The Owners - Strata Plan No 58068 v Cooper

The decisions under appeal

1. On 18 April 2019, the Owners Corporation lodged proceedings (being SC 19/18982) against the Coopers in the Tribunal seeking the permanent removal of the dog named Angus from the environs of the scheme under s 156 of the SSMA.
2. The Owners Corporation also sought a monetary penalty for alleged non-compliance with by-law 14, under s 147 of the SSMA, following notices to comply said to be given under s 146 by the Owners Corporation on 21 November 2018 and 1 February 2019. The application from the Owners Corporation was later amended (with leave) to change the date on which the notices were given to 22 November 2018 and 6 February 2019, and a third notice given on 18 March 2019 was added. The Owners Corporation later withdrew its case in relation to the first and second notices to comply, but pressed its claim in relation to the third notice, given on 18 March 2019.
3. On 13 June 2019, the Coopers lodged a cross-application against the Owners Corporation, being proceedings SC 19/27422, seeking an order that by-law 14 is invalid, or alternatively, an order requiring the Owners Corporation to pass another by-law stating that owners and occupiers must not keep any animal (with the exception of certain small animals, including small dogs) on a lot or common property without written approval, and that the Owners Corporation must not unreasonably withhold such approval. The substantive relief sought included an order under s 150 of the SSMA declaring by-law 14, as registered on 21 January 2019, to be invalid on and from 21 January 2019; an order under s 150 declaring by-law 14, which was registered on 15 October 1998, to be invalid on and from 30 November 2016; and an order under s 232 of the SSMA that the owners might keep the dog Angus on their lot.
4. In the decision the Tribunal found that the by-law prohibiting animals (except for assistance animals) from being kept in the relevant strata scheme was invalid for different reasoning than in other first instance Tribunal decisions, being Yardy v Owners SP 57723 [2018] NSWCATCD 19 (Yardy) and Roden v SP 55773 [2019] NSWCATCD 18 (Roden).
5. The Tribunal included a lengthy analysis and critique of the reasoning in Yardy. The Tribunal took the view that the reasoning in Yardy "cannot in itself support a conclusion about the continuing validity or otherwise of a "no pets" by-law" (Decision at [72]). The Tribunal noted that, in Roden, the Tribunal "followed Yardy for reasons of comity and factual similarity", in accepting that blanket bans on pets should "be struck down as unconscionable per se under ss 139(1) and 150" because they are "contrary to owners' basic habitation rights" (Decision at [100]).
6. The Tribunal stated that, in enacting the current SSMA, "clearly the legislature intended some encouragement of movement towards a regime where the keeping of pets was a decision on the merits and in the context of a particular strata scheme, with the backup of amenity laws, but without outlawing per se the solution of "no pets"" (Decision at [102]).
7. Based on its views of legislative intent, the Tribunal stated that "a scheme which wishes to have a blanket "no pets" by-law needs objectively to justify that choice in the context and circumstances of the scheme where, and once, that choice is challenged by a particular owner or owners in respect of particular types of pet and where evidence is led that gives a proper basis for that challenge" (Decision at [110]).
8. The Tribunal found that "the owners have demonstrated a proper basis for a case that the nature of Angus, in terms of the personality and behaviour of the type of pet that he is, makes it unpleasant or ungentle in action or effect ("harsh"), unjust or unreasonably excessive or not in accordance with what is just and reasonable ("unconscionable"), and unjustly harsh or burdensome in exercise of power ("oppressive"), simply to ban and seek to expel his type of pet (and types of pet with demonstrated similar characteristics) under a blanket prohibition, rather than rely upon the amenity and conduct by-laws to regulate custody and management under the stewardship of owners of types of pets such as him" (Decision at [115]).
9. According to the Tribunal, the "evidential onus" then fell on the Owners Corporation to "put forward evidence… of the particular strata scheme" that the blanket prohibition is not harsh, unconscionable or oppressive. The Tribunal concluded that the Owners Corporation "has not led sufficient evidence that, when taken with the owners' evidence, removes the proper basis for the owner's challenge to the "no pets" by-law in the context and circumstances of this scheme" (Decision at [116], [118]).
10. Accordingly, the Tribunal determined that the pet owners "satisfied their burden of proving that the blanket prohibition by-law is harsh, unconscionable or oppressive under s 139(1)", and that "an invalidation order under s 150(1) should be applied" to by-law 14 (Decision at [118], [123], [127]).
11. On 6 February 2020, after having received written submissions from the parties in accordance with the timetable set out in orders made on 21 November 2019, the Tribunal ordered the Owners Corporation to pay the Coopers' costs of both proceedings as agreed or assessed (and not to recoup any such costs from the Coopers). This was on the basis that there were "special circumstances" under s 60 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) justifying an order that the Owners Corporation pay the Coopers' costs of the substantive proceedings because they were a "test case" and the Owners Corporation should have capitulated in its claim as soon as it was 'put on notice' by the Coopers.

Notice of Appeal and short history of appeal proceedings

1. An internal appeal to the Appeal Panel from a decision (excluding an interlocutory decision) of the Tribunal lies as a matter of right on a question of law, or with leave on other grounds: s 80, NCAT Act.
2. Leave may be granted under s 80(2)(b) for an internal appeal against a decision of the Consumer and Commercial Division only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice as described in cl 12(1) of Sch 4 to the NCAT Act, and if the Appeal Panel is satisfied that leave should otherwise be granted on the discretionary principles set out in the authorities, eg see Collins v Urban [2014] NSWCATAP 17.
3. On 13 December 2019, the Owners Corporation filed a Notice of Appeal on questions of law, together with an application to stay the original decision pending determination of the appeal. The appeal grounds set out in the Notice of Appeal are: 1) That the Tribunal denied the parties natural justice by deciding the matter on an issue not raised by or addressed by the parties; 2) That the Tribunal failed to consider or properly consider the Owners Corporation's oral and written arguments; 3) That the Tribunal erred in declaring by-law 14 harsh, unconscionable or oppressive; 4) That the Tribunal erred in holding that the Owners Corporation bore an onus to establish that by-law 14 prohibiting the keeping of pets was not harsh, unconscionable or oppressive; 5) That the Tribunal erred in holding that a by-law that prohibits the keeping of pets without distinction is harsh, unconscionable or oppressive unless the Owners Corporation can justify that prohibition in the circumstances of the scheme; 6) In the alternative to 4 and 5 above, that the Tribunal erred in holding that the Owners Corporation did not justify that prohibition in the circumstances of the strata scheme, as the Tribunal did not give sufficient weight to: • The fact that the Coopers bought into the strata scheme knowing that it did not permit pets; • The fact that the strata scheme has maintained a blanket ban on pet ownership since its inception in 1998, and has conscientiously maintained it on every occasion it has been challenged; • The impracticalities of mandating that the strata scheme permit pet ownership in light of the size, location and physical characteristics of the strata scheme.
4. The Notice of Appeal also set out the orders sought by the Owners Corporation, namely that orders 1, 2 and 3 of the Tribunal's decision of 21 November 2019 are set aside; the Coopers remove the dog Angus from their lot in the strata scheme; and Mrs Cooper pay a monetary penalty for contravention of by-law 14.
5. The Owners Corporation did not seek leave to appeal in its Notice of Appeal on the basis that each ground of appeal raises a question of law. Later in the appeal proceedings, the Owners Corporation sought leave to amend its Notice of Appeal to seek leave to appeal on grounds other than questions of law. The position of the Owners Corporation (as clarified in the course of the appeal hearing and in further written submissions after the conclusion of that hearing) was that, to the extent it seeks leave to appeal the Tribunal's decision, it does so on the basis that it may have suffered a substantial miscarriage of justice within the meaning of cl 12(a) or (b) of Sch 4 to the NCAT Act.
6. To support its arguments that the Owners Corporation may have suffered a substantial miscarriage of justice by reason that the decision under appeal "was not fair and equitable" (cl 12(1)(a)) or "was against the weight of evidence" (cl 12(1)(b)), the Owners Corporation sought leave to rely on evidence that was not before the Tribunal at first instance, being certain affidavits and statements from the strata manager and a number of lot owners. That evidence was said to go to two points: first, the reasons that particular lot owners have chosen to live in a pet-free building, and second, complaints that the Owners Corporation received as to the consequences of keeping pets in the building since the publication of the Tribunal's decision on 21 November 2019. In response, the Coopers contended that no legal basis was identified to justify the grant of leave, the Owners Corporation has not explained why this evidence could not have been adduced before the Tribunal below, the relevance of the new evidence is not explained, and the evidence is untested.
7. On 20 December 2019, the Appeal Panel (Deputy President Westgarth) stayed orders 1 and 2 made at first instance (i.e. the orders finding by-law 14 to be harsh, unconscionable and oppressive; and to remove by-law 14) pending determination of this appeal.
8. On 28 January 2020, the Coopers filed their Reply to Appeal "denying" the assertions in appeal grounds 1-6. As to ground 5, they say the Owners Corporation "did not adduce any evidence asserting that pets were unable to be kept in the scheme". As to ground 6, they say that the Owners Corporation did not justify the prohibition contained in by-law 14, noting that the Tribunal considered and gave weight to the question of notice of by-law 14 (Decision at [4]); considered the history of by-law 14 (Decision at [21]-[29]); and considered pet ownership in light of the characteristics of the scheme (Decision at [122]).
9. On 6 February 2020, the Tribunal ordered that the Owners Corporation pay the costs of the Coopers as agreed or assessed. This decision found that special circumstances existed for the purposes of s 60 of the NCAT Act.
10. On 2 March 2020, the Owners Corporation filed amended grounds of appeal (with consent of the Coopers). These include the appeal grounds set out in the Notice of Appeal, together with the following additional grounds: 7) That the Tribunal erred in its application of s 60 of the Civil and Administrative Tribunal Act 2013 (NSW) to the determination of the costs of the substantive proceedings below; 8) That the Tribunal erred in failing to determine the costs of the summons separately from the costs of the substantive proceedings below; 9) That the Tribunal erred in failing to consider whether there were special circumstances for the purposes of s 60 of the NCAT Act in relation to the costs of the summons; 10) That the Tribunal erred in failing to find that there were special circumstances for the purposes of s 60 of the NCAT Act justifying an order that Mr and Mrs Cooper pay the Owners Corporation's cost of the summons.
11. At the appeal hearing on 2 April 2020, we granted leave to the Owners Corporation to amend its grounds of appeal (and the orders the Appeal Panel should make), and leave to the Coopers to amend their Reply to Appeal accordingly. We also gave leave to the Owners Corporation to amend its Notice of Appeal to seek leave to appeal on grounds other than questions of law.
12. It is noted that the appeal hearing on 2 April 2020 took place by telephone link due to the COVID-19 pandemic, as notified to the parties prior to the hearing. There was no objection to this course of action. The appeal hearing was not concluded in the allocated time, and accordingly we gave the parties an opportunity to exchange further written submissions in accordance with a timetable included in the orders we made on 2 April 2020. The parties were also at liberty to apply for a further hearing.
13. At the appeal hearing we referred to the Owners Corporation's proposed order that Mrs Cooper pay a monetary penalty for contravention of by-law 14 in an amount to be determined, and raised with the parties whether the Appeal Panel has jurisdiction to hear an appeal from a decision of the Tribunal in proceedings for the imposition of a civil penalty, given the terms of s 32(3)(d) of the NCAT Act. The parties provided written submissions concerning this issue after the conclusion of the appeal hearing in accordance with the timetable included in the orders made on 2 April 2020.

Submissions from the parties

1. In addition to the Notice of Appeal and Reply to Appeal, we had before us detailed written submissions from the parties, being submissions of the appellant dated 9 March 2020, submissions from the respondents dated 24 March, submissions in reply from the appellant dated 30 March 2020, submissions of the appellant on matters arising at hearing dated 6 April 2020, further written submissions of the respondents dated 8 April 2020, and submissions in reply from the appellant dated 9 April 2020.
2. We refer below to the main points raised by the parties in their submissions in relation to the grounds of appeal, excluding those grounds with respect to the costs decision dated 6 February 2020.

Submissions from the appellant

1. The Owners Corporation submits that the "fundamental error" of the Tribunal's decision below is "that the Senior Member approached the matter before him on the basis that there is something special about pets… such that a blanket ban on pets operates outside the realm of legislative governance that applies to every other kind of by-law". It is further submitted that:

• "That perspective is further infected by the… implicit premise that one person's preference to keep a pet is more important than another person's… preference to live without a pet in the building".
• "A by-law about pets is no different to any other kind of by-law".
• There is nothing in the legislation or model by-laws to support the proposition that a by-law as to pets "occupies some special category that might justify any of these extraordinary measures".
• The Tribunal's reasoning on this point is infected by "presumably unconscious bias".
• Nothing in the decision below "answers the fundamental question as to why it is harsh, oppressive or unconscionable for an Owners Corporation to self-regulate" in relation to the keeping of pets in the strata scheme.
• The Tribunal erred in making an "ipse dixit statement that a ban for a pleasant natured dog is harsh etc", while failing to "grapple with…. why a self-governing polity cannot exercise its free will to ban pets".
• The Tribunal failed to "contemplate, because of his ipse dixit approach, why… a blanket ban [isn't] an arguably fairer way to manage the issue of animals in a strata scheme than a by-law which permits pets with permission from the Owners Corporation or strata committee".
• Undertaking a "thin end of the wedge" exercise illustrates that "within a brief period of time, permission to keep a goldfish can be used to justify an array of companion animals". Here, the Owners Corporation made reference to various types of animals.
• It should not be considered prima facie harsh, unconscionable or oppressive for an Owners Corporation to prefer a blanket ban over "comparing the relative merits of different kinds of pets on the application of owners", particularly in a strata scheme with over 300 lots.
• The fact that lot owners knew of the blanket ban when they moved into the strata scheme, and wilfully defied it, are significant facts in determining whether a by-law is harsh, unconscionable or oppressive.

1. It is then submitted that the Tribunal erred by reversing the onus of establishing that a by-law is harsh, unconscionable or oppressive, only in the context of by-laws prohibiting pets. Here the Owners Corporation said:

• Although this onus "only shifts to the Owners Corporation if an applicant first satisfies an evidential onus", that onus is "set at such a low bar… as to be effectively non-existent".
• There is nothing in the SSMA or case law to support this shift.
• The requirement for the Owners Corporation to "objectively justify" a by-law is a "notion that is devoid of content, imprecise in meaning and incapable of performance". It is inconsistent with the concept that a by-law is delegated legislation and the way it must be construed, reference being made to the decision in The Owners of Strata Plan No 3397 v Tate [2007] NSWCA 207 (Tate) at [34] and following.
• It cannot be correct "as a matter of logic [or] legal reasoning" that an "objective justification" made after a by-law is passed can render a by-law, which is otherwise harsh, not harsh.
• It is doubtful whether an Owners Corporation can "objectively justify" a by-law which is the result of a decision "reflect[ing]… the aggregated votes of [a] group of lot owners who may have vastly different reasons for having cast the same vote" (particularly where there is no mechanism for lot owners to give reasons for their vote, and where there are hundreds of lots owners in a scheme).
• "A strata scheme does not purport to represent or reflect broader social norms or community standards, and nothing in the SSMA compels it to do so".

1. Next, it is submitted that the Tribunal erred in finding that an Owners Corporation must have made a "conscious choice" to impose a blanket ban on pets and that, in the case of an existing prohibition, this requires a "conscious reconsideration". On this issue the Owners Corporation said:

• The fact that an Owners Corporation has decided to adopt a blanket ban, rather than one of the model by-laws, is indication enough that it made a "conscious choice".
• It is unclear what the word "conscious" is intended to mean.
• There is nothing in the legislation to suggest that any different standard should apply to an existing by-law, as opposed to a new by-law, as to whether it is "harsh, unconscionable or oppressive".
• In this case, the Owners Corporation has voted against motions to repeal by-law 14 multiple times, including two meetings where Mrs Cooper addressed the owners prior to the vote. "If this does not amount to 'conscious reconsideration'… it is difficult to imagine what would".

1. The Owners Corporation contends that the Tribunal erred in finding that a blanket ban on pets may be "objectively justified" if owners have clear notice of the by-law, "confirmed by express written acknowledgement… coupled with a written undertaking not to challenge such a by-law" other than by proposing an amendment at a general meeting. The Owners Corporation said:

• This reasoning is "untethered to legal principle, contrary to the legislative framework, unworkable and unnecessary".
• Incoming purchasers are already put on notice of by-laws and taken to consent to their terms.
• Section 135(1)(b) of the SSMA requires that lot owners observe the by-laws in a strata scheme. It is not clear why an owner should be further required to "forfeit his or her legislative rights" to bring an action seeking to invalidate a by-law, or why this should only apply to by-laws about pets.
• This requirement would also be unworkable in practice, as an incoming purchaser typically has no interaction with the Owners Corporation of a strata scheme during the sale.

1. It was further submitted that the Tribunal failed to give sufficient weight to "salient facts" about the strata scheme:

• Instead of acknowledging that other owners may have a "legitimate preference" for living in a building without pets, the Tribunal adopted a "one-sided approach that takes into account only the interests of the Coopers in keeping their pets", notwithstanding that the Coopers purchased their lot in the building knowing it did not permit pets.
• The Tribunal failed to take into account the "particular characteristics" of the building.

1. In relation to grounds 1 and 2, in brief, the Owners Corporation submits that the Tribunal did not hear submissions on a number of matters which informed its reasoning and ultimate conclusion, and that it is an error of law for the Tribunal to adopt a process of reasoning that was never put to the parties.

Submissions from the respondents

1. The Coopers first addressed the "preliminary issue" of whether a cross-appeal was required before challenging the Tribunal's "findings" that Yardy and Roden first instance decisions were wrongly decided. They rejected the observation from the Owners Corporation that a cross-appeal was required before any such challenge, on the basis that a party only appeals from orders, not "findings" (let alone conclusions of law). The Coopers submit that the Appeal Panel should proceed on the basis that the decisions and reasoning in Yardy and Roden, are correct. This was also the Coopers' submissions in the Tribunal below.
2. The Coopers' submissions then proceed to deal with the meaning of the phrase "harsh, unconscionable or oppressive" and whether, on the proven facts, by-law 14 transgresses that legal meaning.
3. In connection with the construction and operation of s 139(1) and 150 of the SSMA the Coopers made the following submissions.
4. The object of statutory construction is to construe the relevant provision consistent with the language and purpose of all the provisions of the statute. In this regard the obligation on a court or tribunal is to determine the "legal meaning that the legislature is taken to have intended". Ordinarily, this legal meaning will correspond with the grammatical meaning of the provision. Reference was made to Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355; [1998] HCA 28 at [69], [78].
5. These principles apply to the phrase "harsh, unconscionable or oppressive", there being nothing to suggest in the legislation that those words do not have the ordinary grammatical meaning.
6. The context in which those words are to be construed is against the Strata Schemes Management Act 1996 (NSW) (repealed) (1996 Management Act).
7. Under the 1996 Management Act: 1. a non-exclusive list of the matters about which by-laws could be made was provided in s 43. This included in respect of the keeping of animals; and 2. clause 17 of the model by-laws, found in the now repealed Strata Schemes Management Regulation 2010 (NSW) (2010 Management Regulation), provided three options in respect of the keeping of animals, one of which was a "blanket prohibition on keeping animals".
8. Under the SSMA: 1. there is no list of matters which could be the subject of by-laws, rather, the SSMA simply provides that by-laws can be made in relation to the management, administration, control, use or enjoyment of the lots or the common property: see s 136(1); 2. the model by-laws in respect of the keeping of animals prescribed in the Strata Schemes Management Regulation 2016 (NSW) (2016 Management Regulation) do not include an option to impose a blanket prohibition on the keeping of animals; and 3. unlike the 1996 Management Act, and its predecessor the Strata Titles Act 1973 (NSW) (repealed), s 139(1) introduced "a limit beyond which by-laws could not be made or amended, notwithstanding they might relate to the management, administration, control, use or enjoyment of the lots or the common property (s 136) and notwithstanding they have the support of a sufficient number of all lot owners to pass a special resolution (s 141)".
9. The Coopers say that, prior to the commencement of the SSMA, the by-law making powers in strata schemes had been construed expansively, and in particular, by-laws that interfered with property rights of lot owners in "quite dramatic ways" were permitted. Reference was made to several cases, including White v Betalli (2007) 71 NSWLR 381; [2007] NSWCA 243 where the Court of Appeal of the Supreme Court of New South Wales (Court of Appeal) determined that a special by-law that created rights in favour of one lot proprietor to use or occupy part of lot owned by another to store small watercraft was not invalid. The Coopers sought to distinguish this decision as being made under the 1996 Management Act, before s 139(1) was introduced, and question whether such a decision would now "survive" the prohibition in s 139(1).
10. Next, the Coopers refer to the reasoning in the first instance Tribunal decisions in Yardy and Roden in construing the phrase "harsh, unconscionable or oppressive" in ss 139(1) and 150, and argue that the Tribunal's criticism of these decisions should be rejected. They say that the process of statutory construction in Yardy and Roden was undertaken in an entirely "orthodox" manner, and that the Tribunal in those two decisions made the following observations: 1. Section 139(1) introduced a standard "markedly different from that which applied under the former legislation, which placed no restrictions upon prejudice or requirement for fairness or any definition of the discretion which an owners corporation had in introducing or amending a by-law". 2. "[W]hen the legislature adopts general standards such as "justness" (in the heading to s 139(1)) and, inferentially, 'harsh, unconscionable or oppressive', it intends courts to apply contemporary community standards about what is 'just' and, inferentially what is 'harsh, unconscionable or oppressive', which standards may vary over time". Reference was made to Perpetual Trustee Co Ltd v Khoshaba [2006] NSWCA 41 (Khoshaba) at [64]. 3. "[I]n considering whether a by-law offends contemporary community standards … one must have regard to the owners' basic habitation rights, and their rights to use and enjoy their respective lots". 4. Definitions in the Macquarie Dictionary assist in determining the meaning of "harsh, unconscionable or oppressive", "harsh" meaning "ungentle or unpleasant in action or effect", unconscionable meaning "unreasonably excessive", and oppressive meaning "burdensome, unjustly harsh, or tyrannical", which extends to a by-law that "does not permit a balanced consideration of the interest of all lot owners or occupiers in the scheme, but rather operates only in the interests of some".
11. The Coopers then submitted that s 157 "does not assist in determining whether a no pets by-law is invalid". That section is concerned with whether "an owners corporation withheld approval unreasonably, when it was only entitled to do so acting reasonably".
12. They said that by-law 14 transgresses the s 139(1) prohibition on harsh, unconscionable or oppressive by-laws for five reasons (the first three of which the Coopers say were correctly analysed in Yardy and Roden):

• First, by-law 14 interferes with the ordinary rights of owners of real property to bring onto and keep on their land such things, including animals, as they see fit, subject to any statutory restrictions.
• Division 3 of Part 8 of the SSMA "implicitly recognises that the keeping of animals on strata lots is an ordinary incident of lot ownership".
• The Tribunal's criticism of the reference in Yardy to a "basic right of habitation" is unjustified.
• Second, by-law 14 is inconsistent with contemporary community standards which promote the keeping of pets in strata lots, seen in the "totality of the reforms" under the SSMA and the associated 2016 Management Regulation, and the expert evidence given at first instance about the "suitability of pets in strata premises and the benefits of pet ownership".
• Third, by-law 14 operates as a blanket prohibition on the keeping of pets, and thus, does not permit a balanced consideration of the interests of all lot owners or occupiers in the scheme. Rather, it operates only in the interests of those opposed to the keeping of pets, and does not allow individual circumstances to be taken into account.
• Fourth, a blanket prohibition on the keeping of pets similarly does not permit a balanced consideration of the particular pet in issue.
• It is difficult to see how the keeping of certain animals - e.g. a fish, or a small hypoallergenic cat or dog - could "in any way affect the use and enjoyment of other lots or common property by other lot owners".
• "Yet by-law 14, by imposing a blanket prohibition on all pets, does not permit any distinction between the inoffensive and the offensive", and in that way, "acts oppressively in the same way as described in Yardy".
• Fifth, although there is a "remote" possibility that a "blanket ban on pets might not be harsh, unconscionable or oppressive in the context and circumstances of a particular scheme", the Tribunal was correct to conclude that the Owners Corporation failed to displace the prima facie position that a blanket ban on pets is harsh, unconscionable or oppressive in the context and circumstances of this scheme.

1. For these reasons, the Coopers submit the Appeal Panel should conclude that by-law 14 is:

• Harsh, because it is a "blunt instrument" which takes no account of the circumstances of particular owners, and has an ungentle or unpleasant effect on owners wishing to keep pets;
• Unconscionable, because it unreasonably and unnecessarily precludes the exercise of a right of habitation which is part of contemporary community standards, and is unreasonably excessive in that it is unbalanced and operates only in the interests of those opposed to the keeping of pets; and
• Oppressive, because it does not involve or permit a balanced consideration of the interests and needs of all lot owners, or the difference in types of pets, providing no process through which an owner would be permitted to keep a pet.

1. In relation to grounds 1 and 2, the Coopers say these appeal grounds are unmeritorious. To the extent the Owners Corporation suggests the Tribunal failed to accord procedural fairness by failing to inform it that the onus might shift, the Coopers contend that the Tribunal's findings about onus were "no more than the orthodox shifting of the evidential burden that occurs during every case as the quality of the evidence adduced by both parties is assessed and ebbs and flows". The other two issues about which the Owners Corporation say they were not informed - that the Owners Corporation might be required to engage in "conscious reconsideration" of by-law 14, and the potential need to obtain undertakings from incoming purchasers - were "obiter musings".

Consideration

1. The Owners Corporation states that all its grounds of appeal raise questions of law. Leave to appeal is sought to the extent that we do not agree errors of law were made by the Tribunal.

The Roden appeal reasons

1. As stated above, this appeal raises similar questions to that in the Roden appeal and Spiers appeal which, at the time of hearing this appeal, were reserved before an Appeal Panel constituted by ourselves and Senior Member Wilson.
2. The parties suggested that when the decision in the Roden appeal and Spiers appeal was published they ought to have an opportunity to make submissions. We do not think this is necessary in the present case.
3. The parties have had a full opportunity to make submissions about all matters raised in the decisions of Yardy, Roden and Spiers appeal as well as in relation to the decision at first instance in the present appeal. They have not been confined in the subject matter about which they can make submissions.
4. During the course of the hearing of this appeal, we raised with the parties the circumstances in which s 139(1) might operate. We suggested three ways in which a by-law might be harsh, unconscionable or oppressive. We also raised the issue of the operation of Sch 3 cl 4 of the SSMA which deals with the savings and transitional provisions relevant to by-laws. Again the parties had an opportunity to make submissions on these aspects.
5. In these circumstances, in our view there is no need to provide a further opportunity for the parties to make additional submissions to the extent they might wish to challenge the Appeal Panel's interpretation of the legislation in the decision on the Roden appeal.
6. As stated above, the decision in the Roden appeal has now been published. In that decision at [5] the Appeal Panel expressed the following conclusions: 1. A by-law prohibiting the keeping of animals that was valid under the former Strata Schemes Management Act 1996 (NSW) (1996 Management Act) is not rendered invalid by reason of the passing of the SSMA. 2. A by-law made under former legislation may contravene s 139(1) and be declared invalid under s 150 of the SSMA if it is harsh, unconscionable or oppressive. 3. A contravention may occur in one of three circumstances: 1. By its terms a by-law may be harsh, oppressive or unconscionable. 2. A by-law may be harsh, oppressive or unconscionable because, by its passing, an owners corporation imposes an obligation upon or removes an existing right from a lot owner. 3. Upon consideration of the particular facts and circumstances of a lot owner that might arise from time to time, an existing by-law may operate in a manner which is harsh, unconscionable or oppressive. 1. The fact a by-law prohibits the keeping of animals does not, of itself, mean that the by-law is harsh, unconscionable or oppressive. 2. In proceedings against an owners corporation under s 150 of the SSMA seeking a declaration that a by-law prohibiting the keeping of animals contravenes s 139(1), there is no general obligation on an owners corporation to prove that it has reviewed that by-law or that such a by-law is objectively justified. 3. In considering whether a by-law contravenes s 139(1), the following matters are relevant: 1. the terms of the by-law, 2. the history of the by-law, 3. the circumstances in which the by-law came to operate on various lot owners (including the circumstances in which any lot owner acquired a legal interest in property in the strata scheme); and 4. the particular circumstances of the applicant that might otherwise demonstrate the by-law is harsh, unconscionable or oppressive. 1. the test under s 139(1) is objective. 2. there is a variable scale of severity, whether the expression "harsh, unconscionable or oppressive" is read collectively or disjunctively and/or whether the section operates in different circumstances. 3. the degree of severity is higher than the standard of "unreasonable".
7. An explanation of the statutory scheme under the SSMA and previous strata legislation, and a summary of the decisions at first instance in Yardy, Roden and Cooper, are set out in the Roden appeal reasons at [39]-[63]. The proper construction of s 139(1) and the approach to be taken in determining an application under s 150 to declare a by-law invalid by reason of its contravention of s 139(1), and the reasons for the conclusions above, is set out in the Roden appeal reasons at [64]-[144].
8. We adopt those reasons.

Specific submissions made by respondents

1. It is necessary to consider the specific submissions made by the parties, particularly the Coopers, in this case.
2. The principles of statutory construction are not in dispute.
3. Section 139(1) prohibits by-laws that are harsh, unconscionable or oppressive. It is not in dispute that this is an additional statutory limitation on the power to make by-laws to those expressed in earlier legislation. However the courts have previously recognised that concepts such as oppression or fraud on the minority may operate in the context of strata schemes: see eg Young v Owners - Strata Plan No 3529 (2001) 54 NSWLR 60; [2001] NSWSC 1135 at [45].
4. Despite s 139(1), as was said in the decision in the Roden appeal reasons (eg at [139]-[142] and [185]), a by-law made prior to the commencement of the SSMA is taken to be a valid by-law on commencement of that Act.
5. The Coopers accepted at the hearing that s 139(1) might operate in the three circumstances set out in the summary from the Roden appeal reasons above, although their Counsel said there may be other circumstances to which the section might apply.
6. The Coopers submitted that the Legislature had adopted general standards of "justness", referring to the heading in s 139(1), which should, inferentially apply in the context of deciding what is harsh, unconscionable or oppressive. In doing so, they relied on Khoshaba, a decision of the Court of Appeal which considered the expression "unjust in the circumstances" in connection with proceedings under the Contracts Review Act 1980 (NSW). There, the Court said at [64]: When the Parliament adopts so general, and inherently variable, a standard as that of 'justness', Parliament intends for courts to apply contemporary community standards about what is just. Such standards may vary over time, particularly over a period of two decades.
7. As the Appeal Panel said in the Roden appeal reasons at [103] and following, the use of the heading to s 139(1), "By-law cannot be unjust", to interpret the meaning or breadth of the operation of s 139(1) of the SSMA is inappropriate and unnecessary. The heading does not form part of the SSMA and provides no basis for importing general notions of "justness" into the expression "harsh, unconscionable or oppressive". In our view, there is no relevant ambiguity or other circumstance of the type contemplated by s 34(1) of the Interpretation Act 1987 (NSW).
8. Rather, the expression "harsh, unconscionable or oppressive" must be given its proper meaning in the context in which it is used.
9. It follows, in our view, that reference to cases such as Khoshaba provides little or no assistance in determining the factors that might be relevant in determining whether a by-law is harsh, unconscionable or oppressive.
10. We will deal with the Coopers' submissions concerning why the by-law is invalid under five headings.

Ordinary rights

1. The Coopers' submission is premised on there being a right to keep animals on strata lots which is "an ordinary incident of lot ownership". Reference is made to s 158 of the SSMA which permits the removal of an animal otherwise allowed to be on lot or common property where that animal is causing a nuisance or otherwise where the circumstances of that section are made out.
2. The Coopers said that the "basic habitation rights" referred to in Yardy "meant no more than the ordinary right that is conferred by the ownership of land to use and enjoy that land".
3. In making this submission, the Coopers accept that "the rights of lot owners in Strata schemes to exercise all the fundamental rights of the property associated with ownership of land are circumscribed by the [SSMA]".
4. As the Appeal Panel said in the Roden appeal reasons at [85] and following, what is properly understood as a "right" in the context of the keeping of animals is the ability to choose whether or not to keep or permit animals on land, subject to other constraints imposed by law, for instance in respect of guide dogs and assistance animals. This choice arises in respect of all things that may lawfully be permitted or prohibited on land as an incident of ownership.
5. In a community living situation under the SSMA, where management is vested in the body corporate under s 9, that choice is permitted to be made through the making of by-laws. Such a choice is made at the time of registration of the strata scheme by the developer or promoter of that scheme or by the owners corporation in general meeting after the strata scheme is registered. The fact of choice does not, of itself, mean that a particular by-law is harsh, unconscionable or oppressive. That includes a by-law that operates by way of prohibition.
6. A by-law that prohibits of the keeping of animals in a strata scheme is not, of itself, impermissible under the SSMA. Indicators confirming this are: 1. s 139(5) which makes impermissible a prohibition on keeping of an assistance animal but does not otherwise prescribe the terms upon which a by-law concerning the keeping of animals might be made; 2. s 156 which permits the Tribunal to make an order for the removal of an animal "if the Tribunal considers that the person is keeping an animal on the parcel in contravention of the by-laws"; and 3. s 157 which only permits the Tribunal to make an order to allow a lot owner to keep an animal where "the by-laws permit the keeping of an animal with the approval of the owners corporation and provide that the owners corporation cannot unreasonably withhold consent to the keeping of an animal" but not otherwise.
7. It follows that the fact a by-law prohibits the keeping of animals does not, of itself, render that by-law harsh, oppressive or unconscionable, even though an individual lot owner may be prevented from making his or her own choice about whether to keep an animal.

Contemporary community standards

1. The Owners Corporation's position is that the Tribunal in Cooper rejected the reasoning in Yardy, a matter not challenged by the Owners Corporation in this appeal. This would appear to include the use in Yardy of contemporary community standards as being relevant to or a yardstick by which a by-law in respect of keeping of animals might be judged as being harsh, unconscionable or oppressive under s 139(1) of the SSMA.
2. In Cooper at [63]-[71], the Tribunal referred to the findings made in Yardy at [33]-[34] and said that neither the expert evidence or the content of the Second Reading Speech or Department of Fair Trading position paper (position paper) referred to in Yardy supported a conclusion that the right to keep an animal was part of contemporary community standards or that the Second Reading Speech and position paper were material properly to be considered under s 34 of the Interpretation Act in resolving any question of interpretation.
3. Consequently, in this appeal, the Owners Corporation submitted that the Appeal Panel "should proceed on the basis that there is nothing per se harsh, unconscionable or oppressive in the fact a by-law maintains a blanket ban on the keeping of pets".
4. The Coopers' submission had two aspects.
5. First, the Coopers said that the decision in Yardy at [33] and [63] "disclosed a recognition of contemporary community standards concerning the benefits to humans of appropriate and thoughtful pet ownership". In this regard, the Coopers submitted the reforms under the SSMA were intended: 1. to address concerns raised during the reform process that pet ownership was unreasonably restricted in many schemes (reference being made to the position paper); and 2. to make it easier to amend the by-laws to enable schemes to become more pet friendly (reference being made to the Second Reading Speech).
6. The Coopers say that, properly understood, the use of this material by the Tribunal in Yardy was "as part of the factual enquiry, not as part of its interpretation of the meaning of s 139(1)". It was used as material to identify the contemporary community standards by which the validity of the by-law in issue would be assessed. The Coopers submitted that the Tribunal could use this material as it was not bound by the rules of evidence and may enquire and inform itself in such manner as it thinks fit: s 38(2) of the NCAT Act.
7. The Coopers say that the fact model by-laws in the 2016 Management Regulation do not now have an option for the prohibition of the keeping of animals and the terms of Options A and B as now prescribed, is confirmation that by-law 14 does not meet contemporary community standards.
8. We do not accept these submissions.
9. The submissions assume that contemporary community standards are relevant considerations as a matter of fact in determining whether a by-law is harsh, oppressive or unconscionable and that the position paper and the Second Reading Speech are material properly referenced in deciding what contemporary community standards are.
10. As the Coopers said in their further submissions in reply dated 8 April 2010, it can be accepted that the meaning of the expression "harsh, unconscionable or oppressive" may be protean in nature, its meaning in part being informed by the common understanding of those words in the community from time to time. However, in our view, the importation of a test requiring the Tribunal to determine an application under s 150 by reference to "contemporary community standards" concerning the keeping of animals is not warranted or appropriate having regard to the text of s 139(1).
11. For the reasons set out above and as said in the Roden appeal reasons at [103] and following, s 139(1) does not involve a consideration of a broader notion of what might be "unjust". Nor does the section suggest contravention is to be determined by reference to the general benefits to or expectations of the community at large concerning the keeping of animals. A by-law only operates within a limited community and must be considered in this context: see McColl JA in Tate at [42] referring to the decision of Dowsett J in Re Taylor [1955] 2 Qd R 546 where the Court defined a by-law as "a law or ordinance dealing with matters local or internal regulation, made by a local authority, or by a corporation or association".
12. Unlike s 149(1)(c) of the SSMA (which relates to common property by-laws and the conditions that might be imposed), s 150 does not require the Tribunal to have regard to the general concept of "unjust" when determining an application to declare a by-law invalid because it is harsh, unconscionable or oppressive.
13. Further, the text of the SSMA might be compared with that found in the Contracts Review Act. That Act requires the Court, "[i]n determining whether a contract or a provision of a contract is unjust in the circumstances relating to the contract at the time it was made, [to] have regard to the public interest and to all the circumstances of the case": see s 9.
14. The language of s 139(1) is different in its terms and in its context. There is no requirement for those registering a strata scheme to consider the interests of the community at large. There is no requirement for lot owners to consider what is acceptable for the community at large when making by-laws regulating the use and occupation of their lots and common property in a strata scheme. The fact a choice is made to pass a by-law to permit or prohibit particular activities on lot or common property does not of itself demonstrate s 139(1) has been contravened.
15. Once it is accepted that choice is permissible by the registration of a strata scheme imposing a prohibition on the keeping of animals or, after registration, by an owners corporation in general meeting and that such choice includes the power to prohibit certain things on lot or common property, there is no reason to conclude that a diversion from broader community standards (which might permit or prefer a different choice) would, of itself, render such a by-law invalid because it was harsh, unconscionable or oppressive.
16. The fact the Legislature has decided, in regulating for model by-laws, to exclude what was formerly known as Option C (being a by-law prohibiting the keeping of animals other than fish) does not otherwise assist the Coopers. There is no requirement for a strata scheme to adopt the model by-laws, nor is there any legislative prohibition preventing regulating for a model by-law in the form of Option C in the future: see s 10(1)(b) of the Strata Schemes Development Act 2015 (NSW) (2015 Development Act) and s 138 of the SSMA.
17. Rather, all that the Legislature has done is to provide that new and existing schemes that wish to adopt the model by-laws may choose a by-law permitting the keeping of animals: 1. on lots without the need for approval but on certain conditions (Option A); or 2. on lots and common property, but only with the approval of an owners corporation that cannot be unreasonably refused (Option B).
18. The second aspect of the Coopers' submissions concerns the evidence given by Ms Thorpe, a dog trainer and behaviourist, who gave evidence concerning the suitability of pets in strata premises and the benefit of pet ownership.
19. The Coopers said this evidence was wrongly rejected by the Tribunal and constituted evidence of contemporary community standards.
20. Whether or not this is correct, as we have explained above we do not accept that the test of whether a by-law is harsh, unconscionable or oppressive is to be judged simply by considering whether the majority of people in the community at large consider the keeping of an animal should be permitted. In the context of a strata scheme, the relevant community is the lot owners of that scheme.
21. Further, in a strata scheme which has a by-law prohibiting the keeping of animals, it is difficult to see how the simple fact a particular animal is suitable for living in a strata scheme environment, that the animal is unlikely to create a nuisance, or that there might generally be benefits from pet ownership, would render a by-law harsh, unconscionable or oppressive. This is particularly so where a lot owner has made a decision to acquire a lot and assumed the benefits and obligations imposed by existing by-laws as provided under the SSMA.

Balanced consideration of the interests of all lot owners or occupiers

1. The Coopers submit that a blanket ban on the keeping of animals "does not permit a balanced consideration of the interests of all lot owners or occupiers in the scheme, but rather operates only in the interests of those opposed to the keeping of pets." It is submitted that regard must be had to the competing interests of those wishing to keep pets and that there must be a mechanism within the by-law for a consideration of those interests on a case-by-case basis.
2. This submission, taken to its logical conclusion, would mean that any time a choice was made upon registration of a strata scheme or subsequently in general meeting to make a by-law to prohibit or permit particular use and enjoyment of lot or common property, such a by-law would be harsh, oppressive or unconscionable because a lot owner with different views asserts he or she is adversely affected. This would include by-laws concerning the type of gardens, window furnishings, the colour of painted walls on balconies constituting lot property and decisions granting special use rights over common property.
3. We do not accept this submission.
4. This is because, in resolving any dispute about whether the by-law is harsh, unconscionable or oppressive, such an approach would impose an interpretation of s 139(1) that gives priority to the choice an individual might make despite the majority of lot owners taking a different view and without regard to the history of the strata scheme and the circumstances by which the individual became bound by the by-laws.
5. A by-law is the expression of a choice made by an owners corporation in general meeting and, to the extent permitted by the SSMA, constitutes a rule which applies to all lot owners in a strata scheme. A by-law which does not permit a subsequent review of its operation other than by its amendment by special resolution is not, by reason of that fact alone, a by-law which is harsh, unconscionable or oppressive.
6. While a by-law that has an impact on a person in a particular way may be considered harsh, unconscionable or oppressive, all the circumstances in which that impact came about must be considered in determining whether s 139(1) is contravened.
7. Cases referred to by the Coopers do not assist them. In their submissions, they refer to the decision of the High Court in Lange v Australian Broadcasting Corporation (1997) 189 CLR 520; [1997] HCA 25 where the Court said at [564]: Under a legal system based on the common law "everybody is free to do anything, subject only to the provisions of the law".
8. That is because the SSMA is an Act regulating the rights of lot owners between each other. So much is clear from the Act and the case law to which we have referred. The SSMA permits the making of by-laws that affect the rights of lot owners.

Balanced consideration of the particular pet

1. The Coopers' submission under this heading is to the effect that a by-law that does not permit keeping "small animals" or animals that might "ordinarily be unobjectionable" should be taken as harsh, unconscionable or oppressive.
2. The Coopers relied on the decision of the High Court in Ainsworth v Albrecht [2016] HCA 40 (Ainsworth) at [63]-[64] where the plurality said: opposition to a proposal that could not, on any rational view, adversely affect the material enjoyment of an opponent's property rights may be seen to be unreasonable.
3. By analogy, the Coopers submitted: … the underlying purpose of by-laws is to facilitate and protect the interests of lot owners in the use and enjoyment of their own lot and common property. By-laws ought not be used simply to impose rules and enforce philosophies about how other Lot owners should use and enjoy their lot. That is, where a by-law does not affect a lot owner's or a majority of lot owners' material enjoyment of their own lot but does adversely affect an individual wishing to act contrary to a by-law, such circumstances "weighs powerfully against the submission that the by-law is not harsh, unconscionable or oppressive".
4. Reference is made to particular types of animals, including the keeping of goldfish or axolotl a quiet, small, hypoallergenic bird, cat or dog (which might be innocuous) as opposed to a poisonous snake kept in the lounge room.
5. There are a number of problems with this submission.
6. First, Ainsworth concerned a decision originally made by an adjudicator under in Body Corporate and Community Management Act 1997 (Qld). There the High Court considered Schedule 5 of the that Act including Item 10, which provides: If satisfied a motion ... considered by a general meeting of the body corporate and requiring a resolution without dissent was not passed because of opposition that in the circumstances is unreasonable - an order giving effect to the motion as proposed, or a variation of the motion as proposed.
7. As can be seen, Item 10 is concerned with the conduct of individuals who are entitled to vote and the adjudicator was required to determine whether or not the opposition of the individuals was unreasonable. It allowed an adjudicator to make an order giving effect to a motion which required unanimity in circumstances where the opposition to the motion was unreasonable.
8. Section 139(1) is not concerned with the exercise of voting rights, but rather whether the by-law is itself harsh, oppressive or unconscionable.
9. However, as we have said above and as indicated in the Roden appeal reasons, that does not mean that the prohibition imposed by a by-law passed by a requisite majority of an owners corporation in general meeting which had the effect of removing an existing right from a lot owner could not contravene s 139(1).
10. Secondly, the reasons of the High Court (which concerned Queensland strata legislation) do not suggest that the fact the by-law may prevent an individual lot owner from enjoying his or her lot in a particular manner itself was unreasonable, let alone harsh, unconscionable or oppressive.
11. Thirdly, whether or not a particular animal might be regarded as "inoffensive or offensive" is not, of itself, a reason why a by-law preventing the keeping of animals is harsh, oppressive or unconscionable.
12. As was pointed out in the Roden appeal reasons, by-laws for a strata scheme are registered and the rights and limitations of ownership in the particular strata scheme are, in part, recorded in the by-laws. Lot owners acquire their interest in a strata scheme in the knowledge of existing by-laws and the limitations thereby imposed. Strata schemes provide the means by which a community with particular rules might be created, whether residential, commercial or mixed-use. As with other aspects of community living, this inevitably involves a choice of how people wish to live, including with or without animals.
13. It follows that the exclusion of all or particular types of pets would not, of itself, render a by-law harsh, unconscionable or oppressive.
14. Accordingly, we do not accept this submission.

Prima facie position that blanket pet ban is harsh, unconscionable or oppressive

1. This submission is to the effect that the Coopers had established a blanket ban on pets is harsh, unconscionable or oppressive in the context and circumstances of the particular strata plan, which was not displaced by the Owners Corporation. The Coopers relied upon the findings by the Tribunal in Cooper at [101]-123].
2. In doing so, the Coopers accepted that the expression harsh, unconscionable or oppressive "must be applied to a by-law 'in the context and circumstances of a particular scheme'".
3. In Cooper at [118] and [123] the Tribunal said: 118 In the present challenge the OC has not led sufficient evidence that, when taken with the owners' evidence, removes the proper basis for the owner's challenge to the "no pets" by-law in the context and circumstances of this scheme. The owners accordingly have satisfied their burden of proving that the blanket prohibition by-law is harsh, unconscionable or oppressive under s 139(1). … 123 Accordingly, on the facts as presented in this case, I find under SSMA s 139(1) that the owners have established that both the "no pets" by-law that pre-dated the 2018 AGM and the replacement by-law passed at that AGM which effectively re-affirmed the preceding by-law in substance (with the necessary change for an updated legislative reference) were harsh, unconscionable and oppressive under SSMA s 139(1).
4. The evidence of the Coopers was about the "nature of Angus" and his type of animal. Of this evidence, the Tribunal said at [115]: On the facts objectively assessed in the present case, the [Coopers] have demonstrated a proper basis for a case that the nature of Angus, in terms of the personality and behaviour of the type of pet that he is, makes it unpleasant or ungentle in action or effect ("harsh"), unjust or unreasonably excessive or not in accordance with what is just and reasonable ("unconscionable"), and unjustly harsh or burdensome in exercise of power ("oppressive"), simply to ban and seek to expel his type of pet (and types of pet with demonstrated similar characteristics) under a blanket prohibition, rather than rely upon the amenity and conduct by-laws to regulate custody and management under the stewardship of owners of types of pets such as him. "in terms of personality and behaviour of the type of pet that [Angus] is, makes it unpleasant or ungentle in action or effect ("harsh)".
5. In our view, the Coopers' submissions highlight the error made by the Tribunal.
6. As disclosed by the Tribunal's reasons, its conclusion was based on the evidence concerning Angus and the nature of his breed and its suitability for living in a strata scheme. However, the analysis does not take account of all of the circumstances relevant to a determination of whether or not by-law 14 was harsh, unconscionable or oppressive. Rather, the Tribunal focused upon one piece of evidence, a view concerning a shifting onus of proof, and whether or not the evidence provided by the Coopers should be rejected.
7. In addition to its findings concerning the dog, the breed, and the benefits of pet ownership, the following facts were found by the Tribunal: 1. The Coopers purchased a lot in the strata scheme and have resided there since July 2015: Decision at [4]. 2. Mrs Cooper knew, before she purchased her lot, of the existence of a by-law preventing the keeping of animals: Decision at [4]. 3. From the date of purchase of their lot until about January 2016, the dog resided with Mrs Cooper's sister, not on her lot: Decision at [6]. 4. In about January 2016, Mrs Cooper brought the dog onto her lot. The dog was concealed in a bag when entering and leaving the building: Decision at [6]. 5. In about August 2018 the dog was walked in and out of her lot on a lead and travelled across common property. This was because the dog had suffered an injury which prevented him from being carried: Decision at [7]. 6. It was not until October 2018 that Mrs Cooper notified the Owners Corporation that the dog was living on the lot. At that time she "invited the Owners Corporation to discuss any reasonable concerns about that or taking Angus through common property": Decision at [7]. 7. The dog urinated on common property in about October 2018. At this time a surveillance camera recorded the events, including Mrs Cooper cleaning up some of the soiling and cleaners otherwise attending to cleaning the common area of the property: Decision at [8]-[9]. 8. Mrs Cooper unsuccessfully sought to have the Owners Corporation pass by-laws to repeal the "no pets" by-law and replace it with a by-law that might permit her to keep a dog at EGMs of the Owners Corporation on 15 September 2015 and 20 February 2015 and at the AMG in December 2018. All of these resolutions were defeated: Decision at [10]. 9. On 18 April 2019 the Owners Corporation commenced proceedings against the Coopers seeking an order for removal of the dog and for a penalty to be imposed. This followed the issue of various notices to the Coopers to comply with by-law 14 which were given under s 146 of the SSMA. Those notices were dated 22 November 2018, 6 February 2019 and 18 March 2019: Decision at [11]. 10. The dates of the contravention were, respectively, 13 November 2018, 26 November 2018, 27 November 2018, 29 November 2018, 1 December 2018, 2 December 2018, 3 December 2018, 5 February 2019 and 6 February 2019: Decision at [12]-[14].
8. The Tribunal rejected as hearsay evidence that Mrs Cooper had been told by other residents in the strata scheme "that pets were tolerated if they were snuck in and out of the building and were not troublesome". However, the Tribunal did note there was "some direct evidence of observation of pets being kept in the building in other witness statements, and of a casual comment at the 2018 annual general meeting about pets being tolerated if hidden": Decision at [5].
9. The Tribunal also found at [5] of the Decision: The formal position of the [Owners Corporation], expressed in the consistently-maintained by-law, was clear.
10. These facts reveal that the Coopers bought their lot in 2015 knowing they could not keep the dog on their lot or on common property in the scheme constituted by the strata plan SP 58068. Mrs Cooper brought her dog onto her lot and across common property some time after the Coopers purchased the lot, the dog having resided with Mrs Cooper's sister until 2016.
11. Despite the prohibition on the keeping of a dog, and without notice to the Owners Corporation, Mrs Cooper concealed her dog, kept it in her lot and transported the dog across common property in a bag for a period of up to 2 ½ years. It was not until the dog suffered an injury in about August 2018 that Mrs Cooper openly walked the dog across the common property on a lead. Further, it was not until 18 October 2018 that Mrs Cooper had discussions with the Owners Corporation to discuss the keeping of her dog on the lot.
12. Although the Tribunal recorded that there was some direct evidence about pets being kept by other residents and of some casual comments at an annual general meeting of the Owners Corporation, it is clear from the outcome of various resolutions proposed by Mrs Cooper that the majority of lot owners in the Owners Corporation consistently maintained their opposition to the keeping of animals and the preservation of the prohibition now found in by-law 14.
13. There was no evidence to suggest the Owners Corporation in general meeting, through its strata committee or otherwise, approved the keeping of the Coopers' dog.
14. There is no evidence to suggest there is any medical, psychological or other need of the Coopers which, in the circumstances of the particular case, would render the by-law or its operation harsh, unconscionable or oppressive.
15. In our view, the evidence does not demonstrate the by-law, by its terms, having regard to the circumstances in which it came to operate or having regard to the particular circumstances of the Coopers, could be considered harsh, unconscionable or oppressive.
16. The evidence concerning the qualities of Angus, the breed of dog, and the benefit of pet ownership, is not sufficient to demonstrate the by-law by its terms or its operation is harsh, unconscionable or oppressive. There is no suggestion that the dog is an assistance animal as provided in s 139(6) of the SSMA or otherwise is permitted to stay because of some other law.
17. The simple facts are that the Coopers chose to purchase a lot in a strata scheme that did not permit the keeping of animals. They commenced residing at the scheme appreciating this fact. At that time their dog was not present.
18. They purchased their lot at a time when the 1996 Management Act was still in force. Thereafter, they unsuccessfully challenged the by-law and then, after commencement of the SSMA, sought to have the by-law declared invalid.
19. The Tribunal's failure to consider all the relevant facts and circumstances constitutes an error of law: see eg Ainsworth per Nettle J at [94] and following.
20. While Ainsworth concerned different legislation, not presently relevant, as explained in the Roden appeal reasons at [130] , in determining an application under s 150 of the SSMA, the terms of s 139(1) and its context requires the Tribunal to have regard to: 1. the strata scheme, its history and that of the by-law, 2. the position of all lot owners including the Coopers, 3. the circumstances in which the Coopers acquired their lot, and 4. any other particular circumstances of the Coopers, that might otherwise render the by-law harsh, unconscionable or oppressive in the circumstances.
21. The question of invalidity is not resolved by simply considering a shift in the evidential burden concerning a particular dog, the breed of dog, or the benefits of pet ownership. Nor is the absence of evidence from an owners corporation justifying a particular by-law determinative of the question. Rather, all the relevant facts as found by the Tribunal must be considered in determining whether s 139(1) has been contravened.
22. The question of whether the facts fully found fall within a statutory enactment properly construed is a question of law: Hope v Bathurst City Council [1980] HCA 16; (1980) 144 CLR 1 at 7 (Mason J).
23. Whether considered separately or collectively, in our view none of the facts as found would lead to the conclusion that the by-law is harsh, unconscionable or oppressive by its terms or the manner in which it operates on the Coopers.
24. It follows from the above that we are satisfied grounds 3, 4 and 5 of the Notice of Appeal are made out and that the appeal should be allowed. This is because: 1. the facts as found do not support a conclusion that s 139(1) has been contravened and should be declared invalid (ground 3); and 2. the Tribunal was required to consider all relevant circumstances in deciding whether s 139(1) was contravened, there being no obligation on the Owners Corporation to provide reasons justifying a by-law otherwise permitted by the SSMA (grounds 4 and 5).
25. Whether or not by-law 14 might be a "blunt instrument" because it operates as a universal ban does not, of itself, lead to the conclusion that the by-law is harsh. Further, the circumstances of the Coopers who acquired their lot knowing of the prohibition and what has occurred since they acquired their lot does not provide a basis for a declaration of invalidity. The fact of prohibition when considered against the facts above does not demonstrate the by-law is unconscionable nor does the unavailability of a discretion to permit particular pets demonstrate the by-law is oppressive.
26. There are many considerations that, theoretically, might bear upon the question of whether a by-law is harsh, unconscionable or oppressive. As explained in the Roden appeal reasons at [135]-[136], theoretical arguments about types of pets, the value of lots, and the absence of discretion, provide little assistance in resolving a dispute concerning a particular by-law. Such arguments divert attention from the particular strata scheme, the circumstances in which it came into existence, and the circumstances of all lot owners (including the lot owner challenging a by-law). It leads to the result that, in a community living situation, the majority cannot choose what is permissible and impermissible in a particular strata scheme despite the SSMA permitting them to do so.
27. Further, if accepted, such approach would lead to the result that even where lot owners in a strata scheme were unanimous in passing a by-law imposing a prohibition or restriction, a by-law would be susceptible to challenge by a subsequent lot owner who acquired his or her lot with knowledge of the limitation simply because that lot owner's views were not in conformance with the provision of any by-law that existed at the time he or she purchased the lot.
28. For these reasons, the appeal should be allowed.

Remaining grounds of appeal

1. It is unnecessary for us to deal with the remaining grounds of appeal, and we think that it is not appropriate that we do so. Those remaining grounds of appeal included further errors of law as well as grounds for which leave is required.
2. However, in relation to grounds 1 and 2 (procedural fairness grounds) we note the matters about which the Owners Corporation says it was denied an opportunity to be heard have now been the subject of argument in this appeal and have been dealt with in these reasons as necessary.

Admission of fresh or further evidence

1. We indicated earlier that the Owners Corporation sought leave to rely on fresh evidence in the appeal, including affidavits from the strata manager and a number of lot owners. We did not understand the Owners Corporation to assert that such fresh or further evidence pertained to alleged errors of law, and that such evidence should be received in the exercise of our discretion on that basis.
2. As we have found for the Owners Corporation on questions of law, consideration of the application for leave to appeal on other grounds is not required. Accordingly, there is no need for us to consider whether the Owners Corporation should be permitted to adduce fresh or further evidence in support of its application for leave to appeal, or to consider any such evidence if received. There is also no need for us to consider whether there are grounds to warrant a new hearing under s 80(3) of the NCAT Act.

Civil penalty contravention

1. The Owners Corporation in its Notice of Appeal sought an order under s 147(1) of the SSMA that Johanna Cooper pay a monetary penalty in an amount to be determined for contravention of by-law 14 from 18 March 2018, being the date the Owners Corporation gave her a notice to comply. This raised the issue of whether the Appeal Panel can entertain that part of the appeal relating to payment of a monetary penalty under the SSMA.
2. At the hearing of the appeal, we raised with counsel representing the parties the question of whether the Appeal Panel has jurisdiction, in light of s 32(3)(d) of the NCAT Act, to entertain the part of the appeal relating to payment of a monetary penalty under Div 4 of Pt 7 of the SSMA. At the conclusion of the appeal hearing the parties were provided with an opportunity to provide written submissions on the effect of s 32(3)(d) on our jurisdiction to grant the order sought by the Owners Corporation.
3. The parties agree that, should we overturn the Tribunal's conclusion as to the invalidity of the by-law, the Owners Corporation ought not be deprived of the chance to pursue its claim for a civil penalty simply because of the Tribunal's error, and that we should remit the civil penalty proceedings to the Tribunal for determination. This is clear from the submissions of the parties filed after the conclusion of the appeal hearing.
4. Section 32(3)(d) of the NCAT Act provides that the Tribunal has no internal appeal jurisdiction where the appeal concerns "any decision of the Tribunal in proceedings for the imposition of a civil penalty in the exercise of its general jurisdiction". The parties accept that the Owners Corporation's application in SC19/18982 was a proceeding "for the imposition of a civil penalty in the exercise of the Tribunal's general jurisdiction" and so prima facie comes within s 32(3)(d).
5. Notwithstanding that, the parties contend that the Tribunal below did not make "any decision…in proceedings for the imposition of a civil penalty". The only order (apart from costs) in respect of that proceeding was to dismiss the proceedings. This was not a decision on the merits, rather it was a decision that automatically followed as a result of the Tribunal's decision that by-law 14 was harsh, unconscionable and oppressive, and was so since its date of registration. There was no occasion for the Tribunal to consider and decide whether to impose a civil penalty for breach of the by-law.
6. It is argued that the case of The Owners SP No 6097 v Placanica [2019] NSWCATAP 85, in which an Appeal Panel found it had no jurisdiction to consider the appeal before it based on s 32(2)(d) of the NCAT Act, is distinguishable. There, the Tribunal below construed the order originally made, the breach of which was said to permit the imposition of a civil penalty. The Appeal Panel (at [9] of its decision) characterised the decision from which the appellants sought to appeal as follows: "The Decision concerned whether a civil penalty should be imposed and the Member decided it should not. In the course of coming to that view, the Tribunal considered the effect of the order…which was said to have been breached by the lot owners."
7. In the case at hand, it is argued that the Tribunal did not "consider the effect of the order" in deciding to dismiss the application; it did not give any real consideration whether a civil penalty should be imposed, and did not construe the by-law because it had determined the by-law did not in fact exist as at the date of the alleged contravention.
8. We agree with the parties that the Tribunal did not give consideration to whether it should impose a civil penalty under s 147 of the SSMA in relation to the notice to comply dated 18 March 2018. This is because of the view the Tribunal took about the validity of by-law 14 (see Decision at [129] to [136]). However, notwithstanding the view of the parties that remittal of the civil penalty proceedings would not involve any transgression of s 32(3)(d) of the NCAT Act, it seems to us that there are some problems with the suggested approach.
9. The power of the Tribunal to impose a civil penalty for non-compliance with a notice to comply with a by-law issued by an owners corporation is found in s 147(1). This section provides: 147 Civil penalty for breach of by-laws (1) The Tribunal may, on application by an owners corporation, order a person to pay a monetary penalty of up to 10 penalty units if the Tribunal is satisfied that - (a) the owners corporation gave a notice under this Division to the person requiring the person to comply with a by-law, and (b) the person has since contravened the by-law.
10. That is, the Tribunal must find as a fact that notice has been given under s 146 to a person and that the by-law has since been contravened by that person. Necessarily, the Tribunal must determine that there is a by-law which has been contravened in order to enliven its power to impose a civil penalty. Here the Tribunal determined there was no valid by-law and so determined it had no power to impose a penalty.
11. However, the decision to declare the by-law invalid was made under s 150 of the SSMA. Neither party suggests the Tribunal did not have power to make such an order on application of a lot owner if a by-law was found to be harsh, unconscionable or oppressive. Neither party suggested that such a claim, and the manner it was raised at first instance, was not a proceeding seeking a decision by the Tribunal in the exercise of its general jurisdiction and thus an internally appealable decision: see ss 29(1)(a) and 32(1)(a) of the NCAT Act. Similarly, the dismissal of the Owners Corporation's application seeking an order for removal of the dog under s 156(1) of the SSMA was a decision in the general jurisdiction of the Tribunal and also an internally appealable decision.
12. In the present case, the application for an order for removal of the dog and the application for imposition of a civil penalty were made in the same application. While not desirable, due to the different appeal rights, there does not appear to be any statutory provision which prevents such a combined application. However, appeal rights attach to decisions. In the present case there are essentially three decisions under three different sections of the SSMA.
13. It would seem clear from the definition of "decision" in s 5 of the NCAT Act, when read together with s 32(3)(d), that the Tribunal below made a "decision … in proceedings for the imposition of a civil penalty in the exercise of its general jurisdiction". The definition of "decision" includes the making of an order or determination (s 5(1)(a)) such that the Tribunal's order dismissing the civil penalty proceedings on 21 November 2019 is a "decision" within the meaning of the NCAT Act. Further, the Tribunal in its alternative analysis at [136] of the Decision in relation to the notice to comply dated 18 March 2018 specifically said it had discretion under s 147 of the SSMA to order a monetary penalty and declined to exercise that discretion in favour of ordering a monetary penalty, albeit on the basis that by-law 14 was to be removed as a consequence of the Tribunal's determination that it was harsh, unconscionable and oppressive. Again, it seems to us that the Tribunal below made a "decision… in proceedings for the imposition of a civil penalty", given the definition of "decision" in s 5 of the NCAT Act.
14. As stated above, so far as the Owners Corporation's application is concerned, only that part of the application seeking an order under s 156(1) for removal of the dog and the decision to dismiss that application is "proceedings for a general decision" for which there is internal appeal jurisdiction. That part of the application seeking an order for the imposition of a civil penalty and the decision to dismiss is otherwise a "decision of the Tribunal in proceedings for the imposition of a civil penalty in exercise of its general jurisdiction". Appeal rights in connection with these decisions are to an "appropriate appeal court": see s 82(1)(c) and (3) of the NCAT Act.
15. Notwithstanding the bifurcated rights of appeal, it seems to us that the proceedings, even for a civil penalty under the SSMA, are proceedings in the exercise of the Tribunal's general jurisdiction. Insofar as a decision in those proceedings does not relate to the imposition of a civil penalty but rather to the order making power of the Tribunal in the exercise of its general jurisdiction, the appeal to the NCAT Appeal Panel is competent. Consequently, for the purpose of determining the appeal concerning ss 139(1), 150 and 156, the proceedings are properly before the Appeal Panel.
16. Section 81(1) of the NCAT Act provides relevantly that, in determining an internal appeal, the Appeal Panel may make such orders as it considers appropriate in light of its decision on the appeal, including (but not limited) to orders that provide for the decision under appeal to be quashed or set aside, or for the whole or any part of the case to be reconsidered by the Tribunal, either with or without further evidence, in accordance with the directions of the Appeal Panel (s 81(1)(c) and (e)). Section 32 confers the internal appeal jurisdiction on the Tribunal, subject to exceptions set out in that statutory provision. One such exception is that set out at s 32(3)(d). Section 81(1) applies to the extent only that the Appeal Panel determines an internal appeal.
17. On our reading of the NCAT Act, we do not consider that we can exercise the powers in s 81(1) in relation to a Tribunal decision that falls within the terms of s 32(3)(d). That is, we have no jurisdiction to set aside the dismissal of the civil penalty application.
18. This might be seen as an unfortunate, and perhaps unintended, result of the language employed in ss 5, 32(3) and 81 of the NCAT Act. This is particularly so in the current circumstances where the parties agree that, should the Appeal Panel overturn the Tribunal's conclusion that by-law 14 is harsh, unconscionable and oppressive, the Owners Corporation should not be denied an opportunity to have the civil penalty proceedings determined. Indeed, on one view, because there is only a right of appeal to a court where "a civil penalty has been imposed by the Tribunal" (NCAT Act, s 82(1)(c)), any challenge to the decision to dismiss may be limited to seeking relief under s 69 of the Supreme Court Act 1970 (NSW) or by another like application.
19. However, having determined the appeal in respect of all internally appealable decisions, it seems to us that we can remit the proceedings to the Tribunal at first instance. That is because, for the purpose of dealing with an appeal in respect of an internally appealable decision, the proceedings are before the Appeal Panel which has power to make various orders in determining an appeal, including an order to quash a decision for which the Appeal Panel has jurisdiction.
20. In our view there is also power under s 81(1) of the NCAT Act (which has an inclusive but not limited list of orders it can make) to thereafter remit the proceedings to the Tribunal at first instance to decide matters which the Appeal Panel thinks inappropriate to decide or which the Appeal Panel has no power to decide provided the Appeal Panel is satisfied that there is some utility in making such an order.
21. In the present case, in light of our decision, the parties might consent to the order dismissing the penalty application being set aside under clause 9(1)(a) of the Civil and Administrative Tribunal Regulation 2013 (NSW).
22. Alternatively, the decision might be capable of being set aside by the Tribunal at first instance for jurisdictional error, the Tribunal having incorrectly determined there was no valid by-law and, consequently, no relevant breach: see eg Minister for Immigration & Multicultural Affairs v Bhardwaj 209 (2002) CLR 597; [2002] HCA 11 (Bhardwaj). In Bhardwaj, at [53], Gaudron and Gummow JJ said: … it follows that, if the duty of the decision-maker is to make a decision with respect to a person's rights but, because of jurisdictional error, he or she proceeds to make what is, in law, no decision at all, then, in law, the duty to make a decision remains unperformed. Thus, not only is there no legal impediment under the general law to a decision-maker making such a decision but, as a matter of strict legal principle, he or she is required to do so.
23. In D'Amore v Independent Commission Against Corruption [2013] NSWCA 187, Beazley P (with whom Bathurst CJ agreed) said at [71]: Where legislation requires a person to be satisfied of a specified matter, the person being so satisfied is a jurisdictional fact: see Minister for Immigration v Eshetu; M70/2011 v Minister for Immigration and Citizenship; Minister for Immigration and Multicultural and Indigenous Affairs v SGLB [2004] HCA 32; 207 ALR 12. In this regard, irrationality and illogicality in decision making, including in the formation of a state of satisfaction, may constitute jurisdictional error. However, as indicated, the appellant contended that the question whether the formation of a state of satisfaction that was unreasonable may constitute jurisdictional error.
24. Here, it might be argued the jurisdictional error arises from the failure to determine the penalty application on its merits and proceeding on the erroneous conclusion that there was no valid by-law that had been breached. These errors might constitute an error in respect of a jurisdictional fact having regard to the provisions of s 157(1) of the SSMA set out above.
25. We offer no view as to what the appropriate outcome of such an application might be. However, in light of the position adopted by the parties, it is appropriate that the proceedings be remitted to the Tribunal in respect of the civil penalty application so that the Tribunal can consider any application that might be made.
26. On the other hand, the Owners Corporation may decide to avoid further costs and have the proceedings finalised without remittal. This is because, even if the decision to dismiss the penalty application was set aside, quashed or treated as no decision in the manner described in Bhardwaj, the Owners Corporation may consider it unlikely the Tribunal will now impose a penalty due to what has occurred, particularly the Tribunal having erroneously concluded there was no valid by-law.
27. At this stage, we should allow the Owners Corporation the chance to decide if it still seeks an order for remittal. If so, we will make that order. Consequently, we will make directions to permit the Owners Corporation an opportunity to decide if it wishes to have the proceedings remitted for the purpose outlined above.
28. Otherwise, for the reasons stated above concerning the Tribunal's internal appeal jurisdiction, we make no order with respect to the civil penalty proceedings for contravention of by-law 14 relating to the notice to comply given on 18 March 2018.

First instance costs

1. As earlier noted, on 6 February 2020 the Owners Corporation was ordered to pay the Coopers' costs of both proceedings as agreed or assessed, and not to recoup costs from the Coopers (orders 1 and 2 of 6 February). Given our conclusion on this appeal, we will set aside those orders.
2. Accordingly, it is unnecessary for us to deal with the grounds of appeal 7 to 10 which allege errors of law made by the Tribunal in its decision dated 6 February 2020 in determining costs of the proceedings below under s 60 of the NCAT Act.
3. Under s 81(1) of the NCAT Act, the Appeal Panel has power, when determining an internal appeal, to make "such orders as it considers appropriate in light of its decision on the appeal" including that the decision under appeal be "set aside and for another decision be substituted for it". We have set aside the Tribunal's costs orders, and we have power to make orders in substitution for that decision.
4. Unless there is a finding that "special circumstances" exist, under s 60 of the NCAT Act each party will bear their own costs in relation to the first instance proceedings. We will give the parties an opportunity to make submissions on the issue of costs at first instance in both proceedings, and on whether the first instance costs can be determined on the papers under s 50 of the NCAT Act.

Costs on the appeal

1. On this appeal, s 60 applies such that each party will bear their own costs unless there are special circumstances. We will give the parties an opportunity to make submission on the issue of costs on this appeal, and on whether costs of the appeal can be determined on the papers under s 50 of the NCAT Act.

Orders

1. We make the following orders: In SC19/24722 and SC19/18982: 1. The appeal is allowed. 2. Orders 1, 2 and 3 of the Tribunal made on 21 November 2019 are set aside. 3. Orders 1 and 2 of the Tribunal made on 6 February 2020 are set aside. In SC 19/24722: 1. An order pursuant to s 156 of the Strata Schemes Management Act 2015 (NSW) that the respondents, Johanna Anwar Cooper and Leo Bernard Cooper, remove or cause to be removed the miniature schnauzer dog called 'Angus' from their lot in strata scheme 58058 within 28 days of these orders, and keep such animal away from their lot and common property. In SC19/18982: 1. The appellant is to advise the Appeal Panel within 7 days whether it seeks an order for remittal of the proceedings in so far as it relates to the application for a civil penalty contravention under Div 4 of Pt 7 of the Strata Schemes Management Act 2015 (NSW) concerning the notice to comply given by the appellant to the first respondent Johanna Cooper on 18 March 2019. In SC19/18982, SC19/24722, AP20/55887: 1. In respect of costs, we make the following directions: 1. Any applicant for costs (costs applicant) is to file and serve such application and relevant submissions and evidence within 14 days from the date of these orders; 2. Any reply, including evidence and submissions, to the applicant is to be filed and served within 21 days from the date of these orders; 3. The cost applicant is to file and serve any response within 28 days from the date of these orders; 4. The submissions are to include submissions about whether an order dispensing with a hearing should be made under s 50(2) of the Civil and Administrative Tribunal Act 2013 (NSW).

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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: 27 May 2020