Van der Rijt v Collins

NCAT Appeal Panel|2024-09-12

Background

This appeal concerns a dispute between two lot owners in a strata scheme regulated by the provisions of the Strata Schemes Management Act 2015 (NSW) (the Strata Act). The First Respondent to this appeal owns one of the four lots in the strata scheme and is a co-owner with his wife. The Appellant owns another lot in the strata scheme. The First Respondent wishes to undertake certain works to his lot. The works are described as the installation of a "Juliet balcony attached to the outside of the building (common property) and enlarging an existing window".
The Second Respondent took no active role in either the proceedings at first instance or in this appeal.
The First Respondent's proposal was considered by the lot owners at the annual general meeting of the Owners Corporation held on 20 March 2023 and the proposal was defeated by the opposition of the Appellant. A special resolution was required and the Appellant's unit entitlement was sufficient to defeat the First Respondent's proposals. These proposals involved consideration of a new by-law.
The First Respondent lodged an application with the Tribunal and the outcome of those proceedings was that the First Respondent was successful in obtaining orders enabling the proposed alterations to proceed. The Appellant maintains his opposition by lodgment of the appeal.
The decision under appeal was published on 25 June 2024 (and we will refer to it as the Decision). The Tribunal made four orders which may be summarised as follows: 1. Order 1: the First Respondent was given leave to file and serve a statutory declaration from his wife, Ruth Collins, to the effect that she consented to the proposed works and to the proposed works by law. 2. Order 2: pursuant to s 149 of the Strata Act the proposed by-law described as special by-law 26 in item 17 and Annexure AAA in the minutes of the AGM of the Owners Corporation held on 20 March 2023 is "prescribed as a change to the by-laws of the said strata scheme, to operate on and from 20 March 2023." 3. Order 3: the Owners Corporation is ordered to "promptly to do all acts necessary to record the by-law described in order 2 pursuant to s246" of the Strata Act. 4. Order 4: no order as to costs with the intent that each party bears their own cost of the proceedings.

The Decision

It is helpful to elaborate on the above introductory facts by setting out in more detail the findings of fact made by the Tribunal and its reasons. Before doing so, it is relevant to record that a significant issue in the appeal concerns the provisions of ss 143 and 149 of the Strata Act. They provide: 143 Requirements and effect of common property rights by-laws (1) An owners corporation may make a common property rights by-law only with the written consent of each owner on whom the by-law confers rights or special privileges. Note--: Any addition to the by-laws will require a special resolution (see section 141). (2) A common property rights by-law may confer rights or special privileges subject to conditions specified in the by-law (such as a condition requiring the payment of money by the owner or owners concerned, at specified times or as determined by the owners corporation). (3) A common property rights by-law may be made even though the person on whom the right of exclusive use and enjoyment or the special privileges are to be conferred had that exclusive use or enjoyment or enjoyed those special privileges before the making of the by-law. (4) After 2 years from the making, or purported making, of a common property rights by-law, it is conclusively presumed that all conditions and preliminary steps precedent to the making of the by-law were complied with and performed. 149 Order with respect to common property rights by-laws (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.
From [11] of the Decision the Tribunal described the nature of the proposal for the alteration of the common property and recorded that the other lot owners (ie. other than the Appellant) supported the First Respondent's proposal. The proposal was put to the annual general meeting of the Owners Corporation on 20 March 2023 and the proposed works included an architectural drawing and an engineer's letter [14].
The decision records at [15] that the proposed works by-law was to be governed in its implementation by adopting existing special by-law 22 containing the requirements in respect of such work. Those requirements included "provision, prior to works, of plans and approvals and payment to the Owners Corporation of a bond, proper supervision, inspection, access and compliance regimes and responsibility to maintain the works and indemnify the [Owners Corporation]". We note that a copy of by-law 22 appears in the Respondent's bundle filed in the appeal from page 57. The provisions of the by-law require the lot owners written consent to the passing of the by-law (see Part 3.1) before the works may be commenced. This fact was noted by the Tribunal at [65] 0f the Decision.
From [16] the Tribunal described the reasons for the Appellant's opposition to the proposed works.
At [27] the Tribunal described the proposed works by-law as a "common property rights by law" as defined in s 142 of the Strata Act. The Tribunal stated that the by-law confers on the applicant lot owner special privileges in respect of the common property in authorising changes to the appearance and functionality of the affected external bounds of the lot. The Tribunal noted that that those characteristics appeared not to be in contest.
From [29] the Tribunal noted that the applicant (ie. the First Respondent to this appeal) bore the onus of proving that the refusal of the Appellant was unreasonable for the purposes of considering whether the Tribunal should make an order under the provisions of s 149. From [30] the Tribunal considered the meaning of "unreasonably refused" being the phrase used in that section.
At [50] the Tribunal found that the evidence "when assessed objectively in accord with the requirements in [the Strata Act s 149(2)], does lead to the conclusion that the refusal of consent to the proposed works by-law was unreasonable." At [51] the Tribunal found that there was "no objective evidence, expert or otherwise, of adverse impact of the proposed works by-law and the proposed works on the original design intent of the building or the present aesthetic and amenity of the building". The Tribunal found that the proposed works affected a wall of the common property by "opening that wall further and affixing railings and a balustrade to the outer surface of the wall". There was "no further intrusion such as the landing for an external balcony". At [52] the Tribunal found that there was no "objective evidence of further intrusion by the proposed works into the privacy (visual and auditory)" of the Appellant's lot.
At [58] the Tribunal said that it had regard to the elements in s 149 (2) and found that the "rights and expectations of [the First Respondent], taken with the absence of objectively - established detrimental effect on the interests of the other lot owners, leads to a conclusion that the refusal of the proposed works by-law was unreasonable." In the following paragraph, the Tribunal found that the proposed works by-law was sufficiently specific on the "degree of specificity required by NSWCA in Stolfa v Hempton [2010] NSWCA 218 at [28]-[33]".
At [63] the Tribunal stated that it saw "no reason on the evidence that the operative date of the proposed works by-law should not be the date of the extraordinary general meeting that unreasonably refused its passage, being 20 March 2023".
Then at [64] the Tribunal referred to submissions made by the Appellant to the "alleged absence of written consent of the [First Respondent] and his wife to the proposed works by-law". The Tribunal stated that the submission was to the effect that neither co-owner had given the appropriate form of written consent and there was no evidence of Mrs Collins' consent, who was not a party to the proceedings. Therefore, the power under s 149 had not been in enlivened.
At [65] the Tribunal referred to the earlier decision (of the same member) in Capcelea v the Owners - Strata Plan no 48887 [2019] NSWCATCD 27 where the Tribunal had held that the requirement for consent under s 149(3) can be given by the applicants consenting in advance to the making of any alteration to the proposed by-laws as part of a Tribunal order. The Tribunal stated that here the First Respondent had given consent in writing by making the application to the Tribunal.
The Tribunal noted at [66] that the First Respondent was not cross-examined on the alleged absence of consent. The Tribunal stated that it is "an easy inference to draw that the [First Respondent] made this application on behalf of himself and his wife and with his wife's consent" and at [67] the Tribunal found that the required consent from the two co-owners had been given.
The Tribunal then went on to "regularise the position expressly" and gave to the First Respondent the opportunity to file a statutory declaration from his wife "to the effect (as correct) that she consented to the proposed works, the proposed works by-law and to the bringing of the present proceedings by the [First Respondent] on her behalf as well as on his own behalf."

Proposed Resolutions

The Decision did not set out in detail the proposed resolutions which were put to the lot owners at the AGM on 20 March 2023. The notice of annual general meeting was included in the Appellant's documents lodged in support of his appeal and the relevant resolutions are items 16 and 17 of the papers giving notice of the annual general meeting. Item 16 (containing the heading "Lot 1 Renovations") may be summarised as follows: Subject to the by-law in the next succeeding motion being approved, the owners specially resolve pursuant to s 108 of the Strata Act for the purpose of improving or enhancing the common property to specifically authorise the Works carried out by the owner of Lot 1 to that lot and common property on the terms and in the manner set out by the by-law outlined in the following motion marked Annexure AAA.
Item 17 (containing the heading - lot 1 renovations by-law) may be summarised as follows: subject to the preceding motion being approved, the owners specially resolve pursuant to s 141 and 143 of the Strata Act to make a by-law in the following terms as outlined in the Annexure AAA.
Annexure AAA contained the wording of the new by-law 26 and it included provision for the adoption of by law 22. It made reference to plans and drawings, a copy of which was included with the agenda. At [65] the Tribunal noted that written consent specified in the by-law is required before commencement of works.

Notice of Appeal

The Notice of Appeal was filed with the Tribunal on 1 July 2024 and the grounds of appeal may be summarised as follows: 1. Ground 1: the Appellant contends that the Tribunal applied the wrong principle of law with respect to the "issue of the First Respondent and/or his wife failing to provide written consent to the making of the by-law". The Appellant submitted that he relied upon the decision of GS & CS Holdings Pty Ltd v the Owners - Strata Plan no 63227 [2002] NSWCATAP 20, but the Tribunal did not follow that decision.
In support of ground 1, the Appellant made submissions which may be summarised as follows: 1. In the GS & CS Holdings case, the Appeal Panel held that written consent is required under s 149(3) of the Strata Act and that where relevant written consents have not been received, because consent is a precondition, an Owners Corporation cannot make a by-law. It follows that in the absence of written consent, any failure to pass a resolution to make a by-law cannot be unreasonable as there is no power to pass the resolution at all. 2. In GS & CS Holdings it was held that it is clear by the wording of s 149(1)(a) the Tribunal's power is only enlivened if the Tribunal is satisfied that there has been an unreasonable refusal by the Owners Corporation. In reaching this conclusion, s 149(3) is concerned with the consent of the applicant in the Tribunal proceedings. However, this does not alter the operation of s 143(1), namely, the need for consent of lot owners on whom a benefit is conferred or the Appeal Panel's view that refusal could not be unreasonable in the absence of such consent. 3. The Tribunal member relied upon his own decision in the Capcelea decision contrary to the binding decision of the Appeal Panel in GS & CS Holdings. The Appellant referred to the statement made by the Tribunal, at [65] of the Decision, that in Capcelea, the Tribunal had held that s149(3) is satisfied by giving consent in advance to the making of the alteration to the proposed by-law and that the form of consent is not specified in the Strata Act (either in ss 108 or 143), and that the consent of the First Respondent had been given by the First Respondent making his application in the Tribunal proceedings. 4. The Appellant submitted that the decision in GS & CS Holdings is a binding decision and the decision in Capcelea is not binding. Reliance on the reasoning in Capcelea that the making of an application is considered to be consent to the making of the by-law has the effect of rendering s 143(1) of the Strata Act redundant. Further, the assertion that the making of an application may be considered to be consent to the making of the by-law is incorrect, as confirmed in GS & CS Holdings. 5. The finding by the Tribunal at [24] in Capcelea that the first Respondent satisfied s 149(3) by, in effect, consenting in advance to the making of any alteration to the proposed by-law as part of a Tribunal order is erroneous. The Appellant contended that it is impossible for a lot owner to consent in advance to the making of any alteration when the lot owner does not know which alteration it is consenting to. Further, it is not possible for a lot owner to give prior consent to the making of a by-law by filing a Tribunal application after the by-law has been refused. 6. The Tribunal misconstrued ss 108 and 143 of the Strata Act which resulted in the Tribunal making an order under s 149 that should not have been made. 7. The First Respondent and the First Respondent's wife failed to provide written consent to the making of a by-law pursuant to ss 108 and 143. In the absence of the consent of each owner of a lot, the subject of the by-law, the by-law cannot be given effect. There is no provision for the retrospective consent of a lot owner being obtained.
Ground 2 of the appeal is that the Tribunal failed to afford procedural fairness to the Appellant. In support the Notice of Appeal contained submissions which may be summarised as follows: 1. By order 1, the First Respondent was granted leave to file and serve the statutory declaration from Mrs Collins evidencing her consent to the works and to the by-law. It was procedurally unfair for the Tribunal to make that order for a number of reasons. The first is that the evidence (i.e. the evidence of the consent of Mrs Collins) was available at the time of the hearing. Secondly, the Appellant raised the issue of failure to provide consent in his evidence and during oral submissions at the hearing. Thirdly, the Appellant was not granted an opportunity to scrutinise the evidence. Fourthly, the Appellant was not granted an opportunity to cross-examine the witness (ie. Mrs Collins) at the hearing to test the evidence. 2. The Appellant submitted that it is procedurally unfair to make an order granting leave to the First Respondent for his wife to file evidence following determination of the matter and thereby the Tribunal acted contrary to s 38(2) of the Civil & Administrative Tribunal Act, 2013 (NSW) (the NCAT Act). That section requires the Tribunal's procedures to accord with natural justice.
By ground 3, the Appellant submitted that the Tribunal failed to take into account relevant considerations. In support, the Appellant explained that this ground concerns an external air-conditioning unit located on the wall on which the First Respondent's proposed works are to be carried out. The Appellant contended that, during the hearing, the First Respondent submitted "on multiple occasions" that he would amend his proposed plans to ensure that the works do not impede the existing location of the external air-conditioning unit. Given that the First Respondent admitted that he may be required to alter the works, it is not possible to understand how the Tribunal could determine that the by‑law was adequate and sufficient. The Appellant and the Owners Corporation cannot be reasonably expected to consent to a by-law when the works are unclear and there is no certainty as to what the works actually are. The Appellant submitted that the First Respondent will very likely be required to alter the works to avoid impeding on the air-conditioning unit. The Tribunal failed to take account of admissions made by the First Respondent and the concerns raised by the Appellant
Ground 4: this ground is to the effect that the Tribunal failed to provide proper reasons for its decision. The Appellant submitted that it relied upon its submissions with respect to ground 3 in support of ground 4. At [16] the Tribunal noted the Appellant's concern that the air-conditioning unit might potentially have to be repositioned.
Ground 5: this is to the effect of that the Tribunal made a finding of fact without appropriate evidence and in particular erred in determining that the scope of works was adequate. The Appellant contended that the scope of works did not specify the works to be undertaken. The Appellant contended that a vague and ambiguous scope of works exposes the Owners Corporation to risk of being liable for repairing any damage caused by the works, and this was a reasonable reason for refusing to consent to the by-law: see Williams v the Owners - Strata Plan no 3192 [2018] NSWCATAP 77 at [122], [132]-[133]. Accordingly, there was no basis for the Tribunal's finding at [59] that the proposed works by-law is sufficiently specific in circumstances where the works will require the removal and/or relocation of the air-conditioning unit.
Ground 6: this is to the effect that the Tribunal made a finding of fact without appropriate evidence, namely the wording of order 1 which states that the proposed statutory declaration will confirm that Mrs Collins consented to the proposed works and the by-law in circumstances where there was no evidence filed during the proceedings or given at the final hearing that would warrant the definitive statement made by the Tribunal. The Tribunal relied on "inference" in support of the finding that the Applicant and his wife consented. The Appellant submitted that this finding was an error because it was made without any evidence to substantiate it.
Ground 7: this is to the effect that the Tribunal made a finding of fact without appropriate evidence and in substance is a ground expressed in similar terms to ground 6. The Appellant submitted that the Tribunal took into account irrelevant considerations as the factors considered were not relevant to whether the First Respondent and the First Respondent's wife provided the written consent prior to the meeting where the by-law was considered. The factors taken into account and which were irrelevant were: the making of the application to the Tribunal, the cross-examination of a witness (the First Respondent) and the drawing of an inference from the evidence.
Finally, the Appellant submitted that if the above grounds of appeal are not considered to raise questions of law, then the grounds are to be considered as involving errors of fact for which the Appellant seeks leave. The Appellant submitted that the Decision was not fair and equitable because the First Respondent had not provided written consent and nor had his wife provided written consent. Further, the works proposed would likely differ from the proposed by-law due to the external air-conditioning unit being in a place where the First Respondent intends to carry out work. Further, the Decision was against the weight of evidence in relation to the Tribunal's finding that the scope of works was adequate and the finding that the First Respondent's wife consented.

First Respondent's Reply and Submissions

The First Respondent filed a Reply opposing the appeal and also provided written and oral submissions.
The Appellant objected to some pages of the First Respondent's written submissions. These included pages 13, 14, 18, 19, 28, 29, 76 to 79, 86 to 89 and 121 to 124. Those pages contained either irrelevant material or material protected by without prejudice privilege. Accordingly, they were rejected at the hearing and have not been considered by us in the course of our determination of the appeal.
The Appellant further objected to page 139 which is the statutory declaration dated 8 August 2024 produced in response to order 1. At the hearing, we did not make a formal ruling but indicated we would consider the Appellant's application when preparing our reserved decision. We are of the opinion that the statutory declaration should be admitted and taken into account in determining the appeal. It came into existence as a result of the Tribunal's order and therefore cannot be considered to have been evidence that that was available prior to the hearing. This ruling does not prejudice the Appellant's submissions with respect to whether consent by Mrs Collins to the proposed works and by-law should have been in existence and in writing prior to the First Respondent's item of business being considered at the annual general meeting. We will deal with that aspect later in these reasons.
It is not necessary to set out the thrust of the First Respondent's submissions.

The Transcript of the Hearing

It is necessary to say something about the conduct of the hearing, as revealed by the transcript. On page 19 of the transcript, Mr Joseph Bannerman (solicitor for the Appellant) informed the Tribunal that he did not intend to cross-examine the First Respondent. On page 47 of the transcript, the Tribunal member asked some questions about the air-conditioning unit. The Tribunal member asked whether the condenser unit is intended to move. Mr Collins said that the unit does not move. This was confirmed by Mr Collins a few lines further on. On the following page (page 48) the member asked Mr Collins whether he could install the window without moving the air-conditioner. Mr Collins said yes. Later at page 46, Mr Bannerman requested leave to ask Mr Collins some questions concerning the air-conditioning and leave was granted. In response to some questioning from Mr Bannerman, Mr Collins said that he can confirm that the window would not extend as far as the conduit. He then said: "If that's the case, we would reduce the size of the window to ensure that we don't have to do those extra works. So if it means making a smaller window, then happy to do that" - page 49. Mr Collins then made some comments to the effect that he imagined that the Appellant would not object to a reduction in the size of the window, only to an expansion. Then, at page 50, Mr Bannerman asked whether Mr Collins may need to vary the size of the window so that it doesn't interfere with the air-conditioner. Mr Collins said: "That's correct, yes". Later, Mr Bannerman made oral submissions followed by Mr Collins. On page 134 of the transcript Mr Collins stated that he wanted to "clarify something about the window size because I was a little bit caught off guard and I want to rectify the - make clear that the window width that we propose will not extend past the conduit". Mr Bannerman objected on the basis that Mr Collins should not be allowed to change his evidence. Then Mr Collins said that his plans were correct and the dimensions on the plans won't have the window extending to the conduit.
On page 135 Mr Bannerman submitted that, as the property is owned by Mr & Mrs Collins as joint tenants, Mr Collins could not give evidence that his wife would consent to the proposal. The member replied that Mr Bannerman should really have said that before and Mr Bannerman apologised for not raising the issue earlier other than to confirm that he had made submissions that no consent had been given. On page 136, Mr Collins stated that both he and his wife are prepared to sign the consent form.

Appellant's Written and Oral Submissions

Mr Bannerman helpfully elaborated upon the grounds of appeal (which included the submissions summarised above) in written submissions and in oral submissions at the hearing of the appeal. To the extent that the elaboration does not repeat what has already been summarised above, we record the substance of those written and oral submissions in the following paragraphs.
With respect to ground 1, the Appellant submitted that the decision Capcelea is inconsistent with the decision of the Appeal Panel in the GS & CS decision of the Appeal Panel. We note that the Capcelea decision predates the GS & CS decision and that if there is `an inconsistency between those two cases we should follow GS &CS, it being an Appeal Panel decision rather than the first instance decision.
The Appellant referred us to the decision of the Appeal Panel Lam v Steve Jarvin Motors Pty Ltd [2016] NSWCATAP 186 at [196] where the Appeal Panel stated that members of the Tribunal sitting at first instance should consider themselves bound to follow decisions of the Appeal Panel on questions of law. That decision is not, in our view, relevant to the position we are in. In Lam, the Appeal Panel was directing its attention to the obligation of a first instance member to follow Appeal Panel decisions. It was not directed toward the obligation, if any, of an Appeal Panel to follow an earlier Appeal Panel decision. In any event, for reasons which we will explain later, we do not think that it is necessary for us to decide this appeal on a basis inconsistent with the reasoning of the Appeal Panel in GS & CS.
The thrust of the Appellant's submission was that, in this case, the First Respondent and his wife had not given written consent to the proposed common property rights by law, and that in the absence of such consent, the by-law cannot be given effect. There is no provision for retrospective consent being obtained from a lot owner. The Appellant relied upon the judgment in Khadivzad v The Owners - Strata Plan 53457 [2019] NSWSC 157. In that judgment Darke J agreed with Ball J in the earlier cases of James v The Owners - Strata Plan no 11478 (No 4) [2012] NSWSC 590, a case dealing with the 1996 Strata Act. That judgment dealt with s 52 of the 1996 Strata Act which, like s 143 of the Strata Act provides that the Owners Corporation may "make" a by-law "but only" with the written consent of the owner or owners of the lot or lots concerned. It was held that it is a precondition to the making of a by-law that there be the required consent and that an Owners Corporation makes a by-law when it passes a valid resolution adopting the by-law. In Khadivzad Darke J stated that the language of s 52 is substantially the same as the language of s 143 and that the court should accept the analysis of Ball J concerning the current legislation.
Ground 2 concerns the contention that the Tribunal failed to afford procedural fairness. The Appellant's submissions have already been summarised. The only additional point to record is that the Appellant described ground 2 as raising a question of law and, additionally, contended that the Appellant had not been given an opportunity to provide evidence in reply or to test the evidence of the wife.
The Appellant's submissions with respect to grounds 3 and 4 have been adequately summarised earlier.
Ground 5 concerns the Appellant's contention that the Tribunal made a finding of fact without appropriate evidence. The relevant finding of fact is that the Tribunal determined that the scope of works was adequate. The Appellant submitted that the finding in the Decision at [59] that the proposed works by‑law is "sufficiently specific" must be incorrect in circumstances where it transpired during the hearing that the works will require the removal and/or relocation of the conditioning unit.
Ground 6 is also a contention that the Tribunal made a finding of fact without appropriate evidence. The contested finding is the statement made in order 1 that the statutory declaration to be provided by Mrs Collins was a declaration that "she consented to the proposed works" and the "proposed works by-law" and to the "bringing of the proceedings". The Appellant contended there was no evidence filed during the proceedings or given at the hearing that would warrant those findings of fact.
Ground 7 is to the effect that the Tribunal took into account irrelevant considerations when considering whether Mrs Collins had given consent. Those considerations were the evidence of the First Respondent, Mr Collins that he and his wife were prepared to sign the consent form which accompanied the proposed by-law voted on at the annual general meeting. That evidence was irrelevant to a consideration of whether there was evidence of the written consent of the First Respondent and his wife.

Consideration

Ground 1 concerns the issue of consent raised by the Appellant and therefore requires consideration of ss 143(1) and 149 (3).
It is clear from the wording of s 143(1) and from the judgments in Khadivzad and in James that it is a precondition to the making of a common property rights by-law by an Owners Corporation that there be provided the written consent of each owner, on whom the by-law confers rights or special privileges. In this case, that means that the First Respondent and Mrs Collins must provide their written consent to by-law 26 before the Owners Corporation can make that by-law.
In this case, the Owners Corporation has not made by-law 26. It was put to the annual general meeting in 2023 and did not achieve the appropriate level of approval.
Accordingly, the First Respondent was in the position of making an application under s 149, the success of which required him to be able to establish that there was unreasonable refusal to pass the by-law. By s 149(3) the Tribunal was prohibited from determining the First Respondent's application on the ground that the owners corporation had unreasonably refused to make the relevant by- law by an order prescribing the making of the relevant by-law in terms to which the First Respondent and his wife were not prepared to consent.
The form of consent required under s 149(3) is not expressly stated to be written consent (as is the case with s 143(1)).
One difficulty that the First Respondent had to overcome was that he brought the proceedings in his own name and the proceedings were thus not in the joint names of the First Respondent and his wife.
As recorded at [66] of the Decision the Tribunal said it could be inferred that the application was lodged by the First Respondent with the Tribunal both on behalf of himself and his wife, and with the wife's consent. There was no evidence that could cause one to doubt the reasonableness of that inference. Notwithstanding an opportunity to do so, the representative for the Appellant did not seek to cross-examine the First Respondent as to whether he had brought the application not only for himself but also for his wife. Further, we were told (and it was not disputed during the hearing of the appeal) that the First Respondent voted at the AGM in favour of the proposed by-law not only for himself but also as proxy for his wife.
Although the statutory declaration provided pursuant to order 1 was obtained after the hearing, it confirmed that Mrs Collins consented to the bringing of the application. In view of the fact that, in our view, the Tribunal was entitled to make the inferred finding of fact that Mrs Collins consented to the application, the provision of the statutory declaration only operated to confirm that which had been inferred.
In our view the facts in GS & CS raised issues which are different from those applicable in this case. In that case six lot owners proposed an amended by‑law but there were three others whose consent was required under s 143(1) but were not available. We accept the statement made at [39] of GS & CS where the Appeal Panel said that where relevant written consents have not been received, because consent is a precondition, an Owners Corporation cannot make the relevant by-law. The Appeal Panel went on to say that it follows that, in the absence of written consent, any failure to pass a resolution to make the by-law cannot be unreasonable as there is no power to pass the resolution at all. We agree with those statements.
In the next paragraph, namely [40], the Appeal Panel stated that: "In these circumstances, the person seeking the making of a by-law may apply to the Tribunal under s 149" of the Strata Act. In that case, the absence of consent of three lot owners meant that a condition precedent to the lawful passing of a resolution to change the original by-law had failed to materialise, and therefore the failure to pass the resolution in question could not be unreasonable - see [49].
Here, the facts as found were that the Second Respondent and his wife had given evidence that they were prepared to consent to the proposed by-law and that the by-law in its own terms required the relevant owner (in this case the First Respondent and his wife) to provide written consent to the passing of the by‑law and other matters - see part 3.1(a)(i) and (ii) of by-law 22. In our view that requirement makes the validity or efficacy of the by-law conditional upon the lot owner complying with its terms, including relevantly providing a written consent. In GS & CS at [33] the Appeal Panel stated that it expressed no view about whether an Owners Corporation could pass a by-law conditional upon the consent of the relevant owners being subsequently obtained.
The requirements of ss 143 and 149 relevant to the facts of this case, may be summarised as follows: 1. The requirement of s143 is that the proposed by-law 26 may only be made with the written consent of the First Respondent and Mrs Collins (s143(1)). That by-law may be subject to conditions, such as the payment of money (s143(2)). By- law 26 incorporated the pre-existing by-law 22 which included the requirement for written consent of the relevant lot owners (in this case, the First Respondent and Mrs Collins) to be provided prior to commencement of the relevant works. 2. The effect of s108(5)(a) is that a special resolution approving by-law 26 has no effect unless the "owners corporation obtains the written consent of the owner" (ie the First Respondent and Mrs Collins to the making of the by-law. 3. S149 gave to the First Respondent and Mrs Collins the right to make an application to the Tribunal for an order prescribing a change to the by-laws as a result of the motion to approve by-law 26 failing to achieve the requisite majority. However, the Tribunal was not able to make the order sought unless it found that the owners corporation unreasonably refused to approve by-law 26. In our view because by-law 26 included the requirement for written consent to be provided it is not open to the Appellant to argue that its refusal was not unreasonable on the basis of the lack of written consent of the First Respondent and Mrs Collins being in existence at the time items 16 and 17 were considered at the meeting of the owners corporation. Their written consent was required by by- law 22 to be given before commencement of work. This interpretation is consistent with s149(3) which provides that the tribunal is not to determine the application if it does not have evidence that the applicant (in this case the First Respondent and Mrs Collins) "is prepared to consent " to the terms of the by-law. 4. If an applicant under s 149 is successful in obtaining an order for a new by-law to be prescribed, that order must make it the case that the passing of the by-law is dependent upon compliance with s 143, namely the provision of written consent. 5. The evidence that the First Respondent and Mrs Collins are prepared to consent to the terms of the by-law is constituted by the First Respondent's evidence that he will sign the written form of consent and his representation that his wife would do likewise. In the case of the wife, that representation is confirmed by the statutory declaration provided pursuant to order 1.
It follows from the above interpretation of the operation of ss 143 and 149 that order 3 made by the Tribunal at first instance is to be interpreted as including an obligation on the Owners Corporation to obtain the written consent of the First Respondent and his wife before commencement of the work and before it seeks the recording of the by-law under s 246.
The Appellant's submissions referred to two judgments of the Supreme Court, namely the Khadivzad case and the James case (both cited earlier in this decision). In our view, the operation of ss 143 and 149 to the facts of this case as interpreted by our analysis recorded above is not inconsistent with these two judgments. Both cases were concerned only s 52 of the 1996 Strata Act (that section being in the same terms as s 143) and the judgments were not concerned with s 158 of the 1996 Strata Act (that section being the equivalent of s 149). Both cases did not involve consideration of a by-law which, in its own terms, was conditional upon the relevant lot owners giving written consent.
Accordingly ground 1 is rejected.
Ground 2 concerns the contention that the Appellant was not afforded procedural fairness by reason of the order requiring the Respondent to produce a statutory declaration of Mrs Collins with the consequence that the Appellant was not given an opportunity to cross-examine Mrs Collins during the course of the hearing. The Tribunal found inferentially that Mrs Collins consented to the application. The Tribunal also found that the First Respondent had given his consent to the proposed by-law by making the application to the Tribunal. In our view the Tribunal's findings of fact in this respect were sufficient to satisfy the requirement of s 149(3) which requires that there be evidence that the Applicants are "prepared to consent" to the proposed by-law as a condition of the Tribunal making the order prescribing the by-law. Further, the First Respondent gave evidence that both he and his wife were prepared to consent to the proposed by-law. There was no cross-examination of the First Respondent in respect of that evidence.
In our view, the direction requiring the provision of the statutory declaration did not add anything. There was evidence sufficient to respond to the requirement in s 149(3) and the further requirement in s 143 for written consent was incorporated as a condition of the by-law.
Further, had Mrs Collins been present it is difficult to conceive of a line of questioning which the Appellant's representative could have asked to the advantage of the Appellant. At the hearing of the appeal we asked the Appellant's representative what could have been asked of Mrs Collins had she been present and in our view a satisfactory response was not provided.
Given our views as expressed above, ground 2 is rejected.
Ground 3 concerns the Appellant's submission that the Tribunal failed to take into account relevant considerations. These considerations were that the First Respondent might alter the proposed works because of the placement of the air-conditioning unit in relation to the proposed works. The Appellant did not submit that the Tribunal failed to take account of any mandatory consideration. Rather, the ground is based on some evidence given by the First Respondent that he may need to vary the size of the window so that the air-conditioning unit is not interfered with.
At [59] of the Decision the Tribunal found that the "proposed works bylaw is sufficiently specific on the degree of specificity required by the New South Wales Court of Appeal in Stolfa v Hempton [2010] NSWCA 218 at [28] - [33]". That being the case, it is our opinion that any substantive alteration to the works would require the First Respondent and his wife to seek a new and different by-law. The Tribunal recognised this possibility at [62] when it considered whether Council approval is required. In that context the Tribunal stated that if Council requires amendments which change the substantive character of what the by-law has approved, then that change will need to be the subject of a further by-law.
In our view this ground does not raise a question of law. The ground is to the effect that there was evidence that the First Respondent might seek to alter the proposed works. As a question of law does not arise leave to appeal is required in accordance with the requirements of cl 12 sch 4 of the NCAT Act. There is no basis for the grant of such leave, nor has a submission been made, explaining why leave should be granted.
Ground 3 is rejected.
Ground 4 concerns the Appellant's contention that the Tribunal failed to provide proper reasons. The Appellant's submission links this ground to ground 3 in that the submissions in support of ground 3 are relied upon in support of ground 4.
We are of the view that ground 3 has no merit and accordingly ground 4 also fails. The Tribunal was required to consider a proposed by-law which incorporated a description of works which the Tribunal described as "sufficiently specific". The possibility that the Appellant might seek to alter the works is not a basis for the Tribunal to refuse to prescribe the necessary by-law. The Tribunal gave reasons that were, in all relevant respects, adequate including stating that, at least in the context of the Council requiring alterations, a further by-law would be required.
Ground 5 concerns the Tribunal's finding at [59] that the proposed works by-law is sufficiently specific. The Appellant contends that that finding of fact was made without appropriate evidence and an error was made in determining that the scope of works was adequate. Earlier we set out the terms of the two motions that the Owners Corporation considered at the meeting. We noted that the motion included an annexure which in turn made reference to plans and drawings. The Appellant's submissions do not explain why the material annexed to the motion (particularly the plans and drawings) described an inadequate scope of works. The Appellant's submission links this ground to grounds 3 and 4 concerning the possibility that there will be a removal and/or relocation of the air-conditioning unit. As we understand it the works as proposed do not permit removal and/or relocation and, as the Tribunal stated changes of such a nature would require the Owners Corporation to pass a new by-law.
By ground 5 the Appellant also contended that the Tribunal made a finding of fact without appropriate evidence concerning the scope of works, which the Appellant described as inadequate. The Tribunal found that the proposed scope of works included "an architectural drawing and engineer's letter and marked up drawing". At [55] the Tribunal found that there were "architectural plans and engineering drawings and a preliminary engineering opinion on the absence of structural problems for the proposed works" and that the "architectural plans were dimensioned on the proposed window alterations". The Tribunal concluded at [59] that the proposed works by-law is "sufficiently specific on the degree of specificity required by the NSWCA in Stolfa v Hampton [2010] NSWCA 218. In that judgment, at [30] the Court of Appeal stated that it will be a question of fact or mixed fact and law in each case whether any given special resolution or special resolutions is or are adequate in its or their specificity of authorisation and in its or their particularity as to the actions proposed. The court stated that: "There is obviously a clear policy in requiring direct and specific attention to the proposed action; at the same time, an overly pedantic attention to detail might frustrate otherwise clear authorisation. Common sense and reasonableness have their part to play in the operation of a provision intended to regulate how people go about dealing with the common property in their units in everyday life". This contention concerning ground 5 is also rejected.
The Appellant's submissions referred to the decision of a principal member at first instance in the Consumer & Commercial Division of the Tribunal in the case of Williams v Owners - Strata Plan no 3192 [2018[NSWCATCD27. In that case, the concern of one of the parties was that the special by-law did not provide adequate details or plans with respect to the works. The Tribunal found that there were no details in terms of specifications, dimensions, and "so on" [124].
Here, the evidence relied upon by the Tribunal is identified in [14] and [55]. The Appellant's contention that the Tribunal made a finding of fact without appropriate evidence is plainly not supportable given the findings of fact made by the Tribunal. To the extent that this ground raises a question of law, the ground is rejected. To the extent that this ground only raises a question of fact it is not only rejected but we also note that no submissions were made explaining why leave should be granted.
Ground 5 is rejected.
Ground 6 concerns the Appellant's contention that the Tribunal made a finding of fact without proper evidence in that the wording of order 1 (concerning the provision of the statutory declaration of Mrs Collins) stated that Mrs Collins consented to the proposed works and the by-law where there was no evidence filed during the proceedings or given at the final hearing that would warrant "the definitive statement made by the Tribunal".
At [66] the Tribunal found that it was able to draw the inference that the First Respondent lodged the application on behalf of himself and his wife, with Mrs Collins' consent and that the First Respondent and Mrs Collins sought the proposed works as "an endeavour by both of them". At [67], the Tribunal found that by reason of the above inference the required consent from First Respondent and Mrs Collins was in place. The Tribunal then stated that in order to "regularise the position expressly, given the manner in which the issue arose, I shall give the Applicant [ie. First respondent] the opportunity to file a statutory declaration from his wife to the effect (as correct) that she consented to the proposed works, the proposed works by-law and to the bringing of the present proceedings". In our view the purpose of the statutory declaration was to confirm in express language that which the Tribunal was comfortable in inferring. On one view, it was unnecessary given the fact that the requirement for written consent pursuant s 143 was an express requirement of the proposed by-law and that the works could not commence without that written consent being provided beforehand. The Tribunal stated that the First Respondent's evidence "refers throughout to the proposed works being an endeavour by both of them" [66] - meaning the First Respondent and Mrs Collins. The complaint of the Appellant is that the wording of order 1 to the effect that the proposed statutory declaration will confirm that Mrs Collins consented was wording proposed for which there was no evidence. The Tribunal made clear the evidence upon which it relied for the inferred finding of fact referred to earlier.
Accordingly ground 6 is rejected.
We now turn to ground 7. This concerns the contention by the Appellant that the Tribunal made a finding of fact without appropriate evidence in that the Tribunal took into account irrelevant considerations in its determination that the First Respondent and Mrs Collins had provided consent prior to the meeting of the Owners Corporation. The alleged irrelevant factors said to be taken into account were the making of the application to the Tribunal, the cross-examination of the First Respondent and the drawing of an inference from the evidence.
In our view this ground is without merit. The task of the Tribunal in part was to identify whether the First Respondent and Mrs Collins were prepared to consent to the proposed by-law, that being a requirement of s 149(3). The Tribunal found that that requirement had been satisfied by the making of the application to the Tribunal and the evidence given by Mr Collins. In our opinion, those matters were not irrelevant and it was appropriate for the Tribunal to have regard to them in its consideration of whether s 149(3) had been satisfied. In so doing, the Tribunal made it clear at [65] that the requirement under s 143 for written consent was a requirement built into special by-law 22. This ground is rejected.
Finally, the Appellant submitted that to the extent that any of the grounds did not give rise to questions of law, then the Appellant seeks leave on the basis that the Decision was not fair and equitable. The Appellant's submission stated that it was not fair and equitable because the First Respondent and Mrs Collins had not provided written consent and further the works would "likely differ from the proposed by-law due to the external air-conditioning unit being in a place where the First Respondent intends to carry out work". The Appellant also submitted that the Decision was against the weight of evidence in relation to the Tribunal's finding that the scope of works was adequate and the finding that the First Respondent's wife consented.
We have dealt with each of the matters raised in this final submission as the issues concerning consent and the place of the air-conditioning unit have been considered under the other grounds. The requirements for obtaining leave have been set out in the Appeal Panel decision in Collins v Urban [2014] NSWCATAP 17. That decision also concerned the requirements of cl 12 of sch 4 of the NCAT Act. Clause 12 states that the Appeal Panel must be satisfied that the Appellant "may" have suffered a substantial miscarriage of justice. From [80] the Appeal Panel set out the general principles for the granting of leave. Those general principles were set out at [84]. That paragraph stated: 1. In order to be granted leave to appeal, the applicant must demonstrate something more than that the primary decision maker was arguably wrong in the conclusion arrived at or that there was a bona fide challenge to an issue of fact: BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [19] and the authorities cited there, Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10 at [45]; 2. Ordinarily it is appropriate to grant leave to appeal only in matters that involve: 1. issues of principle; 2. questions of public importance or matters of administration or policy which might have general application; or 3. 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; 4. a factual error that was unreasonably arrived at and clearly mistaken; or 5. 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, 6. BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [20] and the authorities cited there, SAB v SEM [2013] NSWSC 253 at [8] and [9] and the authorities cited there, Nakad v Commissioner of Police, NSW Police Force [2014] NSWCATAP 10 at [45]; 3. In relation to an application for leave to appeal relating to a question of practice and procedure, the application is to be approached with the restraint applied by an appellate court when reviewing such decisions, especially if the application is made during the course of a hearing: BHP Billiton Ltd v Dunning [2013] NSWCA 421 at [21] and the authorities cited there.
We have not received a submission specifically directed to these grounds and, in our view, it is not clear that any of the grounds are likely to be relevant to the issues identified in Collins v Urban. Accordingly, we do not grant leave to appeal and the appeal in that respect is rejected.

Conclusion

The Appeal Panel makes the following orders: 1. Appeal dismissed. 2. Orders 2, 3 and 4 made at first instance on 25 June 2024 are affirmed. 3. Stay lifted.

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: 06 December 2024

Strata Schemes Management Act 1996(NSW)

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