The Owners - Strata Plan No 70871 v Turek - [2020] NSWCATAP 28 - NSWCATAP 2020 case summary

NCAT Appeal Panel|2020-02-06

Introduction

On 24 April, 2019 the respondents to this appeal, Louise and Michael Turek who are the owners of Lot 59 in Strata Plan 70871 filed an application in the Commercial and Consumer Division of this Tribunal seeking a number of orders arising out of disputation with the appellant Owners Corporation known as The Owners - Strata Plan No 70871. The disputation extended to two matters, but only one of those matters is the subject of these appeal proceedings.
It is uncontroversial that the property which is under the control of the appellant consists of 58 residential apartments in a high-rise building, with 3 commercial units with street frontage on the ground level. Lot 59 is one of those commercial units and is leased by the respondents to a tenant who operates a café from the premises. The disputation arises because the respondents' tenant wishes to store waste bins in the general bin room where all of the waste bins of the occupiers of the residential apartments are stored. The appellant declined to allow this.
The respondents' application sought an order under section 131 of the Strata Schemes Management Act 2015 ("SSM Act") relevantly for our purposes, allowing garbage bins used by the tenant to be kept in the general bin room. Those proceedings were the subject of a mediation conducted under the auspices of this Tribunal and a signed settlement agreement was entered into on 10 August 2018 which required among other things that the tenant of the shop prepare a special use by law.
Section 131 of that Act is in the following terms; 131 Order granting certain licences (1) The Tribunal may, on application by an owner of a lot in a strata scheme, order that the owner and any occupier of the lot may use specified common property in the manner, for the purposes, and on the terms and conditions (if any), that are specified in the order. (2) The Tribunal must not make the order unless satisfied - (a) that the lot would otherwise be incapable of reasonable use and enjoyment by the current owner or occupier of the lot or generally by an owner or occupier of the lot, and (b) that the owners corporation has refused to grant a licence to use common property in a manner, for purposes, and on terms and conditions that would enable the current owner or occupier, or generally any owner or occupier, reasonably to use and enjoy that lot, and (c) in the case of a leasehold strata scheme, that the lessor of the scheme has, before the making of the order, been given an opportunity to make representations to the Tribunal with respect to the application for the order. (3) An order under this section, when recorded under section 246, has effect as if its terms were a by-law (but subject to any relevant order made by a superior court).

The decision under appeal

The matter next came on for hearing before Senior Member Vrabac on 1 November 2019. The following narration of what occurred that day is taken from Reasons for Decision published by the Senior Member on 28 November 2019. At the hearing the appellant submitted that the Tribunal had no jurisdiction to deal with the matter relying on the provisions of section 131 of the SSM Act. This submission was based substantially on a failure by the respondents to present to the appellant a license agreement for the storage of waste bins prior to the commencement of the proceedings. As such, the appellant submitted that the proceedings should be dismissed with costs. Notwithstanding this submission the Senior Member determined to adjourn the proceedings and ordered that costs of the day become "costs in the cause". The Senior Member made the following orders; 1. the hearing was adjourned to a date to be fixed by the Registrar 2. the respondents were to provide the appellant and the Tribunal with a draft license agreement for the proposed use of waste bins on or before 22 November 2019 3. the appellant was to arrange an extraordinary general meeting of the Owners Corporation on or before 17 January 2020 to consider the proposed waste bins license.
The appellant has appealed against this decision, and these are the appeal proceedings which are before us.
The Senior Member set out in some detail the history of the proceedings, which we have summarised above. The Senior Member noted the arguments to be advanced by the respondents that the waste bins could conveniently be stored in the general bin area and the arguments to be advanced by the appellant that there was an alternative area for the storage of the tenant's waste bins, they could not be stored in the general area and in any event there had not been any submission of a license agreement by the respondents to the appellant. Finally, the appellant submitted that the proceedings had come before the Tribunal a number of times, they had not been disposed of by reason of the fault of the respondents and the appellant had unnecessarily incurred costs in defending the proceedings.
In refusing the appellant's application to dismiss the proceedings and to refuse the adjournment the Senior Member said, in part; 35 The application for dismissal was not granted in line with the aspiration of quick and cheap resolution of the issues in the proceedings. My view was that if the proceedings were dismissed the applicant would have to prepare a license for the owners corporation to consider. An EGM would have to be called for by the applicant and if the licence was not granted at the meeting, fresh proceedings would have to be commenced by the applicant.
The Senior Member rejected a submission made by the solicitor for the appellant that the Tribunal had no jurisdiction to deal with the matter because of the provisions of section 131 of the SSM Act.
In determining to grant the adjournment, the Senior Member said that the issue of costs would be left for determination either "on the next occasion or at the completion of the proceedings."
Finally, the Senior Member said; 44 The proceedings were adjourned in the interest of justice. The applicant, in my view, will get a conclusion of the waste bin issue quicker and cheaper if the proceedings were adjourned rather than if they were dismissed.

The grounds of appeal

The appellant filed a Notice of Appeal on 28 November 2019. It was prepared by its solicitor, Mr Joseph Bannerman. The form of Notice of Appeal utilised by this Tribunal is a standard form. It requires the appellant to specify a number of matters. Significantly for our purposes these include; the orders challenged on appeal, the grounds of appeal, the orders that should be made on appeal, and in connection with the seeking of leave to appeal, the reasons why the decision from which the appeal is brought was not fair and equitable, that significant new evidence was now available that was not reasonably available at the time of the hearing, and why that evidence was not so available. Each of these matters were referred to in the Notice of Appeal by use of the words "Please see attached submissions." There was annexed to the Notice of Appeal a document entitled "Respondent's Submissions" consisting of 4 closely typed pages and to which were attached seven documents with a total length of 45 pages. The attachments included 32 pages of transcript of two sets of proceedings, correspondence between Mr Bannerman and the Registrar of this Tribunal, and copies of a number of orders made by the Tribunal.
It is not necessary that we analyse the documentation furnished by the appellant's solicitor in any detail. It is sufficient to state that the written submissions do not assist the Appeal Panel in any meaningful manner in discerning what are the grounds of appeal, as well as the matters relating to the leave issue. Although the written submissions do set out the orders that are sought on appeal, the discursus on why the decision the subject of the appeal was not fair and equitable consists of a rambling narrative, and an attempt to identify significant new evidence is misplaced.
We add for completeness that in written submissions counsel for the respondent encountered the same difficulty that confronted us in endeavouring to comprehend what were the grounds of appeal being advanced by the appellant.
At the commencement of the hearing we suggested to Mr Bannerman that our understanding of the basis for the appeal, as best we could comprehend it, was an argument based upon the construction of section 131 of the SSM Act, namely that the owners corporation could not be said to have refused to grant a licence to use the common property because no license agreement had been submitted to it by the respondents or their tenant. Mr Bannerman embraced this as encapsulating the substantial ground of appeal.

The statutory basis for the appeal

As will be seen, we have determined that the appeal is without merit and should be dismissed. In the circumstances it is only necessary that we discuss briefly the statutory matrix against which the appeal proceedings are brought.
Notwithstanding that the appellant might be seen to have submitted to the contrary, the decision under appeal is clearly an interlocutory decision in the sense that it was concerned with the granting of an application for adjournment and the making of orders in the nature of case management orders directed towards the preparation of the proceedings for hearing. "Interlocutory decision" is defined in section 4 of the Civil and Administrative Tribunal Act ("CAT Act"), but it is unnecessary for present purposes to set out that definition in detail. By section 80 of the CAT Act an appeal may only be made from an interlocutory decision with the leave of the Appeal Panel. As the proceedings under appeal involve a decision of the Consumer and Commercial Division, clause 12 (1) of Schedule 4 of the CAT Act restricts the circumstances in which leave to appeal may be granted. It will be necessary for the appellant to satisfy us that it has suffered a substantial miscarriage of justice because the decision was not fair and equitable, or was against the weight of the evidence or that in some manner "significant new evidence" has arisen which was not available at the time that the proceedings under appeal were being conducted. In determining whether a "substantial miscarriage of justice" has occurred we are required to consider the consequences of the decision upon the parties, and in particular upon the appellant.
As will be seen, all that has occurred by reason of the decision of the Senior Member under appeal is that the proceedings have been adjourned to allow the parties to consider the relevant factual circumstances pertaining to the respondents' application and to make a determination which is hopefully confined to a defined factual matter, rather than the parties making generalised allegations about whether the waste bins in question could be appropriately stored with the residential bins, or in some other area. It was clear that the Senior Member was concerned to force the parties to focus their attention on the real issues which were likely to arise in the proceedings. In the circumstances it could not be said that the decision was not fair and equitable.
This conclusion is reinforced when considering the guiding principle which this Tribunal is compelled to apply in the conduct of its proceedings as set out in section 36 of the CAT Act. That section is in the following terms; 36 Guiding principle to be applied to practice and procedure (1) The guiding principle for this Act and the procedural rules, in their application to proceedings in the Tribunal, is to facilitate the just, quick and cheap resolution of the real issues in the proceedings. (2) The Tribunal must seek to give effect to the guiding principle when it: (a) exercises any power given to it by this Act or the procedural rules, or (b) interprets any provision of this Act or the procedural rules. (3) Each of the following persons is under a duty to co-operate with the Tribunal to give effect to the guiding principle and, for that purpose, to participate in the processes of the Tribunal and to comply with directions and orders of the Tribunal: (a) a party to proceedings in the Tribunal, (b) an Australian legal practitioner or other person who is representing a party in proceedings in the Tribunal. (4) In addition, the practice and procedure of the Tribunal should be implemented so as to facilitate the resolution of the issues between the parties in such a way that the cost to the parties and the Tribunal is proportionate to the importance and complexity of the subject-matter of the proceedings. (5) However, nothing in this section requires or permits the Tribunal to exercise any functions that are conferred or imposed on it under enabling legislation in a manner that is inconsistent with the objects or principles for which that legislation provides in relation to the exercise of those functions.
In our opinion the manner in which the Senior Member conducted the proceedings and the Orders issued by him which are the subject of the appeal represent an orthodox application of the provisions of section 36 of the CAT Act. The Senior Member clearly focused on the real issues in the proceedings and made orders to facilitate the determination of those issues in a just, efficient and cost-effective manner. The decision of the Senior Member was clearly within discretion and involved an appropriate application of section 36.
In written submissions the appellant's solicitor said that there was "significant new evidence" concerning whether the appellant had consented to the consequential orders made following the decision to adjourn the proceedings. We discuss this matter later in these reasons for decision and, as will be seen, there is no new evidence of any significance, and indeed, the solicitor has clearly misunderstood what is meant by this expression as used in section 80.
No question of principle arises in the circumstances of these proceedings, no questions of public importance or matters of administration of policy or any other clear injustice has occurred, for reasons which we discuss later. As will be seen, there can be no justification for the grant of leave to appeal, especially as, will be seen, we conclude that there is no merit in the appeal.

The construction of section 131

Before the Senior Member and before us Mr Bannerman asserted vehemently that the failure of the respondents or their tenant to submit a form of licence agreement containing the provisions pertaining to a license to use the bin area, being common property, was fatal to a consideration of the respondents' application.
Indeed, he asserted in oral submissions that the application brought by the respondents was doomed to fail and there was no basis upon which it could succeed. Mr Bannerman submitted the application should be summarily dismissed. In so submitting, he did not engage in any attempt to analyse and discuss the provisions of section 131 of the SSM Act, nor did he deign to discuss the relevant principles which apply to a consideration of the summary dismissal of proceedings. During the course of the hearing we raised with Mr Bannerman principles espoused in well-known decisions such as General Steel Industries Inc v Commissioner for Railways (NSW) [1964] HCA 69 in the High Court of Australia.
In General Steel, Barwick CJ sitting alone pronounced the following fundamental principles which are clearly enshrined in the jurisprudence of courts and tribunals; 8. The plaintiff rightly points out that the jurisdiction summarily to terminate an action is to be sparingly employed and is not to be used except in a clear case where the Court is satisfied that it has the requisite material and the necessary assistance from the parties to reach a definite and certain conclusion. I have examined the case law on the subject, to some of which I was referred in argument and to which I append a list of references. There is no need for me to discuss in any detail the various decisions, some of which were given in cases in which the inherent jurisdiction of a court was invoked and others in cases in which counterpart rules to Order 26, r. 18, were the suggested source of authority to deal summarily with the claim in question. It is sufficient for me to say that these cases uniformly adhere to the view that the plaintiff ought not to be denied access to the customary tribunal which deals with actions of the kind he brings, unless his lack of a cause of action - if that be the ground on which the court is invited, as in this case, to exercise its powers of summary dismissal - is clearly demonstrated. The test to be applied has been variously expressed; "so obviously untenable that it cannot possibly succeed"; "manifestly groundless"; "so manifestly faulty that it does not admit of argument"; "discloses a case which the Court is satisfied cannot succeed"; "under no possibility can there be a good cause of action"; "be manifest that to allow them" (the pleadings) "to stand would involve useless expense". (at p129) 9. At times the test has been put as high as saying that the case must be so plain and obvious that the court can say at once that the statement of claim, even if proved, cannot succeed; or "so manifest on the view of the pleadings, merely reading through them, that it is a case that does not admit of reasonable argument"; "so to speak apparent at a glance". (at p129) 10. As I have said, some of these expressions occur in cases in which the inherent jurisdiction was invoked and others in cases founded on statutory rules of court but although the material available to the court in either type of case may be different the need for exceptional caution in exercising the power whether it be inherent or under statutory rules is the same. Dixon J. (as he then was) sums up a number of authorities in Dey v. Victorian Railways Commissioners [1949] HCA 1; (1949) 78 CLR 62 where he says at p 91 : "A case must be very clear indeed to justify the summary intervention of the court to prevent a plaintiff submitting his case for determination in the appointed manner by the court with or without a jury. The fact that a transaction is intricate may not disentitle the court to examine a cause of action alleged to grow out of it for the purpose of seeing whether the proceeding amounts to an abuse of process or is vexatious. But once it appears that there is a real question to be determined whether of fact or law and that the rights of the parties depend upon it, then it is not competent for the court to dismiss the action as frivolous and vexatious and an abuse of process." Although I can agree with Latham C.J. in the same case when he said that the defendant should be saved from the vexation of the continuance of useless and futile proceedings (1949) 78 CLR, at p 84, in my opinion great care must be exercised to ensure that under the guise of achieving expeditious finality a plaintiff is not improperly deprived of his opportunity for the trial of his case by the appointed tribunal. On the other hand, I do not think that the exercise of the jurisdiction should be reserved for those cases where argument is unnecessary to evoke the futility of the plaintiff's claim. Argument, perhaps even of an extensive kind, may be necessary to demonstrate that the case of the plaintiff is so clearly untenable that it cannot possibly succeed. (at p130)
An examination of the clear provisions of section 131 of the SSM Act leads us to disagree with the submissions of Mr Bannerman. Whilst the provisions of section 131 certainly refer to the terms and conditions applying to the use of the common property, there is no requirement that a form of licence agreement embodying any particular terms and conditions be forwarded by the respondents to the appellant as a precondition to the grant of jurisdiction and power in this Tribunal to deal with the matter.
Obviously, the Tribunal could not be appropriately seized of the matter without being able to consider all of the terms and conditions which might arguably be relevant to the determination of the application before it. However, this requires the Tribunal to ensure that the respondents had adequately particularised the basis upon which the licence should be granted and to ensure that the appellant had had an appropriate opportunity to respond. At that stage the Tribunal would presumably have sufficient information before it to be able to make a determination whether a licence would be granted and, if so, on what terms and conditions.
Indeed, a careful consideration of what occurred before the Senior Member at the hearing before him demonstrates that he was anxious to ensure that the parties had addressed these matters in the most efficient and cost-effective manner. That is clearly the basis upon which the Senior Member determined to adjourn the proceedings.
It is clear that there is simply no basis upon which it could be asserted that the application brought by the respondents was doomed to fail within the General Steel principles. No consideration could be given to such an application unless the respondents had been given an opportunity of furnishing to the Tribunal all of the information upon which they wished to rely in support. That occasion had not then arisen.

The consent issue

After the conclusion of the hearing Mr Bannerman wrote to the Senior Member asking that he provide written reasons for his decision. The Senior Member responded that the adjournment order had been made by consent. Mr Bannerman disputed this and insisted that written reasons be provided, being those published on 28 November 2019.
Before us the appellant submitted that it had objected to the adjournment and had then objected to orders made by the Tribunal that the respondents were to provide a draft license agreement and that the appellant was required to arrange an EGM to consider the terms of that license. Mr Bannerman said that he had objected to these subsequent orders. He cited an extract from the transcript of evidence in which he said to the Senior Member I have to take instructions from my client. I can't say if my client is going to even agree to convene a meeting to consider it. They don't have to, but I would encourage them to.
This was said to constitute the "new evidence" upon which Mr Bannerman sought to rely for the purpose of this appeal.
In citing to us this extract, Mr Bannerman failed to include reference to the following material which is extracted in the submissions of the respondents and which follows immediately after the above passage; Member: Then we will order one Mr Bannerman: Okay, okay but I mean… Member: Your client can't refuse everything Mr Bannerman: Yes, okay. Fine. But… Member: Then no point in having me here Mr Bannerman: Okay, understood. But, but yeah, I mean, well, we can set a timetable, um and we can convene a meeting, it takes about three weeks or so Member: And, and then you can ask for an extension. I'm not saying you have to do anything, but something will have to be done Member: I, I haven't heard yet that we won't call a meeting to consider it. Then the licence will come to me. Mr Bannerman: Yep Member: Okay, so if you say you need two weeks, what would you need, four? That would be six weeks Mr Bannerman: Oh, I'd probably need 5, because we need to convene the general meeting and then prepare our evidence after that.
Shortly after, the following exchange occurred; Member: You're fine with that? So direction I am making to you is, the Respondent, is to call, arrange and EGM and, ah, what would you do, you will decide whether to approve or not to approve the draft license Mr Bannerman: Yes, yes Member: Or amendments or whatever Mr Bannerman: Sure
Following this further exchange, the Member fixed 17 January 2020 as the date on which the EGM would be held and asked Mr Bannerman whether that date was acceptable, and he replied in the affirmative.
When the above extracts were drawn to our attention by counsel for the respondents, we questioned Mr Bannerman why he had asserted that his client had not consented to the making of the two subsequent orders. After discussion he reluctantly indicated to us that he had "acquiesced" in the making of these orders.
It follows from the material referred to above that in submitting to us that there was a lack of consent by his client to the making of orders requiring the submission of a licence agreement and the holding of an EGM to consider it that Mr Bannerman was acting in a disingenuous manner. A legal practitioner appearing before this Tribunal must conduct himself or herself in a manner which is consistent with an appropriate degree of candour and accuracy.
To the extent that Mr Bannerman sought to set aside the making of those orders for the purpose of these appeal proceedings, in circumstances where he informed the Member that his client acquiesced in the making of those orders, which we understand as best we can to be the basis for such a submission, that submission must be rejected.

Other possible grounds of support for the appeal

In his written submissions Mr Bannerman sought to rely on the provisions of section 55 of the CAT Act which are in the following terms; 55 Dismissal of proceedings (1) The Tribunal may dismiss at any stage any proceedings before it in any of the following circumstances: (a) if the applicant or appellant (or, if there is more than one applicant or appellant, each applicant or appellant) withdraws the application or appeal to which the proceedings relate, (b) if the Tribunal considers that the proceedings are frivolous or vexatious or otherwise misconceived or lacking in substance, (c) if the applicant or appellant (or, if there is more than one applicant or appellant, each applicant or appellant) has failed to appear in the proceedings, (d) if the Tribunal considers that there has been a want of prosecution of the proceedings. (2) The Tribunal may reinstate proceedings that have been dismissed under subsection (1) (c) if the Tribunal considers that there is a reasonable explanation for that failure.
In support of this submission Mr Bannerman's written submissions asserted that the proceedings were "frivolous or vexatious or otherwise misconceived or lacking in substance and/or there has been a want of prosecution of the proceedings." In no manner did Mr Bannerman attempt in his written submissions to describe why the proceedings should be characterised by any of these descriptions contained in section 55. He did not describe why they might be characterised as frivolous or vexatious, and as we have previously discussed, he did not deign to describe why he thought that they might be lacking in substance or "otherwise misconceived." Of course, there is material contained in his narration that does assert a lack of prosecution on the part of the respondents. But apart from this particular matter, the overall submissions of Mr Bannerman dealing with the provisions of section 55 are unhelpful.
We cannot find any basis for the application of section 55 of the CAT Act as asserted by the appellant. This submission is rejected.

The appeal against the costs order

The appellant submitted that there was no appropriate basis upon which a costs order could have been made by the Senior Member to the effect that the costs of the proceedings before him would become costs of the cause.
In dealing with the question of costs in his written reasons, the Senior Member said, in part; 42. The respondent's argument on costs thrown away for the day had considerable merit and force but not as significant as it had on 28 August, 2019 when costs thrown away were ordered by Senior Member Burton. In the exercise of the discretion, I have in determining costs I decided to leave that matter for determination on the next occasion or at the completion of the proceedings. 43. Costs orders in the Tribunal are made pursuant to s 60 of the CAT Act. It is not decided here whether the respondent will or will not be able to make out the criteria set out in 60(3)(b) for costs of today at the conclusion of this matter.
So read it is clear that the Senior Member in making an order that the costs of the proceedings before him that day become costs of the cause, should not be taken to have made any determination that the more usual meaning of the expression "cost of the cause" should apply. That more usual meaning is that the outcome of the proceedings would determine whether an appropriate costs order should be made subject however to the particular circumstances of the proceedings. What the Senior Member clearly had in mind as discussed in his written reasons is that he intended to reserve the question of costs as they applied to the proceedings before him that day for determination at the conclusion of the overall proceedings. Seen in this light this was an exercise of discretion which was clearly available to the Senior Member in all the circumstances of the proceedings and is not amenable to any successful appeal.

Disposition of the appeal

For the reasons which we have set out above, we conclude that there is no merit in the appellant's appeal and that it should be dismissed accordingly. We propose making formal orders that leave to appeal be refused, and that the appeal be dismissed.
We propose to grant leave to the parties to make submissions concerning any appropriate costs order, because the question of costs of the appeal was not finally argued before us. The parties were to provide written submissions concerning costs within 7 days of the hearing. After the hearing Mr Bannerman wrote to the Registry expressing uncertainty about the direction which we had made. In these circumstances it is preferable that we reserve costs.

Orders We make the following orders; 1. leave to appeal is refused 2. the appeal is dismissed 3. we grant liberty to apply with respect to costs which must be exercised within one month by either party by giving notice to the Registrar

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

Amendments 28 February 2020 - Typographical Error 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: 28 February 2020

The Owners - Strata Plan No 70871 v Turek

At a glance

Court

Decision date

Source

Judgment (12 paragraphs)

Parties

Cases Cited (3)

Cited By (3)