Williams v The Owners - Strata Plan No 3192

Preliminary matter

1. There is one preliminary matter to determine. The respondent claims that the failure of the applicants to provide a written consent to the making of the Special By-Law is fatal to their claim. The respondent relies respectively on ss 143(1) and 108(5) of the Act. Those sections relevantly 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. 108 Changes to common property (5) A special resolution under this section that allows an owner of a lot to take action in relation to certain common property and provides that the ongoing maintenance of that common property after the action is taken is the responsibility of the owner has no effect unless: (a) the owners corporation obtains the written consent of the owner to the making of a by-law to provide for the maintenance of the common property by the owner, and (b) the owners corporation makes the by-law.
2. I note that there is no prescribed form for the provision of consent pursuant to either section.
3. The applicants rely on the letter of their solicitor to the respondent's solicitor of 21 September 2018. That letter attached a copy of the proposed Special By-Law, and states that "we will provide signed consent forms at your request, when it is known what the date of the general meeting will be".
4. The letter attached a form of consent for each of Ms Williams, Mr Williams and Ms Rhiannon Williams, but no consent was signed. The applicants say that the very act of sending the proposed Special By-Law to respondent's solicitor indicated that they were consenting to the making of the Special By-Law.
5. In additional written submissions, the applicants submit that it is axiomatic that the requirement for the provision of written consent does not apply to the making of a by-law by order of the Tribunal under s 149 of the Act as:

• the only mention of a consent in s 149 appears in s 149(3), which prevents the Tribunal from ordering that a by-law be made in terms that the applicant for the order "is not prepared to consent to"
• there is no available reading of s 149 (3) which even remotely suggests a requirement that the consent in question be given prior to the meeting at which the contested by-law was proposed to be made.

1. For the avoidance of any doubt, the applicants are prepared to consent to the making of the by-law in accordance with the orders sought herein.
2. In response, the respondent submits that there is a strict obligation that an owners corporation may not make a common property rights by-law without the written consent of each lot owner on whom the by­law confers special rights or privileges under s 143(1) of the Act. It relies on various authorities including James v The Owners Strata Plan No. SP 11478 (No 4) [2012] NSWSC 590 and Owners Corporation SP 32033 v Mullins [2015] NSWCATCD 23.
3. In James the Court relevantly stated: 94. Section 52 of the SSM Act [equivalent to section 143 of the Act] provides that the owners corporation may "make" a by-law under that section "but only" with the written consent of the owner or owners of the lot or lots concerned. The by-law is made by the owners corporation, but a pre-condition to making the by-law is the required consent. In my opinion, the owners corporation "makes" a by-law when it passes a valid resolution adopting the by-law in accordance with the relevant requirements of the SSM Act. . . . 95. In my opinion, there is also a practical reason for interpreting s 52 as requiring written consent before a resolution is passed. That reason is that lot owners may well want to know whether written consent is forthcoming before voting on the resolution. The powers conferred by s 52 cannot operate any differently because they are being exercised by Mr Anderson under s 162 rather than by the owners corporation. . . . 97. It follows that each of resolutions 4 to 11 passed by Mr Anderson on 19 December 2011 was not validly passed. Those resolutions could only be validly passed with the prior written consent of each lot owner affected by the relevant by-law.
4. In Mullins The Tribunal stated: 30. Under the SSMA, the obligation to maintain and repair common property can be transferred to lot owners. Specifically, it may happen when an Owners Corporation makes a by-law which gives to a lot owner either a right of exclusive use and enjoyment of all or part of the common property, or special privileges in respect of the whole or part of the common property. If such a by-law is made, then it may impose on the relevant lot owner or owners the responsibility for the maintenance and upkeep of the common property concerned. Such a by-law may be made by special resolution under s 52 of the SSMA, but only with but only with the written consent of the owner or owners of the lot or lots concerned. 33. I have considered whether Special by-law 2 is impliedly an exclusive use or special privileges by-law of a kind contemplated by s 52 of the SSMA. However, in the absence of evidence of written consent by the lot owners as required by s 52(1)(a), I am not satisfied that a finding to this effect should be made.

Consideration

1. I reject the applicants' submission that written consent is not required as there is no such requirement within s 149 itself. The submission overlooks the clear expectation if not demand of s 143(1) that 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.
2. As to the authorities on which the respondent relies, it is to be noted that neither of these authorities states or describe the form in which the written consent is to be contained or conveyed.
3. In my view, the relevant question is whether the communication from the applicants' solicitors was sufficient for the purposes of ss 143 (1) and 108(5). In my view, the writing of the letter of 21 September 2018 does constitute the written consent of the applicants. The purpose of the two sections is to ensure that no Special By-Law imposes obligations on lot owners affecting common property rights without their knowledge or consent. I am satisfied that the writing of the letter by the solicitors of the applicants sufficiently satisfied both s 143 (1) and s 108(5).
4. I note that in coming to this conclusion I have assumed that the proposed Special By-Law is one in relation to "ongoing maintenance" of the common property.
5. I turn now to the substance of the applicants' application.

Applicants' Evidence

1. The evidence relied on by the applicants includes: 1. (1) the statutory declarations of Ms Julie Williams respectively sworn 31 August 2018, 5 September 2018 and 19 October 2018 (respectively marked as Exhibits "A", "B" and "C"). I shall refer to her evidence in detail below; 2. (2) the statutory declaration of Ms Kent Williams sworn 18 October 2018 (Exhibit "D"). Mr Williams is the son of Ms Julie Williams. In summary, he states that he and his wife, Ms Rhiannon Williams, are very concerned about the proposal to remove and replace the garage door. He says this will have the effect of making it impossible to park a car in the garage and to close the doors. He says that this is a fundamental and very serious change in the nature of his property, and will destroy the comfort, efficiency and amenity of his property. He says that this will affect the potential sale price of Lot 14 and rental income. He says that a number of reasonable settlement proposals put to the respondent have been ignored; 3. (3) the statutory declaration of Ms Rhiannon Williams sworn 18 October 2018 (Exhibit "E"). Ms Rhiannon Williams makes statements to similar effect as her husband; together with various other documents including minutes of general meetings of the respondent and the submissions of Mr Philips (Exhibit "F").
2. The only witness required for cross-examination by the respondent was Ms Julie Williams. She gave her responses in a courteous and responsive way, and I found her to be a credible and reliable witness.
3. The evidence relied on by the respondent included the following: 1. (1) the witness statements of Ms Stacey Armstrong respectively dated 10 October and 31 October 2018 (respectively Exhibits 1 and 2). Ms Armstrong has been a lot owner since 2009 and a member of the strata committee of the respondent for approximately nine years. In summary, she says that:

• a previous owner of Lot 14 carried out unauthorised works to the common property including the installation of the wooden garage doors which she says encroach onto common property;
• there is no registered by-law for those works;
• an attendance at Northern Beaches Council revealed no record of consent for those works;
• the works obstruct and reduce the visibility of drivers on the common property driveway;
• the works cause health and safety issues;
• the works have fallen into a state of disrepair and re unsightly. 1. (2) a witness statement of Ms Corinna Kaufmehl dated 31 October 2018 (Exhibit 3). She is employed by the strata manager for SP 3192. Her statement recounts her version of events at the EGM, which I will consider below; 2. (3) a witness statement of Mr Peter Mackay dated 31 October 2018 (Exhibit 4); 3. (4) a witness statement of Mr Andrew Maundrell dated 31 October 2018 (Exhibit 5); 4. (5) a witness statement of Mr Lee Gordon Jaques dated 2 November 2018 (Exhibit 6); 5. (6) an expert report of Mr Brett Daintry dated 29 October 2018 (Exhibit 7), 6. together with various documents including quotations, correspondence between the parties and, and the submissions of Mr Bannerman (Exhibit 8).

1. Each of Ms Armstrong, Mr Maundrell and Mr Mackay were required for cross examination. The significance of their evidence was that Mr Maundrell and Mr Mackay agreed that Ms Armstrong had read a statement of reasons to refuse the proposed Special By-Law to the EGM, and that they agreed with those reasons as being sufficient to warrant them deciding to vote against the motion.

Findings

1. I note that my obligation is to state generally and briefly the grounds for my conclusions concerning disputed factual questions and to list the findings on the principal contested issues: Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247, per Kirby P at 259. It is not necessary for me to make findings on every argument or every submission, particularly where the arguments advanced are numerous and of varying significance, or are unsupported by any evidence: Beale v Government Insurance Office of NSW (1997) 48 NSWLR 430 at 443. As the Court of Appeal stated in Mitchell v Cullingral Pty Ltd [2012] NSWCA 389 at [2], (adopted in Mifsud v Campbell (1991) 21 NSWLR 725): There are ample statements of this Court and of the High Court to express the duty upon judicial officers as to the giving of reasons. . . . a judge may, in dealing with large bodies of evidence, be forced to economise in expression and approach in order to be coherent in resolving the overall controversy. The need for coherent and tolerably workable reasons sometimes requires truncation of reference and expression. Judgment writing should not become a process that is oppressive and that produces unnecessary prolixity. Not every piece of evidence must be referred to. That said, central controversies put up for resolution by the parties must be dealt with. The competing evidence directed or relevant to such controversies must be analysed and resolved.
2. Given the written and oral evidence and cross-examination, I make the following relevant findings.

Background

1. SP 3192 was registered on 8 July 1968. The strata scheme was subdivided on 9 December 1994 (SP 46078).
2. The applicants are the owners of lot 14 in SP 46078 (previously lot 5 in SP 3192):

• the applicant Ms Julie Williams as to half a share;
• the applicants Ms Rhiannon Jade Williams and Mr Kent Ryan Williams as to half a share each as joint tenants.

1. There 13 lots in the strata plan. Ten have garages, three have car spaces.
2. Lot 14 was relevantly purchased by Ms Julie Williams (hereafter Ms Williams) and Ms Lynette May Clark in 1999. Lot 14, had been marketed for sale as having its own lock up garage. The relevant garage for Lot 14 had wooden garage doors which are still in place. The doors were installed on her garage at some unknown time prior to her purchasing Lot 14.
3. At the time of the purchase of Lot 14, Ms Williams' car, a Toyota Corolla, could fit in her garage. The garage can only accommodate a smaller car as a stair well occupies part of the garage. Ms Williams says that if the doors as now present were removed and replaced with doors that were flat in line across the front of the building, there would very few cars that could be parked in the garage. This is because, and this appears to be common ground, the doors proposed by the respondent, and which have now been installed in most of the other garages, reduce the space available by some 0.6 to 0.7 meters of depth.
4. Lot 14 is rented to tenants, with the garage forming part of the premises forming part of the residential premises the subject of relevant residential tenancy agreements.

1988

1. On 30 April 1988, the respondent resolved to allow another lot owner to install garage doors on her garage. The minutes record that, at the time, the respondent's managing agent, advised that it could be illegal to attach a garage door and block off access to an unregistered right a walkway. The agent suggested that further legal advice be sought. The respondent voted 9-1 against this advice.

1989

1. At the Annual General Meeting (AGM) of the respondent held on 29 April 1989, it was resolved to approve "all remaining owners" enclosing their garages subject to necessary local Council approval being obtained, that the work be carried out in a tradesman like manner, and that the doors should match as close as possible those approved for garage 13, with all future maintenance being at the owners' cost.

1990

1. At the AGM of the respondent held on 14 July 1990, it was resolved to grant permission to make attachments to common property to support door frames in the respective garages.

1992

1. At the EGM of the respondent held on 16 June 1992, a motion to ask Mr Wheen to remove two doors from his garage was defeated. The agenda states that the request had been made because the two garage doors did not comply in appearance and structure with the garage door of unit 13, as passed at a meeting on 14 July 1990.

2004

1. Ms Williams the first of a number of requests for the repair of her garage doors. No repairs were carried out.
2. At the 2004 AGM, Ms Williams asked for approval to repair her garage doors. The minutes of that meeting record: The garage doors were once noted as being an owners responsibility. Strata manager explained that unless a by malt was put in place, the minutes would not stand up if challenged or an owner who install the door subsequently sold out. After sale, no bylaw in place, any alterations to common property would become owners corporation responsibility An extraordinary general meeting by postal vote is to be arranged to ask owners if they want the garage doors to be Owners Corporation or owners responsibility.

2006

1. At a meeting of the strata committee of the respondent (the strata committee) held on 23 October 2006, the strata committee agreed to accept a quotation to replace 5 garage doors with wooden doors at a cost of $41,000.00 [sic?]. The doors were to be a "tiltadoor" in timber and "preferably to be primed on both sides in preparation for painting".
2. A subsequent meeting of the strata committee was held on 4 December 2006. Those minutes refer to six flat garage doors having been installed and that the "trifold doors" were to be inspected with the view of determining the feasibility of repairing/replacing the plywood.

2007

1. At a meeting of the strata committee held on 2 April 2007, the minutes record that four bifold garage doors needed repair. The strata committee recommended accepting a quotation to supply fit and paint the doors.
2. An AGM of the respondent was held on 30 April 2007. A quotation for repairing the "bifold" garage doors was accepted.
3. At a meeting of the strata committee held on 7 August 2007, it was decided to defer work on the "bifold" doors because of storm damage.

2008

1. At a meeting of the strata committee held on 3 November 2008, it was resolved not to proceed immediately with the repair and painting of the "bifold" garage doors but to "wait and include this work when the remaining doors are painted".

2009

1. At a meeting of the strata committee held on 30 March 2009, it was decided to obtain a work order for repairing and painting the four "bifold" remaining unpainted garage doors.
2. At a meeting of the strata committee held on 29 April 2009, it was agreed that "stable style" doors were to be repaired and all doors to be repainted.
3. At a meeting of the strata committee held on 16 November 2009, the minutes record: discussion then focused on the wooden trifold garage doors the back of the building, with some committee members preferring to standardise the doors using tilt doors. The meeting adjourned and reconvened on the premises. No agreement was reached and therefore this item deferred to next meeting

2010

1. At a meeting of the strata committee held on 23 March 2010, it was agreed that the strata committee would reconsider refurbishing the "trifold" garage doors including installing rollers if supplies could be found.
2. At a meeting of the strata committee held on 9 August 2010, the committee resolved that the refurbishing of the garage doors would be considered after work on the driveway was finalised.

2016

1. At the AGM of the respondent held on 31 May 2016, Ms Williams submitted a proposed resolution to "continue the building upgrades by accepting the quotation from N and K Cratchley dated 18 November 2015 to repair/replace the back garage doors to match other garage doors". The motion was deferred.

2018

1. At the AGM of the respondent held on 11 April 2018, Ms Williams requested the doors be repaired or replaced because there still had not been any repair or maintenance. The meeting refused and requested both evidence of the lawfulness of the doors in current configuration and two graphic designs, one of appearance when repaired and one with the brick pillar option. The Committee undertook to test the egress with the "brick pillar option"
2. On 16 April 2018, Ms Williams sent an email to Ms Corinna Kaufmehl, an employee of the strata manager of the respondent, Mason & Brophy Strata Management Pty Ltd. The email was said to be sent in response to the previous AGM at which Ms Williams was asked to show proof that the back garage doors in their current configuration had been approved by the respondent. Ms Williams states in her email: I am attaching for documents for your records. . . . 1. A timeline summary of the history with numbers relating to sheets in the next file. Of most relevance are sheets 5, 6, 7, 8 and 9. The rest relates to repairs. 2. A scanned file containing copies of minutes (numbered sheets) relating to the garage doors, including approval. 3. A PDF the possible look of the current garage doors if they were repaired and painted. 4. A PDF of the possible look of the garages if the pillar option was to go ahead. At the meeting I became quite frustrated and annoyed because as the history shows, on 5 occasions I have allowed the repair of these doors to be delayed because major building issues arose. Agreement to repair the doors is never an issue, but the timing was unfortunate, hence the delay is. The building could look so much better and we would all benefit from increased value. Andrew [Maundrell] and Peter [MacKay] agreed to conduct a pilot to check ingress and egress with the pillar option, and I guess they will advise me of the timing that seems a bit unnecessary since unit 13 always already enters and leaves the garage and that garage protrudes much further than the proposed pillars.
3. On 2 May 2018, Ms Williams asked Mr McKay and Mr Maundrell when it would be suitable to meet on site to test an option for the garage doors for both pillars and flat doors. Mr Maundrell's response was that he was not sure there was any point in undertaking the test because:
4. he had not seen any evidence that the doors had been lawfully erected;
5. Ms Williams did not believe she should purchase the common property from the respondent; and
6. in his opinion, the drawings of her proposal did not look "nice".
7. Mr Maundrell also stated that he felt "bad about the situation".
8. On or about 24 May 2018, Ms Williams requested the respondent convene a general meeting to consider a by-law proposed by her. I make no findings as to the terms of this proposed by-law as it was not included in the materials before me.
9. Ms Williams states, and I accept, that the by-law proposed by her was not placed before the EGM of the respondent held on 31 May 2018. Rather, at that EGM, the following special resolution was passed 7-1, with one abstention: SPECIAL RESOLUTION-GARAGE DOOR REPLACEMENT UNITS 3, 5 AND 9: 2.1 That the Owners Corporation SP 3192 Specially Resolves in accordance with section 106 and 108 of the Strata schemes Management act 2015 to remove the existing garage doors of units 3, 5 and 9 which were previously relocated on the common property, and reinstall garage doors that are aligned with the strata plan and adjacent garage doors to be of identical appearance to the rest of the garage doors brackets being the garage doors of unit 13 through the unit 6). 2.2 that the Owners Corporation SP 3192 confirm and acknowledge that the strata committee during the course of the garage door replacement works be authorised on behalf of the owners corporation to: a) seek and accept appropriate quotes b) liaise with the tradesmen on site c) authorise variations as may be necessary during the course of the works d) approved progress payments
10. In her statement of 31 August 2018, Ms William states at par [42] that the notice of the EGM conceded that the works would reduce the length of the garages. As the notice of the meeting was not included in the evidence, I decline to make that finding. There is no such concession contained in the minutes of the EGM.

EGM of 8 October 2018

1. On or about 21 September 2018, the strata manager caused to be distributed to lot owners notice of an EGM of the respondent to be held on 8 October 2018. Relevantly, the EGM was to consider and if thought appropriate to pass the following motion: THAT the Owners - Strata Plan No. 3192 SPECIALLY RESOLVE pursuant to the Section 108 of the Strata Schemes Management Act 2015 (NSW) to make an additional By-Law in the following terms: Special By-Law 2 - Attachments to common property for the purpose of a garage door Part 1: Introduction (1) This is a by-law made under the provisions of Sections 141 and 108 of the Strata Schemes Management Act 2015 (NSW). (2) The effect of the by-law is to grant the Owner of Lot 14 in Strata Plan No. 46078 (formerly lot 5 in Strata Plan No. 3192) permission to perform the Works, subject to the conditions specified in the by-law. (3) So far as the Works involve any alteration, improvement or enhancement of the common property, this by-law records the approval of the Owners Corporation in terms of Section 108 of the Strata Schemes Management Act 2015 (NSW) and the obligation of the Owner, subject to this by-law, to maintain those works in a state of good and serviceable repair.
2. The Works the subject of the proposed Special By-Law were defined as follows: "Works" means the installation of a tilt style garage door at the entrance the Lot 14 which: (a) is in accordance with the description given by Mr Simon brain in his letter of September 2, 20 18 which the next of this bylaw and is of a similar design and colour to the doors as illustrated in the colour illustration which is the next to the Notice of Meeting and which has an exterior face in the same position as the existing garage door serving Lot 14, thereby allowing the parking of a medium-size car and the locking of the door when the car is so parked
3. At the EGM, the owners of lots 1, 8, 10, 12 and 14 were present in person. The owners of lots 11 and 13 were present by proxy. Mr/Ms S Miller attended on behalf of lot 9. The proxies for lots 6 and 15 were ruled ineligible. Ms Kaumehl attended as Chair and Secretary of the respondent.
4. The EGM 2018 at the offices of the strata manager and commenced at 6.05 pm. The minutes state: 1.1 That the minutes of the last general meeting of the Owners Corporation held Thursday 31 May 2018 be confirmed as a true record of the proceedings of that meeting. CARRIED SPECIAL RESOLUTION - COMMON PROPERTY RIGHTS BY-LAW - ATTACHMENTS TO COMMON PROPERTY FOR THE PURPOSE OF A GARAGE DOOR As proposed by the Owners of Lot 14 Julie, Rhiannon & Kent Williams 2.1 That the Owners Corporation SP 3192 specially resolve pursuant to Section 108 of the Strata Scheme Management Act 2015 (NSW) to make an additional By-law in the terms detailed in Annexure A. VOTING BY UNIT ENTITLEMENTS: FOR: 1. AGAINST: 6. LOST
5. Ms Williams makes three principal complaints about the conduct of the EGM. The first was that she was not given sufficient time, and was interrupted, in her attempts to explain why the Special By-Law should be passed. I reject this claim. The evidence consistently supports a finding, and I so find, that she addressed the meeting for at least 10 minutes and handed out a document which explained why she thought the respondent should consider and pass and make the Special By-Law. She told me so during her oral evidence. In summary, I am satisfied that Ms Williams addressed the EGM for at least 10 minutes in which she explained why she wished the respondent to consider and to approve the proposed Special By-Law.
6. Ms Williams' second complaint is that she was not allowed to amend the proposed motion so as to increase its scope such that its effect was also to grant the owners of two other lots permission to perform the Works the subject of the Special By-Law. The respondent submits that the approach taken by the strata manager who was conducting the EGM was that this was effectively a new motion and well outside any proper amendment which might be considered at the meeting.
7. I agree. In any event there was no written consent, even of the type referred to above, by the owners of those lots. I think the strata manager acted correctly in not allowing the amendment.
8. The third matter raised by Ms Williams was that her application for an adjournment of the meeting to consider the Special By-Law was refused. On the basis of the evidence before me, the only person who states that such an application was made at the meeting is Ms Williams. Each of the witnesses relied on by the respondent say that no such application for an adjournment was made, none of whom were cross-examined on this point. In the circumstances, I find as a matter of fact that no application was made by Ms Williams for an adjournment of the EGM and that any submission to the contrary should be rejected.
9. I note that there was evidence of the events that occurred at the EGM by each of Ms Kaufmehl, Ms Armstrong, Mr Mackay and Mr Maundrell. Ms Kaufmehl is employed by the strata manger. Each of Ms Armstrong, Mr Mackay and Mr Maundrell is a lot owner in SP No 3192. Four witnesses deny that Ms Williams sought to have the EGM adjourned, this matter is not recorded in the minutes, and I find on the balance of probabilities, that she did not.
10. After Ms Williams addressed the EGM, Ms Armstrong addressed the EGM to explain the reasons why she did not agree with the proposed Special By-Law. In summary, she said that:
11. the original doors encroached on the common property;
12. the original doors and propose new doors were inconsistent with and negatively change the appearance of the building;
13. the original doors and propose new doors created a health and safety issue as the doors obstructed the views of motorists;
14. the driveway was already narrow and would be made more narrow by the extension;
15. the Special By-Law did not provide adequate details or plans with respect to the works which Ms Williams wished to carry out;
16. the Special By-Law did not adequately describe the parts of the common property affected by the works;
17. the Ms Williams was not offering to pay compensation for the grant of any exclusive use of the common property;
18. the proposed works could not be permitted as the lot owners would never be able to get consent from the Council, as they would not be able to comply with the Australian Standards for parking and driveways.
19. Each of Mr Mackay and Mr Maundrell gave evidence that they agreed with and supported this reasoning of Ms Armstrong.
20. Ms Armstrong also mentioned that she had had a meeting with a "duty planner" on 19 September 2018 advised her that of these Australian Standards and that regardless of how old the building was, any changes would need to comply with current Australian Standards.
21. At the EGM Ms Armstrong held a report in her hand from a surveyor which she said demonstrated that the proposed works did not comply.

Relevant law

1. Ms Williams seek relief pursuant to s 149 of the Act. That section provides that: 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. . . .
2. The expression "unreasonably refused" has been considered in a number of cases.
3. In Gazebo Penthouse Pty Limited v Owners Corporation SP 73943 [2015] NSWCATCD 93 the Tribunal said: 86. The test of reasonableness has been considered by the High Court in George v Rockett [1990] HCA 26; [1990 170 CLR 104] where it was said (at 112) The test of reasonable is an objective test which requires the existence of facts which are sufficient to induce that state of mind in a reasonable person 87. What is reasonable must be determined objectively. For a decision to be reasonable requires the existence of facts which are "sufficient to induce that state of mind in a reasonable person". . . .
4. In CS Group (Australia) Pty Ltd v Hobby [2014] NSWCA 193, the Court of Appeal considered the concept of unreasonableness in the context of whether the respondent had failed to mitigate her loss and should have pleaded in its defence that she had unreasonably refused to undergo the recommended surgery. The Court referred to the decision of the High Court in Fazlic v Milingimbi Community Inc [1982] HCA 3; 150 CLR 345, where that Court stated at 350: Any assessment of the reasonableness or otherwise of a worker's refusal of treatment must depend upon the worker's state of knowledge at the relevant time. This accords both with good sense and with authority. A worker's choice cannot be said to be unreasonable because he has failed to give effect to factors unknown to him. And in the case of complex medical or surgical procedures he will know little except what he is told. In the present case he was told very little indeed."
5. In the context of contract law, the expression was considered by the Court of Appeal in Fulham Partners LLC v National Australia Bank Ltd [2013] NSWCA 296. The Court stated at [45]: Propositions at such a high level of generality do not necessarily convey where to draw the boundary between the legitimate and the extraneous. That is partly because, where the parties have stipulated that an assignment cannot be made without consent which must not be unreasonably refused, the concept of "unreasonable refusal" is not an abstract point of law, but a matter to be understood in the context of the particular contract: Cathedral Place at [27]. Further, there are grounds which, abstractly, might be thought legitimate, in terms of a broadly stated principle, but which in particular cases have been rejected.
6. Section 149(2) of the Act was referred to in Yardy v Owners Corporation SP 57237 [2018] NSWCATCD 19. The Tribunal noted at [65] that: It is worthy to note that section 180(7) of the Queensland Act requires that the assessment of whether a by-law is "oppressive or unreasonable" is to have "regard to the interest of all owners and occupiers of lots included in the scheme". This expression is also included in section 149(2) of the Act. In the opinion of the Tribunal this expression represents part of the contemporary community standards to apply when determining whether an animal may be kept as a pet in a strata unit.
7. Other authorities referred to me by the respondent included the Reen v Owners Corporation SP 300 [2008] NSWSC 1105; Owners Corporation Strata Plan 7596 v Risidore [2003] NSWSC 966 and Reilly v The Owners, SP 18687 [2007] NSWCTTT 58.
8. In Reen, the Supreme Court of NSW dismissed an appeal from a decision of the Tribunal. The Senior Member constituting the Tribunal allowed an appeal from a decision of an Adjudicator. The Adjudicator had ordered that a by-law be made in favour of the Reens for the exclusive use enjoyment and enjoyment of a garage. In allowing the appeal, and setting aside the orders of the Adjudicator, the Senior Member stated: At the annual general meeting on 19 March 2007 the Owners Corporation refused to make the by-law. In the evidence provided by the owners corporation the reasons given for arriving at that decision include a disagreement with the terms of the by-law, a concern that one lot owner has rights for exclusive use when the other lot owners have a licence to use the garages until 2013. The by-law does not go far enough in addressing the payments, which should be made to the owners corporation. The making of the by-law will hinder the resolution by the owners corporation of the issues relating to the use of the garages..."
9. On appeal to the Supreme Court, the Reens submitted that the Senior Tribunal took into account an irrelevant consideration, namely, that the Reens had made no offer of compensation to SP300 for the proposed by-law. The proposed by-law imposed an obligation on the Reens only in so far as maintenance and repairs of garage No 3. The Court found that the Reens' failure to provide compensation to SP300 for the benefit over the common property that would be obtained by them and lost by the other lot owners was arguably a matter relevant to the determination of the proposed by-law.
10. The Court noted that the Senior Tribunal took into account that the Reens had exclusive use over garage No 3 for a number of years, and stated that: As long as they had the benefit of exclusive use over that part of the common property, a number of other lot owners missed out. Now however, the lot owners who have not previously had such access are interested in obtaining access. Those owners are exploring ways of developing the common property so that more parking is available on the scheme or implementing a more equitable allocation of the existing garages. It was open to the Tribunal Member to conclude that the Adjudicator was in error when she determined that the owners' interest is equal to that of the Reens in the use and enjoyment of the common property.
11. The Court referred to the Tribunal's statement (at [62]) that The circumstances in which the lot was purchased by the Reens does not give the Reens any greater right to exclusive use of the common property garage than any of the other lot owners. Nor does it create a reasonable expectation that they should obtain a benefit in having exclusive use of part of the common property over any of the other lot owners having an interest in making use of the common property."
12. The Court noted at [57], in a passage that I find to be of assistance, that the starting point is that by-laws are made to facilitate the administration and harmony of the strata scheme.
13. In Risidore the Supreme Court considered the meaning of unreasonable refusal in the context of s 140 of the Strata Schemes Management Act 1996 (NSW) (the 1996 Act). Section 140(1) of that Act provided that an Adjudicator may order an owners corporation to consent to work proposed to be carried out by an owner if the Adjudicator considers that the owners corporation has unreasonably refused its consent and the work relates to (a) alterations to common property directly affecting the owner's lot, or (b) carrying out repairs to common property or any other property of the owners corporation directly affecting the owner's lot. The Court stated: 12 In my view, this provision makes it clear that the question for determination by the adjudicator in the present case was whether or not he considered that the Owners Corporation had unreasonably refused its consent. 13 It seems to me that that is a question which falls to be determined having regard to the state of affairs in existence at the time of the refusal of consent. In considering that question, regard should not be had to material that came subsequently into existence. The taking into account of the subsequent material would involve the adjudicator in embarking on a fresh consideration in the light of material that was not before the decision maker. The adjudicator would not then be addressing the relevant question.
14. In Reilly the Tribunal considered the alleged unreasonable refusal of an owners corporation to make a by-law with respect to a right of exclusive use and enjoyment of part of the common property. The Tribunal noted that before the Adjudicator, and before the Tribunal, there was a range of materials demonstrating that at the time of the owners corporation decision to refuse the by-law:

• there have been a number of discussions about the proposal is for general meetings of the corporation of the previous two years;
• those discussions included motions for an exclusive use bylaw, either expressly or "in principle";
• of a had been, on occasion, "in principle" approval, mobile or had been granted;
• at one general meeting the owners corporation had resolved to accept the proposal "subject to details of materials to be used and specifications of the construction and engineers reports"; at three general meetings concern had been expressed about the conditions of the bylaw, and particular financial compensation for the bylaw; concerns were expressed about the aesthetic effect of the alteration.

1. This decision is concerned with the Adjudicator's decision to find that the owners Corporation had made a "prudent" decision to reject the by-law. The Tribunal considered an appeal from that decision. It dismissed the appeal. The Tribunal found that the adjudicator had failed to take into account a number of matters, and took into account some matters that he should not have. In particular, the Tribunal found that the adjudicator formed an unnecessarily severally adverse view to the applicants.
2. Having said that, the Tribunal found the Adjudicator correctly identified three issues:
3. that evaluation had been deliberately withheld by the applicants;
4. that there were real concerns about the effects of the work on the structural integrity of the building; and that the owners were concerned about the aesthetic result of any all-terrain alteration;
5. that having regard to the state of affairs the time of the general meeting, the owners were concerned about a number of matters.
6. While the Tribunal found that a number were not especially relevant, concerns about the structural integrity were very relevant. The Tribunal also found concerns about the aesthetic effect of the alteration was not irrelevant, and to the extent that they contributed to the decision not unreasonable. In the circumstances the appeal was dismissed in the decision of the Adjudicator confirmed.
7. The final authority relied on by the respondent is Lee v Geary, a decision of the Tribunal published on 14 April 2015. At par [31] the Tribunal stated: in my opinion it is possible for a meeting to reject a motion on the basis of particular reasons put to the meeting and accepted by the meeting, yet the decision may still be "unreasonable". That will be the case, in my view, if the reasons put forward with themselves irrational, irrelevant or mistaken.
8. The Tribunal accepted that reasons were given at the relevant EGM, but considered that he still had to consider, given those reasons, if the decision was unreasonable. I propose to adopt the same course.

The applicants' submissions

1. The applicant submits that I should find that the respondent unreasonably refused to make the Special By-Law for the following reasons.
2. First, because of the "unlawful, disorderly and bullying nature of the meeting". Secondly, because of the failure of the meeting to allow her to amend the proposal. Thirdly, the failure of the meeting to adjourn the motion.
3. Given my findings above, all these submissions must be rejected.
4. Fourthly, because of the inadequacy of the reasons put to the meeting by Ms Armstrong. I propose to deal with this submission in some detail. In doing so, I accept that the concerns of Ms Armstrong were, so far as I can determine matters, representative of and accepted by and agreed to those lot owners present (save for Ms Williams) as reasons for voting against the proposed Special By-Law.

Ms Armstrong's concerns

1. Ms Armstrong's first concern was that the original doors encroached on the common property. In my view, this is a relevant consideration for the respondent. I accept that for many years all of the garage doors for all of the lots encroached on the common property. I accept that Ms Williams thought at all material times that that the garage doors were lawful. With the exception of the three remaining lots, this issue has now been somewhat minimised. In my view, this factor was a reasonable one for the respondent to include in its decision to refuse to make the Special By-Law.
2. Ms Armstrong's second concern was that the original doors and proposed new doors were inconsistent with and negatively changed the appearance of the building. The issue of aesthetics has been taken into account in a number of cases, and the issue has been raised over the years in meetings of the respondent and the strata committee over the years. In my view, this factor was a reasonable one for the respondent to include in its decision to refuse to make the Special By-Law, although the fact that the garages are at the rear of the property must weight against too ready an acceptance of this being a significant factor.
3. Ms Armstrong's third concern was that the original doors and proposed new doors created a health and safety issue as the doors obstructed the views of motorists. I reject this factor as being reasonable one for the respondent to include in its decision to refuse to make the Special By-Law. I find the claim to be exaggerated, and unsupported by any credible or probative evidence.
4. Ms Armstrong's fourth concern was that the driveway was already narrow and would be made narrower by the extension. I reject this factor as being reasonable one for the respondent to include in its decision to refuse to make the Special By-Law. I find the claim to be somewhat exaggerated, and unsupported by any credible or probative evidence, save for Ms Armstrong's say-so.
5. Ms Armstrong's fifth concern was that the Special By-Law did not provide adequate details or plans with respect to the works which Ms Williams wished to carry out. While I am satisfied that the respondent was clearly on notice of the nature of the work the Williams' required to have undertaken, I consider that there is some substance that the submission that adequate details or plans were not provided. The motion referred to the quotation of Simon Brain Carpentry. Assuming that this was distributed before the EGM, (and I am not certain that it was), but assuming this to be the case, while the quotation provided details of the nature of the construction ("construct timber framed column extensions"; "paint with textured pain to match existing concrete"; "paint doors to match existing garage doors"), no details in terms of specifications, dimensions and so on are provided about the Works. In my view, this factor was a reasonable one for the respondent to include in its decision to refuse to make the Special By-Law.
6. Ms Armstrong's sixth concern was that the Special By-Law did not adequately describe the parts of the common property affected by the Works. There is some force given the unknown specifications of the encroachment. This factor is but part of the same concerns above. There is some substance in this concern.
7. Ms Armstrong's seventh concern was that the applicants were not offering to pay compensation for the grant of any exclusive use of the common property. In my view, this factor was a reasonable one for the respondent to include in its decision to refuse to make the Special By-Law: see Reen.
8. Ms Armstrong's eighth concern was that the Works could not be permitted as the lot owners would never be able to get consent from the Council, as they would not be able to comply with the Australian Standards for parking and driveways. I find this claim is unsupported by any credible or probative evidence, and I reject this factor as being a reasonable one for the respondent to include in its decision to refuse to make the Special By-Law.
9. Ms Armstrong's ninth concern was that she had had a meeting with a "duty planner" on 19 September 2018 advised her that of these Australian Standards and that regardless of how old the building was, any changes would need to comply with today's Australian Standards. I reject this factor as being a reasonable one for the respondent to include in its decision to refuse to make the Special By-Law. I find this claim is unsupported by any credible or probative evidence.
10. Ms Armstrong's tenth concern was that she held a report in her hand from a surveyor which she said demonstrated that the proposed works did not comply. I entirely reject this as a basis for refusing to make the Special By-Law. It is not credible that an unidentified, undistributed report could be taken into account to form a basis for refusing to make the Special By-Law. I note that even at the Tribunal hearing a copy of this report was not provided.

Conclusion

1. In the result, the only matters which I find were appropriate or reasonable for the respondent to take into account, (or to use the adapted language of Lee v Geray, namely rational, relevant or correct) are:

• the encroachment on the common property, and the unknown specifications of the future encroachment;
• aesthetic inconsistency;
• no payment of compensation for the sue of the common property; and
• lack of detail of the specifications and plans.

1. This first matter in my view is militated somewhat by the very lengthy period of time that Ms Williams' garage doors have been in place. It remains the case however that the encroachment will increase rather than decrease or remain the same if the Special By-Law proposed by the applicants is made.
2. As to the second matter, minds will always vary about aesthetic values, and I would have thought that it would be not impossible to find a visual solution consistent with the new doors installed by the respondent. Thus this factor may be militated somewhat.
3. As to the third matter, as indicated above, in my view this is a relevant consideration.
4. As to the fourth and final matter, as indicated above, I find that this is a substantive matter, and an appropriate basis for the respondent to refuse consent to the Special By-Law.
5. Balancing all these matters, I am not satisfied that the respondent unreasonably refused to make the Special By-Law. While there were several matters considered which were not reasonable to take into account, in my view there were sufficient objective and reasonable matters which cumulatively made it reasonable for the respondent to refuse to make the Special By-Law.

Conclusion

1. My conclusion therefore is that the application should be dismissed. It is a matter for the applicants and their legal advisers to consider whether they wish to place a further motion before an EGM, addressing the matters discussed above.

Costs

1. The applicants have been unsuccessful. If the respondent seeks an order as to costs, submissions should be provided within 14 days of these reasons. Those submissions must identify the relevant costs rule to be applied. The applicants may respond within a further 14 days.
2. I propose to deal with any application for costs on the papers and without a hearing. If either party that a hearing is necessary, they should address that issue in their submissions.

Orders 1. (1) The application is dismissed. 2. (2) Order (4) of the orders of 9 November 2018 is revoked. 3. 3) The respondent is to file and serve any submissions as to costs by 7 December 2018. 4. (4) The applicants are to file and serve any submissions as to costs by 21 December 2018.

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: 18 March 2019