Turek v The Owners - Strata Plan No. 70871

The relevant legislation

1. Owners corporation may grant licence to use common property 112 Owners corporation may grant licence to use common property (1) An owners corporation may grant a licence to an owner or occupier of a Lot in the strata scheme or another person to use common property in a particular manner or for particular purposes if the owners corporation has approved the granting of the licence by a special resolution. (2) A licence may be granted subject to terms and conditions. Note : Division 3 of Part 7 enables owners corporations to make common property rights by-laws granting exclusive use rights and special privileges (including licences) in relation to common property. (3) Without limiting this section, a licence may be granted under an agreement with the local council for a strata parking area under section 650A of the Local Government Act 1993 . 131 Order granting certain licences (1) The Tribunal may, on application by an owner of a Lot in a strata scheme, order that the owner and any occupier of the Lot may use specified common property in the manner, for the purposes, and on the terms and conditions (if any), that are specified in the order. (2) The Tribunal must not make the order unless satisfied-- (a) that the Lot would otherwise be incapable of reasonable use and enjoyment by the current owner or occupier of the Lot or generally by an owner or occupier of the Lot, and (b) that the owners corporation has refused to grant a licence to use common property in a manner, for purposes, and on terms and conditions that would enable the current owner or occupier, or generally any owner or occupier, reasonably to use and enjoy that Lot, and (c) in the case of a leasehold strata scheme, that the lessor of the scheme has, before the making of the order, been given an opportunity to make representations to the Tribunal with respect to the application for the order. (3) An order under this section, when recorded under section 246, has effect as if its terms were a by-law (but subject to any relevant order made by a superior court).

Issues for determination:

1. The respondent has the power and the discretion to grant a licence by way of special resolution (see s 112 SSMA above).
2. As already noted the respondent did "consider" the Licence at the EGM.
3. As also noted, at the commencement of the hearing I made and gave my oral reasons for finding that by its actions at the EGM and subsequently, the respondent had refused the Licence and hence the Tribunal was not precluded from determining the application under s 131SSMA.
4. What now falls to the Tribunal is to determine whether to exercise its discretion and make an order implementing the Licence under s 131(1) SSMA.
5. To make such an order the Tribunal must be satisfied that Lot 59 "would otherwise be incapable of reasonable use and enjoyment by" the applicant or current occupier of Lot 59 or "generally by an owner or occupier ( to) reasonably to use and enjoy that Lot " (s 131(2)(a).
6. The Tribunal must also be satisfied that the respondent "has refused to grant a licence to use " the bin room "in a manner , for purposes and on terms and conditions that would allow" the applicant "or current occupier, or generally any owner or occupier, reasonably to use and enjoy that Lot" (s 131(2)(b) SSMA.
7. It is with these matters in mind that I now turn to the evidence before the Tribunal.

The evidence:

1. The parties presented a folder to the Tribunal which contains the documents on which they rely.
2. Included in this folder, at TAB 10, is a document arising from a conclave which was prepared by the parties respective experts, Mr Kosnetter and Mr Winnicott who, also gave evidence concurrently before and presented their reports to the Tribunal.
3. There is lay evidence before the Tribunal from Mr Franz, the building manager for the respondent and Mr Vurmeski, the strata manager. There is also the evidence of the applicant Mrs Louise Turek and Mr Cardinale, the applicants' current tenant.
4. I have categorised this evidence under the categories set out below.

Council Consents

1. Development applications and consents for the building issued on or about 2002. There is no evidence before the Tribunal that these consents require waste bins from commercial Lots to be stored separately to waste bins from residential Lots, as is currently the case.
2. Development applications and consents for Lot 59 issued in 2005 and then again in 2006.
3. The respondent submits that the application should be dismissed because the applicants require and do not have development consent to store the bins in the bin room.
4. On or about 15 June 2005, City of Sydney Council (the Council) issued consent to use Lot 59 as a café and restaurant.
5. On or about 15 March 2006, the Council issued consent to use Lot 59 as an Asian Supermarket (the DA) . There is no issue that this is the DA that is still operative.
6. As far as I can glean from the DA, Condition 10 deals with the hours for the collection of waste and Condition 16 requires compliance with the council's "Policy for Waste Minimisation in New Developments 2005" which requires facilities to" minimise and manage waste and recycling generated by the proposal."
7. Neither these, nor any other conditions appear to make any stipulation as to where waste from Lot 59 is to be stored.
8. There is also before the Tribunal the Experts' Conclave document (the Conclave) which, on my reading, notes agreement by the experts that there are no Council approvals in place requiring that only residential waste is to be stored in the bin room, although Mr Koznetter notes that the impact of waste at the time of these approvals would have been considered low impact.
9. As best as I understand from the Conclave, the experts also agree that the relevant statement of environmental effects provides for how waste will be stored in bins and the rate of disposal but does not make provision for either separate or co-mingling of commercial and residential bins.
10. On my reading of the Conclave, the experts agree that the DA does not contain any conditions restricting Lot 59 from storing waste in the bin room.
11. In light of the above I am satisfied that there is nothing arising from the DA or any other Council consent instruments, that precludes waste from Lot 59 being stored in the bin room.

Policies and Guidelines

1. The Respondent submits that the application should be dismissed because under Council regulations and policies, commercial and residential waste cannot be comingled and to store the bins in the bin room poses occupational health and safety risks.
2. The respondent appears to rely primarily on the Council's "Guidelines for Waste Management in New Developments of August 2018".
3. The applicant submits that this policy is not relevant as it was adopted after the DA was granted and that in any event, this document is not mandatory.
4. Mr Kosnetter disagrees and opines that regard should be had to this document.
5. While Mr Koznetter provides sound reasons for his opinion, it is difficult to accept that the document is intended to apply retrospectively, in particular, to a development application approved over 10 years before the document came into existence, without being shown some specific legislative document evidencing such an intent. There is no such evidence before the Tribunal.
6. I am therefore not satisfied that there is sufficient evidence to show that the Policy applies to the relevant planning consents that are in place and that in any event that it is binding.

Complying Development Certificate

1. On 29/8/2017 a complying development certificate was issued for the refurbishment of Lot 59 (the CDC) which describes the scope of works as a "Minor interior refurbishment of an existing convenience store"(my emphasis) .
2. As far as I can ascertain there is nothing in this document that addresses the issue of waste storage.
3. What has arisen however, is a point of contention about the use of the words existing convenience store in the CDC rather than a reference to an Asian Supermarket, which, it will be recalled is the approved use under the DA.
4. The applicants' case is that the use of the word "convenience store" was an error and that the substance of the CDC makes it clear it relates to a refurbishment of the Lot 59 in keeping with a mini market or small format supermarket.
5. This is supported by the evidence of Mr Cardinel, a director of the current tenant of Lot 59 and the statement of Vince Furfaro who was the project manager in actioning the CDC.
6. The respondent has used this issue , as best as I can understand, to argue that the applicants now need Council approval to address the current use of Lot 59.
7. Mr Kosnetter opines that a convenience store is not currently approved and would require Council approval.
8. There is, however, no direct substantiating evidence from the respondent to support its case that Lot 59 is currently being used as a convenience store. The respondent has not provided sufficient evidence to directly refute that of the applcants' that what occurred with the CDC was a descripti9ve mistake and that Lot 59 continues to be used in accordance with the DA.
9. In any event, it is not for the Tribunal to determine if the applicants are in breach of the DA and require further Council approval. That is a Council matter. The Tribunal is confined to determining the Licence issue under s 131SSMA.

The By-laws

1. The respondent submits that the application should be dismissed because if granted, it would be in breach of by-law 15.
2. The respondent points out that the applicants fall within the ambit of that by-law, being owners who "do not have shared receptacles for garbage...".
3. I accept this to be the case.
4. However, under the by-law, such owners must maintain their receptacles "within their Lot or on such part of the common property as may be authorised by the owners corporation" (my emphasis).
5. Thus on my reading, by-law 15 does not prevent the applicants from storing the bins in the bin room per se. What the by law requires is for the applicant to have the respondent's authorisation to do so.
6. These proceedings are the result of the applicants attempt to obtain that authorisation.
7. Thus I accept the applicants' submission that by law 15 does not prevent the applicants from storing the bins in the bin room per se.

The feasibility of installing the Bins in the Bin Room

1. The respondent submits that the application should be dismissed because the Bin Room is full; that it is impractical to store the bins within the configuration of the Bin room; and that in any event, the bins can be accommodated in the applicants' Lot.
2. There is no issue that as matters stand the only bins in the bin room are those used by the residential Lots.
3. The respondent submits that waste from these residential Lots is transported by garbage chutes and points out that there are no such chutes from the applicants' Lot.
4. While this may be the case, there is no persuasive argument as to why this should prevent the applicants from storing their bins in the bin room, as they propose under the Licence.
5. Mr Winnacott, for the applicant, opined that there is sufficient space in the Bin Room for the applicant to locate 2 large bins.
6. Mr Kosnetter does not directly refute that" there is some physical space to provide for additional bins " but submits that it is for the applicants to show . which he says they have failed to do, that they could be placed in a "separated area" as required by relevant guidelines . Mr Kosnetter is also of the view that the applicants were required and failed, to provide information correlating the volume of waste generated from Lot 59 with the requested 2 bins.
7. Mr Kosnetter also opines that it is for the applicants to demonstrate that the bin room can accommodate sufficient bins for all the commercial Lots in the scheme.
8. On this last point, I agree with Mr Winnacott that should the other 2 commercial Lots seek to use the Bin Room, then their applications should be considered at that time and so it is not for the applicants to now undertake this task. What the Tribunal is being asked to consider at this point in time is the applicants' request to store 2 bins in the Bin Room.
9. Further, I am not greatly persuaded that the applicants' need to demonstrate the volume of waste generated from Lot 59 or of the great relevance of Mr Kosnetter's figures on this point. No matter what the volume of waste , under the Licence the amount of bins permissible will be limited to two.
10. The respondent also submits that the applicants require a food waste bin and so need to store 3 bins in the bin room. Again, whether the applicants need to comply with this requirement and how they choose to do so is not of significant relevance to the application before the Tribunal which to grant a licence for to 2 bins, one waste and the other recycling.
11. Mr Franz the building manager gave evidence that there is currently no space to store these bins.
12. In his 1 October 2020 statement Mr Franz states: "On or about March 2020 I arranged for four additional red bins to be obtained from Council and placed in the residential bin room as more red bins were required for the residential Lots…there is no room whatsoever for any additional bins in the residential bins room".
13. Interestingly, although Mr Franz gives no reason for this then need, in his statement, in his oral evidence, he referred to the Covid19 impact whereby more occupants were staying at home and generating more waste.
14. The applicants submit that the Tribunal should view this evidence with some scepticism, pointing out that the purchase of these bins occurred after the respondent's defeat in the Supreme Court.
15. It does strike me as odd that Mr Franz would not explain the reason for his actions in his statement.
16. Further, as the applicants point out, Mr Franz' acquisition of additional residential bins seems to pre-date the time of the Covid Lockdown in 2020.
17. Clearly it does not assist the respondent's case if it has added additional residential bins in the Bin Room so as to now be able to argue that the room has reached saturation point.
18. Finally, countering the respondent's submissions that the 2 bins proposed under the Licence will not suffice and so lead to the applicants' waste spilling into the residential bins in the Bin Room, there is the evidence of Mr Cardinale about the arrangements for waste collection that will only require 2 bins.
19. As the applicants submit, it is not sustainable for the respondent to oppose the Orders sought because it anticipates future breaches of that Order.

The Licence

1. The respondent submits that the terms of the Licence are not reasonable or clear.
2. It appears that Annexure A to the Licence, which shows the proposed location for the bins in the Bin Room, may not have been placed before the Respondent at the EGM.
3. From the correspondence before the Tribunal it also appears that this was resolved and addressed. Clearly the respondent had every right to request such a document and it appears from the correspondence to have done so.
4. In any event, I am not convinced that this matter is fatal, given the wording of s131(2)(b) SSMA and the matters the Tribunal is directed to consider in determining when to grant the Licence .
5. The Licence that sets out the proposed storage areas for 2 bins; provides for a term and payment; sets out the covenants of the Licensee and Licensor; and such contractual matters as termination; abatement; costs; waver and variations.
6. On 17/1/2020 the respondent raised certain queries which apparently were explained other than where, exactly, in the bin room the bins were to be placed; the reason for a requested 10 year term ; and an explanation as to the amounts of waste and collection proposed by the applicans, was arrived at.
7. Under the Licence the applicants propose a rent of $50 per month to store the bins in the Bin Room.
8. In its submissions the respondent takes issue with the 10 year term and the $50 rental.
9. The applicants say that under the council consent such use is envisaged without the need for a licence payment; that the area required for the applicant's bins is not used or required for use by any other Lot owners; that as this space is not suitable for other uses its value cannot be easily evaluated by a professional; and that in any event, the applicants put forward the $50 figure as a starting point from which it is ready to negotiate , a matter the respondent has not pursued.
10. These are all persuasive arguments.
11. Clearly the applicants seek some security as to the time within which to exercise the benefit of the Licence and there is no reason advanced as to why 10 years is not a reasonable time.
12. Further, there is no evidence that the other Lots pay for the use of the Bin Room and in the absence of any evidence to the contrary, there is no sound reason why the $50 figure should not be accepted

Reasonable Use and Enjoyment of the Lot/ The impact on other Lot Owners

1. The applicants' evidence is that the bins cannot be stored in Lot 59.
2. The respondent submits that the bins have been stored in Lot 59 since 2017.
3. This does not appear to be the case. The storage of the Lot 59 bins surfaced at least by 2018 when the respondent took issue with Lot 59 bins being kept on common property.
4. This gave rise to discussions between the parties and proposals for a special use bylaw which did not eventuate.
5. The respondent points to storage room in the applicant's Lot and to Mr Winnacott's oral evidence that a storage room for the bins could possibly be constructed within Lot 59.
6. While this may be a possibility, it appears one that would place restriction and confinement on the use of Lot 59.
7. On the other hand both Mr Winnacott and Mr Kosnetter at the time of the Conclave opined that the Bin Room could accommodate the bins.
8. The respondent points to the difference between the mechanisms for disposing of residential and commercial waste and submit that if the waste generated from Lot 59 exceeds the 2 bins under the Licence, the excess will be placed in the residential bins, causing tension within the scheme.
9. This is speculation and not substantiated by any evidence.
10. The respondent submits that Council approval is required to construct a discreet area within the bin room to store the bins and that to construct such a section is impractical.
11. There is no persuasive evidence supporting these submissions.
12. The respondent submits that the other commercial Lots do not use the bin room.
13. This may very well be the case but in the absence of any evidence about those Lots it is difficult to give this submission great weight.
14. The respondent submits that granting the Licence will reduce the waste storage available to the other 60 Lot owners.
15. Again this is a proposition unsupported by persuasive evidence.
16. Finally the respondent fears that the occupants of Lot 59, who will need to access the bin room to store waste, will not have the skills to deal with the garbage compactor, a matter which at present is the sole domain of Mr Franz and trained cleaners.
17. There is no evidence to substantiate whether the applicants and other occupants of Lot 59 will need to use the compacters. There is no evidence of what, in any event, are these special skills the applicants and other occupier's lack.
18. The respondent fears that the proposal is too inconvenient for the occupiers of Lot 59, given the distance of that Lot from the Bin Room and the configuration of the building. The respondents query why the applicants would choose to go to the Bin Room when they will, in any event, have to accumulate waste in Lot 59 before embarking on this arduous trip.
19. Clearly the applicants who have been pursuing this matter since before lodging these proceedings in 2019 and subsequently; proceedings that have seen them maintaining their position in the Tribunal, the Appeal Panel and the Supreme Court, do not share this view.

FINDINGS

1. As noted, it is agreed that the respondent considered the Licence at the EGM and for oral reasons given at the commencement of the hearing, I found that this amounted to a refusal by the respondent of the Licence considered at that meeting.
2. For reasons given above, I am not satisfied that there are development or other Council consents ; local government or planning laws , guidelines or rules that prevent the storage of the bins proposed under the Licence in the Bin Room.
3. Also for reasons given above, I am not satisfied that granting the Licence would amount to a breach of By-Laws
4. I have also found that the Licence proposes terms and conditions are reasonable and do not appear wanting in any way.
5. The evidence of the applicants as to the difficulty of storing the bins within Lot 59 is persuasive and is supported by the fact that they have for some time now sought to have bins located on common property.
6. The evidence of the experts is that at the time of the Conclave there was sufficient room to store the bins in the Bin Room.
7. If, since that time, the respondent (and this appears to be the case) has taken deliberate steps to thwart that position by installing further residential bins, then the respondent must live with that decision and accommodate any licence granted to the applicants.
8. The respondent's submissions as to future, likely breaches of the Licence are speculative in nature and unsupported by evidence.
9. The respondent's submissions as to the need to obtain counsel consent to accommodate the bins in the Bin Room are not strongly substantiated and in any event such a requirement needs to be weighed against the impact that refusing the Licence would have on " the reasonable use and enjoyment" of Lot 59.
10. While the other two commercial Lot owners may not have chosen to access the Bin Room, without any evidence about those Lots and their use, this does not amount to a persuasive argument.
11. Ultimately the applicants seek access to a discrete area of common property dedicated solely to waste storage and used by 58 other Lot owners under a licence that will allow Lot 59 to store 2 bins in that area, freeing up the difficult constraints of accommodating those bins within Lot 59, and so giving the applicants or any occupant of the Lot generally, "reasonable use and enjoyment" of that Lot and of which they "would otherwise be incapable."
12. I therefore find that the Tribunal should exercise its discretion and make the orders sought under s 131 SSMA.

ADDENDUM

1. On 11/6/21, the evidence having concluded and written submissions received, the respondent made an application to the Tribunal to have the proceedings dismissed on the basis that the current tenant of Lot 59 was vacating the Lot.
2. The matter was listed for directions, following which the parties were required to file submissions.
3. On 18/6/21 the applicants filed a statement by Louise Turek to the effect that until the time of the respondent's application she was unaware of the tenant vacating and that no Notice of Termination had been served by either the applicants or the tenant and that rental negotiations are on foot.
4. As I read that statement, the deponent submits that she and her husband, being the owners of Lot 59, still retain standing to pursue the application before the Tribunal.
5. On 23/7/21 the respondent filed a statement by Mr Franz confirming that at the date of that statement the business in Lot 59 continued to be closed, attaching text messages between himself and the tenant on which he relies to draw the inference that the tenant does not intend to reopen the business.
6. On 30/6/21 the respondent elaborated on his submissions also referring to the fact that the applicants refused to have Mrs Turek available for cross-examination. I note that the matter was listed for directions, however, if the respondent required, it could have requested the issue of a summons.
7. In their submissions of 9/7/21 the applicants note that the respondent did not exercise the leave granted at the directions hearing to issue a summons to produce documents. Instead the parties have agreed that the tenant has paid rent to 18/6/21; closed the business on 26/5/21; and there is no indication of when that business will recommence.
8. In considering the above, I am persuaded by the fact that s 131 gives standing to an owner to bring the proceedings; the application before the Tribunal has been brought by the applicants in their capacity as owners of Lot 59 and that has not altered.
9. Further, s131 SSMA makes it clear that the Tribunal is to consider the position of the current owner (still being the applicants) or "generally by an owner or occupier of the Lot".
10. In addition, as the applicants in my view also correctly submit, there is no evidence that the lease has ended despite the business remaining closed.
11. There is no evidence that the current approved use of the Lot has changed nor that any of the factual findings reached above that have led to my findings, have altered.
12. I therefore reject the respondent's submission that the Tribunal has no jurisdiction to proceed with the application.

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: 16 September 2021