The Tribunal's order making power in s 232 is expressed as being "to settle the complaint or dispute" about which the Tribunal has jurisdiction. That phrase also appeared in the 1996 Management Act in the context of an Adjudicator resolving disputes. As we have said, Part 12 of the 2015 Management Act establishes three levels of dispute resolution: voluntary internal dispute resolution, mediation by the relevant Department and applications to the Tribunal under the general order making power in s 232.
The lot owners' case in this appeal is that the words "to settle the complaint or dispute about" failure to comply with the duty in s 106(1) confers or imposes power on the Tribunal to make an order for damages. The word "settle" was said to be broad enough to include a remedy available under a private cause of action for breach of that duty. While that order making power is not conferred expressly on the Tribunal, it can be inferred.
In Shum, at [74], the Appeal Panel framed the issue as being "whether a claim for compensation under s 106(5) is a claim 'about' the failure of the owners corporation to perform its duty under s 106(1) or (2)." In our opinion, there are two difficulties with this formulation of the issue. First, it conflates the Tribunal's jurisdiction to entertain a dispute about the failure to perform the duty in s 106(1) with the Tribunal's order making powers. The Tribunal's jurisdiction over certain subject matters and its order making powers are distinct. Secondly, the Appeal Panel has invoked the order making power in s 106(5) in circumstances where that provision does not impose or confer, either expressly or impliedly, any order making power on the Tribunal.
[2]
Interpretation of legislation conferring jurisdiction
For courts, laws conferring jurisdiction are construed broadly, and laws excluding jurisdiction are construed narrowly: Mark Leeming, Authority to Decide: the Law of Jurisdiction in Australia (2012, The Federation Press) at 131. In support of that proposition, the author quoted the following passage from Owners of Shin Kobe Maru v Empire Shipping Company Inc [1994] HCA 54; (1994) 181 CLR 404 at 421:
It is quite inappropriate to read provisions conferring jurisdiction or granting powers to a court by making implications or imposing limitations that are not found in the express words. (Emphasis added.)
This principle relates to the conferral of jurisdiction, not to the conferral of order making power, but there is no reason why the principle should not apply to both circumstances. The express words in this case ("to settle a complaint or dispute about" a particular subject matter) are general words. We should not read s 232 as imposing limitations that are not found in the express words.
[3]
Principles of statutory construction
Both text and context are relevant when interpreting statutory provisions. The High Court summarised the relevant principles in Commissioner of Taxation v Consolidated Media Holdings Ltd [2012] HCA 55 at [39]:
"This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the [statutory] text" (footnote omitted). So must the task of statutory construction end. The statutory text must be considered in its context. That context includes legislative history and extrinsic materials. Understanding context has utility if, and in so far as, it assists in fixing the meaning of the statutory text. Legislative history and extrinsic materials cannot displace the meaning of the statutory text. Nor is their examination an end in itself.
In Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 384, the majority of the High Court emphasised text and context and added that "the purpose of the statute" may also be relevant:
However, the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning.
[4]
Literal or grammatical meaning
One literal or grammatical meaning of the words "to settle" as given in the online Macquarie Dictionary is:
14. Law
. . .
b. to terminate (legal proceedings) by mutual consent of the parties.
While this is one of the literal or grammatical meanings of the words, neither party submitted that we should interpret the words in that way. The NCAT Act gives the Tribunal power to make consent orders to give effect to any agreed settlement, as long as the Tribunal would have had the power to make those orders: NCAT Act, s 59. Rothman J expressed the "preliminary, but uninformed view" that those words do not require consensus or mediation: The Owners - Strata Plan No 37762 v Pham [2006] NSWSC 1287 at [68]. The Appeal Panel in Shum agreed with that view at [63]. In our opinion, the words "to settle" do not mean that the Tribunal is restricted to making consent orders under s 232.
In Shum, the Appeal Panel quoted the following definition of "settle' in Butterworths Australian Legal Dictionary (1997):
Resolve a dispute or proceeding.
We agree that s 232 gives the Tribunal jurisdiction over certain kinds of matters and power to settle or resolve those disputes. But even if the words "to resolve" are read for the words "to settle" that does not take the issue any further. As we have noted above, s 29(3) of the NCAT Act already gives the Tribunal "jurisdiction to exercise such other functions as are conferred or imposed on the Tribunal by or under this Act or enabling legislation in connection with the conduct or resolution of such proceedings." (Emphasis added.)
Having decided that s 232 is not confined to consent orders, the literal or grammatical meaning of the words "to settle" is "to resolve". These are general words that do not, either expressly or impliedly, confer or impose power on the Tribunal to make an order for damages under s 106.
We look now to the context, the consequences and the purpose of the legislation to determine whether any of those factors affect the meaning of the words in s 232.
[5]
Legislative history
Under s 138 of the 1996 Management Act, there were two limitations on the powers of an Adjudicator which were removed from the 2015 Management Act. The first was that an Adjudicator was prevented from making an order "that includes the payment by a person to another person of damages": 1996 Management Act, s 138(3)(d). The second was that an Adjudicator was prevented from making an order for the settlement of a dispute or complaint "dealt with in another section of this Chapter": s 138(3)(a). (Emphasis added.)
In Shum, at [87], the Appeal Panel noted that the 2015 Management Act does not contain equivalent limitations. The Appeal Panel had regard to that historical context in support of its conclusion at [95] that:
". . . there is no reason to construe the jurisdiction of the Tribunal or the order making power in s 232 in a manner that would prevent an order for the payment of damages consequent upon the determination of a claim by a lot owner for damages arising from an owners corporation breach of statutory duty."
With respect, in our view, the removal of these provisions does not support the Appeal Panel's conclusion. We can only speculate about the legislature's reason for including these provisions and then removing them. The removal of the provision preventing the Tribunal from awarding damages cannot support the conclusion that the legislation now imposes or confers that order making power. Order making power must be imposed or conferred by legislation in accordance with s 28(1) and s 29(1) of the NCAT Act.
The removal of s 138(3)(a) can have no significance because s 62 was in Chapter 3 of the 1996 Act and s 138 was in Chapter 5.
[6]
Other order making powers in the 2015 Management Act
The order making power in s 232 of Division 4 is in addition to the more specific order making powers in other parts of the 2015 Management Act. The introductory note and table to Part 12 of the 2015 Management Act summarise the Tribunal's powers. The introductory note states, in part, that:
This Part gives power to the Tribunal to make orders to settle disputes about certain matters relating to the operation and management of a strata scheme. It also contains general provisions about the powers of the Tribunal and some other order-making powers of the Tribunal.
The introductory note then states that:
The following table describes the types of orders that may be made and who may apply for them.
The table contains three columns headed "To do what?", "Who may apply?" and "Section". Under the sub-heading, "General orders for the settlement of disputes," the table identifies s 232 as the relevant provision "to resolve dispute or complaint". Each of the other provisions (under the heading "Section") is a provision expressly giving the Tribunal power to make specific kinds of orders in certain circumstances.
The table also mentions the "general provisions about the powers of the Tribunal". Those provisions are in Division 5 of Part 12. They include s 241 which gives the Tribunal power to "order any person the subject of an application for an order to do or refrain from doing a specified act in relation to a strata scheme." Consistently with that power, the Tribunal in Pullicin ordered that the owners corporation "commence works" set out in a "Work Order" to rectify the defects which were allowing water to penetrate the apartment.
Section 34 of the Interpretation Act 1987 sets out the circumstances in which extrinsic material may be used in the interpretation of legislation. We do not rely on the introductory note (which is extrinsic material) for any of the purposes listed in that provision. Parker J concluded that the note was "of no real use in resolving the question of construction" in The Owners - Strata Plan No 54026 v Ternes [2019] NSWSC 1579 at [36]. We have come to the same conclusion in this case. However, it does provide a convenient summary of many of the Tribunal's order making powers.
[7]
Purpose of the statute
An object of the 2015 Management Act is "to provide for the resolution of disputes arising from the strata schemes." The circumstances in which the purpose of the statute is relevant are set out in s 33 of the Interpretation Act 1987 (NSW):
In the interpretation of a provision of an Act or statutory rule, a construction that would promote the purpose or object underlying the Act or statutory rule (whether or not that purpose or object is expressly stated in the Act or statutory rule or, in the case of a statutory rule, in the Act under which the rule was made) shall be preferred to a construction that would not promote that purpose or object.
We note that the term "resolution of disputes" is used in the objects clause. The use of these words does not persuade us that we should imply an order making power in s 232 which is not given expressly.
[8]
Consequences of interpreting s 232 as not conferring power on Tribunal to order damages
The most obvious consequence of the owners corporations' interpretation of s 232, is that they will not be liable for damages under s 232(1)(e). Lot owners will have to pursue that remedy in a court of competent jurisdiction pursuant to s 106(5). That is not a consequence which implies that the legislature has conferred or imposed on the Tribunal power to order damages under s 232. Concurrent jurisdiction with courts cannot be assumed or implied.
Both the 2015 Management Act and the NCAT Act qualify a person's right to bring proceedings in the Tribunal and in the courts. For example, if an application is made under s 232, the applicant may not commence other proceedings in connection with the settlement of the dispute or complaint. Similarly, if other proceedings have been commenced (and not discontinued), a person cannot apply to the Tribunal under s 232(1): 2015 Management Act, s 232(3). Our understanding of the effect of these provisions is that, subject to the relevant limitation periods, a person cannot seek damages for breach of the statutory duty in s 106(1) in a court at the same time as proceedings are on foot in the Tribunal seeking orders for failure to comply with that duty.
Schedule 4, clause 5 of the NCAT Act regulates the relationship between the Tribunal and the courts in connection with any functions in the Consumer and Commercial Division of the Tribunal.
None of these provisions leads us to imply that the legislature has conferred or imposed on the Tribunal power to order damages under s 232.
[9]
Should the interpretation of s 232 be affected by other judgements?
Nothing that was said by the learned judge in The Owners - Strata Plan No 54026 v Ternes [2019] NSWSC 1579 persuades us that s 232 confers or imposes on the Tribunal power to order damages. In that case Parker J considered the scope of the Tribunal's powers under s 232. Section 181 of the 2015 Management Act makes it an offence to fail to deliver certain property to a member of the strata committee. The 2015 Management Act does not give the Tribunal jurisdiction or a function in relation to s 181.
Sections 187 and 188 empower the Tribunal to make orders about the strata roll and records. Parker J held that neither 187 nor 188 applied to the facts of the case. Nevertheless, his Honour held that s 232 gave the Tribunal power to make an order under the offence provision, s 181, "if the conditions set out in that section were satisfied." His Honour's reasoning at [28] - [36] was that s 232 should not be 'read down' because of the specific provisions in s 187 and 188. If it were 'read down', "the result would be that s 181 would create a right which could not be fully vindicated because of the limitations in the nature of the orders provided for under ss 187 and 188." (at [30]).
With respect, it is not clear from this decision, whether the Court was taken to the provisions of the NCAT Act about the Tribunal's jurisdiction and order making powers. Nor is it apparent that his Honour was directed to s 251 which provides that proceedings for an offence "may be dealt with summarily before the Local Court".
[10]
Conclusion
The words "to settle a complaint or dispute" about a failure to comply with the duty to maintain and repair common property are general words. They do not impose or confer power on the Tribunal to order damages for failure to comply with that duty. Sub-sections 106(3) - (7) govern applications to courts of competent jurisdiction for breach of the statutory duty in s 106(1). Section 232 and relevant provisions of the NCAT Act, govern applications to the Tribunal for failure to perform the duty in s 106(1). The power to order damages is not imposed or conferred on the Tribunal either by s 106(5) or by s 232.
If such a power had been conferred or imposed, no doubt consideration would have been given to whether a jurisdictional limit was appropriate. But we do not need to speculate on that matter because, in our view, the legislature has not conferred or imposed on the Tribunal the power to award damages. On the other hand, for example, an order under s 241 "to do or refrain from doing a specified act in relation to the strata scheme" is an order making power that has been conferred or imposed on the Tribunal. Under that provision, the Tribunal may make an order that an owners corporation repair common property if it has failed to comply with s 106(1).
[11]
Power to order compensation for failure to comply with duty to repair and maintain common property
In Shih, the Appeal Panel came to the tentative opinion at [84] that the Tribunal "might arguably have power to award compensation for past losses by reason of its wide powers to make orders under section 232." One "strong indication" that the Tribunal's powers are broad was said to be the removal of the prohibition in s 138(3)(d) of the 1996 Management Act on the payment of damages. At [90] the Appeal Panel held that the Tribunal, "was empowered in dealing with the proceedings before it to require the respondent to pay monies by way of compensation to the applicant in the course of making orders to settle the complaint and dispute with which it was dealing."
At [88] the Appeal Panel recognised that it might be said that this approach to the construction of s 232 is inconsistent with the Appeal Panel's conclusion that the Tribunal could not award damages for breach of statutory duty. However, the Appeal Panel distinguished between the right to bring an action for damages from a broad power to settle a dispute or a complaint.
The 2015 Management Act gives the Tribunal express powers to order payments or compensation in certain circumstances. Relevant provisions include s 72(1)(b), s 86(1), s 89(1), s 60(3), s 132(1)(b) and s 148(4). Unlike s 241, which can be characterised as a general power to make orders in the nature of an injunction, there is no general power to award compensation.
For the reasons we have already given, including our conclusion about the significance of the removal of s 138(3)(d) of the 1996 Management Act, we do not agree with the tentative view expressed by the Appeal Panel in Shih. The 2015 Management Act does not, either expressly or impliedly, confer or impose power on the Tribunal to make orders by way of compensation for failure to comply with the duty in s 106(1).
While it is not necessary for us to determine comprehensively the scope of the order making power in s 232, our view is that the Tribunal is limited to making orders which it otherwise has power to make under specific or general order making powers in the 2015 Management Act, or the NCAT Act. The word "settle", like the word "resolve" or "resolution", does not confer order making powers.
[12]
Main legislative provisions in full
We set out below s 232 and s 106 of the 2015 Management Act which are the main provisions under consideration in this case.
232 Orders to settle disputes or rectify complaints
(1) Orders relating to complaints and disputes The Tribunal may, on application by an interested person, original owner or building manager, make an order to settle a complaint or dispute about any of the following -
(a) the operation, administration or management of a strata scheme under this Act,
(b) an agreement authorised or required to be entered into under this Act,
(c) an agreement appointing a strata managing agent or a building manager,
(d) an agreement between the owners corporation and an owner, mortgagee or covenant chargee of a lot in a strata scheme that relates to the scheme or a matter arising under the scheme,
(e) an exercise of, or failure to exercise, a function conferred or imposed by or under this Act or the by-laws of a strata scheme,
(f) an exercise of, or failure to exercise, a function conferred or imposed on an owners corporation under any other Act.
(2) Failure to exercise a function For the purposes of this section, an owners corporation, strata committee or building management committee is taken not to have exercised a function if -
(a) it decides not to exercise the function, or
(b) application is made to it to exercise the function and it fails for 2 months after the making of the application to exercise the function in accordance with the application or to inform the applicant that it has decided not to exercise the function in accordance with the application.
(3) Other proceedings and remedies A person is not entitled -
(a) to commence other proceedings in connection with the settlement of a dispute or complaint the subject of a current application by the person for an order under this section, or
(b) to make an application for an order under this section if the person has commenced, and not discontinued, proceedings in connection with the settlement of a dispute or complaint the subject of the application.
(4) Disputes involving management of part strata parcels The Tribunal must not make an order relating to a dispute involving the management of a strata scheme for a part strata parcel or the management of the building concerned or its site if -
(a) any applicable strata management statement prohibits the determination of disputes by the Tribunal under this Act, or
(b) any of the parties to the dispute fail to consent to its determination by the Tribunal.
(5) The Tribunal must not make an order relating to a dispute involving a matter to which a strata management statement applies that is inconsistent with the strata management statement.
(6) Disputes relating to consent to development applications The Tribunal must consider the interests of all the owners of lots in a strata scheme in the use and enjoyment of their lots and the common property in determining whether to make an order relating to a dispute concerning the failure of an owners corporation for a strata scheme to consent to the making of a development application under the Environmental Planning and Assessment Act 1979 relating to common property of the scheme.
(7) Excluded complaints and disputes This section does not apply to a complaint or dispute relating to an agreement that is not an agreement entered into under this Act, or the exercise of, or failure to exercise, a function conferred or imposed by or under any other Act, if another Act confers jurisdiction on another court or tribunal with respect to the subject-matter of the complaint or dispute and the Tribunal has no jurisdiction under a law (other than this Act) with respect to that subject-matter.
Section 106:
106 Duty of owners corporation to maintain and repair property
(1) An owners corporation for a strata scheme must properly maintain and keep in a state of good and serviceable repair the common property and any personal property vested in the owners corporation.
(2) An owners corporation must renew or replace any fixtures or fittings comprised in the common property and any personal property vested in the owners corporation.
(3) This section does not apply to a particular item of property if the owners corporation determines by special resolution that -
(a) it is inappropriate to maintain, renew, replace or repair the property, and
(b) its decision will not affect the safety of any building, structure or common property in the strata scheme or detract from the appearance of any property in the strata scheme.
(4) If an owners corporation has taken action against an owner or other person in respect of damage to the common property, it may defer compliance with subsection (1) or (2) in relation to the damage to the property until the completion of the action if the failure to comply will not affect the safety of any building, structure or common property in the strata scheme.
(5) An owner of a lot in a strata scheme may recover from the owners corporation, as damages for breach of statutory duty, any reasonably foreseeable loss suffered by the owner as a result of a contravention of this section by the owners corporation.
(6) An owner may not bring an action under this section for breach of a statutory duty more than 2 years after the owner first becomes aware of the loss.
(7) This section is subject to the provisions of any common property memorandum adopted by the by-laws for the strata scheme under this Division, any common property rights by-law or any by-law made under section 108.
(8) This section does not affect any duty or right of the owners corporation under any other law.
[13]
The Owners - Strata Plan No 80412 v Vickery
In Vickery, the Tribunal ordered that the owners corporation pay Mr Vickery's costs "of and incidental to the proceedings, such costs to be agreed or assessed." The owners corporation conceded that, as the amount in issue in the proceedings exceeded $30,000, rule 38 of the Civil and Administrative Tribunal Rules 2014 applied and there was no need to find that "special circumstances" exist: NCAT Act, s 60.
Given our conclusion, we will set aside order 1, which was to the effect that the owners corporation pays Mr Vickery $97,000 immediately. It follows that, in the absence of any disentitling conduct, the costs order should be reversed. Mr Vickery should pay the owners corporation's costs "of and incidental to the proceedings, such costs to be agreed or assessed."
As to the costs of the appeal, the same rule applies: Civil and Administrative Tribunal Rules 2014, rule 38. We propose to make an order that Mr Vickery pay the owners corporation's costs of and incidental to the proceedings, such costs to be agreed or assessed.
At the hearing, we said we would give the parties an opportunity to make further submissions on the issue of the costs at first instance and on appeal. If either party wishes to make submissions that the costs orders should be different from the orders we have proposed, that party should file and serve written submissions within 14 days of the date of these reasons. The other party should file and serve written submissions in reply within a further 14 days. At the hearing, the parties agreed that the Appeal Panel should determine any issue of costs on the papers after that date: NCAT Act, s 50.
[14]
The Owners - Strata Plan No 74835 v Pullicin
In Pullicin, the Tribunal did not make a costs order. The proceedings were adjourned, part heard, pending completion of the works. Given our decision, the parties may reach agreement as to the appropriate first instance costs orders in accordance with rule 38 of the Civil and Administrative Tribunal Rules 2014. If not, they may make submissions in accordance with our directions.
As to the costs of the appeal, the same rule applies: Civil and Administrative Tribunal Rules 2014, rule 38. We propose to make an order that Mr and Mrs Pullicin should pay the owners corporation's costs of and incidental to the proceedings, such costs to be agreed or assessed.
At the hearing, we said we would give the parties an opportunity to make further submissions on the issue of the costs at first instance and on appeal. If either party wishes to make submissions that the costs order should be different from the orders we propose, that party should file and serve written submissions within 14 days of the date of these reasons. The other party should file and serve written submissions in reply within a further 14 days. At the hearing, the parties agreed that the Appeal Panel should determine any issue of costs on the papers after that date: NCAT Act, s 50.
[15]
The Owners - Strata Plan No 80412 v Vickery
(1) The appeal is allowed.
(2) The following order made by the Tribunal on 18 October 2019 is set aside:
1. The Owners Strata Plan 80412 c/- Vardanega Roberts DX 738 SYDNEY NSW 2000 Australia is to pay Graham John Vickery c/- Morag & Agnew DX 7808 NEWCASTLE NSW 2300 Australia the sum of $97,000.00 immediately.
(3) If either party wishes to file and serve submissions in relation to the Appeal Panel's proposed costs orders, they should do so within 14 days of the date of these reasons.
(4) If either party wishes to make submissions in reply to the Appeal Panel's proposed costs orders, they should do so within 14 days of receiving the other party's submissions.
(5) Final costs orders will be determined on the papers.
[16]
The Owners - Strata Plan No 74835 v Pullicin
(1) The appeal is allowed.
(2) The following order made by the Tribunal on 17 July 2019, is set aside:
3. The respondent is to pay to the applicants the sum of $73,744.76 within 60 days of the date of these orders.
(3) If either party wishes to file and serve submissions in relation to the Appeal Panel's proposed costs orders, they should do so within 14 days of the date of these reasons.
(4) If either party wishes to make submissions in reply to the Appeal Panel's proposed costs orders, they should do so within 14 days of receiving the other party's submissions.
(5) Final costs orders will be determined on the papers.
[17]
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
[18]
Amendments
21 January 2020 - Names of correct respondents substituted in [81]
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: 21 January 2020
The Owners Strata Plan 50276 v Thoo [2013] NSWCA 270
The Owners Strata Plan No 30621 v Shum [2018] NSWCATAP 15
Texts Cited: Mark Leeming, Authority to Decide: the Law of Jurisdiction in Australia (2012, The Federation Press)
Category: Principal judgment
Parties: AP 19/36345
The Owners - Strata Plan No 74835 (Appellant)
Benjamin Pullicin (Respondent)
Diya Pullicin (Respondent)
Overview
Mr and Mrs Pullicin own an apartment in Sydney. Water began penetrating into the apartment from common property outside the apartment. Their tenants complained of serious mould infestation and terminated the tenancy. Mr and Mrs Pullicin applied to the Tribunal for orders including damages for loss of rent. The Tribunal ordered the owners corporation to pay $73,744.76 in damages for breach of its statutory duty "to properly maintain and keep in a state of good and serviceable repair the common property. . .": Strata Schemes Management Act 2015 (the 2015 Management Act), s 106(1).
Mr Vickery had a similar experience. He owns an apartment in Newcastle. Water penetrated the apartment from common property and he applied to the Tribunal for damages for compensation for loss of rent. The Tribunal found that the owners corporation had breached its statutory duty and ordered it to pay Mr Vickery $97,000.
Each owners corporation has appealed to the Appeal Panel from the Tribunal's decision. Because there are common issues, we heard the appeals concurrently and have given all our reasons in this decision.
The common issue in the grounds of appeal is whether the Tribunal has power to award damages to a lot owner in a strata scheme for a breach of s 106(1) of the 2015 Management Act by the owners corporation. Section 106(5) gives the lot owner the right to recover damages for foreseeable loss as a result of a breach of the statutory duty in s 106(1). Section 232(1)(e) gives the Tribunal jurisdiction to "make an order to settle a complaint or dispute about" failure to comply with the duty in s 106(1). The lot owners contended that the dispute also came within the more general provision in s 232(1)(a). That provision gives the Tribunal jurisdiction to "make an order to settle a complaint or dispute about the operation, administration or management of a strata scheme under the Act".
The lot owners in both cases acknowledged that s 106(5) gives them a private right of action to sue for damages in the Supreme Court or any other court of competent jurisdiction. They submitted that, as long as they do not have other proceedings on foot which are the subject of the application in the Tribunal, s 232(1)(a) or (e) of the 2015 Management Act gives the Tribunal power to award damages for breach of the statutory duty in s 106(1). (See 2015 Management Act, s 232(3)(b).)
In support of their submissions, the lot owners rely, in part, on the 2018 decision of the Appeal Panel in The Owners Strata Plan No 30621 v Shum [2018] NSWCATAP 15. In 2019, a differently constituted Appeal Panel decided that the Tribunal did not have power to award damages for breach of the statutory duty in s 106(1): Shih v The Owners - Strata Plan No 87879 [2019] NSWCATAP 263. We will refer to these cases as "Shum" and "Shih". In Shih, the Appeal Panel also expressed the tentative view that, even though the Tribunal cannot order damages, the Tribunal may have power to order compensation for the same kinds of losses. The Tribunal in Vickery characterised the payment of $97,000 as being compensation for losses sustained.
Jurisdiction conferred by s 232
Part 12 of the 2015 Management Act is headed "Disputes and Tribunal powers". That Part establishes three levels of dispute resolution. The first is voluntary internal dispute resolution under Division 1. The second is mediation as arranged by the Commissioner for Fair Trading. The third is applications to the Tribunal for an order to settle the complaint or dispute under Division 4. Parties to a dispute are encouraged to attempt mediation before applying to the Tribunal: 2015 Management Act, s 227.
The heading to Division 4 is "Orders that may be made by Tribunal". The lot owners relied on s 232(1)(a) and (e):
232 Orders to settle disputes or rectify complaints
(1) Orders relating to complaints and disputes The Tribunal may, on application by an interested person, original owner or building manager, make an order to settle a complaint or dispute about any of the following -
(a) the operation, administration or management of a strata scheme under this Act,
. . .
(e) an exercise of, or failure to exercise, a function conferred or imposed by or under this Act or the by-laws of a strata scheme,
Even if the Tribunal has jurisdiction under s 232(1)(a), the question as to whether the Tribunal has power to order damages under that provision remains. We are not aware of any bases, other than the bases we have addressed in relation to s 232(1)(e), that would give the Tribunal power to award damages under s 232(1)(a).
The word "function" in s 232(1)(e) includes "a power, authority or duty and exercise a function includes perform a duty": 2015 Management Act, s 4. The effect of this definition is that a failure by the owners corporation to perform the duty in s 106(1), to "properly maintain and keep in a state of good and serviceable repair the common property . . ." is the "failure to exercise a function conferred or imposed by" the 2015 Management Act. Section 232(1)(e) of the 2015 Management Act confers jurisdiction on the Tribunal to entertain complaints or disputes between a lot owner and an owners corporation about the failure to comply with the duty in s 106(1) to maintain and repair common property.
The word "about" relates to the complaint or dispute, not the orders. The complaint or dispute must be "about" one of the matters listed at s 232(1)(a) - (e). If it is not, the Tribunal has no jurisdiction under that provision. As Rothman J said in The Owners - Strata Plan No 37762 v Pham [2006] NSWSC 1287 at [63], s 138(1)(a) (the equivalent to s 232(1) in the 1996 Management Act) does not allow the adjudicator "to make any order to settle any dispute or complaints. The words in paragraph (a) and (b) confine the subject matter of the dispute and complaint and are words of limitation."
The owners corporation for each of the strata plans contended that only a court of competent jurisdiction has power to award damages for breach of s 106(1). The Tribunal does not have that power. In addition, they submitted that the Tribunal does not have power to order the payment of compensation for losses sustained as a result of a breach of the statutory duty in s 106(1). Those questions are questions of law that this Appeal Panel has jurisdiction to consider: Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act), s 80(2).
We have decided that the Tribunal does not have power to order damages or compensation for failure to comply with the duty in s 106(1). In summary, that conclusion is based on the following propositions:
1. The Tribunal has the jurisdiction and order making powers imposed or conferred on the Tribunal by the NCAT Act or other legislation.
2. The inclusion of s 106(5) in the 2015 Management Act has put beyond doubt the existence of a private cause of action in damages for breach of the statutory duty in s 106(1) in a court of competent jurisdiction.
3. Sub-section 106(5) of the 2015 Management Act does not confer or impose any jurisdiction or order making powers on the Tribunal, nor does it confer or impose jurisdiction on the Tribunal to exercise any other functions in connection with the conduct or resolution of proceedings.
4. Section 232(1)(e) of the 2015 Management Act confers jurisdiction on the Tribunal to entertain complaints or disputes between a lot owner and an owners corporation about the operation of a strata scheme or the failure to comply with the duty in s 106(1) to maintain and repair common property.
5. The word "about" in s 232(1) relates to the complaint or dispute, not the orders the Tribunal has power to make.
6. Sub-sections 106(3) - (7) govern applications to courts of competent jurisdiction for breach of the statutory duty in s 106(1). Section 232 and relevant provisions of the NCAT Act, govern applications to the Tribunal for failure to perform the duty in s 106(1).
7. The order making power in s 232 is expressed as being "to make an order to settle a complaint or dispute about" failure to comply with the duty in s 106(1) to maintain and repair property.
8. The words "to settle" do not mean that the Tribunal is restricted to making consent orders under s 232.
9. Having decided that s 232 is not confined to consent orders, the literal or grammatical meaning of the words "to settle" is "to resolve". These are general words that do not, either expressly or impliedly, confer or impose power on the Tribunal to make an order for damages under s 106(5).
10. The context, the consequences and the purpose of the legislation do not affect our conclusion.
11. The 2015 Management Act does not, expressly or impliedly, impose or confer power on the Tribunal to make orders by way of compensation for failure to comply with the duty in s 106(1).
These conclusions make it unnecessary for us to consider any of the other grounds of appeal raised by the owners corporations, apart from the issue of costs. There are now three partially inconsistent Appeal Panel decisions about the same issue. None takes precedence. However, the current Appeal Panel is constituted by three members including two presidential members who are judicial officers. We agree with the observation of Bell J in Director of Liquor Licensing v Kordister Pty Ltd [2011] VSC 207 at [107] in relation to the Victorian Civil and Administrative Tribunal, that "... where there is a properly considered decision on point, especially on a legal question and by a presidential member, considerations of consistency and predictability of decision-making and maintaining public confidence in the legal process come into play".
At the end of these reasons, we set out in full the main provisions under consideration - s 232 and s 106 of the 2015 Management Act.
In the cases under consideration in these appeals, the disputes or complaints were about the "failure to exercise a function," that is the failure to perform the duty in s 106(1) to maintain and repair common property: 2015 Management Act, s 232(1)(e). There is no doubt that the Tribunal has jurisdiction to entertain a dispute about that failure. In The Owners Strata Plan 50276 v Thoo [2013] NSWCA 270, the Court of Appeal (Tobias AJA, Barrett JA and Preston CJ of LEC agreeing) held at [210] that the equivalent provision to s 232(1)(e) "encompasses the failure of the Owners Corporation to exercise its duty under" the equivalent provision to s 106(1).
The jurisdiction to entertain a dispute or complaint about failure to comply with the duty to maintain and repair common property is different in many respects from the right given to a lot owner to recover damages for breach of statutory duty. We have reached that conclusion for the following reasons. First, they are conferred in different parts of the legislation. The right to recover damages for breach of the statutory duty in s 106(1) is given by s 106(5) which is in Part 6, Division 1, headed "Common property". The right to commence proceedings in the Tribunal for failure to perform the duty in s 106(1) is set out in s 232(1)(e) which is in Part 12 headed "Disputes and Tribunal powers".
Secondly, s 106(6) imposes a limitation period. A lot owner "may not bring an action under this section for breach of a statutory duty more than 2 years after the owner first becomes aware of the loss." There is no time limit specified for applications under s 232, but the Civil and Administrative Tribunal Rules 2014 (NSW), cl 23(3) provides that:
(3) Unless the Tribunal grants an extension under section 41 of the Act, an application must be made -
(a) in the case where enabling legislation specifies the period within which the application is to be made - within the period specified, or
(b) in any other case - within 28 days from the day on which the applicant became entitled under the enabling legislation to make the application.
As the 2015 Management Act does not specify the period within which an application under s 232 is to be made to the Tribunal, an application must be made within 28 days from the day on which the applicant became entitled under the enabling legislation to make the application. The Tribunal may extend time under s 41 of the NCAT Act.
Thirdly, s 232(2) defines the circumstances in which an owners corporation is taken not to have exercised a function (or performed a duty). For the purpose of s 232, a failure to exercise that function is deemed to have occurred in the two circumstances set out in s 232(2):
(2) Failure to exercise a function For the purposes of this section, an owners corporation, strata committee or building management committee is taken not to have exercised a function if--
(a) it decides not to exercise the function, or
(b) application is made to it to exercise the function and it fails for 2 months after the making of the application to exercise the function in accordance with the application or to inform the applicant that it has decided not to exercise the function in accordance with the application.
There is no equivalent deeming provisions in s 106 in relation to the private cause of action for breach of the statutory duty in s 106(1).
Finally breach of the statutory duty in s 106(1) requires that the loss suffered be "reasonably foreseeable" before a lot owner may recover damages as a result of a contravention of "this section." Section 232 does not contain a provision relating to the foreseeability of any loss suffered.
Sub-sections 106(3) - (7) govern applications to courts of competent jurisdiction for breach of the statutory duty in s 106(1). Section 232 and relevant provisions of the NCAT Act, govern applications to the Tribunal for failure to perform the duty in s 106(1).