely in agreement with the ultimate conclusion expressed by Senior Member Sarginson in Boutenko.
Further, we are of the opinion that the language used in s 41, having regard to other provisions of the NCAT Act, particularly s 35 is not in conflict with our interpretation of s 106(5) and (6).
Section 41 appears in the part of the NCAT Act which commences with the heading "Practice and Procedure". The first section in that part is s 35 and it provides that each of the provisions of Pt 4 is subject to enabling legislation and the procedural rules. Part 4 is divided into six divisions, namely Division 1 headed "Introduction", Division 2 headed "Commencement of Proceedings", Division 3 headed "Participation in Proceedings", Division 4 headed "Conduct of Proceedings", Division 5 headed "Determination of Issues and Proceedings" and Division 6 headed "Information Disclosure". In our view, the provisions of Part 4 do not create or modify causes of action which give rise to the Tribunal having jurisdiction to determine disputes. The Tribunal's jurisdiction arises out of enabling legislation, in this case the Strata Act. Part 4 is concerned with practice and procedure as is evident by the heading and the headings to each of the Divisions. Those headings form part of the Act: Interpretation Act 1987 (NSW), s 35(1). Therefore, they assist in the contextual interpretation of provisions that fall within the Part and the Divisions.
Section 41 provides that the Tribunal may extend the period of time for the "doing of anything under any legislation" but that is then qualified to limit the Tribunal's power to legislation "in respect of which the Tribunal has jurisdiction". If the Tribunal does not have jurisdiction (because, for example, the application is based upon a statutory cause of action limited to the period specified in that legislation - as here) then there is no jurisdiction in respect of which the Tribunal has power to extend time.
In Hua Nan the Appeal Panel held that s 41 is expressed as overriding any provision to the contrary in the legislation which confers general jurisdiction on the Tribunal. With respect, that view is contrary to the express provision of s 35 which, as stated earlier, provides that each of the provisions of Part 4 are subject to enabling legislation.
The importance of s 35 was considered by the Supreme Court in Kaye v Owners Strata Plan 4350 [2022] NSWSC 1386. That case also concerned provisions of the Strata Act but what is relevant for the purposes of this decision are comments made by his Honour Basten J in the context of considering costs. From [78] of the judgment his Honour dealt with the issue of whether costs would be determined by reference to s 60 of the NCAT Act (which is also contained within Part 4) or whether r 38 and 38A of the NCAT Rules govern costs. At [81] his Honour said that it "may appear counterintuitive that a rule can override s 60 of the NCAT Act, which does not state that it is subject to any other provision or rule". At [82] his Honour held that the "key provision for present purposes is s 35" which, in the context of that case, meant that if r 38 and 38A are engaged they operate to the exclusion of s 60. Similarly, here, if s 106(6) of the Strata Act limits the availability of the bringing of the cause of action created by s 106(5) by setting a time limit in the manner it does, its provision operates to the exclusion of s 41.
That view is also consistent with the text of s 41, which is concerned with extending time "for the doing of anything" under legislation. It does not allow the Tribunal to modify the effect of a statutory provision providing that a person "may not bring" proceedings after a fixed time. That phrase, "may not bring" is specific and clearly couched in negative terms, a factor referred to in R v McNell, cited above.
Our view concerning the proper construction of s 106 is, in our view, consistent with the judgment of the Court of Appeal in The Owners - Strata plan no 74232 v Tezel [2023] NSWCA 35 (which, coincidentally, was published on the same day as publication of the Appeal Panel decision in Hua Nan, namely 6 March 2023). That case involved a lot owner's claim against an owners corporation under s 106 for loss of rent and the application was brought outside of the time required by s 106(6). The specific issue before the Court of Appeal was when does the time under s 106(6) commence to run.
At [38] of Tezel her Honour Mitchelmore JA stated that the right to recovery under s 106(5) is "circumscribed, relevantly, by the requirement that the action must be brought within the period prescribed in s 106(6)". Her Honour described the formulation of the subsection by reference to the date of first awareness of the loss, as opposed to the date on which the relevant cause of action accrues is to the benefit of the lot owner suffering the loss. Although an owners corporation will contravene s 106(1) when the common property is no longer operating effectively or has fallen into disrepair, a lot owner may not immediately become aware of that contravention. This may be significant in the case of a latent cause being one which a lot owner may not be expected to be able to discern [39].
At [40], her Honour stated that the period of two years is a "relatively short limitation period" which reflects the broader interests of lot owners constituting the owners corporation as the body that will have to make good any reasonably foreseeable loss a lot owner is found to have suffered as a result of its contravention. Also at [40] her Honour endorsed a submission made by senior counsel for one of the parties to the effect that the two-year period was directed at ensuring that a lot owner cannot delay taking proceedings in circumstances where the people having to make good the loss are also lot owners, and the passage of time may affect their ability, through the owners corporation, to recover that loss from other persons.
The provisions of the Civil and Administrative Tribunal Rules 2014 (the Rules) support our view that s 41 is concerned with matters of practice and procedure. Section 25 of the NCAT Act provides that the Tribunal's Rules Committee (established by s 24) may make rules of the Tribunal not inconsistent with the NCAT Act or enabling legislation for or with respect to: 1. the practice and procedure to be followed in proceedings in the Tribunal, 2. any matter that is, by this Act or any other legislation, required or permitted to be prescribed by the Tribunal Rules.
Rule 4(3) provides that the Rules apply to proceedings in the Tribunal "subject to any provisions of enabling legislation or a Division Schedule for a Division of the Tribunal that are applicable to the practice and procedure to be followed in proceedings of the kind concerned." Rules 23, 24 and 25 provide for the time when certain applications must be made and include words to the effect that unless the Tribunal grants an extension under s 41, an application must be made in the case where enabling legislation specifies the period within which the application is to be made - within the period specified.
In our view, rules 23, 24 and 25 are to be interpreted subject to rule 4(3) which, as stated above, states that the rules apply "subject to any provisions of enabling legislation". Enabling legislation may stipulate a time by which an application is to be made and where such a time is construed as a matter of practice or procedure then that time may be extended under s 41. This is recognised in the final part of the note to s35 (albeit where the note is not part of the Act: Interpretation Act , s 35(2)(c)) where it is said that enabling legislation "may also make provision for matters relating to practice and procedure" including specifying time periods within which applications are to be made. However, where a stipulated time circumscribes a right to make an application in the way s 106(6) of the Strata Act does, then s 41 is not able to be engaged to extend the time required by the enabling legislation.
In the case of s 106 of the Strata Act, there is the provision contained in s106(6) limiting or circumscribing the time by which an application must be made under s106(5).
We finally turn to a consideration of whether we are able to depart from the reasoning contained in the Hua Nan decision or whether we should follow it on the basis that the doctrine of precedent or comity (and the principles encouraging certainty and predictability behind that doctrine) require us to follow the reasoning in Hua Nan.
We have not been provided with an Appeal Panel decision of the Tribunal concerning the contended for requirement that one Appeal Panel should follow the reasoning of an earlier Appeal Panel decision. The decision in Lam v Steve Jarvin was limited to a statement that a member at first instance should follow decisions of the Appeal Panel.
We are of the opinion that we are able to and should depart from the decision in Hua Nan for the following reasons: 1. It is our respectful view that it (i.e. Hua Nan) is wrong in its interpretation of s 106 (particularly s 106(6)) and the relationship of that section to s 41. The Appeal Panel in Hua Nan did not consider s 35 of the NCAT Act. That section would have no work to do with respect to its reference to enabling legislation were the reasoning in Hua Nan to prevail. 2. It is not apparent that the Appeal Panel in Hua Nan had the benefit of prehearing written submissions on the issue of whether s 41 could extend time in the circumstances of that case. The Appellant was not legally represented and it is not clear from the decision that the Respondents addressed the issue by the preparation of prehearing written submissions. 3. The Appeal Panel in Hua Nan did not have the benefit of the views of the Court of Appeal in Tezel in which Mitchelmore JA said that the statutory right to recovery under s 106(5) is "circumscribed" by s 106(6). 4. Nor did the Appeal Panel in Hua Nan consider, as did Mitchelmore JA, the broader interests of lot owners for whom it could be said that the two year period was directed at ensuring that a lot owner cannot delay taking proceedings because to do so may affect the ability of other lot owners to recover from the lot owners owning lots at the relevant time when the breach by the Owners Corporation occurred. 5. If it be the case, as the Respondent contends, that we should not depart from the decision in Hua Nan unless we are of the view that that decision is "plainly wrong" and that there are compelling reasons to depart from that Appeal Panel decision, we are satisfied that those requirements are met. We are respectfully of the opinion that the Hua Nan decision is plainly wrong and that the decision can or might lead to uncertainty adverse to the interests of other lot owners were it the case that the time limit in s 106(6) is open to the possibility of being extended.
Accordingly, we are of the opinion that the appeal should be upheld and that order 6 made at first instance should be set aside. As order 6 is set aside the stay will dissolve.
We make the following orders: 1. Appeal upheld. 2. Order 6 made in proceedings 2022/00433027 is set aside. 3. If the Appellant seeks costs, written submissions must be filed and served within 14 days. 4. If the Respondent opposes an application for costs, its submission shall be filed and served within 14 days following service of the Appellant's submissions. 5. The submissions on costs should include whether the parties consent to or oppose the Appeal Panel making an order dispensing with a further hearing and determining costs on the papers.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar

Amendments 02 July 2024 - Paragraph 94 amended. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 02 July 2024

Crown Suits Act 1898(WA)

(2020) 103 NSWLR 352

The Owners - Strata Plan No 30691 v Pickard

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (9 paragraphs)

Parties

Legislation Cited (5)

Cases Cited (17)

Cited By (3)