The Owners - Strata Plan No. 54026 v UniLodge Australia Pty Ltd

Notice of Appeal and history of appeal proceedings

1. The Notice of Appeal raises four grounds, namely: 1. The Tribunal erred in law in finding the Supreme Court lacked jurisdiction to hear the dispute. 2. The Tribunal erred in law in finding it possessed jurisdiction to hear the dispute. 3. The Tribunal correctly found the respondent filed and served evidence which included report written by a member of the Tribunal, Mr Vadim Topolinsky and correctly identified the legal test to be applied for apprehension of bias, but erred in law by failing to apply it. 4. The Tribunal denied the appellant procedural fairness and denied natural justice by reason of prejudgement and other conduct during the hearing of the application to transfer the proceedings to the Supreme Court.
2. The appellant says leave to appeal should be granted, the order dismissing the transfer application set aside and the proceedings transferred to the Supreme Court pursuant to Sch 4 cl 6 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act).
3. The appellant also says in the Notice of Appeal that leave should be granted because: "The appellant lost a chance, fairly open to it, of securing an order for transfer based on the proper application of the law during a hearing in which, contrary to what occurred below, the presiding member (1) read the affidavit and documentary evidence patiently and carefully; and (2) allowed the orderly development of evidence and submissions.
4. On 3 October 2019, the Appeal Panel made directions for the filing and service of written submissions by the parties. The Appeal Panel also made an order dispensing with a hearing (as permitted by s 50(2) of the NCAT Act) and provided for the application to be "determined on the papers".
5. Each party filed written submissions as directed. However, no transcript of the hearing at first instance was provided in support of the application for leave to appeal.
6. The basis upon which leave to appeal was sought was expanded in the submissions filed by the appellant. In addition to asserting that it had lost a chance, fairly open to it, the appellant also said that the appeal was fairly arguable and that there is an issue of principle, a question of public importance, and a reasonably clear injustice, arising out of an unorthodox hearing.

Consideration

1. There is no dispute that leave to appeal is required.
2. In this regard I note the decision to refuse an application to transfer the proceedings to the Supreme Court is an interlocutory decision, being a decision that does not finally determine the proceedings. Consequently, leave to appeal is required on all grounds: see definition of interlocutory decision s 4 NCAT Act, s 80(2)(a) of the NCAT Act, Hammond v Ozzy's Cheapest Cars Pty Ltd t/as Ozzy Car Sales [2015] NSWCATAP 65 at [23] and following, Carr v Finance Corporation of Australia Ltd (No 1) (1981) 147 CLR 246; [1981] HCA 20 per Gibbs CJ at 248.
3. In respect of the principles applicable to the grant of leave in these circumstances, reference is made by the appellant to the decision of Collins v Urban [2014] NSWCATAP 17 at [71]. That part of the decision in Collins relates to leave to appeal decisions other than interlocutory decisions and the application of Sch 4 cl 12(1) of the NCAT Act. Clause 12(1) does not apply to the present appeal: Champion Homes v Guirgus [2018] NSWCATAP 54 at [31]-[33]. Rather, the general principles applicable to the grant of leave to appeal an interlocutory decision are set out in Champion Homes at [35].
4. Otherwise, the general principles set out in Collins at [80] and following might also have some application.
5. Also relevant to determination of the present application is that it involves the exercise of a discretion as to whether an order should be made transferring proceedings to a court pursuant to Sch 4 cl 6 of the NCAT Act.
6. The appellant raises four grounds in support of its application for leave to appeal. It is necessary to consider the substance of each ground in order to determine whether leave should be granted.
7. Ground 1 is that the Tribunal erred in concluding the Supreme Court did not have jurisdiction to hear the dispute. In support of this ground, the appellant refers to the Reasons at [12]-[14] and says (at para 28 of its submissions) that the Tribunal used the terms "power" and "jurisdiction" interchangeably.
8. The appellant then develops this ground in its submissions at para 33. Referring to the decision of the Supreme Court in The Owners - Strata Plan No 47027 v McGinn [2018] NSWSC 1230, the appellant says that the Supreme Court has jurisdiction to resolve disputes concerning the conduct of meetings of an Owners Corporation. Consequently, the Tribunal was in error in determining the Supreme Court lacked jurisdiction.
9. In this regard, I note that the issues in dispute appear to include whether a person holding a general power of attorney on behalf of a lot owner could "complete and validly lodge an SSMA proxy form on behalf of the lot owner": see respondents' submissions at para 28.
10. At [16] the Tribunal said: … Section 237 involves a statutory power to appoint a strata manager. Unlike [Breecass Pty Ltd v The Owners - Strata Plan No. 61419; The Owners - Strata Plan No. 61419 v Breecass Pty Ltd [2019 NSWCATCD 10], it does not have parallel positions in common law relating to contract and unlike [Lawrence v Gunner; Gunner v Lawrence [2015] NSWSC 1229] there is no issue relating to the status of the parties in equity. The jurisdiction in relation to s 237 of the SSMA is plainly given to the Tribunal. It is a statutory order making power, defined by the terms of the statute that created. The Tribunal is not satisfied that the Supreme Court would have jurisdiction to decide the matter. However, even if it did, like the situation in Lawrence after making the relevant findings and declarations, the Supreme Court would most likely have to remit the matter for the Tribunal to make the order under s 2372 appoint a strata manager to exercise the functions of the Owners Corporation.
11. The Tribunal then continued at [17]: … Further, even if the Tribunal is wrong and the Supreme Court has jurisdiction to decide the application, the Tribunal finds that the grounds raised by the respondent for transfer do not warrant transferred to the Supreme Court.
12. In evaluating the Tribunal's reasons and what the Tribunal meant, the Appeal Panel has regard to the comments of the Court of Appeal of the Supreme Court of New South Wales in New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231, particularly Bell P at [65] and following.
13. In short, the Tribunal concluded that the order making power under s 237 of the SSMA is given to the Tribunal and that there is no power given to the Supreme Court to make an order under that section.
14. The appellant has not made any submissions to the contrary. The appellant's submissions do not suggest that, upon its proper construction, s 237 empowers the Supreme Court to make an appointment under that section.
15. That is not to suggest the Supreme Court may not have power to otherwise appoint an administrator of a body corporate, a matter presently not relevant to the determination of this application. However, no error is demonstrated in respect of the conclusion the Supreme Court has no power to make an order under s 237 of the SSMA.
16. Otherwise, the Tribunal did not conclude the Supreme Court lacked jurisdiction to determine disputes concerning the conduct of meetings of an Owners Corporation.
17. Finally, the Tribunal made clear that even if it was wrong concerning its construction of the SSMA, it would not have exercise a discretion to transfer the proceedings to the Supreme Court. The exercise of this discretion was not the subject of challenge under this appeal.
18. In these circumstances this ground is not made out.
19. Ground 2 is that the Tribunal was incorrect in determining it possessed jurisdiction to hear the dispute. Here the appellant refers to the Reasons at [29]-[30].
20. Again, this ground appears to relate to the question of whether the Tribunal can determine the validity of a vote cast by way of proxy and the appointment of the proxy by a person holding a power of attorney in favour of a lot owner.
21. On this topic, the appellant apparently submitted in the application to transfer (see appellant's submissions paragraph 19 (a)) that: the Tribunal lacked jurisdiction to hear the dispute about the validity of hundreds of proxies and the counting of thousands of vote at several meetings arising out of the chain of entitlement claimed by UniLodge.
22. In the present application for leave to appeal the appellant submitted that "the Tribunal will have to confront the question of whether it has jurisdiction to hear the dispute" and that the "Appeal Panel is in as good a position as the member presiding over any final hearing to determine the issue".
23. The appellant submits that the Reasons "do not engage in any meaningful way with statutory construction, instead reasoning on the form of the claim in the original process as determining jurisdiction" and that "by relying on the form of the claim in the originating process [the Tribunal ignored] the substance and [ignored] the legislation conferring jurisdiction": appellant's submissions at paragraph 29.
24. I do not agree.
25. At [29]-[30] the Tribunal said: 29. Part of the [respondent's] claim in relation to dysfunction of the scheme relates to the Owners Corporation wrongly rejecting proxies when making resolutions about the maintenance and repair works. The [appellant] submits that "hundreds" of those proxies came about by reason of purported misconduct. The [appellant] alleges that an issue in relation to jurisdiction arises because the Tribunal is limited to review of powers of attorney which are enduring and the powers of attorney relied on by the applicant are otherwise. 30. There has been no application for review of powers of attorney under part 5A of the Powers of Attorney Act, 2003 (NSW). This is not an application by the respondent seeking review of the powers of attorney, nor has any such application be (sic) made in the Tribunal or elsewhere. The Tribunal does not find that this is a ground to transfer the proceedings.
26. It is clear from these reasons that the Tribunal identified as an issue in the proceedings whether proxies had been properly voted and/or whether proxies had been improperly disallowed from participating in any appropriate meeting. This may be a relevant issue in order to determine whether or not circumstances existed of a type prescribed in s 237(3) of the SSMA which would permit the making of an order appointing a strata manager under that section.
27. Section 237(3) provides: (3) Circumstances in which order may be made The Tribunal may make an order only if satisfied that - (a) the management of a strata scheme the subject of an application for an order under this Act or an appeal to the Tribunal is not functioning or is not functioning satisfactorily, or (b) an owners corporation has failed to comply with a requirement imposed on the owners corporation by an order made under this Act, or (c) an owners corporation has failed to perform one or more of its duties, or (d) an owners corporation owes a judgment debt.
28. Part of the functioning of a strata scheme involves the Owners Corporation meeting in general meeting to conduct its business. Issues arising at such meetings are resolved by resolution, those entitled to vote being able to speak and/or cast a vote in favour of or against particular resolutions. In this regard there is a power to appoint proxies: see Sch 1 Pt 4 Div 2 of the SSMA.
29. Further, the Tribunal can make orders concerning the conduct of such meetings and whether resolutions have been validly passed and whether a person has been wrongly denied a vote at a relevant meeting: see eg ss24 and 25 of the SSMA.
30. The power under s 24(1) may be exercised "if the Tribunal considers that the provisions of this Act or the regulations have not been complied with in relation to the meeting". Similarly, s 25(2) permits the Tribunal to make orders where a person "was improperly denied a vote on the motion for resolution". Resolving such disputes may include the Tribunal determining issues concerning who is entitled to vote, including by way of proxy, as specified in the SSMA.
31. In some circumstances, this may also include determination of collateral issues concerning whether the appointor of the proxy had the requisite authority.
32. When read as a whole, the Reasons make clear that the Tribunal considered it may be required to determine the issue of validity of proxies and the manner in which meetings had been conducted for the purpose of determining whether circumstances specified in s 237(3) existed.
33. It follows that I am not satisfied any relevant error has been demonstrated.
34. That is not to suggest that the issues raised at the final hearing will not need to be considered in the context of the relief sought in order to determine what, if any, orders the Tribunal has jurisdiction to make and/or should make.
35. Finally, I would add that the fact the Supreme Court has power to determine issues concerning the appointment of proxies does not mean the Tribunal lacks jurisdiction to determine such an issue if necessary to resolve an application for an order it is permitted to make under the SSMA. There are numerous examples where jurisdiction is conferred on the Tribunal permitting it to make orders different to that which a court might make which require it to consider issues also relevant to the exercise by a court of collateral jurisdiction: see eg Steak Plains Olive Farms Pty Ltd v Australian Executor Trustees Ltd [2015] NSWSC 289.
36. Ground 3 relates to the Tribunal incorrectly determining issues of apprehended bias.
37. The issue arises from the fact a part time Tribunal Member, Mr Topolinsky, provided a report in connection with the strata scheme the subject of the present dispute. It may be that he will become a witness in the proceedings although I have not been provided with any relevant evidence.
38. On this ground, the appellant submitted at para 30 that even if Mr Topoloinsky is not called as a witness the Tribunal may be required to evaluate his opinion in order to determine whether the Owners Corporation has breached s 106 of the SSMA.
39. In the context of the refusal to grant the transfer application, the submission appears to be to the effect that a reasonable apprehension of bias arises which might prevent the Tribunal (as a distinct from a particular Member) hearing this claim. In this regard the appellant says the Tribunal's "reasoning in paragraph 22 sits uncomfortably with [its] reasons at paragraph 35 which accept the Owners Corporation's position set out in its application for directions lodged 3 September 2019".
40. In those paragraphs the Tribunal said: 22. The Tribunal rejects the [appellant's] submissions that apprehended bias by the whole Tribunal would require a transfer of proceedings to the Supreme Court. Mr Topolinsky is not being called as a witness in the proceedings. The reports relied on were not provided by Mr Topolinsky for the purpose of an expert report to the Tribunal and he has not and will not be giving evidence to the Tribunal, expert or otherwise. The Tribunal is being asked to consider the conduct of the Owners Corporation and whether it is functioning satisfactorily, including in relation to the obligation to maintain and repair. Further, at present there is no concreting evidence to that set out in Mr Topolinsky reports. The [appellant] has not provided reports addressing the required maintenance and repair. It is noted that the [appellant] is also seeking an extension of time to provide such evidence, but it does not yet exist. Even if such evidence were to be filed, that would not lead to an immediate possibility of an apprehension of bias as the applicant does not intend to rely on Mr Topolinsky's evidence as expert evidence or call him as a witness. In any event, the Tribunal can, if necessary, manage such issues through the constitution of the Tribunal for hearing. … 35. At paragraph 26 of his affidavit, Mr Hodgkison (sic) sets out the steps that have been taken to get expert opinion. The Tribunal is mindful that the [respondent] alleges that this matter has some urgency because of the required repairs, that if necessary, may be dealt with by way of any further interim application. However, having considered the issues, the Tribunal is of the view that the matter should be adjourned to allow the [appellant] to provide its documents and sufficient time to obtain it expert evidence. The [appellant] has sought 2 months and the Tribunal is not satisfied that this is appropriate given the time that has passed. In that regard a short extension of the timetable made by the Tribunal on 19 July 2019 has been allowed and the hearing for 9 and 10 September has been adjourned.
41. In my opinion, there is no relevant error in the manner in which the Tribunal proceeded.
42. In my view, it cannot be correct that a tribunal or court is wholly deprived of a capacity to determine a dispute on the basis of apprehended bias simply because a member or judge of that body may be a witness in proceedings before it. Rather, as the Tribunal indicated in the Reasons, it will be necessary for the Member appointed to constitute the Tribunal for the purpose of any hearing to consider any issues of apprehended or actual bias raised in respect of that particular Member if that occurs.
43. Consequently, no error is shown.
44. Ground 4 relates to a claim of that the Tribunal denied the appellant procedural fairness or that the appellant was denied natural justice by reason of the Tribunal pre judging the issues for determination in the application or other conduct of the Member during the hearing.
45. Reliance is placed on an affidavit of Mr John Hodgkinson, solicitor for the appellant, sworn 24 September 2019. Mr Hodgkinson deposes to matters said to have occurred at the hearing including providing his "impression that the Senior Member was predisposed against the orders sought", that the Senior Member interrupted both Counsel, and that the Senior Member "did not allow the orderly development of evidence and submissions"
46. In support of this ground the appellant refers to the decision of the Court of Appeal in Damjanovic v Sharpe Hume & Co [2001] NSWCA 407. That case dealt with issues of apprehended bias and pre judgement and a judicial officer communicating in an inappropriate way, particularly where one party was not legally represented. In that case the Court described some of the conduct as extraordinary and some comments as unnecessary.
47. The factual matters which Mr Hodgkinson records are challenged by the respondents.
48. The respondents' evidence on this aspect is an affidavit of Ms Helen Kowal sworn 30 September 2019. Ms Kowal's evidence is to the effect that the Senior Member "was not 'interrupting' Mr Doyle Gray" (Counsel for the appellant), that "the Senior Member was extremely patient with Mr Doyle Gray, whose oral submissions were lengthy and somewhat repetitive" and that "the Senior Member did not adopt a 'hostile' tone of voice or use 'dramatic facial expressions'".
49. Significantly, Ms Kowal says directions had been made for the filing and service of written submissions prior to the hearing and that the hearing took approximately two and a half hours to complete, the decision being reserved and published later.
50. In the present case, no submissions have been made about what conduct was inappropriate. No submissions have been made as to why the decision of Damjanovic is relevant in circumstances where both parties are legally represented. At best the Appeal Panel is being asked, in the absence of a transcript of the hearing, to conclude the hearing process of an interlocutory application miscarried on the basis of competing evidence of the lawyers in attendance concerning the Senior Member's demeanour and what was said.
51. This ground is asserted despite the fact that the parties had filed written submissions- presumably setting out their respective contentions in respect of the various matters for determination- and despite the fact that the Tribunal is not a court and is able to inform itself in such manner as it thinks fit (subject to the requirement to afford natural justice and to allow a party a reasonable opportunity to be heard): see s 38(1) and 38(5)(c) of the NCAT Act.
52. The decision that has been made by the Tribunal is an interlocutory decision to refuse a transfer application. The application was rejected because the Tribunal found, on the information then available that it, that the Tribunal could deal with the issues raised in the proceedings and make orders to finalise the dispute under the SSMA. There is no claim the discretion to refuse the transfer application miscarried.
53. In these circumstances this ground is not established.

Orders

1. As I said above, ultimately what orders the Tribunal can make will depend on the claims made and evidence provided by the parties at the final hearing. However, on the material provided in support of the present application for leave to appeal, there is no circumstances warranting the grant of leave.
2. There is no issue of principle, question of public importance, injustice which is reasonably clear or factual findings that were unreasonably arrived at or clearly mistaken nor is there any other matter that would lead me to conclude leave to appeal should be granted.
3. In the substantial application the Tribunal is being asked to determine whether orders should be made under ss 24, 25 and 237 of the SSMA. These are matters clearly within the power of the Tribunal.
4. In effect, the order to transfer the proceedings was for the purpose of the Supreme Court determining particular issues which the appellant thought should be dealt with by the court. However, a determination by the court would not finally resolve the application being brought by the respondents under the SSMA. Ultimately, it was for this reason the Tribunal declined to exercise its transfer powers.
5. It follows that leave to appeal should be refused and the appeal dismissed. 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 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: 29 November 2019