The Owners – Strata Plan No 865 v Carroll

1. The respondent to this appeal was the applicant in the primary proceedings filed 29 June 2023. She owns lot 1 (unit 7) in a seven-lot strata scheme over five levels in a harbourside suburb near to North Sydney, NSW. The then respondent, now appellant, is the owners corporation (OC). The scheme was registered on 14 July 1964 but the building was constructed in about 1913.
2. The lot owner purchased lot 1 in 2007 "as is". If there was ever a veranda, it had been enclosed by the time that the scheme was registered and formed the kitchen and meals area; by that time the area was registered as a lot apartment. Lot 1 was lower ground, below natural ground level, with a north-south axis. The other lots above had an east-west axis and were accessible from the front of the building. The land slopes from the eastern front to the western back where lot 1 is situated.
3. The primary hearing spread over 21 February and 23 August 2024 with the primary decision delivered with written reasons (PR) on 31 March 2025. The OC appeal was filed in time on 28 April 2025.
4. The primary member (the Member) at PR [5] adopted as "incontrovertible" the background from the application. To his summary have been added some matters from the application that appear not to be in dispute before us. The OC disputed some of the background adopted by the Member as "highly partisan", inaccurate and inconsistent with the lot owner's case as presented at primary hearing. It was ultimately unnecessary to resolve all these background matters. The OC's version has been adopted where it was not apparently disputed on appeal, such as the earlier date, in late 2019, when dampness and water ingress to lot 1 were first raised with the OC, which was recognised at PR [50].
5. The lot owner's builder discovered defects in the common property kitchen sub-floor "slab" (actually only a skim concrete cover on rock, with moisture penetration) of lot 1 when starting in November 2022 to renovate lot 1. It was also discovered that there were no proper footings to part of the northern wall of the lot.
6. The lot owner first notified the strata committee (SC) of the slab defects in December 2022, having already told the SC on 28 November 2022 that her renovation works were due to be completed by 5 April 2023 under her contract with her builder and that the contract contained delay damages provisions which could be called on by the builder. She invited the OC to engage an expert to determine a scope of remediation work to the common property. The SC said they would obtain legal advice before responding and represented that they intended to resolve the matter amicably with the lot owner.
7. On 25 February 2023, in the absence of a response from the OC, the lot owner gave notice of likely damages. On 12 May 2023 the lot owner notified the SC through her solicitors that she had been forced to move from her existing tenancy (in which she was while the renovation works were conducted) to a new tenancy at an estimated rental of about $1,000pw because the existing tenancy was not extended and that as a result of the common property works her renovations were now significantly behind schedule.
8. On 15 May 2023 the OC's solicitors said that the lot owner had to rectify the common property waterproofing, sub-floor and foundations at her expense. In a response the same day the lot owner's solicitors said the OC response was not consistent with earlier indications that the OC wanted an amicable resolution having received legal advice.
9. On 30 May 2023 the lot owner said that the OC, having ceased using lawyers to communicate, indicated that it was willing to mediate but resolution was not achieved despite subsequent communications. The lot owner obtained an expert report dated 16 June 2023 identifying waterproofing and structural defects. The report was refused to be discussed at the AGM on 23 June 2023 and the SC meeting of the same day resolved to call an OC meeting to issue notices to the lot owner to comply by performing the common property works. The primary proceedings were filed six days later.
10. A special by-law 12 had been resolved on 28 October 2019 that permitted the lot 1 renovations. The notice for the AGM at which the resolution was proposed and passed contained the proposed by-law text, architectural drawings and five pages of engineering sketches. These documents had been provided to the then strata manager by email from the lot owner which is considered later in these reasons.
11. The then strata manager lodged for registration in March 2021 what the lot owner contended was an incorrect version of the by-laws for lot 1 and lot 4; for lot 1 the architectural drawings had not been attached as part of the registrable instrument and the engineering sketches had been attached. The lot owner contended that the architectural drawings should have been attached, which was not disputed, but the engineering sketches should not have been attached, which was disputed. Lot 4 registration was corrected in early 2025 but lot 1 remained in contention for resolution in these proceedings.

1. In her application the lot owner claimed: a work order under SSMA ss 106 and 232 for the waterproofing and footings work; compensation for alternative accommodation from December 2022 to 26 May 2023 at $580per week and from 26 May 2023 at $800per week; compensation for what she had been charged by her builder for delay costs at $1,545 per week from 1 April 2023 and storage costs at $400per month from 1 April 2023, in both cases until the OC served certifications on completion of the common property works; interest on her construction loan from 1 April 2023 until the same endpoint ($13.50 per day in March 2025); moving and transport costs $2,910; engineer's report fee $3,832.76; engineer's fee for scope of common property works $2,498; engineer's fee for design of slab $1,292.50; pre-litigation legal costs $9,250.12; correction to registration of special by-law 12; waiver of mediation (which was subsequently waived), and extra cost from the lot property work having to accommodate the common property remediation.
2. The OC said that, irrespective of which was the correct form of special by-law 12, the lot owner was responsible for the common property works, although it accepted that it was responsible for drainage works around the northern, southern and eastern perimeters of lot 1.
3. The OC further contended that inclusion of the engineering sketches in the special by-law was consistent only with the lot owner being responsible for works involving slab modification; it didn't matter what was provided to the certifier for the construction certificate (CC). Both the architectural drawings and the engineering sketches had been attached to the notice of meeting for the special by-law 12 resolution. This inferred that the lot owner's engineer suspected that the floor slab was not strong enough for the lot owner's works unless the sketched works were undertaken.

1. The primary decision noted that the original area of lot 1 was not an apartment but, rather, an undercroft with two rooms and toilet, so the slab had not been built for an apartment.
2. The primary decision essentially found in favour of the lot owner on all counts for reasons set out and examined below to the extent that they were the subject of appeal. The parties were required to bring in orders with a scope of works for the work order and a schedule of damages based on the findings in the primary reasons. The OC was ordered within 42 days of the order to register special by-law 12 with only the architectural plans, not the engineer's sketches, annexed. Each party was to pay her or its own costs unless alternative costs orders were sought. On 16 June 2025 the Member ordered the OC to pay the lot owner's costs of the primary proceedings. The consequences under the SSMA in respect of damages and costs, summarised at the end of these reasons, followed.

1. On 1 May 2025 the OC's stay application filed with its appeal was deferred to a hearing on 9 May. On that date it was adjourned to 23 May 2025 with final hearing preparation directions being made. Leave was granted for both parties to be legally represented in the appeal.
2. On 23 May 2025 the primary orders, including those implementing the initial orders, were stayed. A draft schedule of damages had been served which calculated damages up to 31 March 2025 at $263,520 with part on-paid to the lot owner's builder for its delay damages. The draft schedules had been agreed on 28 April 2025.
3. There was further dispute over the meaning of "affected" in special by-law 12, with the lot owner saying that pre-existing defects in common property could not be affected by the renovations so as to make the lot owner responsible for them. The OC said that the defective common property was absorbed into or replaced by the lot owner's renovations. There was common ground that the OC was responsible, irrespective of the appeal outcome, for some of the common property works involving surrounding drainage.
4. During the appeal hearing the OC accepted that the common property works in contest were its responsibility if they were not within special by-law 12's wording.
5. It also was confirmed that the essence of the challenge on appeal was the meaning of "plans" within "Plans" in the by-law. It was not contended that the engineering sketches that had been included were the required report under para 5.1(d).
6. There was no longer contest on what was defective and required remediation in the common property, which had been in issue in part in the primary decision.

1. At PR [63] the Member found, contrary to the OC's submission, that a reasonable person looking at the engineering sketches "would make no conclusion about the plans other than taking them on face value as preliminary sketches only". The Member pointed to the absence of named or other attribution to an engineer, the overwriting on some of the architectural drawings and that they otherwise were "fairly rough sketches of the slab without any precision". He ordered the correction of the registered by-law to remove the sketches and ensure the architectural drawings were included.
2. At PR [67]-71] the Member found that: the right of exclusive use flowed from actual performance of the Works; the exclusive use right and concomitant maintenance obligation fixed on "only those areas which in fact come to be occupied by the Works"; there was no immediate liability of the lot owner; since the lot owner had not constructed a new kitchen area slab, the parties' pre-existing responsibilities were unaltered; the decision in Lyon discussed below reinforced that conclusion; the OC's duty and liability remained.
3. The Member then found progressively from PR [76] as follows:

(1) The rectification of the kitchen slab remained the OC's responsibility as already found. Even if it wasn't, the absence of proper footings to the northern wall remained the OC's responsibility and there was no evidence to support that the cost of the footings was absorbed wholly within the slab cost by thickening the slab edges; part at least of the footings was still required.

(2) The OC had not discharged the onus it bore to translate the duty to remediate the main bathroom slab. It had not shown that it was necessary to replace the existing slab as part of the works because the penetrations for the revised main bathroom fittings were in new locations. The lot owner's expert had "cogently explained in cross-examination" how existing penetrations could be used with minor pipe re-location work. This was consistent with the proposed floor plan and the absence of reference to removing the existing slab in the lot owner's plans.

(3) The OC was responsible for damp proofing the walls and installing a moisture/vapour barrier to the sections of the floor slab left intact by the Works. The OC's submissions on the extent of the Works rendering it of no utility to apportion damp proofing walls was rejected and the apportionment of the floor slab barrier was also rejected. The lot owner's submission on the proper interpretation of by-law 12 set out above was accepted. Further and in any event, the moisture barrier was beneath the slab and therefore outside the renovations. Damp proofing was to be installed to existing walls not affected by the Works.

(4) External pathway falls and drainage were defective in themselves and contributed to the water issues in the lot in addition to the absence of moisture proofing. The OC had not discharged its onus to establish its contention that absence of moisture proofing was the sole cause of water entry. It was in the OC's interest to avoid further water entry damaging the Works. Substantial portions of the external walls were not being re-built in the Works and there was no evidence to support an opportunity to reseal the interface. The evidence of the lot owner's expert was preferred as to the effect of the external drainage.

(5) The need to remediate the eastern breezeway spoon drain as part of increasing capacity of the drainage system was accepted.

(6) There was common ground on repointing the original lime mortar in the eastern brick wall.

1. From PR [104] the Member found that expert reports and legal costs pre-litigation were for the purpose of achieving an early resolution without litigation, on the unchallenged evidence of the lot owner. Further, there was contractual liability for the lot owner to pay her builder delay damages for latent conditions, being the matters for which the OC had been found responsible.

Principles governing appeals from the Consumer and Commercial Division

1. Section 80(2) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) states, in respect of Division decisions:

(a) in the case of an interlocutory decision of the Tribunal at first instance - with the leave of the Appeal Panel, and

(b) in the case of any other kind of decision (including an ancillary decision) of the Tribunal at first instance - as of right on any question of law, or with the leave of the Appeal Panel, on any other grounds.

1. Paragraph 12 of Schedule 4 to the NCAT Act states:

An Appeal Panel may grant leave under section 80 (2) (b) of this Act for an internal appeal against a Division decision only if the Appeal Panel is satisfied the appellant may have suffered a substantial miscarriage of justice because:

(a) the decision of the Tribunal under appeal was not fair and equitable, or

(b) the decision of the Tribunal under appeal was against the weight of evidence, or

(c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).

1. A Division decision is a primary decision of the Consumer and Commercial Division. The primary decision here is such a decision.
2. In summary, internal appeals may generally be made as of right on a question of law, and otherwise with leave (that is, the permission) of the Appeal Panel.
3. In Unique Commercial Group Pty Ltd v Cusumano [2024] NSWCATAP 204 at [25]- [40] esp at [30]-[32], the Appeal Panel revisited non-exclusive instances of errors on questions of law. At [33] the Appeal Panel that the categories of questions of law are "not closed" and at [37] stated:

37. What constitutes a question of law is vexed and context dependent in the sense that the distinction between matters of fact and of law may turn on the circumstances in which the question arises: Targeted Property Investments Pty Ltd v Look Up Technologies Pty Ltd (No 2) [2023] NSWSC 416 at [33(4)], citing Thomas and Naaz [2023] NSWCA 40 at [52] and Da Costa v The Queen [1968] HCA 51; (1968) 118 CLR 186 at 194; [1968] HCA 51.

1. A failure to take into account a "clearly articulated and substantial argument" is a constructive failure to exercise jurisdiction as well as an error of law and so constitutes a question of law: Alexandria Landfill PL v Transport for NSW [2020] NSWCA 165 at [8]- [11]; Prakash v Health Care Complaints Commission [2006] NSWCA 153 at [87]- [89]; Health Care Complaints Commission v Robinson [2022] NSWCA 164 at [91].
2. Taking into account an irrelevant consideration or not taking into account a relevant consideration may include not making a finding on an ingredient or central issue required to make out a claimed entitlement to relief: see CEO of Customs v AMI Toyota Ltd [2000] FCA 1343; (2000) 102 FCR 578 (Full Fed Ct), [2000] FCA 1343 at [45], applying the statement of principle in Craig v South Australia [1995] HCA 58; (1995) 184 CLR 163 at 179.
3. The interpretation of a statute or contract is directed to ascertaining the document's actual and true meaning; there can be only one correct meaning on a proper construction, so the proper construction of a statute or contract is a question of law. In contrast, a question of mixed fact and law, such as an alleged error in applying correct legal principle to the facts, is not a question of law unless the relevant facts are jurisdictional in nature or do not require the appellate tribunal to resolve disputed facts relevant to the matter in dispute, or the question of law does not depend on facts not found: Crystele Designer Homes PL v Wood [2023] NSWCATAP 242 at [41]- [43]; FTB v Children's Guardian [2024] NSWCATAP 174 at [8]; O'Keefe v Integral Corporate Property PL [2020] NSWCATAP 76 at [16]; Wilson v Chan & Naylor Parramatta Pty Ltd atf Chan & Naylor Paramatta Trust [2020] NSWCA 62 at [4] and [11]; Orr v Cobar Management PL [2020] NSWCCA 202 at [48], [109]; Commissioner of Police, NSW Police Force v White [2025] NSWCATAP 30 at [21]- [23]; Damico v Secretary, Department of Customer Service [2025] NSWCATAP 109 at ; and authority cited in those decisions; , esp at [32].
4. However, as noted by Basten AJ in Donohoe v Albulario [2025] NSWSC 9 at [33], this general requirement for purity does not stand in the way of an Appeal Panel making necessary findings of fact about the composition of the primary Tribunal or conduct of the primary hearing when the question of law concerns a denial of procedural fairness.
5. Adequacy of reasons will vary according to the nature of the determination and of the determining body: New South Wales Land and Housing Corporation v Orr [2019] NSWCA 231, 100 NSWLR 578 at [65]- [77] esp at [77]. In relation to adequacy of reasons, it is essential to expose the reasons for resolving a point critical to the contest between the parties: Soulemezis v Dudley (Holdings) PL (1987) 10 NSWLR 247 (CA) at 259, 270-272, 280-281; Minister for Immigration and Multicultural and Indigenous Affairs; ex parte Palme (2003) 216 CLR 212 at [40]; Wainohu v NSW (2011) 243 CLR 181 at [58]; NCAT Act s 62(3).
6. The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited by para 12(1) of Sch 4 to the NCAT Act. In such cases, as set out above, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice on the basis that:

(a) the decision of the Tribunal under appeal was not fair and equitable; or

(b) the decision of the Tribunal under appeal was against the weight of evidence; or

(c) significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with).

1. In Collins v Urban [2014] NSWCATAP 17, the Appeal Panel stated at [76] and [79] that a substantial miscarriage of justice for the purposes of cl 12(1) in Sch 4 to the NCAT Act may have been suffered where:

"[76] ...there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance. ...

[79] In order to show that a party has been deprived of a "significant possibility" or a "chance which was fairly open" of achieving a different and more favourable result because of one of the circumstances referred to in cl 12(1)(a), (b) or (c), it will be generally be necessary for the party to explain what its case would have been and show that it was fairly arguable. If the party fails to do this then, even if there has been a denial of procedural fairness, the Appeal Panel may conclude that it is not satisfied that any substantial miscarriage of justice may have occurred - see the general discussion in Kyriakou v Long [2013] NSWSC 1890 at [32] and following concerning the corresponding provisions of the [statutory predecessor to CATA (s 68 of the Consumer Trader and Tenancy Tribunal Act)] and especially at [46] and [55]."

1. Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of para 12(1) of Sch 4 to the NCAT Act, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b): Pholi v Wearne [2014] NSWCATAP 78 at [32]. In Collins v Urban, the Appeal Panel stated at [84] that ordinarily it is appropriate to grant leave to appeal only in matters that involve:

(b) questions of public importance or matters of administration or policy which might have general application; or

(c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand;

(d) a factual error that was unreasonably arrived at and clearly mistaken; or

(e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed."

1. Turning to the specific grounds in cl 12(1)(a) and (b) of Sch 4 to the NCAT Act, in Collins the Appeal Panel said:

"[77] As to the particular grounds in cl 12(1)(a) and (b), without seeking to be exhaustive in any way, the authorities establish that:

1 If there has been a denial of procedural fairness the decision under appeal can be said to have been "not fair and equitable" - Hutchings v CTTT [2008] NSWSC 717 at [35], Atkinson v Crowley [2011] NSWCA 194 at [12].

2 The decision under appeal can be said to be "against the weight of evidence" (which is an expression also used to describe a ground upon which a jury verdict can be set aside) where the evidence in its totality preponderates so strongly against the conclusion found by the tribunal at first instance that it can be said that the conclusion was not one that a reasonable tribunal member could reach - Calin v The Greater Union Organisation Pty Ltd [1991] HCA 23; (1991) 173 CLR 33 at 41-42, Mainteck Services Pty Limited v Stein Heurtey SA [2013] NSWSC 266 at [153]."

1. The question of what constitutes significant new evidence not reasonably available at the time the proceedings under appeal were being dealt with under the ground in para 12(1)(c) of Sch 4 to the NCAT Act was considered by an Appeal Panel in Owen v Kim [2017] NSWCATAP 26. There the Appeal Panel stated at [37]-[39]:

"[37] In Owners - SP 76269 v Draybi Bros Pty Ltd [2014] NSWCATAP 29 the Appeal Panel stated at [109] in connection with cl 12(1)(c) of Schedule 4 to the Civil and Administrative Tribunal Act:

'In order to fall within this paragraph the appellant must be able to point to evidence which:

(2) has arisen and is new in the sense that it was not reasonably available at the time the proceedings below were being heard.'

[38] In Leisure Brothers Pty Ltd v Smith [2017] NSWCATAP 11 the Appeal Panel stated at [40 ]:

'The meaning of this clause was considered by the Appeal Panel in Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown [2015] NSWCATAP 111. At [23] - [24] the Appeal Panel said:

'23 Unlike the WIM Act, the expression "reasonably available" is not qualified by the words "to the party". This difference suggests that the test of whether evidence is reasonably available is not to be considered by reference to any subjective explanation from the party seeking leave but, rather, by applying an objective test and considering whether the evidence in question was unavailable because no person could have reasonably obtained the evidence. For example, in Owners SP 76269 v Draybi Bros [2014] NSWCATAP 20 at [114] the Appeal Panel refused leave because, although the appellant may not have been aware of the evidence (being an email), it could have obtained the evidence by summons. In Prestige Auto Centre Pty Ltd v Apurva Mishra [2014] NSWCATAP 81 at [17] the Appeal Panel granted leave because the respondent to the appeal had fraudulently altered evidence. The party seeking leave under cl 12(1)(c) could not reasonably have had available to them the evidence that the report in question had been fraudulently altered at the time the proceedings were being dealt with by the Tribunal. That fact was not known to the appellant at the time of the hearing and could not reasonably be known due to fraud.

24 Each of these cases illustrates that something more than a party's incapacity to procure evidence is necessary to satisfy the requirements of cl 12(1)(c).'

[39] As stated at [27] in Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown:

'the issue is whether, objectively, the evidence has arisen since the hearing and was "not reasonably available" at the time of the hearing.'"

1. In Ryan v BKB Motor Vehicle Repairs Pty Ltd [2017] NSWCATAP 39 an Appeal Panel stated at [10]:

"An appeal does not provide a losing party with the opportunity to run their case again except in the narrow circumstances which we have described. Mr Ryan has not satisfied us that those circumstances apply to his case and we refuse permission for him to appeal."

1. The notice of appeal, as amended at hearing, had been prepared with professional legal assistance, so it was not necessary to undertake the task explained by the Appeal Panel in Cominos v Di Rico [2016] NSWCATAP 5 at [13].
2. The appeal grounds must be reasonably discernible from the material before an Appeal Panel rather than the result of an artificial construct imposed on the material by the Panel: Damico at [45]. They were so, here.
3. The amended notice of appeal characterised the following as alleged errors on questions of law:

(1) On the true construction of special by-law 12, the primary member erroneously held that the lot owner became responsible for the defined "Exclusive Use Area" only once the "Works" as defined in the by-law were completed.

(2) On the true construction of special by-law 12, the Member erroneously equated the Exclusive Use Area with the common property actually occupied by the Works thereby failing to give any effect to the definition's inclusion of "common property occupied or affected by the Works" (emphasis added) and erroneously rejected the proposition that the Exclusive Use Area included the kitchen concrete slab and northern, western and southern walls adjoining the Works themselves.

(3) The effect of either or both of the alleged errors in construction was erroneously to impose liability for the rectification works to the said common property (kitchen concrete slab and relevant walls) and damages for breach of the OC's duty in respect of common property under SSMA s 106 on the OC rather than on the lot owner in respect of the rectification works (with no damages in favour of the lot owner as a result of a contravention of duty by the OC).

(4) The foregoing were the OC's primary contention and assumed (against the OC's secondary case below) that the kitchen slab was not part of the Works.

1. The amended notice of appeal characterised the following as alleged errors on questions of fact, requiring leave to appeal if made out, as the OC's secondary contention:

(1) The Member erroneously held that the engineering sketches designated "SK-01" were not part of the "Plans" as defined in special by-law 12.

(2) The Member erroneously held that the "Works", as defined, did not include the sub-floor to the kitchen area of the lot owner's lot.

(3) The effect of either or both of the alleged errors was erroneously to impose liability on the OC for the re-design of the kitchen floor slab and damages for delay in the lot owner's works the subject of the by-law.

(4) The Member erroneously ordered, contrary to the facts, that special by-law 12 be registered in a form which included only the architectural plans and not the engineering sketches.

(5) In the event that any of the posited questions of law were found not to be so characterised, leave was sought to raise them.

(6) Leave ought to be granted because the result would have clearly been different on scope of OC liability for works and rent and there was an issue of principle as to the proper approach to interpretation of by-laws and in particular common property rights by-laws.

1. As said at the outset of these reasons, the amendments in the notice relating to appeal against the primary costs order were deferred to consideration of costs submissions after delivery of the substantive appeal decision.
2. The reply to the notice of appeal, which was filed on 22 May 2025, contained the following in summary:

(1) There was no properly articulated ground of appeal as to an error on a question of law where it was not in dispute that certain remediation items were not part of the Works, or the Member so found, and consequently could not come within the defined Exclusive Use Area.

(2) Alternatively, the Member never found as claimed and instead correctly construed cl 1.1 of special by-law 12 to mean that no obligation was imposed on the lot owner with respect to common property "affected by the Works" prior to any Works being carried out and irrespective of whether the works on common property were carried out.

(3) Further in the alternative, the Member correctly adopted the decision in Lyon v Owners SP 11045 [2023] NSWCATCD 31 that "the common property ... affected by the Works" requires evidence that the particular common property defect was caused by the lot owner's works and there was not simply a geographical coincidence, however tenuous or remote, between the common property defect and the proposed renovation works.

(4) There was no articulated error on a question of fact and no articulated reasons for a grant of leave to appeal.

(5) Even if the appeal succeeded, the proceedings would need to be remitted for further findings by the Member as to what common property areas were "affected by the Works" and how much, if any, of the compensation award was affected.

1. An owners corporation owes lot owners a strict duty to maintain and repair, including as required to renew or replace, common property under SSMA s 106(1) and (2) as interpreted in well-established authority: Seiwa PL v Owners SP 345042 [2006] NSWSC 1157 at [3]- [7], [21]-[23]; Trevallyn-Jones v Owners SP 50358 [2009] NSWSC 694 at [128] et seq, esp at [154]-[156]; Riley v Owners SP 73817 [2012] NSWCA 410 at [75]- [76], referring to the same content of duty in the predecessor to SSMA s 106, being s 62 of the 1996 Act; more recently in Owners SP 33368 v Gittins [2022] NSWCATAP 130 at [57]- [59].
2. There was no qualification on appeal to what was said in Seiwa at first instance in relation to the strict nature of the duty: Owners SP 345042 v Seiwa Australia PL [2007] NSWCA 272 - Hodgson JA at [5] referred to the strict nature of the duty in similar terms to Brereton J in Seiwa, as did Tobias JA at [54] with an acknowledgement of what is now s 106(3) that is not presently relevant. The same approach on the present provision was endorsed by reference to the earlier authority in Smith v Owners SP 3004 [2022] NSWSC 1599 at [30]- [31] and more recently in Selkirk v Owners SP 2661 [2024] NSWSC 760 at [16] et seq.
3. The duty extends to remediation of defects in the construction of the common property, because repair means making something good even if it was not originally good: Proprietors SP 6522 v Furney [1976] 1 NSWLR 412 at 416; Seiwa [2006] NSWSC 1157 at [4]. The duty also extends to requiring the owners corporation to restore common property that has been altered, replaced or destroyed without authority: Owners SP 21702 v Krimbogiannis [2014] NSWCA 411. It also extends to repairing damage caused by others. In either of the last two situations, the owners corporation may pursue rights against those others: Lubrano v Proprietors SP 4038 (1993) 6 BPR 13,308.
4. Brereton J in Seiwa [2006] NSWSC 1157 at [4]- [5] expressly referred to the duty as including keeping the common property "in proper order by acts of maintenance before it falls out of condition, in a state which enable it to serve the purpose for which it exists ... Thus the body corporate is obliged not only to attend to cases where there is a malfunction, but also to take preventative measures to ensure that there not be a malfunction ... It follows that as soon as something in the common property is no longer operating effectively or at all, or has fallen into disrepair, there has been a breach of the [s 106] duty". This encompasses preventative maintenance and repair and financial provision for such preventative work; see also at [14], [19]-[21], [23], where it is clear that it is unnecessary to decide whether the owners corporation had attended to the defects with due diligence.
5. Reasonable steps is not a defence, nor is contributory negligence a consideration: Seiwa PL v Owners SP 345042 [2006] NSWSC 1157 at [4], [21]; Owners SP 345042 v Seiwa Australia PL [2007] NSWCA 272 at [46]; Owners SP 74232 v Tezel [2023] NSWCA 35 at [35]. The statutory provision is not cast in the form of a duty on an owners corporation to take reasonable care. It does not embody a range of reasonable excuses for inaction. The common property is out of the state of repair and maintenance in breach or contravention of duty until the repair or maintenance occurs: Owners SP 80412 v Vickery [2021] NSWCATAP 98 at [36], [63]; Owners SP 36613 v Doherty [2021] NSWCATAP 285 at [84], [93]-[94].
6. Alleged restriction of access to, or interference with or resistance to, remediation by a lot owner as a matter of law does not qualify the OC's performance of its strict duty, but will be relevant in determining whether and, if so, to what extent the lot owner has established that a reasonably foreseeable type of loss (which also needs to be established) was "as a result of" a breach of such statutory duty as distinct from whether all or part of such loss was caused by an intervening act or by the lot owner's own conduct, such as in refusing access and the consequent delay while the necessary access order under SSMA ss 122 and 124 is obtained: Owners SP 2661 v Selkirk [2024] NSWSC 760 at [9], [21]-[24], [130], [138]-[144] [149]-[150], [163]-[176], qualifying the decision of the Appeal Panel [2024] NSWCATAP 17 on this point. The lot owner's conduct will be relevant, as will the owner's corporation's response - for example, did the owners corporation act sufficiently to seek to overcome lot owner resistance; did the lot owner unreasonably prolong rectification; was the lot owner undertaking renovations, or did the lot owner take the opportunity to undertake renovations, which meant that no rent was obtainable and for what period, and was such period extended by the owners corporation's work to fulfil its strict duty.
7. An owners corporation does not require approval by the owners in general meeting to carry out its strict statutory duty under SSMA s 106: Stolfa v Hempton [2010] NSWCA 218 at [9]-[10].
8. Delays associated with an owners corporation's insurers are an explanation but not an excuse: Nicita v Owners SP 64837 [2010] NSWSC 68 at [11]. One would expect the same to apply to others involved in the process such as delays by contractors or regulatory authorities, subject to the limited exception in s 106(4) where an owners corporation itself takes the initiative in bringing proceedings against a third party.
9. It should not be the case that the strict duty as established by authority is qualified to operate differentially depending on whether the common property in question is purely related to a particular lot or that a particular lot owner is the only person affected by the breach. To so differentiate would be to read into the application of SSMA s 106 a differentiation that is not there on the plain words and is inconsistent with the thrust of the authority just cited. It is not there for good reason. Such a differentiation would potentially be very difficult to administer and would potentially increase disputation. An owners corporation's judgment call on who was affected by fulfilment of its duty in respect of specific common property would have that consequence. Such a differentiation would be inconsistent with what Brereton J said in Seiwa [2006] NSWSC 1157 at [4]: "And it extends to oblige the owners corporation to do things which could not be for the benefit of the proprietors as a whole or even a majority of them ... "; see also Proprietors SP 159 v Blake [1986] CCH Strata Titles Cases 30-068; Davenport v Owners SP 536 [2018] NSWCATAP 301.
10. The foregoing principles are not qualified by the decision in Glenquarry Park Investments PL v Hegyesi [2019] NSWSC 425 at [57]- [74] et seq, [100]-[114]. In Glenquarry Park there were jurisdictional deficiencies in formulation of the orders for remediation, because the formulation potentially imposed on the owners corporation in that case, without basis in the findings, a scope of works which went beyond the owners corporation's strict duty. Further, the orders (which involved an owners corporation obtaining expert investigations and then performing work in accordance with expert recommendations) were too uncertain and indeterminate to form the proper basis of a remedial order. It was not a dispensation from the strict duty. There was recognised a degree of flexibility in the form of compliance by the owners corporation with the strict duty, which, on the authorities canvassed extensively in that decision (Ridis v Owners SP 10308 (2005) 63 NSWLR 449, [2005] NSWCA 246, Owners SP 50276 v Thoo [2013] NSWCA 270 and Stolfa) includes replacement if that is reasonably necessary because the item has come to the end of its serviceable operating life and can no longer be kept in a state of good and serviceable repair. The same must be true if the state of the item is so damaged or deteriorated that it cannot be repaired but must be replaced.
11. An owners corporation's fulfilment of its strict obligation requires it to repair or replace common property so that it substantially is similar in appearance, characteristics and quality compared with what was there before, to which could be added functionality and amenity to the extent those are not already encompassed within the foregoing words. It is inevitable that replacement in fulfilment of duty, and some repairs, will bring an element of improvement and will not be inappropriate, unless it is established that the repair or replacement was an unreasonable choice or was extravagant: Owners SP 36613 v Doherty [2021] NSWCATAP 285 at [163], [165]-166], [181]; authority discussed in Glenquarry already referred to; cp Hyder Consulting (Australia) PL v Wilh Wilhemsen Agency PL [2001] NSWCA 313 at [47], [54], [107].
12. The requirements in Glenquarry find complementary support in the requirements for work orders under the Home Building Act 1989 (NSW) (HBA). Under HBA s 48O(1)(c) an owner is required to specify action by the builder that is grounded in proof by the owner of, not only the defect, but also the manner of remediation and a work order must focus on the particular defect to be rectified and must be certain, practical and enforceable: Catapult Constructions PL v Denison [2018] NSWCATAP 158 at [46]- [61] and the authority there cited.
13. An expert report may be integral to formulation of the precise scope of work required to assist the owners corporation to fulfil its strict duty or as an incident of the relief granted to require the owners corporation to fulfil its strict duty: Carli v Owners SP 56120 [2018] NSWCATCD 55i at [53]; cp in a home building context Marr v JCK Building Solutions PL [2018] NCATCD, unreported, 4 December 2018, HB 16/43946 at [46]-[54], where an element of the manner of remediation in certain circumstances may inherently require inspection, properly defined so as to be sufficiently specific, to establish the need for and required scope of remediation.

1. Consistent with the grounds of appeal, in appeal submissions the OC put its primary contentions as an error by the Member on a question of law (alternatively, leave should be granted to appeal the error) being the misconstruction of special by-law 12. The Member, it was submitted, ought to have construed the by-law as immediately transferring responsibility from the OC to the lot owner for the "Exclusive Use Area" which included areas of common property "directly affected by the Works. These would naturally include any common property (such as the kitchen slab) which served no purpose other than supporting the Works and would also include such elements as walls partially demolished and rebuilt as part of the Works", being the northern, southern and western walls of the lot.
2. We respectfully agree that, on the authority cited earlier in these reasons on what constitutes alleged errors on a question of law, these were correctly articulated as such and do not require a grant of leave to appeal in the form in which they were argued before us. We deal below with the possible need for grant of leave had certain factual contests intruded.
3. In submissions the OC's alternative case was that proper consideration of the documents accompanying the resolution to adopt special by-law 12, specifically the engineering sketches, actually included the kitchen slab within the Works. It was submitted that the Member erred in excluding the engineering drawings from the registrable form of the by-law and further in finding that the inclusion of those sketches would not have reasonably conveyed that the Works included the kitchen slab.
4. Consistent with the grounds of appeal, it was submitted that these contentions and any interpretation of special by-law 12 that required conclusions on contested questions of fact ought to attract a grant of leave to appeal. To the ground for exercise of discretion to grant leave in the notice of appeal were added that the issue was still primarily one of construction of the by-law, the Member's construction was erroneous and therefore was not fair and equitable, the factual element of "affected" was not in dispute, only what it meant as a matter of construction, and the costs of litigating construction of a frequently-encountered form of by-law were not disproportionate to the public importance of the issue and the amount of damages.
5. Turning to the construction of special by-law 12 in relation to common property responsibility, the starting point is that the OC has the strict duty to put the common property into repair and maintain it, which preceded the lot owner's works even if those works later affected some of the repaired common property when actually carried out. All the relevant defects were pre-existing. Unless the OC showed that the existing slab in the kitchen and other relevant items of common property were maintained and in repair and were only rendered inadequate by the Works (which was not the case sought to be made by the OC), the lot owner was entitled to start with a "clean slate" effectively.
6. In special by-law 12 cl 2.1 "Exclusive Use Area" means "that part of the common property occupied or affected by the Works". "Works" means the works and renovation depicted in the Plans and any works prescribed in the Engineer's Report. "Plans" means the plans attached to and forming part of the by-law or attached to the notice and agenda of the general meeting that passed the by-law or tabled at the general meeting that passed the by-law. "Engineer's Report" means the engineer's report in cl 5.1(d). All definitions have their given meaning unless the context or subject-matter otherwise indicate or require. Cl 5.1(d) requires that, "Before commencing the Works, the Owner must: ... (d) at least 14 days before commencing the Works, give the Owners Corporation a report from a structural engineer addressed to the owners corporation or prescribing such works that are required to maintain the structural integrity of the Building or any part of it, in respect of the Works".
7. In addition to authorising the Works and permitting the lot owner to retain the Works, in cl 3.1 paras (c) and (d) the OC respectively confers on the lot owner special privileges in respect of the Exclusive Use Area to permit the Works to be carried out and grants to the lot owner a right of exclusive use and enjoyment of the Exclusive Use Area in relation to and to keep the Works.
8. There are thus two dimensions to the grant, signified by the defined distinction between Exclusive Use Area and Works. Each dimension distinguishes between the common property which is occupied or affected by the Works and which is the defined Exclusive Use Area, and the Works themselves. Consistent with SSMA s 106(7), the common property does not change character and become part of the works or the lot owner's responsibility except to the extent enunciated by the special by-law (see also s 108(3) and (4)). As a result, the strict duties in respect of the common property imposed by the SSMA as described above remain except to the extent that the by-law otherwise provides, which is signified by the closing words of para 3.1 "upon and subject to the conditions set out in this by-law".
9. Both dimensions in the grant are and operate in the realm of the present and the future. There can by definition be no element of retroactive operation in respect of the Works, which are new. Equally, there is no element of retroactive operation expressed or implied in the special privileges granted in respect of the Exclusive Use Area which are to permit carrying out the Works, to keep the Works and in relation to the Works, all of which are in the present or the future.
10. The scope of the modification of the OC's strict duty in relation to common property is found in cl 8.1. Under para (a) the lot owner at her cost must properly maintain "the Works and the common property occupied by them" and keep "them" in repair in words redolent of the duty on the OC in SSMA s 106, and where necessary to renew or replace any fixtures or fittings comprised in "the Works". It is immediately apparent that the words "the common property occupied" by the Works are used as the defining phrase rather than the broader defined Exclusive Use Area which includes common property "affected" by the Works.
11. Under para 8.1(b) the lot owner at her cost must properly maintain "the Exclusive Use Area" and keep it in repair in words redolent of the duty on the OC in SSMA s 106 and where necessary to renew or replace any fixtures or fittings comprised in the Exclusive Use Area. The use of the defined term brings in common property "affected" by the Works to the extent that it differs from "occupied" by the works. "Affected by" connotes a causal relationship with the Works; the Works must be demonstrated to have an influence on or cause a change in the common property that is distinct from purely occupying it. For example, in Lyon v The Owners SP 11045 [2023] NSWCATCD 31 at [55] it was held that the same words "the common property affected by the Works" did not extend the lot owner's responsibility to remove a black substance because the owners corporation had not provided any evidence to demonstrate that the black substance was caused by the lot owner's works. Here, as the lot owner contended, the need for remediation of the slab and the concomitant duty on the OC to do so pre-dated and had no causal link to the Works other than that support of the Works would be one function of the slab, just as the pre-existing structures were supported.
12. However, and irrespective of the causal characterisation in Lyons, in both paras (a) and (b) the obligations are imposed only in the context of futurity rather than retroactivity already described, because the obligation is defined by reference to terms that (as already described) are and operate in the realm of the present and future.
13. Likewise, paras (c), (d), (e) and (f) operate in the realm of the present and the future. The lot owner at her cost is obliged to: make good any damage to common property or another lot caused as a result of "the Works"; indemnify the OC against all claims and liabilities caused by "the Works, the use of the Exclusive Use Area or any breach of this by-law"; if required make or permit the OC on its behalf to make any insurance claim "concerning or arising from the Works" and to use proceeds to complete "the Works" or repair any building damage "caused by the Works", and comply with all laws and council requirements "applicable to the Works" or "concerning the Works".
14. There appears no longer to be any challenge before us to the scope of the structural and waterproofing works in respect of common property proximate to lot 1, only as to who is obliged to pay for some of them and/or perform them (being the kitchen slab and specified footings) and to the financial consequences if it is not the lot owner's responsibility to pay for or perform them. It is clear and now not in dispute that those common property works pre-dated, were not caused by and were discovered to be required before or at the outset of the lot owner's works.
15. On the authorities already cited the breadth and meaning of the strict duty in SSMA s 106(1) and (2) expressly includes a strict duty to "maintain" as well as to repair. The ordinary meaning of "maintain" is to keep in continuance or preserve or retain in due condition. In other words, the OC's strict duty includes taking steps to avoid the common property falling into disrepair or otherwise ceasing to continue in a proper state and to ensure such continuance. The authorities already cited state that the OC's obligation is to keep the common property "in proper order by acts of maintenance before it falls out of condition, in a state which enables it to serve the purpose for which it exists": Brereton J in Seiwa [2006] NSWSC 1157 at [4]- [5], [14], [19]-[21]. Such obligations require properly-provisioned and funded pre-emptive action, including investigative inspection, once a risk that the common property has fallen or will fall "out of condition" has become obvious or ought reasonably (including by reasonable further steps on what is then known) to become obvious or a matter of awareness: Doherty at [180]-[181].
16. On the above authorities the relevant common property was already out of repair and the OC was already in breach of its strict duty in respect of that common property. The Member so found for water ingress and dampness from at least late 2019 and the defective slab in the kitchen area since prior to December 2022 when it was discovered: PR [50].
17. It would require very clear words and very clear lot owner's consent to impose a retroactive duty and obligation to transfer to the lot owner the consequences of the existing breach of the OC's strict duty and obligation, otherwise there could be an unjust windfall to the OC simply because a lot owner sought permission to undertake works.
18. Absent clear and explicit consent in the terms of the common property rights by-law for the lot owner to be responsible for repair of pre-existing defects in common property, a lot owner is entitled otherwise to receive at the outset of approved works the relevant common property in a state where the OC was not in breach of duty in respect of that common property. If a common property rights by-law contained such an obligation, the potential exists for an application to be made under SSMA s 149(1)(c), but it is unnecessary for us to explore that issue.
19. A response of the OC - that works it was required to undertake were subsumed by the lot owner's Works - does not absolve the OC of responsibility. Expressing the above in colloquial terms, the lot owner was entitled to a clean slate in terms of the common property in relation to which the lot owner's approved works were to occur. If on that clean slate the lot owner's works required further work that might obviate the utility of some of what the OC was required to do earlier but in breach of duty had not yet done, the OC still was required to perform its duty. It was up to the OC to establish the extent to which performance of that duty might be relieved by overlap with the lot owner's works. That issue was not sought to be argued before us nor, on the material available to us, before the Member. As the lot owner's submissions pointed out as an example, the kitchen slab was a structural component of the building, not just the base (on the OC's case) for the kitchen renovations.
20. The Member at PR [66] et seq focused on a subset of the foregoing principled analysis, namely, that the OC's duty in respect of common property within the Exclusive Use Area remained until performance of the Works: see in particular at [69]. This was reinforced, particularly at PR [70] (in the context of the discussion of Lyon at [45]), by reference to "affected" having a causal connotation - the Works must cause the common property effect.
21. We respectfully agree with those conclusions to the extent they are consistent with the foregoing principled analysis. The principled analysis in which we have engaged above itself reinforces the conclusions: if the lot owner never commenced the Works then the existing obligations of and breaches by the OC remained to be remedied, unaffected by the mere passage of the special by-law; if the pre-existing breach was not caused by the lot owner then it remained the duty of the OC to remedy. Further, the terms of special by-law 12 did not involve the lot owner agreeing to replace the kitchen slab in its entirety.
22. That principled analysis however goes further and makes it clear that the OC cannot transfer the burden of its pre-existing duty to remediate onto a lot owner seeking approval for works, even once the works have begun or been completed and if there is no causal connection with the works, without very clear retroactive words or identification of specific responsibility (if the works are to alter pre-existing defective common property) to which the lot owner consents, knowing that to be the clear position, or has rights to challenge the refusal to pass a proposed common property rights by-law without such retrospectivity or such apportionment.
23. It will be apparent from the foregoing analysis that we respectfully disagree with the OC's submission. That submission contends that the special by-law speaks from its passage by resolution of the OC but does not recognise that the language of the by-law is of the present and future state of the common property as it should be had the OC performed its strict duty, not retroactive operation to shift the burden of that non-performance (in the absence of very clear words to do so).
24. We disagree with the lot owner's submission that leave to appeal was required because there was a factual dispute before us on what common property was "affected" by the works. It seems to us that the correct interpretation of special by-law 12 as argued before us does not turn on the scope of "affected" in a particular factual context but, rather, on the principled analysis set out above and on the absence before us of any evidence about apportionment of responsibility or any evidence contesting causation of pre-existing defects. If those last two matters (apportionment of responsibility and/or causation of pre-existing defects) had been live issues before us, then it is likely that leave would have been required.
25. Turning to the content of the attachments to the special by-law 12 as resolved, it is clear, and now common ground as we understand, that the engineer's sketches were not the Engineer's Report as defined, and that was in any event the unchallenged finding of the Member at PR [64]. It was also common ground, as found at PR [65], that the registered by-law should have attached the architectural drawings.
26. It is not in serious contention that, whether by-laws are characterised as delegated legislation or statutory contracts, common property rights by-laws should be interpreted objectively, by what they would convey to a reasonable person: Owners SP 3397 v Tate [2007] NSWCA 207; (2007) 70 NSWLR 344 at [71(4), (5)]. That does not exclude consideration of what is said in an email that forms part of the surrounding circumstances which can be considered to assist in resolving ambiguity of meaning, only that the subjective intent of the author of the email is not relevant: Owners SP 74698 v Jacinta Developments PL [2021] NSWCATAP 387 at [35], [51(4)], [129]-[137].
27. The OC submitted that, in the ambiguity of what was "attached to and forming part of this by-law", and in the absence of evidence as to what was tabled at the AGM at which the by-law was approved, what was attached to the notice and agenda of the AGM governed and that this included the engineering sketches.
28. We respectfully disagree.
29. In our view the meaning of "plans", as used within the definition of "Plans" and in the context of provisions of a proposed common property rights by-law, connoted a fully-developed document setting out in pictorial or diagrammatic form the final or near-final proposed form of the lot owner's works put forward for approval, as distinct from preliminary or developmental sketches. The purpose of putting forward such a final or near-finalised document is to provide a basis for lot owners to appraise the proposed works. Architectural drawings provided the developed concept and so qualified - they referred to the slab as an existing structure to remain, with the Works to include timber flooring on top. More specialised documentation such as engineering detail does not so qualify unless it is much more than a preliminary or developmental sketch which did not define Works elements as distinct from existing or assumed building elements.
30. On that analysis the engineer's sketches did not come within the meaning of "plans" within the definition of "Plans" whether or not they were relevantly attached. They were preliminary and on their face subject to further investigation.
31. This was in contrast to the then fully-developed architectural drawings and was consistent with the lot owner's instructions, in her email to the strata manager of 10 October 2019, set out at PR [52]. Those instructions made it clear that the architectural "drawings/plans" were "for motion". In contrast, the sketches (mistakenly called the Engineer's Report which did not need to be provided, separately, until 14 days before commencement of the Works) were provided for information or if there was a positive response to the lot owner's question whether they needed, as the Engineer's Report, to be attached, a question that the strata manager did not answer. Those are matters which can be gleaned from the email as an objective part of the surrounding circumstances, irrespective of the lot owner's intent in writing the email.
32. In light of the separate requirement for an engineer's report, there was no need to attach preliminary engineering sketches since the architectural drawings provided the best information at that point for the form of works sought to be approved. Those drawings included colour coding of the kitchen and meals floor and underfloor areas as existing structure to remain.
33. Even if the engineering sketches qualified as "plans" within the definition of "Plans", the words "attached to and forming part of the by-law or attached to the notice and agenda of the general meeting that passed the by-law or tabled at the general meeting that passed the by-law" did not apply to them. Those words could not objectively carry more than that they referred to plans attached or tabled in accordance with authority and instructions. In the evidence before us, including the lot owner's email, there were no such instructions, nor was authority given, to attach or table the engineering sketches.
34. We have earlier noted that it was common ground that, at the AGM on 28 October 2019, the proposed special by-law 12 which was considered and passed contained a suite of architectural drawings and five pages of engineering sketches. Only the engineering sketches were annexed to the by-law that was subsequently registered, which is inconsistent with what was considered and voted upon at the meeting.
35. If, contrary to the foregoing, an error on a question of fact had been established, on balance we would have exercised discretion to refuse leave to appeal even though there was the possibility of a different outcome had the engineering sketches formed part of the material on what constituted the Works. That was not a foregone conclusion in respect of the kitchen slab, let alone the walls. Importantly for exercise of discretion, what was involved was, on unvarnished analysis, an application of the interpretative principles for by-laws (which are well-established) to the facts of this particular case. Further and in any event, as the lot owner contended there was no distinct utility in the ground - it went nowhere unless the OC's characterisation of the operation of special by-law 12 was upheld.
36. The primary member made no error on a question of law in interpreting special by-law 12 either in respect of the scope of obligation transferred to the lot owner or in respect of what was required to be registered in relation to the by-law. To the extent that the latter issue went beyond a question of law, there was no error on a question of fact or against the weight of evidence so as to justify consideration of a grant of leave. The primary member's reasons, even if they differed in extent from the reasons expressed herein, came to the same conclusion and justified the same outcome. There is thus no material reason to grant leave to appeal or to allow the appeal and no utility in doing so.
37. Accordingly, leave to appeal will be refused and the appeal dismissed.

1. For strata schemes, there are special legislative provisions which govern recovery of OC costs and expenses in respect of proceedings, as relevantly determined by the Appeal Panel in Owners SP 74698 v Jacinta Investments PL [2021] NSWCATAP 387 at [180]- [208].
2. First, SSMA s 232 supports the making of an order quarantining lot owners against contributions (from the existing funds of an owners corporation or from levies) to pay damages and costs orders against the owners corporation in favour of the lot owners.
3. Secondly, SSMA s 104 operates of its own force, without need for orders, to quarantine successful lot owners from contributing (from the existing funds of an owners corporation or from levies) to the owners corporation's costs and expenses in the proceedings.
4. Thirdly, it is appropriate, if there is a separate determination on costs and expenses in the proceedings, to reserve for that determination any dispute as to the operation of SSMA s 104 in terms of whether the lot owner is successful in the proceedings and the owners corporation unsuccessful in the proceedings, even if that appears reasonably clear. Since SSMA s 104 operates as a statutory obligation without need for an order once the lot owner is established as the successful party, a notation of that statutory force is sufficient without further order.
5. What is not the subject of such quarantining is expenditure from existing funds or from levies to fund remedial work to common property.
6. Disputes about aspects of those issues more properly will be the subject of fresh proceedings in the Tribunal rather than orders in the appeal: Owners SP 70871 v Turek [2022] NSWCATAP 83 at [29]- [30].

(1) Leave to appeal refused.

(2) Appeal dismissed.

(3) In respect of costs of the appeal:

(a) Any application in respect of costs together with submissions and any further documents in respect of costs, including any application for a hearing on costs, are to be filed and served within 28 days after date of these orders;

(b) Any submissions and further documents in respect of costs in response are to be filed and served within 42 days after date of these orders.

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.

27 February 2026 - Details for decision under appeal added to cover sheet