The Owners - Strata Plan No. 98503 v Morrell

THE HEARING

1. The hearing commenced on 4 June 2021, however insufficient time had been allocated and the hearing was subsequently completed on 5 August 2021.
2. The applicant was represented by Jane Crittenden, solicitor.
3. The respondent was represented by Dominic Williams, counsel, and Keith Spencer of Nexus Law, solicitor.
4. The applicant relied on: 1. a folder of documents received by the Tribunal on 12 March 2021, which included written submissions, annexures thereto and a report dated 16 March 2020 and prepared, for the respondent, by Michael Hanisch of HABU Town Planning and Development (the HABU Report); 2. a report dated 19 March 2021 prepared by Graham Brooks, an architect and director of GBA Heritage; and 3. written submissions in reply dated 18 May 2021 and annexures thereto.
5. The respondent relied on: 1. a folder of documents received by the Tribunal on 13 April 2021, which included written submissions and a statement by the respondent and annexures thereto, which included, inter alia: 1. a report or letter dated 25 March 2021 prepared by James Phillips of Weir Phillips; 2. a report dated 22 October 2020 prepared by Igor Vavrica;; 3. a report or letter dated 24 February 2020 prepared by Quoc Huy Nguyen; and 4. the HABU Report; 1. clearer photos of Lot 1 received by the Tribunal on 14 May 2021; 2. a signed statement of Robert Wilkins dated 19 May 2021 and an addendum to the Vavrica Report dated 21 May 2021, both received by the Tribunal on 21 May 2021; and 3. supplementary written submissions dated 4 June 2021 received by the Tribunal on 28 July 2021.
6. Objections to portions of the respondent's evidence were made by the applicant, some of which were upheld and some of which were not for reasons given orally during the hearing. No objections were made by the respondent to the applicant's evidence.
7. Both parties also made oral submissions.

RELEVANT LEGAL PRINCIPLES

1. Section 106 of the SSMA provides that: (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.
2. In The Owners - Strata Plan No. 21702 v Krimbogiannis [2014] NSWCA 411 Basten JA (with whom Macfarlan and Meagher JJA agreed) said at [15], with respect to section 62 of the Strata Schemes Management Act 1996 (NSW), which was in the same terms as section 106 of the SSMA: Section 62 imposes an obligation to "maintain" the common property. Read in its statutory context, having regard to the nature of the common property vested in the owners' corporation, and the functions of the owners' corporation with respect to that property, the obligation carries with it the powers necessary for its performance: Interpretation Act 1987 (NSW), s 50(1)(e). The reasoning in the District Court sought to read down the meaning of "maintain" by reference to the following words, namely "keep in a state of good and serviceable repair". However, "maintain" is not so limited in its meaning. Keeping in good repair assumes the continued existence of the property in question; maintaining the property includes preserving it by not removing, replacing or destroying the property. So much is clear from the dictionary definition relied on by McColl JA in Ridis at [158].
3. Section 108 of the SSMA provides that: (1) Procedure for authorising changes to common property An owners corporation or an owner of a lot in a strata scheme may add to the common property, alter the common property or erect a new structure on common property for the purpose of improving or enhancing the common property. (2) Any such action may be taken by the owners corporation or owner only if a special resolution has first been passed by the owners corporation that specifically authorises the taking of the particular action proposed.
4. In Stolfa v Hempton [2010] NSWCA 218 Allsop P (with whom Basten and Young JJA agreed) referred approvingly at [34] to the following observations by the primary judge, Brereton J (as his Honour then was), in Stolfa v Owners Strata Plan No 4366 [2009] NSWSC 589 at [97]: Within the scheme created by the Strata Schemes (Freehold Development) Act (which vests title to common property in the owners corporation) and the Strata Schemes Management Act (which imposes duties upon the owners corporation in key management areas including, relevantly, the management of common property), the voting requirements in s 65A serve a public policy function of protecting the beneficial proprietary rights of lot owners in common property. Works which alter, add to, or erect a new structure on common property may be carried out 'only if' the voting requirements in s 65A are satisfied. The choice of words used evinces a legislative intention that there be only one method for authorising such work, namely that provided in s 65A; the provision is 'essentially prohibitory' in that it expressly precludes any other method for authorising the carrying out of those categories of works …
5. Section 111 of the SSMA provides that: An owner of a lot in a strata scheme must not carry out work on the common property unless the owner is authorised to do so - (a) under this Part, or (b) under a by-law made under this Part or a common property rights by-law, or (c) by an approval of the owners corporation given by special resolution or in any other manner authorised by the by-laws.
6. Section 132 of the SSMA provides that: (1) The Tribunal may, on application by an owners corporation for a strata scheme, make either of the following orders if the Tribunal is satisfied that work carried out by or for an owner or occupier on any part of the parcel of the scheme has caused damage to common property or another lot - (a) an order that the owner or occupier performs the work or takes other steps as specified in the order to repair the damage, (b) an order that the owner or occupier pay to the owners corporation or the owner of the lot a specified amount for the cost of repairs of the damage and any associated costs, including insurance and legal costs. (2) An amount payable by an owner or occupier to an owners corporation under this section is payable, and may be recovered, under this Act as if it were an amount of unpaid contributions.
7. Section 135 of the SSMA provides that: (1) The by-laws for a strata scheme bind the owners corporation and the owners of lots in the strata scheme and any mortgagee or covenant chargee in possession, or tenant or occupier, of a lot to the same extent as if the by-laws - (a) had been signed and sealed by the owners corporation and each owner and each such mortgagee, covenant chargee, tenant and occupier, and (b) contained mutual covenants to observe and perform all the provisions of the by-laws. (2) There is an implied covenant by the tenant of a lot or common property to comply with the by-laws for the strata scheme. Note - The effect of having been taken to have signed and sealed a by-law is that the person is always taken to have known about it.
8. Section 149 of the SSMA provides that: (1) The Tribunal may make an order prescribing a change to a by-law if the Tribunal finds - (a) on application made by an owner of a lot in a strata scheme, that the owners corporation has unreasonably refused to make a common property rights by-law, or (b) on application made by an owner or owners corporation, that an owner of a lot, or the lessor of a leasehold strata scheme, has unreasonably refused to consent to the terms of a proposed common property rights by-law, or to the proposed amendment or repeal of a common property rights by-law, or (c) on application made by any interested person, that the conditions of a common property rights by-law relating to the maintenance or upkeep of any common property are unjust. (2) In considering whether to make an order, the Tribunal must have regard to - (a) the interests of all owners in the use and enjoyment of their lots and common property, and (b) the rights and reasonable expectations of any owner deriving or anticipating a benefit under a common property rights by-law. (3) The Tribunal must not determine an application by an owner on the ground that the owners corporation has unreasonably refused to make a common property rights by-law by an order prescribing the making of a by-law in terms to which the applicant or, in the case of a leasehold strata scheme, the lessor of the scheme is not prepared to consent. (4) The Tribunal may determine that an owner has unreasonably refused consent even though the owner already has the exclusive use or privileges that are the subject of the proposed by-law. (5) An order under this section, when recorded under section 246, has effect as if its terms were a by-law (but subject to any relevant order made by a superior court). (6) An order under this section operates on and from the date on which it is so recorded or from an earlier date specified in the order.

THE BY-LAWS

1. The Owners Corporation submit that the installation of the bi-fold windows breached clauses 14 and 24 of the by-laws for the Strata Plan.
2. Clause 14 of the by-laws provides as follows: 14. Appearance of Lot and Building (a) The Occupier of a Lot must not, without the prior written consent of the Owners Corporation, install, erect or display within the Lot anything visible from outside the Lot that, which when viewed from outside the Lot, is not in keeping with the rest of the Building. This includes, without limitation: (i) posters, pictures, stickers or other items on or from windows; (ii) "for sale" or "for lease" signs, or any form of notice of advertising; and (iii) satellite dishes or antennas.
3. Clauses 24.1 and 24.2 of the by-laws provides as follows: 24. Carrying out Building Works 24.1 Consent to carry out Building Works (a) The Owner of a Lot must have consent from the Owners Corporation prior to carrying out Building Work. (b) Notwithstanding any other By-law, the Owners Corporation may refuse consent if the proposed Building Work affects the façade of the Building, any aspect of the Building which has been designated by Council as having heritage significance or the Common Property. 24.2 Procedures before carrying out Building Works Before Carrying Out Building Works, the Owner of a Lot must: (a) If the Building Work constitutes a Minor Renovation, obtain approval of the Strata Committee under delegated authority for the Owners Corporation pursuant to s110(6)(b) of the Act, and approval from any relevant Authority and otherwise comply with section 110 of the Act. (b) to the extent the Building Work does not constitute a Minor Renovation, obtain approval of the Owners Corporation, given by special resolution, and approval from any relevant Authority and otherwise comply with section 108 of the Act; and (c) arrange with the Owners Corporation a suitable time and means by which the Owner's contractors may access the Building for purposes associated with those Building Works.
4. I note that "Building Works" is defined by clause 1.1 of the by-laws as follows: means works, alterations, additions, damage, removal, repairs or replacement of: (a) Common Property structures, including the walls, floors and ceilings enclosing the Lot (Common Property walls include windows and doors in those walls); (b) the structure of the Lot; (c) the internal walls inside the Lot (e.g. a wall dividing two rooms in the Lot); (d) Common Property services; or (e) services in the Strata Scheme whether or not they are for the exclusive use of the Lot, but does not include Cosmetic Work.
5. I note that "Cosmetic Work" is defined by clause 1.1 of the by-laws to have same meaning as in the SSMA.

DETERMINATION

1. I am satisfied that the respondent has breached sections 108 and 111 of the SSMA by installing the bi-fold windows.
2. I am satisfied that the respondent has breached clause 24 of the by-laws for the Strata Plan by installing the bi-fold windows.
3. I am satisfied that the installation of the bi-fold windows was neither cosmetic work nor a minor renovation within the meaning of the SSMA.
4. I am satisfied that the installation of the bi-fold windows has caused damage to common property of the Building, by drilling into common property boundary walls and the underside of the slab of the balcony of lot 6 of the Strata Plan.
5. Insofar as the respondent sought to justify her breaches of the SSMA and the by-laws by evidence, principally from Mr Vavrica, that the installation of the bi-fold windows rectified a non-compliance in the common property with certain sections of the National Construction Code, in my opinion that is irrelevant. In this regard, the applicant referred me to the decision of Hall J in The Owners - Strata Plan No. 32735 v Heather Lesley-Swan [2012] NSWSC 383 where his Honour said at [177] to [182]: The respondent in the present case did not seek to engage either the statutory remedy under s 140 or any equitable relief. By her own decision a contractor was engaged, not for the purpose of undertaking work on her property, but to perform it on common property. The issue of a claimed right to undertake work on another's property and claim the cost of doing so from the owner of that property in this case is to be considered in the context of the statutory scheme. It is useful to examine the relevant principles by considering the position under the general law where damage arises from a nuisance occurring on a neighbouring property. The common law principles which limit the circumstances in which damages may be claimed for abating a nuisance have been set out above. Just as, in accordance with those principles, the unlawful performance of work on another's property does not find favour with the law for the reasons discussed in the case law above, provisions of the statutory scheme established under the Act operate so as to prevent lot owners or others from performing work on common property in the 'Key Management areas' specified in the Act. In that way the scheme, by conferring exclusive power, control and responsibility for common property in an owners corporation, ensures a controlled consistency of approach and the avoidance of disputes, or, in the language of the authorities on abatement of nuisance, "disorder". The rationale or purpose for ensuring that all work referred to in ss 62 and 140 remains under the control of an owners corporation accordingly may readily be identified. If an individual lot owner was free to have his or her contractor enter upon common property where an owners corporation has failed to rectify a defect and perform work on it, the integrity of a particular strata scheme could be readily undermined. Repairs or rectifications undertaken by an individual lot owner could result in strata safety issues, or impact on the convenience of other owners or result in visual or structural features or other matters that are out of keeping with the style and integrity of the unit building itself. The statutory obligations of an owners corporation to repair common property or to replace fixtures etc may be discharged by the corporation engaging contractors pursuant to s 13 of the Act. Where that occurs enforceable contractual rights against contractors operate in an owners corporation's favour should a contractor fail to meet relevant standards. In that event the owners corporation, may have the basis for seeking a remedy against a contractor. However, where work is performed by a contractor on behalf of an individual lot owner on common property, an owners corporation is obviously without such contractual remedies and rights. The statutory scheme under the Act, in other words, centralises the control of common property in an owners corporation in 'Key Management areas' and confers both powers and functions on it to be exercised in accordance with the Act.
6. His Honour further said at [197]: … The relevant case law authorities establish that the law does not look with favour upon an owner of one property of performing work on his neighbours property, it being recognised that such conduct carries with it the propensity for disputation, "turmoil" or "disorder". The statutory provisions that establish a strata scheme, in my opinion, are directed towards maintaining an order amongst strata lot owners and with the owners corporation. They neither authorise nor permit a lot owner to determine the nature and extent of construction to be undertaken on common property. Nor do they permit an individual owner to engage a contractor to perform work on common property without the consent or approval of the owners corporation …
7. For the reasons set out above, in my opinion it is appropriate to grant the relief sought by the applicant, subject to giving the respondent more time than the twenty-eight days sought by the applicant to remove the bi-fold windows and make good any damage.
8. Insofar as the respondent submitted that the Tribunal ought to make an order under subsection 149(1) of the SSMA that the Owners Corporation make the common property rights by-law in the terms sought by the respondent, I note that, before the Tribunal can make an order under subsection 149(1) of the SSMA, an application must be made.
9. Section 39 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) provides that: For the purposes of this Act, an application to the Tribunal includes a complaint, referral or other mechanism (however expressed) by means of which enabling legislation provides for a matter to be brought to the attention of the Tribunal for a decision.
10. Section 40 of the NCAT Act provides that: An application or appeal to the Tribunal is to be made in the time and manner prescribed by enabling legislation or the procedural rules.
11. Subsection 23 of the Civil and Administrative Tribunal Rules 2014 (NSW) (NCAT Rules) provides that a general application, being the type of application made under subsection 149(1) of the SSMA, must be: 1. in or to the effect of the approved form; 2. duly completed; 3. lodged at the Registry; and 4. accompanied by the applicable fee (if any) for the application.
12. The approved form for an application under subsection 149(1) of the SSMA was a strata schemes application (now known as a strata and community schemes application).
13. Subsection 23(3) of the NCAT Rules provides that: 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.
14. The SSMA does not specify the period within which an application under subsection 149(1) of the SSMA is to be made. Accordingly, any such application by the respondent for an order under subsection 149(1) of the SSMA would need to be made within 28 days from the day on which the applicant became entitled to make the application, which would be 28 days from the extraordinary general meeting of the Strata Plan on 30 June 2020 at which the Owners Corporation refused to make the common property rights by-law sought by the respondent. As no such application was made within those 28 days, the respondent would need to seek an extension of time to make such an application and the applicant given an opportunity to be heard on any application for an extension of time.
15. Division 3 of Part 12 of the SSMA sets out the procedures for applications to the Tribunal under the SSMA, including that certain applications (including an application for an order subsection 149(1) of the SSMA) cannot be accepted without prior mediation and that, on receipt of the application, an owners corporation given notice of it must: 1. immediately cause a copy of the application to be prominently displayed on any notice board required to be maintained by or under the by-laws on some part of the common property; 2. so display the copy for the period specified in the notice for the making of submissions; 3. immediately serve a copy of the application on each owner of a lot in the strata scheme except an owner who is a named party to the application.
16. In my opinion, the cumulative effect of subsection 149(1) and Division 3 of Part 12 of the SSMA, as well as sections 39 and 40 of the NCAT Act and section 23 of the NCAT Rules, is that a strata schemes application, or strata and community schemes application, must be filed by the respondent in order for the Tribunal to have jurisdiction to make the orders sought by the respondent. It is not sufficient for the respondent to simply seek that such orders be made in written and oral submissions in reply to the strata schemes application made by the applicant.
17. As set out above, no such application was made by the respondent. Accordingly, in my opinion, I do not have jurisdiction to make the orders sought by the respondent and I decline to do so.

CONCLUSION

1. For the reasons set out above, I make the following orders: 1. an order pursuant to section 132 of the SSMA and/or section 232 of the SSMA and/or section 241 of the SSMA that, within six (6) months of the date of this order, the respondent remove the bi-fold windows and make good all damage caused to the common property by the installation and removal of the bi-fold windows; and 2. in the event that the respondent fails to comply with order (1), an order pursuant to section 120(4) of the SSMA and/or section 229 of the SSMA that the applicant, by its agents, servants and contractors, be granted access to Lot 1 to remove the bi-fold windows and make good all damage caused to the common property by the installation and removal of the bi-fold windows.

I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales. Registrar DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 10 February 2022