York & Edwards v The Owners - Strata Plan No 675 - [2024] NSWSC 1648 - NSWSC 2024 case summary

Supreme Court of NSW|2024-12-16

wards (Second Plaintiff) The Owners - Strata Plan No 675 (Defendant) Representation: Counsel: P Jayawardena York (sol) (Plaintiffs) J A Darvall (Defendant)

Solicitors: York Law (Plaintiffs) Tankard's Law (Defendant) File Number(s): 2024/00274478 Publication restriction: Nil Decision under appeal Court or tribunal: NSW Civil and Administrative Tribunal Jurisdiction: Appeal Panel Citation: [2024] NSWCATAP 121 Date of Decision: 26 June 2024 Before: K Ransome, Principal Member A Lo Surdo SC, Senior Member File Number(s): 2023/17017

JUDGMENT

The plaintiffs seek leave to appeal from a decision dated 26 June 2024 of an Appeal Panel of the NSW Civil and Administrative Tribunal (NCAT) (York & Edwards v The Owners - Strata Plan No 675 [2024] NSWCATAP 121 (AP decision)).
The general background to the proceedings is summarised in York & Edwards v The Owners - Strata Plan No 675 [2024] NSWSC 1478, when, on the plaintiffs' application, this Court deferred the hearing of the summons from 20 November 2024 to 16 December 2024.
In brief, the plaintiffs are the registered owners of both lots 31 and 32 in a strata scheme at 54 Fitzmaurice St, Wagga Wagga. The Owners of that strata scheme are the defendant to the summons. The strata scheme comprises a total of 36 lots, only three of which are residential lots, including lot 31. Lot 32 is a commercial lot, but it has no electricity, water or NBN cabling and access is via a separate staircase the subject of exclusive use rights in favour of the plaintiffs.
The Owners sought to have the unit entitlements among the lots in the strata scheme reallocated under s 236 of the Strata Schemes Management Act 2015 (NSW) (SSM Act). That process necessarily requires NCAT to determine, relevantly, that the allocation of unit entitlements among the lots was unreasonable when the most recent strata plan of subdivision was registered and that it was appropriate to make an order reallocating those unit entitlements, having regard to the respective values of the lots and such other matters as NCAT considers relevant.
The plaintiffs are strongly opposed to the proposed reallocation of unit entitlements, which they claim will severely prejudice their rights and interests as owners of both lots 31 and 32.
The proceedings have a lengthy history, which it is convenient now to summarise.

(a) The first NCAT decision dated 18 October 2021

In 2021, the Owners commenced proceedings in NCAT seeking to obtain under s 236 of the SSM Act a reallocation of unit entitlements on the basis that the allocation of unit entitlements was unreasonable when the last subdivision was registered on 17 June 2014. The Owners relied on a valuation report prepared by Mr Darren Keen dated 11 January 2021 (Keen Report). The Keen Report valued each of the lots in the strata scheme as at 17 June 2014.
In a decision dated 18 October 2021, NCAT (constituted by Senior Member G Meadows) found that the allocation of unit entitlements as at 17 June 2014 was unreasonable. This was because, when viewed as at 17 June 2014, the allocation of unit entitlements meant that some lot owners were paying less than was fair towards the running costs of the strata scheme because they were allocated too few unit entitlements; and, conversely, other lot owners were paying more, and in some cases significantly more, than was fair because they were allocated too many unit entitlements. These findings were made with reference to the Keen Report.
The Senior Member nevertheless declined to exercise the discretion under s 236(1) of the SSM Act to reallocate the unit entitlements.
The following five reasons were given by the Senior Member for that decision: 1. There appeared to be some anomalies in the schedule in the Keen Report when that schedule was compared with the schedule in Strata Plan 89511 (being the plan of subdivision registered on 17 June 2014). 2. The Senior Member was not satisfied that lot 31 (and perhaps the other two residential lots in the strata scheme) "should fairly be contributing to the running costs of the strata scheme, at least on the basis of the current evidence". He added that the three residential lots are "swamped by the number of commercial or retail lots", and that one would expect that some commercial or retail lots are higher users of water and waste disposal services. 3. The Senior Member was concerned that there were "simply no true comparison properties available to Mr Keen" in conducting his valuation, particularly where none of the comparison properties used by him could be described "as a tiny minority of residential lots within a large majority of commercial or retail lots in any scheme". 4. The plaintiffs had led evidence that the proposed strata levies for lots 31 and 32, viewed as a proportion of lot value, would be comparable to strata levies payable on "premium properties in capital cities". The Senior Member did not accept that analysis and also noted that the comparison schemes referred to by the plaintiffs "were overwhelmingly residential which itself renders them inapposite as comparison properties". 5. The Senior Member, having noted that lot 32 is "an empty space in a dilapidated condition" with no water or waste disposal and minimal use of common property, stated that he was "unable to accept either the purchase price or the valuation of lot 32". He said that a valuation of lot 32 could only be made with some indication of its proposed use. The Senior Member recognised that unit entitlements will usually be allocated regardless of a particular lot's use of common property (eg, lifts), but described lot 32 as an "extreme case".

(b) The first Appeal Panel decision dated 24 May 2022

NCAT's decision dated 18 October 2021 was appealed by the Owners to an Appeal Panel under s 80 of the Civil and Administrative Tribunal Act 2013 (NSW) (CAT Act). That provision confers a right of appeal to the Appeal Panel on any question of law and otherwise (on any other matter) only with the leave of the Appeal Panel (subs 2(b)). The appeal was determined on the papers. The plaintiffs were self-represented.
The Owners' appeal was allowed on 24 May 2022 (see The Owners Strata Plan 675 v York & Edwards [2022] NSWCATAP 171). The first Appeal Panel found that NCAT had erred in law in declining to reallocate the unit entitlements, for the following reasons: 1. Whether the three residential lots should be contributing to the strata costs was an irrelevant consideration and resulted from NCAT asking itself the wrong question. In fact, the plaintiffs' submission had been that the increase in levies due to the proposed reallocation was unfair and out of all proportion to the costs placed by the residential lots on the strata scheme and did not reflect the market (at [41]-[43]). 2. As to NCAT's finding that there were no comparable properties to lot 31, this was because there were no comparable strata schemes in which residential lots were such a tiny minority as was the case here. But, having accepted the valuations in the Keen Report and on that basis having concluded that the allocation of unit entitlements as at 17 June 2014 was unreasonable, this issue did not arise for NCAT's consideration in determining whether to reallocate the unit entitlements. Moreover, NCAT's finding was misconceived because "the notion of a comparable property in the valuation sphere recognises the lack of complete identity and the likely need for adjustments" and because the primary factor in Mr Keen's valuation of lot 31 was the sale price to the plaintiffs. Accordingly, NCAT had taken into account an irrelevant consideration arising from it having asked the wrong question (at [44]-[48]). 3. NCAT failed properly to explain the third reason for its decision (which related to the plaintiffs' evidence concerning comparable strata levies being paid in capital cities), leading the Appeal Panel to describe it as an irrelevant consideration (at [49]-[50]). 4. There was an inconsistency in NCAT's approach in that it accepted the Keen Report for the purposes of determining that the unit entitlements were unreasonable but then refused to accept the valuation of lot 32 in the Keen Report. NCAT also overlooked the fact that the Keen Report did not rely on the price paid by the plaintiffs in 2017 for lot 32 in valuing that lot. Accordingly, this and related reasons given by NCAT for not applying Mr Keen's valuation of lot 32 constituted irrelevant considerations which resulted from NCAT asking itself the wrong questions (at [51]-[57]). 5. Finally, as to the anomalies which NCAT identified in Mr Keen's proposed schedule of current unit entitlements, the Appeal Panel found it unnecessary to determine this issue, having already determined that NCAT's exercise of its discretion miscarried on the basis of the four matters set out above (at [65]).
The first Appeal Panel made the following orders (emphasis added): (1) The appeal is allowed. (2) Set aside the order made by the Tribunal on 18 October 2021 dismissing the application the subject of those proceedings. (3) The proceedings are remitted to a differently constituted Tribunal for redetermination of so much of the application as concerned whether the Tribunal should make the order sought under s 236 (1) of the Strata Schemes Management Act 2015 (NSW), including the question as to what are the current unit entitlements of each of the lots in the strata scheme, in circumstances where: (a) It has already been determined by the Tribunal, in accordance, with that section and s 236 (2) of that Act that it considers that the allocation of unit entitlements among the lots was unreasonable when a strata plan of subdivision was registered on 17 June 2014, as required by s 236 (1) (a) of that Act. (b) The respective values of each of the lots, within the meaning of s 236 (2) of that Act, has been ascertained by the Tribunal as being the values set out under the "Certificate of Value" set out on page 53 of the Keen Report (as referred to in these reasons). (4) Such redetermination is to be made on the basis of the evidence already adduced to the Tribunal at first instance and such further evidence as the Tribunal may allow.
At the relevant time, the plaintiffs did not take any action to challenge those orders.

The second NCAT decision was made by Senior Member D Robertson. A copy of his reasons for decision was included in the evidence before this Court. Senior Member Robertson noted at [13] that there was "no question" that the primary consideration in determining whether to make an order for the reallocation of unit entitlements is "the value of each lot as at the date of the last strata subdivision, that is 17 June 2014".
The Senior Member rejected the plaintiffs' submission that the Owners had the onus to lead evidence that the administrative expenditures of the owners corporation were not disproportionately increased by the requirements of the commercial lots (apart from the plaintiffs' lot 32, which was unique for reasons already mentioned).
The Senior Member reasoned at [26] that if a party opposing a reallocation application claims that there are other matters which render inappropriate an allocation determined entirely by reference to the relative values of each unit, that party carries the onus of establishing the relevant facts. He added at [27] that the procedure provided for by s 236 of the SSM Act would be "unworkable" if the plaintiffs' approach was correct.
The Senior Member accepted that, in considering the Owners' application, it was relevant to take into account the extent to which the reallocation would impose an unfair burden of strata scheme expenses upon any lot and the extent to which lot owners generally may be assumed to have relied upon the existing unit entitlements (at [55]). He concluded, however, that the evidence before him did not enable him to find that the proposed reallocation would impose an unfair or unwarranted burden of the strata scheme's expenses on any lot, including lots 31 and 32 (at [56]). He then added that, although there was no evidence before him to suggest that the current allocation of unit entitlements had been relied on in any substantial way by other lot owners apart from the plaintiffs, it was reasonable to assume that lot owners had relied upon existing unit entitlements in making decisions such as whether or not to buy or sell. However, the Senior Member did not consider this factor to be of significant weight, where the evidence indicated that the allocation of unit entitlements was substantially disproportionate to the relative values of the lots as at 17 June 2014 (at [58]).
Thus the Senior Member concluded at [60] that, having regard to the evidence before him, the plaintiffs had failed to identify any matter which rendered it inappropriate to adopt an allocation scheme which relied wholly upon the relative values of the lots at the relevant dates as assessed in the Keen Report. That report proposed that the unit entitlements of lots 31 and 32 should increase from 60 to 109 (an increase of 82%) and 24 to 43 (an increase of 79%) respectively.
Although Senior Member Robertson used the phrase "relative values of the lots", no party has suggested at any point of the litigation that this was erroneous, having regard to what Santow J said in Anderson Stuart v Treleaven (2000) 49 NSWLR 88; [2000] NSWSC 283 at [55] as to the difference between "respective values" and "relative values". That is presumably because it is plain, when regard is had to the relevant parts of the Keen Report upon which Senior Member Robertson relied, that each of the respective lots in the subject strata scheme was in fact valued individually.

(d) The second Appeal Panel decision summarised

The plaintiffs appealed against the second NCAT decision under s 80 of the CAT Act. This gave rise to the AP decision which is the subject of the plaintiffs' summons seeking leave to appeal to this Court. The second Appeal Panel reserved its decision for almost 14 months.
It is to be recalled that, under s 80 of the CAT Act, the plaintiffs had an unconditional right of appeal on a question of law to the Appeal Panel, but otherwise required leave to appeal on any other matter. It is evident that the Appeal Panel regarded, or at least assumed, that the 14 grounds of appeal raised by the plaintiffs' notice of appeal below related to one or more questions of law. However, the Appeal Panel also noted that the plaintiffs sought to challenge the Tribunal's decision on the separate basis that it "was erroneous as it was obliged to rely upon the Keen Report which contained methodological errors", for which they required leave to appeal. The Appeal Panel stated at [12] that, to obtain leave to appeal, the plaintiffs needed to satisfy the requirement in cl 12 of Sch 4 to the CAT Act, namely that they may have suffered a substantial miscarriage of justice for one or more of the reasons set out in that provision.
This ordinarily required there to be an issue of principle, a question of public importance or matter of administration or policy which might have general application, a factual error that was unreasonably arrived at or clearly mistaken, or involve a substantial injustice which it is in the interests of justice to review. The Appeal Panel also noted that it had a residual discretion whether or not to grant leave.
The Appeal Panel noted that the subject strata scheme was unusual, with particular reference to the two relevant features highlighted at [3] above concerning both lots 31 and 32.
The Appeal Panel noted at [17] that there was considerable overlap and repetition in the plaintiffs' 14 grounds of appeal from the NCAT decision. Some of the grounds were grouped together. The Appeal Panel appears to have assumed that the grounds of appeal all related to one or more questions of law. That issue was not addressed in this Court.
The reasons why the Appeal Panel rejected all the grounds of appeal may be summarised as follows.

Ground 1

This ground claimed that NCAT erred by not having regard to "current and relevant respective values of the lots as required by the Act". The plaintiffs contended that the valuations in the Keen Report (upon which the first NCAT decision relied in determining that the allocation of unit entitlements as at 17 June 2014 was unreasonable) did not necessarily reflect the current value of the lots. They contended that, in determining the reasonableness of any proposed reallocation, NCAT was required to have regard to current valuations.
The Appeal Panel rejected these contentions for reasons that are set out at [22]-[23] in the AP decision (emphasis added): [22] In our view Ms York and Mr Edwards misunderstand the premise of s 236 of the SSMA. The unit entitlements allocated among the lots in a strata scheme are established at the time the strata plan is registered: s 10, Strata Schemes Development Act 2015. Clause 2 of Schedule 2 of that Act provides that the proposed unit entitlement of each lot is apportioned on a market value basis at the valuation day and totalling the aggregate unit entitlement of all lots. That allocation can be varied in limited circumstances as set out in s 236 of the SSMA. The valuation day for the purposes of the various circumstances set out in s 236(1)(a)-(c) depends upon the event that has occurred - the date of registration, the date when a revised schedule of unit entitlement was lodged at the conclusion of a development scheme or the date of a change in permitted land use. [23] The relevant date for the assessment of the market value of the lots and determination of the unit entitlement in this case is the date when the last strata plan of subdivision was registered, that is, 17 June 2014. The date of valuation and therefore what the unit entitlement allocation is at any one time does not shift according to the vagaries of the market or other intervening events. That would simply be unworkable. In our view the date of valuation for the purpose of determining whether the unit entitlement allocation was unreasonable under s 236(1) and in determining under s 236(2) whether in fact the unit entitlement should be reallocated is the same. In this case, that is 17 June 2014 and, as the Owners submitted, the relevant values were as set out in the Keen Report.

Grounds 2 and 3

By these grounds, the plaintiffs claimed that NCAT had erred in law by distinguishing Sahade v The Owners - Strata Plan 62022 [2014] NSWCA 208. They contended that Sahade was squarely on point and obliged NCAT to take into account the consequences of the proposed increase in strata fees for lots 31 and 32, which they said would produce a significant and unreasonable prejudice to them.
The Appeal Panel noted that NCAT had accepted that the proposed reallocation would substantially increase the levies on lots 31 and 32 and that this was a relevant matter to be taken into account in determining whether to approve the proposed reallocation. The Appeal Panel also noted that NCAT had accepted that the imposition of a disproportionate liability for strata costs on lots which did not benefit from that expenditure was a relevant matter. It concluded that NCAT had in fact taken into account the increase in levies but determined nevertheless not to exercise its discretion in the plaintiffs' favour (at [27]).

Ground 4

Under this ground, the plaintiffs claimed that NCAT erred by failing to take into account their evidence which established that the owners corporation's expenditures substantially and disproportionately benefitted the commercial lots in the strata scheme compared with the residential lots, including lot 31.
The Appeal Panel noted, at [30], that the plaintiffs' complaint was that NCAT had failed to have regard to what the plaintiffs described as "uncontested evidence" which was annexed to the first plaintiff's supplementary affidavit dated 28 September 2021. That evidence related to strata levies concerning properties located in Sydney and Perth which were of a magnitude similar to the levies which would be paid by lot 31 under the proposed reallocation. The plaintiffs submitted that, because levies of this amount were typically levied on luxurious capital city apartments in expensive locations, it could be inferred that the strata levies to be paid by lot 31 were substantially for the benefit of the commercial lots.
The Appeal Panel explained at [31] why it rejected these arguments: In relation to this ground of appeal, the evidence about other properties in other locations with similar strata levies is not evidence that the strata levies for residential lots in the particular strata scheme in Wagga Wagga are substantially and disproportionately for the benefit of the commercial lots. There was no evidence of apportionment of such costs between lots before the Tribunal. We agree with the Tribunal that the only cogent evidence in this regard that was before the Tribunal was that referred to in its decision as quoted above.
At [32], the Appeal Panel also addressed the plaintiffs' repeated contention that the owners corporation bore the onus of establishing various matters. The Appeal Panel acknowledged at [33] that the Owners had the onus of establishing that the present allocation of unit entitlements was unreasonable and that this burden had been discharged having regard to the first NCAT decision, but observed that the Owners had no onus "to raise other relevant matters as part of its application unless it so chooses, particularly when those matters are not within its knowledge".
The Appeal Panel added at [35] that the onus of adducing evidence to support an alleged fact normally rests with the party asserting that fact. Accordingly, where the plaintiffs claimed that there were matters which should inform the exercise of NCAT's discretion in allocating unit entitlements, it was a matter for them to adduce evidence in support of those asserted matters.

Grounds 5 and 6

The plaintiffs took particular issue with the second NCAT's conclusion that it did "not consider that the impact of increased levies on the value of a lot is an independent factor which needs to be considered, independently from the raw fact of the likely increase in levies". They contended that this was inconsistent with Sackville AJA's observations in Sahade at [91] (set out below at [110]), where his Honour said that if the effect of a variation on voting rights is likely to prejudice other lot owners by, for example, decreasing the value of their lots, the Tribunal could take that prejudice into account. His Honour added that if parties opposed to a proposed variation of unit entitlements based their opposition on the prejudice they would suffer, a failure to take that prejudice into account "may well constitute an error of law".
The Appeal Panel noted at [37] that NCAT had accepted that a substantial increase in strata levies for individual lots could reduce the value of a lot by reducing the net revenue capable of being generated from the lot. NCAT had also noted that the increase in voting power flowing from an increase in unit entitlements could have a positive effect on the value of a lot. However, unlike in Sahade, where there were only three lot owners in the strata scheme such that the proposed reallocation of unit entitlements would have a substantial effect on their respective voting power, the size of the strata scheme in this case (with 36 lot owners) meant that the voting power of any one lot owner would not be substantially altered as a result of the proposed allocation. NCAT had concluded at [40] that the impact of increased levies on the value of a lot did not need to be considered independently of the likely increase in levies, particularly in circumstances where the plaintiffs had not adduced any evidence to enable NCAT to assess any diminution in the value of their two lots if the proposed reallocation was implemented.
Adopting NCAT's reasoning, the Appeal Panel rejected the plaintiffs' contention that Sahade was indistinguishable, emphasising that it involved a proposed reallocation of unit entitlements in a strata scheme which had only three lots, the effect of which was to give majority control to one owner. This necessarily meant, in those unusual circumstances, that other lot owners would suffer prejudice if the single lot owner effectively gained majority voting power. In contrast, there was no issue of voting rights in the present proceedings, where the plaintiffs instead emphasised the significance of the diminution in the market value of their two lots because of the substantial increase in levies.
The Appeal Panel concluded that NCAT did not err in finding that its consideration of the impact of increased levies on the value of a lot needed to be considered separately from the question of the impact of an increase in the levies applicable to the two relevant lots.
As to NCAT's finding that the plaintiffs had not provided evidence upon which a determination could be made as to the extent of any diminution in the value of their lots presented by the proposed reallocation, the Appeal Panel concluded that the evidence provided by the plaintiffs did not directly relate to the effect of the proposed reallocation on the value of lots in a mixed-use scheme in Wagga Wagga.
Moreover, at [42]-[43], the Appeal Panel considered that NCAT did not err in failing to take "judicial notice" of various related matters concerning the effect of increasing strata levies on the saleability of lots 31 and 32, in circumstances where such matters were "highly speculative and contain value judgments about people's supposed behaviours and expectations".

Grounds 7 and 8

The effect of these grounds was that the plaintiffs had been denied procedural fairness because, as self-represented litigants, NCAT did not inform them of the need to adduce evidence of any depreciation in the value of their lots arising from the proposed unit entitlement allocation. The Appeal Panel found that NCAT's procedural fairness obligations, as expressed in s 38(5) of the CAT Act and as explained in various authorities, did not extend to providing advice about the precise nature of the evidence which the plaintiffs should adduce.
As to the plaintiffs' further contention that NCAT should have adopted an inquisitorial approach and obtained evidence itself, the Appeal Panel noted at [52] that proceedings in the Consumer and Commercial Division of NCAT were not "strictly inquisitorial" and that there was no obligation on NCAT to make good the case of any individual party.

Grounds 9, 10 and 11

These grounds claimed that NCAT erred in the exercise of its discretion by acting unreasonably in approving the proposed unit entitlement reallocation in circumstances where the plaintiffs had demonstrated significant detriment and where the proposed reallocation was inequitable. The Appeal Panel understood that this complaint involved the claim that NCAT had acted unreasonably in failing to give adequate consideration and weight to the matters advanced by the plaintiffs.
The Appeal Panel found that NCAT had considered the matters put forward by the plaintiffs, particularly their claims that the proposed reallocation would impose an unfair burden on their lots, as well as the extent to which lot owners could be assumed to have relied upon existing unit entitlements in making decisions concerning their lots, including buying and selling. The Appeal Panel reasoned that, in view of the discretionary nature of the power being exercised by NCAT, it was necessary for the plaintiffs to demonstrate an error of the kind identified in House v The King (1936) 55 CLR 499; [1936] HCA 40. The Appeal concluded that no such error had been established and, in particular, that NCAT's decision was not so unreasonable or plainly unjust as to warrant an inference that its discretion had miscarried.

Ground 12

This ground also related to whether NCAT had "reversed" the onus of proof in respect of an application under s 236. It overlapped with ground 4 and therefore was not separately addressed by the Appeal Panel.

Ground 13

This ground was also viewed by the Appeal Panel as overlapping with other grounds, in that the plaintiffs contended that NCAT had erred in law and acted unreasonably by: (a) proceeding on the basis that the proposed unit entitlement allocation should be approved because it was in the interests of "workability"; and (b) disregarding the prejudices that made the allocation unreasonable and the fact that NCAT failed to quantify those prejudices. These contentions were rejected by the Appeal Panel, which adopted the same reasons given for rejecting ground 4.

Ground 14

The Appeal Panel described this ground as a "catchall". It failed because all the earlier grounds had also failed.
As to the plaintiffs' challenge to NCAT's reliance on the Keen Report, which they said contained "methodological errors", the Appeal Panel noted that the plaintiffs had failed to identify the basis for any grant of leave. Moreover, the Appeal Panel stated that the ground could not be sustained in circumstances where NCAT had simply implemented the procedure required by the orders of the first Appeal Panel (in respect of which no appeal had been brought).
For all these reasons, the Appeal Panel refused leave to appeal, dismissed the appeal and lifted a stay order which had been made on 8 February 2023.

(a) Difficulties with the summons seeking leave to appeal

The multiple grounds of appeal set out in the summons seeking leave to appeal appear to overlap with many of the 14 grounds in the notice of appeal before the second Appeal Panel. However, in some instances, the grounds identified in the summons go further.
The summons is broadly structured as follows. The appeal grounds are identified with reference to the reasons in the AP decision for rejecting each of the 14 grounds below. After extracting relevant paragraphs from the AP decision, the summons then sets out multiple individual errors which have allegedly been committed by the Appeal Panel. For example, in respect of the Appeal Panel's rejection of ground 1 below, it is claimed in the summons (at [6]) that the Appeal Panel erred in: 1. misstating the argument put by the plaintiffs; 2. failing to address the argument put by the plaintiffs; 3. misapplying s 236 of the SSM Act; 4. misapplying Sahade; and 5. "error on the face of the record".
Thus the plaintiffs raise five alleged separate errors on the part of the Appeal Panel in rejecting ground 1 of the notice of appeal below.
A further example is provided by the errors identified in the summons as relating to the Appeal Panel's rejection of grounds 5 and 6 of the notice of appeal below. Broadly speaking, these grounds concerned NCAT's findings regarding the impact of increased levies on the value of the lots and which party carried the onus of establishing relevant facts. After extracting relevant paragraphs from the AP decision, the summons (at [21]) identifies the following alleged errors on the part of the Appeal Panel: 1. misapplying s 236 of the SSM Act; 2. misapplying Sahade; 3. endorsing a decision of NCAT that exhibited Wednesbury unreasonableness; 4. endorsing NCAT's decision that the detriments to the plaintiffs were not evident, relevant, real and significant detriments to which Sahade would apply; 5. endorsing a decision of NCAT in which NCAT's conclusions or inferences were seriously irrational or illogical, to the extent that NCAT's decision amounted to jurisdictional error (citing Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002 [2003] HCA 30; (2003) 198 ALR 59); 6. endorsing NCAT's decision that it did not consider that "the impact of increased levies on the value of a lot is an independent factor which needs to be considered, independently from the raw fact of the likely increase in levies" (citing Sahade at [91]); and 7. endorsing a decision of NCAT in which NCAT's conclusions or inferences were seriously irrational or illogical and amounted to jurisdictional error, to the extent that NCAT's decision amounted to jurisdictional error (citing Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002).
This is an instance where the alleged errors are more confusing because of the repetition of two of the alleged errors (being errors (e) and (g) immediately above). Similar repetition appears in the alleged errors relating to the Appeal Panel's rejection of grounds 9, 10 and 11.
Another confusing aspect of the summons is that it contains multiple claims that the second NCAT decision was affected by jurisdictional error or error on the face of the record. It is difficult to understand why these concepts have any particular or direct relevance to the present proceeding, which involves an application under statute for leave to appeal on a question of law. It is not a judicial review proceeding in which concepts of jurisdictional error or error of law on the face of the record are directly relevant.
These difficulties with the presentation of the plaintiffs' case are compounded by the failure to identify with precision the questions of law to which the grounds of appeal relate. After this matter was drawn to the plaintiffs' attention at the interlocutory hearing on 20 November 2024, the plaintiffs filed written submissions in reply with an annexure which purported to identify no less than 22 separate questions of law to which they say their grounds of appeal relate. They did not, however, elect to file an amended summons.

(b) Difficulties with the plaintiffs' annexure

There are at least four significant difficulties with the annexure. The first, and fundamental, difficulty is that many of the purported questions of law do not relate directly to the reasoning of the Appeal Panel, but rather focus on alleged errors in the underlying NCAT decision. The Appeal Panel's affirmation of NCAT's reasons is said to involve questions of law without precisely identifying how the question of law relates specifically to the AP decision, as opposed to that of NCAT. By identifying the purported questions of law in this manner, the plaintiffs have failed to appreciate the significant differences between an internal appeal under s 80 of the CAT Act and an external appeal to this Court under s 83 (see further at [84] below). Acceptance of their approach would effectively obliterate those differences.
Secondly, as currently expressed, the annexure seeks to introduce into many of the purported questions of law matters other than questions of law for which the plaintiffs needed to obtain leave to appeal in the Appeal Panel and where such leave was refused. They should not be permitted in an application for leave to appeal under s 83 impermissibly to expand the ambit of the appeal so that it extends to matters other than questions of law.
That is not to say, however, that a question of law is not properly presented where it is asserted that the Appeal Panel has, for example, adopted the same misconstruction of a statutory provision as NCAT. But many of the purported questions of law in the annexure are not of that character. Rather, they are expressed in a way which invites the Court to leapfrog the AP decision and review many aspects of the second NCAT decision on their merits.
A third, and related difficulty is the fact that many of the purported questions of law are said by the plaintiffs to arise from certain "circumstances" that are set out in paragraph 1 of the annexure. Many of those circumstances involve matters of fact which the plaintiffs unsuccessfully sought to have determined in their favour in either NCAT or the Appeal Panel. The manner in which those circumstances are now relied upon as informing many of the purported questions of law invites this Court to engage in impermissible fact finding or merits review, contrary to the limited scope of the statutory appeal under s 83 of the CAT Act.
Those "circumstances", as set out in paragraph 1 of the annexure, are now reproduced without alteration (footnotes omitted)): a. The Plaintiffs provided evidence, in respect of which the Defendant provided no contrary evidence, that i. the Defendant's proposed unit entitlement allocation set the strata fees of the Plaintiffs' small, bottom-of-the-market, $230,000 flat in Wagga (Lot 31), to over $9,000 per annum; ii. strata fees in the order of $9,000 per annum are seen only in respect of top-of-the-market, large, multimillion-dollar, luxury apartments in capital cities; iii. apartments that require strata fees in the order of $9,000 per annum are seen only in top-of-the market, capital city buildings, including grand, heritage buildings, and mixed-use commercial/residential buildings that would require top-of-the market upkeep; iv. apartments that require strata fees in the order of $9,000 per annum put their strata fees to funding extensive communal amenities such as car parking, pools, gardens, and gyms whereas Lot 31 is served by no such amenities; v. market rates for strata fees in respect of flats in Wagga Wagga comparable to Lot 31 would likely be in the order of $1,615; vi. the housing market causes strata fees to have a proportionate relationship to the price of a lot and the amenities provided evidence; vii. the Defendant's proposed unit entitlement reallocation set the strata fees of a bottom-of-the market flat with low levels of amenities to top-of-the market strata fees. The effect of this, apart from being unjust to the owner, who had not volunteered to enter into such an undesirable bargain, is that there is unlikely to be a new buyer who will voluntarily enter into such an undesirable bargain; b. Further: There was no evidence that: economic conditions in Wagga are so unique and vastly different from the rest of Australia, such that a small, bottom of the market flat with virtually no amenities would impose greater costs or burdens on a strata scheme than top-of-the-market, large, luxury apartments with luxury amenities, in grand, heritage buildings, or in mixed-use commercial/residential buildings in Sydney Harbour suburbs; There was no evidence that: any buyers budgeting to live in a cheap, bottom of-the-market flat, with virtually no amenities, in Wagga, would eschew other properties with normal costs, and prefer to be locked-in to the most expensive possible, top-of the market strata fees, that would fund luxury apartments in Sydney, with secure car-parking, gyms and pools; There is no known example, in any strata scheme, anywhere in Australia, at any time in history, of any lot similar to Lot 31 ever being sold with attached strata fees in the order of $9,000; There was no evidence that there has ever been such vastly disproportionate strata fees applied in Australia, setting a bottom of the market lot to top of the market rates, such that the Defendants sought to apply to Lot 31. The Plaintiffs provided evidence that the valuations relied on by the Defendants to set the new allocations were based on false assumptions of equal communal amenity, failing to account of the effect of strata fees on valuations, failing to take into account the influence of anxious buyers, and other errors. c. The Plaintiffs provided evidence, in respect of which the Defendant provided no contrary evidence, that the proposed unit entitlement would approximately double the strata fees of the Plaintiffs' Lot 32 loft, whereas: i. Lot 32 was a relatively useless loft with no water, no electricity, no lift access, no access by indoor, communal stairs; ii. Lot 32 placed little demand on the strata budget; iii. Lot 32 could not readily be turned to any commercial or residential use, and regulations might prohibit it being turned to any such use.
Against those background circumstances, the plaintiffs purport to identify 22 individual questions of law in the annexure. I shall attach the annexure as a schedule to these reasons for judgment.
Finally, it is necessary to say something more regarding a document filed on 16 December 2024 by the plaintiffs, pursuant to a direction of the Court, in which the plaintiffs purported to identify to which of the questions of law the individual grounds of appeal related. Regrettably, this document did little to clarify the position or provide a coherent statement of the plaintiffs' case.
The document was expressed by reference to the 14 grounds of appeal in the notice of appeal to the second Appeal Panel, as opposed to the multiple errors of law identified in the summons in this Court. This meant, for example, that in respect of ground 1 of the notice of appeal, this ground is said to relate to no less than 21 of the questions of law. Moreover, on close analysis, ground 1 actually raises five separate errors of law. Similar problems are presented by the balance of the document.
It is convenient to set out that document without alteration: Introduction 1. As directed by the Court, the plaintiff provides this document which identifies to which of the questions of law the individual grounds of appeal set out in the summons seeking leave to appeal, relate. 2. In the plaintiffs' notice of appeal dated 16 January 2023 to the Appeal Panel (CB page 163), there were a number of grounds on which that appeal was made ["2023 Notice of Appeal to Appeal Panel Grounds"]. The Appeal Panel's reasons for the decision (CB page 105) are organised around those 2023 Notice of Appeal to Appeal Panel Grounds. In the plaintiffs' summons seeking leave to appeal (CB page 1) filed in the Supreme Court, the plaintiff identifies the "grounds on which it is contended that there is an error of law in the decision of the court below" pursuant to rule 50.4(2) of the Uniform Civil Procedure Rules 2005 (NSW) under those 2023 Notice of Appeal to Appeal Panel Grounds set out in the reasons for decision. 2023 Notice of Appeal to Appeal Panel Ground 1 Questions of Law to which the ground relates: 3. Questions of Law 1 to 6, and 8 to 22. 2023 Notice of Appeal to Appeal Panel Grounds 2 and 3 Questions of Law to which the grounds relate: 4. Questions of Law 1, 5, 6, 8, 9, 10, 11, 13, 15, 18. 2023 Notice of Appeal to Appeal Panel Ground 4 Questions of Law to which the ground relates: 5. Questions of Law 2, 3, 4, 12, 16, 17, 19, 22. 2023 Notice of Appeal to Appeal Panel Grounds 5 and 6 Questions of Law to which the grounds relate: 6. Questions of Law 1, 5, 6, 8, 9, 10, 11, 13, 15, 18. 2023 Notice of Appeal to Appeal Panel Grounds 7 and 8 Questions of Law to which the grounds relate: 7. Questions of Law 1, 5, 6, 8, 9, 10, 11, 13, 15, 18. 2023 Notice of Appeal to Appeal Panel Grounds 9, 10 and 11 Questions of Law to which the grounds relate: 8. Questions of Law 1 to 6, 8 to 19, 21 to 22. 2023 Notice of Appeal to Appeal Panel Ground 12 Questions of Law to which the ground relates: 9. Questions of Law 1 to 6, and 9, 10, 12, 15 to 19, 21, 22. 2023 Notice of Appeal to Appeal Panel Ground 13 Questions of Law to which the ground relates: 10. Questions of Law 1 to 6, and 9, 10, 12, 15 to 19, 21, 22. 2023 Notice of Appeal to Appeal Panel Ground 14 Questions of Law to which the ground relates: 11. Questions of Law 2 to 4, 12, 16, 17, 19, 21, 22.

The plaintiffs relied upon an affidavit by their solicitor, Pradeepa Jayawardena York, sworn 18 September 2024, to which was exhibited a bundle of documents totalling in excess of 520 pages (which became Exhibit 1). That material included copies of orders, transcripts, reasons for decision, pleadings, written submissions, and duplicates of three affidavits of the first plaintiff dated 24 June 2021, 28 September 2021 and 3 August 2022 (which were filed in either the first or second NCAT proceedings). The material was admitted into evidence, subject to relevance.
The plaintiffs had previously filed a Court Book which totalled more than 650 pages and also included copies of the same three affidavits by the first plaintiff mentioned above. Although the Court Book was not tendered in evidence, the plaintiffs' submissions referred to several pages in it, which were differently paginated to the affidavit.
The defendant relied upon an affidavit dated 24 October 2024 by Zachariah Michael Tankard, the Chairman of the defendant's Body Corporate, to which was attached a copy of the Keen Report. It was read without objection.

(a) Some relevant statutory provisions summarised

It is desirable to trace some of the history of statutory provisions concerning unit entitlements in strata schemes. Under s 18 of the Conveyancing (Strata Titles) Act 1961 (NSW), the schedule of unit entitlements lodged with a strata plan for registration had to have endorsed on it in whole numbers the unit entitlement of each lot and the aggregate unit entitlements of all lots in the strata plan. At that time, there was no requirement that the unit entitlements be apportioned on a market value basis as at the date of registration of the strata plan. This is to be contrasted with cl 2(1) of Sch 2 of the current Strata Schemes Development Act 2015 (NSW) (SSD Act) (see further at [81] below).
It was possible, under the 1961 Act, to register a strata plan of resubdivision. Such a plan had to have endorsed on it a schedule apportioning among the lots created by the resubdivision the unit entitlements of the lots in the original strata plan as were included in the resubdivision.
Under the Strata Schemes (Freehold Development) Act 1973 (NSW), lots and common property could be subdivided by registration of a strata plan of subdivision. Any such plan had to be accompanied by a schedule setting out the proposed unit entitlement of each lot not included in the subdivision (ie, continuing lots) and each lot proposed to be created by the subdivision (ie, proposed lots). Different requirements applied depending on whether the subdivision included common property. If there was no common property included in the proposed subdivision, there was a requirement that each continuing lot had to have the same proportionate unit entitlements as it had under the previous strata plan, and the aggregate unit entitlements of the proposed lots had to have the same proportion of unit entitlements as their predecessor lots under the earlier plan.
If common property was included in the proposed subdivision, the schedule had to show, as a whole number, the proposed unit entitlement of each continuing lot and each proposed lot, as well as the proposed aggregate unit entitlement of all continuing and proposed lots. That schedule of unit entitlements had to be agreed by the body corporate and by the passing of a special resolution.
Under the present statutory scheme, the proportionate allocation of unit entitlements is significant for several reasons. For example, it has various financial consequences, such as forming the basis for the levying of contributions (SSM Act, s 83(2)), the liability to rates (SSD Act, s 192) and distribution of surplus money in the administration and capital work funds (SSM Act, s 77). Unit entitlements also control the power of management through the owners corporation.
Turning now to highlight some other relevant provisions in the SSM Act, including s 236 (which is at the heart of the proceedings), those additional provisions are as follows.
Section 10(1) provides: 10 Functions of owners corporation generally (1) An owners corporation has such other functions as may be conferred or imposed on it by or under this or any other Act. …
Section 81 obliges an owners corporation to determine the amounts to be levied as a contribution to the administrative fund and the capital works fund so as to raise the estimated amounts required by those funds and to levy an amount on each person liable to make such a contribution. Under subs (4), the owners corporation is empowered to impose special levies in order to meet unexpected expenses.
Under s 83(2), contributions levied by an owners corporation must be levied in respect of each lot and are generally payable by the owners in shares proportionate to the unit entitlements of their respective lots.
Under s 87, NCAT may, on an application, make orders for contributions to be paid either in a different amount or in a different manner if it considers that any amount levied or proposed to be levied is inadequate or excessive or that the manner of payment of contributions is unreasonable. This is a separate power from that conferred upon NCAT under s 236, which empowers NCAT to make an order reallocating unit entitlements.
Section 236 relevantly provides: 236 Order for reallocation of unit entitlements (1) Tribunal may make order allocating unit entitlements The Tribunal may, on application, make an order allocating unit entitlements among the lots that are subject to a strata scheme in the manner specified in the order if the Tribunal considers that the allocation of unit entitlements among the lots - (a) was unreasonable when the strata plan was registered or when a strata plan of subdivision was registered, or (b) was unreasonable when a revised schedule of unit entitlement was lodged at the conclusion of a development scheme, or (c) became unreasonable because of a change in the permitted land use, being a change (for example, because of a rezoning) in the ways in which the whole or any part of the parcel could lawfully be used, whether with or without planning approval. (2) Matters to be taken into consideration In making a determination under this section, the Tribunal is to have regard to the respective values of the lots and to such other matters as the Tribunal considers relevant. (3) Persons who may apply for order An application for an order under this section may be made by any of the following - (a) an owner of a lot (whether or not a development lot) within the parcel for the strata scheme, (b) the owners corporation, … (4) Application to be accompanied by valuation An application for an order must be accompanied by a certificate specifying the valuation, at the relevant time of registration or immediately after the change in the permitted land use, of each of the lots to which the application relates. (5) Qualifications of person making valuation The certificate must have been given by a person who is a qualified valuer within the meaning of the Strata Schemes Development Act 2015. … (7) Lodgment of order The owners corporation must ensure that a copy of an order made by the Tribunal under this section is lodged with the Registrar-General no more than 6 months after the order is made. Nothing in this section prevents a person who is entitled to apply for an order under this section from lodging a copy of an order made under this section. …
Schedule 2 of the SSD Act sets out requirements for a schedule of unit entitlements for a strata scheme that does not include a development lot (as is the case with the strata scheme here). Clause 2(1) provides: (1) A schedule of unit entitlement for a strata scheme that does not include a development lot must show as whole numbers - (a) the aggregate unit entitlement of all lots, and (b) apportioned on a market value basis at the valuation day and totalling the aggregate unit entitlement of all lots, the proposed unit entitlement of each lot.

(b) Section 83(1) of the CAT Act and the need to identify one or more questions of law

Section 83 of the CAT Act relevantly provides: 83 Appeals against appealable decisions (1) A party to an external or internal appeal may, with the leave of the Supreme Court, appeal on a question of law to the Court against any decision made by the Tribunal in the proceedings. (2) A person on whom a civil penalty has been imposed by the Tribunal in proceedings in exercise of its enforcement or general jurisdiction may appeal to the appropriate appeal court for the appeal on a question of law against any decision made by the Tribunal in the proceedings. (3) The court hearing the appeal may make such orders as it considers appropriate in light of its decision on the appeal, including (but not limited to) the following - (a) an order affirming, varying or setting aside the decision of the Tribunal, (b) an order remitting the case to be heard and decided again by the Tribunal (either with or without the hearing of further evidence) in accordance with the directions of the court. …
In Targeted Property Investments Pty Ltd v Look Up Technologies Pty Ltd (No 2) [2023] NSWSC 416, I sought (at [33]) to emphasise some significant points relating to s 83 of the CAT Act: There are several important points to make about this provision: (1) There is no appeal to this Court from a decision of the Appeal Panel as of right. The applicant must persuade the Court that leave should be granted. (2) An appeal is limited to "an appeal on a question of law". (3) As was recently emphasised in Thomas and Naaz at [32], "it is not sufficient merely to assert that the Tribunal erred in law in order to satisfy the limited conferral of jurisdiction". (To similar effect, see Ferella v Chief Commissioner of State Revenue [2014] NSWCA 378; (2014) 96 ATR 875 at [6] and [22]; and Schwartz Family Co Pty Ltd v Capitol Carpets Pty Ltd [2017] NSWCA 223 at [13]). Accordingly, it is well-settled that a challenge which is wholly or partly factual cannot be converted into a question of law merely by asserting that a question of law is involved or merely by asserting error itself. (4) What constitutes a question of law is "vexed and context dependent" in the sense that the distinction between matters of fact and of law may turn on the circumstances in which the question arises (see Thomas and Naaz at [52] and Da Costa v The Queen (1968) 118 CLR 186 at 194; [1968] HCA 51). (5) Although there is no clear test of what constitutes a question of law for the purposes of s 83 of the CAT Act, it is important not to lose sight of the continuing binding authority in this State of the Court of Appeal's decision (by majority) in Azzopardi v Tasman UEB Industries Ltd (1985) 4 NSWLR 139. Azzopardi stands for the proposition that a particular finding which is alleged to be "perverse" or "unreasonable" or "not reasonably open" is not ordinarily a question of law. At pp 155-156, Glass JA (with whom Samuels JA agreed, Kirby P dissenting) said: It is clear from these extracts that numerous pejorative expressions in common usage possess a single meaning and are interchangeable. To say of a finding that it is perverse, that it is contrary to the overwhelming weight of the evidence, that it is against the evidence and the weight of the evidence, that it ignores the probative force of the evidence which is all one way or that no reasonable person could have made it, is to say the same thing in different ways. Upon proof that the finding of a jury is vitiated in this way, it will be set aside because it is wrong in fact. Since the Act does not allow this Court to correct errors of fact, any argument that the finding of a Workers' Compensation Commission judge is vitiated in the same way discloses no error of law and will not constitute a valid ground of appeal. It is also pointless to submit that the reasoning by which the court arrived at a finding of fact was demonstrably unsound as this would not amount to an error of law: R v District Court of Metropolitan District Holden at Sydney; Ex parte White (1966) 116 CLR 644 at 654. (6) Furthermore, at p 157, Glass JA said: …when the law correctly stated is applied to the facts found in order to produce a conclusion error may intrude again. An erroneous conclusion that facts properly determined fail to satisfy a statutory test, for example, injury arising out of the [course] of employment, substantial interruption to journey, or failure to provide suitable employment will ordinarily be an erroneous conclusion of fact. It is only in marginal cases that the statutory test is satisfied or not satisfied as a matter of law, because no other application is reasonably open: Hope v Bathurst City Council; Australian Gas Light Co v Valuer-General. See also Thomas and Naaz at [53]. (7) It is unnecessary to decide for the purposes of this appeal whether a "question of law" encompasses a mixed question of fact and law (see generally, at the federal level, the decisions of the Full Court of the Federal Court in Haritos v Commissioner of Taxation (2015) 233 FCR 315; [2015] FCAFC 92 and May v Military Rehabilitation and Compensation Commission (2015) 233 FCR 397; [2015] FCAFC 93 and contrast the position at the State level, which is reflected in cases such as Attorney-General for the State of New South Wales v X (2000) 49 NSWLR 653; [2000] NSWCA 199 at [44]; Orr v Cobar Management Pty Ltd (2020) 103 NSWLR 36; [2020] NSWCCA 220 at [60]; and Hanave Pty Ltd v Nomad Sydney Pty Ltd (formerly Wine Nomad Pty Ltd) [2023] NSWSC 265 at [45] per Chen J). (8) The existence of a question of law is not merely a qualifying condition to the statutory right of appeal; rather, the question of law alone is the subject matter of the appeal (see Osland v Secretary to the Department of Justice (No 2) (2010) 241 CLR 320; [2010] HCA 24 at [21] per French CJ, Gummow and Bell JJ and Davis v NSW Land and Housing Corporation [2016] NSWCA 325; (2016) 18 BPR 36,459 at [77] per McColl JA, with whom Meagher and Leeming JJA agreed). (9) Whether or not an appeal is on a question of law should be approached as a matter of substance and not merely form. As the Full Court of the Federal Court said in Haritos at [107], if, as a matter of substance, there exists a question of law, the Court has "a procedural discretion, to be exercised judicially and where it is in the interests of justice to do so, to direct its formal identification in an amended notice of appeal even where the question of law has not been identified before the primary judge". It is notable that the Court there viewed this approach as consistent with that of the Court of Criminal Appeal in R v JS [2007] NSWCCA 272; (2007) 175 A Crim R 108 at [57]-[69] per Spigelman CJ (with whom Mason P, McClellan CJ at CL, Hidden and Howie JJ agreed). Where an appellant is unrepresented, it may be appropriate to adopt a more generous or benevolent approach in assessing whether the notice of appeal identifies a question of law (see, for example, Avetmiss Easy Pty Ltd v Australian Skills Qualifications Authority [2014] FCA 314 at [75]-[77] per Mortimer J, as approved in Haritos at [104] and see also Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 at [12]). (10) A s 83 appeal to this Court is confined to a decision of the Appeal Panel and does not extend to the NCAT at first instance (see Bronze Wing International Pty Ltd v Safework NSW [2017] NSWCA 41 at [10]).
The significant differences between internal appeals within NCAT to an Appeal Panel under s 80(2)(b) of the CAT Act and an appeal from an Appeal Panel to this Court under s 83(1) of the CAT Act were highlighted and described in Dokas v Gallagher (No 2) [2024] NSWCA 236 at [63]-[68] per Kirk JA and Griffiths AJA.
It is also important not to lose sight of the fact that an appeal on a question of law under s 83(1) depends upon the Court granting leave to appeal. In Targeted Property Investments, I sought to summarise some of the relevant principles at [36]-[38], which are now reproduced: [36] The relevant core principles are well-settled. They were helpfully summarised by Gleeson JA (with whom Macfarlan and Payne JJA agreed) in Secretary, Department of Family and Community Services v Smith (2017) 95 NSWLR 597; [2017] NSWCA 206 at [28]: Only if the decision is attended with sufficient doubt to warrant its reconsideration on appeal will leave be granted: Sharpe v Heywood [2013] NSWCA 192 at [34]; McMahon v Permanent Custodians Ltd [2013] NSWCA 275 at [57]. Ordinarily, it is only appropriate to grant leave where there is an issue of principle, a question of general public importance, or an injustice which is reasonably clear, in the sense of going beyond what is merely arguable: Jaycar Pty Ltd v Lombardo [2011] NSWCA 284 at [46]. It is well established that it is not sufficient merely to show that the trial judge was arguably wrong: Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 at [32]. [37] Other helpful guidance is provided by the observations of Basten JA (with whom Tobias AJA agreed) in Be Financial Pty Ltd as Trustee for Be Financial Operations Trust v Das [2012] NSWCA 164 at [32]-[37]: [32] The principles governing cases such as these have recently been restated in Zelden v Sewell; Henamast Pty Ltd v Sewell [2011] NSWCA 56. As Campbell JA noted (with the agreement of Young JA) at [22]: "It is of some importance to reiterate the principles that were stated in Carolan v AMF Bowling Pty Limited [1995] NSWCA 69, where Sheller JA said that an applicant for leave must demonstrate something more than that the trial judge was arguably wrong in the conclusion arrived at. Cole JA relied on a principle that where small claims are involved, it is important that there be early finality in determination of litigation, otherwise the costs that will be involved are likely to swamp the money sum involved in the dispute." [33] In Jaycar Pty Ltd v Lombardo [2011] NSWCA 284 Campbell JA, with the agreement of Young and Meagher JJA, expanded on his summary of Carolan, noting that Kirby P had recognised "that ordinarily it was appropriate to grant leave to appeal only concerning matters that involve issues of principle, questions of general public importance or an injustice which is reasonably clear, in the sense of going beyond [what is] merely arguable": at [46]. [34] Kirby P in Carolan set out a number of reasons for the constraint on rights of appeal in such cases. Not all of them have been repeated in later cases. Not all are universally relevant. Thus, the delay in obtaining a hearing in this Court appears to have been greater at that time than is the case presently, although an overly liberal approach to leave applications might well result in an increase in the period between filing and hearing. [35] In Coulter v The Queen [1988] HCA 3; 164 CLR 350, dealing with a challenge to a refusal of the South Australian Full Court to grant leave to appeal in a criminal matter, the majority noted that a leave requirement was a preliminary procedure "recognised by the legislature as a means of enabling the court to control in some measure the volume of appellate work requiring its attention": at 356 (Mason CJ, Wilson and Brennan JJ). That statement is clearly applicable to civil, as well as criminal, appellate jurisdiction. [36] As the High Court has noted, an application for leave is not a proceeding in the ordinary course of litigation but a preliminary procedure: Collins v The Queen [1975] HCA 60; 133 CLR 120 at 122; Coulter at 356. On the other hand, there is no reason to doubt that s 58 of the Civil Procedure Act 2005 (NSW), requiring a court to act in accordance with "the dictates of justice" when making an order or direction "for the management of proceedings", applies in respect of a leave application. One of the factors to be taken into account pursuant to s 58 is "the degree of injustice that would be suffered by the respective parties as a consequence of any order or direction": s 58(2)(b)(vi). That provision, like s 56, identifying the overriding purpose of the Civil Procedure Act as being to facilitate the just, quick and cheap resolution of the real issues in the dispute, recognises that questions of injustice are relative. Similarly, the requirement that this Court not order a new trial unless it appears that "some substantial wrong or miscarriage" has been occasioned, also reflects a principle of parsimony in requiring that the parties be put to the expense of a second trial: UCPR, r 51.53. [37] The idea that injustice may be measured on a scale reflects a number of underlying considerations. First, the ability to assess the existence of an injustice in a preliminary proceeding, such as a leave application, is limited. In assessing the merit of a proposed appeal, the Court may well apply a vague criterion, such as whether the judgment below is attended by "sufficient doubt". Secondly, injustice involves a balancing exercise. The delay and cost of further litigation will constitute a form of injustice to the successful party below, whatever the outcome of the appellate process. Thirdly, the entitlement of the parties to justice is not unconditional, but is dependent upon the resources of the court made available by the government and the appropriate allocation of resources by the parties, which may depend upon their individual assessments of the importance of the issues in dispute. The parties may well make disparate assessments in a particular case. [38] An applicant for leave under s 83 must demonstrate something more than that the impugned decision of the Appeal Panel is arguably wrong. Ordinarily, leave will only be granted where there is a matter that involves an issue of principle, a question of general public importance or an injustice which is reasonably clear in the sense of going beyond what is merely arguable.
To similar effect, see Dokas at [36]-[37].

I shall address each of the alleged errors identified in the summons seeking leave to appeal, adopting the same approach as have the plaintiffs in focusing on the reasons why the Appeal Panel rejected all 14 grounds of appeal below. I will defer addressing the 22 purported questions of law, for reasons which will become apparent.

Ground 1

Ground 1 contains five alleged errors of law which are said to arise from [22]-[24] of the AP decision (see at [27]-[28] above).

(a) Misstating the plaintiffs' argument

The essence of the plaintiffs' argument, as put to the Appeal Panel, was that, having determined that the existing unit entitlement allocation was unreasonable, the decision-maker was required to consider the actual and existing respective values of the lots as at that time in determining whether or not to make a reallocation. They contended that the present valuation of the lots was a mandatory relevant consideration under s 236(2) but the valuations in the Keen Report were not current.
In my opinion, the Appeal Panel plainly understood those arguments, as is reflected in the AP decision at [21]-[24], but the arguments were rejected for the reasons set out by the Appeal Panel there.

(b) Failing to address the plaintiffs' argument

It may be accepted that the failure by a decision-maker to address a clearly articulated and substantive argument based on incontestable facts may amount to either procedural unfairness or a constructive failure to exercise jurisdiction. In either case this would involve a question of law (see Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; (2003) 77 ALJR 1088; Day v SAS Trustee Corp [2021] NSWCA 71 at [34]-[38] per Meagher JA (Payne and White JJA agreeing); and Health Care Complaints Commission v Robinson [2022] NSWCA 164 at [91] per Simpson AJA (Leeming and Kirk JJA agreeing)).
The Appeal Panel did not fail to address the plaintiffs' argument. The argument was considered, but rejected, for the reasons given at [22]-[23] of the AP decision.

The alleged misapplication appears to relate to what the plaintiffs contend was the Appeal Panel's misconstruction of s 236(2), with particular reference to their argument that, in determining whether or not to reallocate unit entitlements, having determined that the existing allocation was unreasonable, the decision-maker is obliged to take into account present valuations, as opposed to only an historic valuation such as the Keen Report.
I do not consider that the Appeal Panel misconstrued s 236(2) in the manner claimed by the plaintiffs. On its proper construction, I consider that, in a case such as the present, where the relevant point in time is the registration of the strata plan of subdivision on 17 June 2014, the valuation of each of the lots is that contained in the Keen Report in respect of determining both whether the existing allocation was unreasonable and in determining whether to make a reallocation. That is not to say, however, that those valuations are determinative in deciding whether or not to make a reallocation because the outcome could be affected by such other matters as NCAT considers relevant.

(d) Misapplying Sahade

The plaintiffs' claim that the Appeal Panel misapplied the Court of Appeal's decision in Sahade is raised by them in several grounds of appeal. To avoid repetition, I shall address Sahade at some length.
The first point to note about Sahade is that it related to the Strata Schemes Management Act 1996 (NSW) (1996 Act), which is an earlier iteration of the 2015 SSM Act the subject of the current proceedings. The provision conferring power on the Tribunal to reallocate unit entitlements under the 1996 Act was s 183, which then relevantly provided: 183 Order for reallocation of unit entitlements (1) Tribunal may make order allocating unit entitlements The Tribunal may make an order allocating unit entitlements among the lots that are subject to a strata scheme in the manner specified in the order. (2) Circumstances in which order may be made An order may be made only if the Tribunal considers that the allocation of unit entitlements among the lots: (a) was unreasonable when the strata plan was registered or when a strata plan of subdivision was registered, or (a1) was unreasonable when a revised schedule of unit entitlements was lodged at the conclusion of a development scheme, or (b) became unreasonable because of a change in the permitted land use, being a change (for example, because of a rezoning) in the ways in which the whole or any part of the parcel could lawfully be used, whether with or without development consent. (3) Matters to be taken into consideration In making a determination under this section, the Tribunal is to have regard to the respective values of the lots and (if a strata development contract is in force in relation to the strata scheme) to such other matters as the Tribunal considers relevant. (4) Application to be accompanied by valuation An application for an order must be accompanied by a certificate specifying the valuation, at the relevant time of registration or immediately after the change in the permitted land use, of each of the lots to which the application relates. (5) Qualifications of person making valuation The certificate must have been given by a registered valuer under the Valuers Act 2003 authorised under that Act to make such a valuation (a qualified valuer). (6) Ancillary orders that may be made if original valuation unsatisfactory The Tribunal may, if it makes an order allocating unit entitlements that were not allocated in accordance with a valuation of a qualified valuer and, in the opinion of the Tribunal, were allocated unreasonably by a developer, also order: (a) the payment by the developer to the applicant for the order of the costs incurred by the applicant, including fees and expenses reasonably incurred in obtaining the valuation and the giving of evidence by a qualified valuer, and (b) the payment by the developer to any or all of the following people of such amounts as may be assessed by the Tribunal to represent any overpayments (due to the unreasonable allocation) for which liability arose not earlier than 6 years before the date of the order: the lessor of a leasehold strata scheme the owners corporation the owners of lots. ... (8) Who may make application? An application for an order under this section may be made only by: (a) an owner of a lot (whether or not a development lot) within the parcel, or (b) the owners corporation, or (c) the lessor of a leasehold strata scheme, or (d) the local council, or by any other public authority or statutory body representing the Crown, being an authority or body that is empowered to impose a rate, tax or other charge by reference to a valuation of land. …
Although there is substantial similarity with the terms of s 236 of the SSM Act, there are also some differences, most notably in s 183(3), which identifies the matters to be taken into consideration. In addition to having regard to the respective values of the lots, the Tribunal was required to have regard to such other matters as it considered relevant, but only if a strata development contract was in force in relation to the strata scheme. That qualification does not appear in s 236(2).
The facts in Sahade were complicated. They related to a dispute concerning the allocation of unit entitlements in a three-lot strata scheme in Point Piper. The applicant contended that the value of her unit (Lot 3) was greater than the combined value of the other two units (Lots 1 and 2) and that this was not reflected in the allocation of unit entitlements (which was 30, 30 and 40 for Lots 1, 2 and 3 respectively). The applicant's valuation case was substantially rejected by the then Consumer, Trader and Tenancy Tribunal, which instead found that the values of the lots at the relevant time were $3.8 million in respect of Lot 1 (27.14%), $3.25 million in respect of Lot 2 (22.86%) and $7 million in respect of Lot 3 (50%). However, despite finding that the value of Lot 3 at the time of registration of the strata plan was equal to the combined value of the other two units, the Tribunal declined to reallocate the entitlements.
On appeal to the District Court, it was held that the Tribunal had erred in failing to provide reasons for its refusal to reallocate the unit entitlements. The Court also held that the Tribunal was not required to reallocate unit entitlements in accordance with the market values of the respective lots as at the time of registration of the strata plan, but should take into account the effect of any proposed reallocation on control of the management of the strata scheme.
The applicant sought judicial review of the District Court's decision, which was heard by the Court of Appeal. Basten JA and Sackville AJA gave separate, detailed reasons for dismissing the judicial review summons. McColl JA agreed with both those sets of reasons.
After setting out the terms of s 183(3) and noting that the second limb of that provision had no application in Sahade, "except as context to the relevant element", Basten JA said at [19] that the only matter identified in s 183(3) as a mandatory relevant consideration was the respective values of the lots. His Honour then added: [t]hat left open the issue in dispute in the present case, namely whether "by implication from the subject-matter, scope and purpose of the Act" some factor can be identified as either mandatory (or prohibited), so that a failure to take it into account (or taking it into account) will reveal legal error: Minister for Aboriginal Affairs v Peko-Wallsend Ltd [1986] HCA 40; 162 CLR 24 at 39-40 (Mason J). Such a factor may be identified in objective terms (as with the first limb in subs (3)) or in terms which refer to the opinion of the Tribunal (being the approach adopted in the second limb in subs (3)).
At [20], Basten JA stated that it seemed that the respective values of the lots, being "the identified mandatory consideration", had to be considered both in determining unreasonableness and in exercising the power to make an order under s 183. His Honour stated, however, that whether "other potentially mandatory considerations, or even permissible considerations, operate at the stage of identifying unreasonableness or in determining whether or not to make an order is not a question which can be resolved in the abstract".
At [38], Basten JA identified that the question to be decided was whether, either in determining the unreasonableness of the original application or in deciding whether or not to make a reallocation order, or in both circumstances, "the Tribunal may take account of (respectively) the significance of the consequences of the original allocation and the effect of a reallocation".
His Honour then added, at [39], that the substantive issue turned upon the District Court's ruling that the question of "control" was a relevant consideration in determining whether to reallocate the unit entitlements. Basten JA's conclusion on this issue is set out at [47]: On one view, it cannot be irrelevant that a change in the allocation of unit entitlements will affect the balance of power as between unit holders. Accordingly, there is no reason to conclude that such a factor is outside the proper contemplation of the Tribunal in determining an application under s 183. On another view, whether that factor has weight in any particular circumstances is a matter for the Tribunal, acting reasonably and taking into account the statutory scheme revealed by the Act and the Regulation. The Tribunal properly rejected an irrelevant consideration (the identity of the current owners); its failure to give reasons for declining to make the reallocation sought by the applicant deprived the District Court of any basis for knowing whether it had rejected the proposed change in the balance of power (as an abstract notion divorced from the identity of the current owners) as irrelevant.
Basten JA considered that the matter of the effect of a reallocation of unit entitlements on control of management powers could be a relevant consideration, but whether that matter had weight in any particular circumstances was for the Tribunal to determine, acting reasonably and taking into account the relevant legislative scheme.
Accordingly, Basten JA drew a distinction between mandatory relevant considerations which are expressly identified in the statute as opposed to mandatory relevant considerations which arise from a process of statutory construction which focuses upon the subject-matter, scope and purpose of the statute (as to which see Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24 at 39-40 per Mason J; [1986] HCA 40). This is an orthodox analysis of the relevant legal issue with which I respectfully agree. Merely because the plaintiffs assert that a particular matter is a mandatory relevant consideration is not sufficient of itself for the matter to have that status. Furthermore, if the plaintiffs advance a submission to the effect that a particular matter is a mandatory relevant consideration when, on a proper analysis, it is not, and the decision-maker fails to address the argument, I do not consider that in those circumstances the decision-maker necessarily errs in law.
In his separate reasons for dismissing the judicial review summons, Sackville AJA emphasised that the Tribunal had not yet made any determination on the merits as to whether the original allocation of unit entitlements was unreasonable (at [83]). His Honour rejected an argument that, if the matter was remitted to the Tribunal, it was inevitable that the original allocation of unit entitlements would be found to be unreasonable. In doing so, Sackville AJA expressed agreement with Santow J's view in Anderson Stuart that the effect of s 183(3) is that the valuation of lots in a strata scheme "is a fundamental consideration, but is not the only matter that can be taken into account in determining whether the original allocation was unreasonable" (at [86]).
Sackville AJA stated, at [87], that the evidence which was before the Tribunal was not before the Court and other factors might bear on a determination under s 183.
Sackville AJA also stated, at [90], that, although the District Court Judge's comments on the "control issue" were somewhat ambiguous, he did not read them as purporting to decide that the issue of control was a mandatory relevant consideration in every case. Rather, he viewed the primary judge's comments as saying that where the effect of a proposed variation of unit entitlements would confer a high level of control on a particular lot owner, in circumstances where such control did not previously exist, as a practical matter, the Tribunal had to take that consideration into account. This was particularly so in a case such as that in Sahade, which involved a very small number of lots in a strata scheme and where the lot owners opposing the proposed reallocation claimed that they would suffer prejudice with the change in control.
The plaintiffs here place particular reliance on what Sackville AJA said at [91] (emphasis added): Understood in this way, I do not think that [the District Court Judge's] observations involve any error of law. Section 183(1) of the Management Act confers on the Tribunal a discretion to vary the unit entitlements where it has found the original allocation of unit entitlements to be unreasonable. The fact that a proposed variation of unit entitlements will give one lot owner control over important matters may well be a relevant (although not decisive) consideration in determining whether the order should be made. If the effect of a variation on voting rights is likely to prejudice other lot owners, for example, by decreasing the value of their lots, it is difficult to see why it would not be open to the Tribunal to take that prejudice into account. If the parties opposing the proposed variation base their resistance on the prejudice they would suffer, a failure to take that prejudice into account may well constitute an error of law.
As the Appeal Panel noted in the AP decision at [37], the second NCAT accepted that a substantial increase in the liability for strata levies for a particular lot was likely to reduce the value of that lot, as it would reduce the net revenue which might be generated from that lot. NCAT also noted, however, that the dispute in Sahade concerned the impact of a reallocation of unit entitlements on the respective voting power of lot owners in a three-lot scheme. It was in those circumstances that Sackville AJA observed that, if the parties opposing a proposed variation based their opposition on the prejudice they would suffer in terms of their voting rights, a failure to take that prejudice into account may well constitute an error of law.
Sackville AJA's observations in Sahade at [91] also need to be read in context. That context relates to the question whether control of the affairs of the owners corporation is a relevant consideration in making a determination. As Sackville AJA stated at [90], while the primary judge's reasons on this control issue were somewhat ambiguous, his Honour did not read them "as purporting to decide that the Tribunal is bound in every case, as a matter of construction of the legislation, to take into account the 'control issue'". Rather, the primary judge's comments there were to be understood as saying that, where the effect of a proposed variation of unit entitlements is to confer a high level of control on a particular lot owner over other lot owners (where such control did not previously exist), as a practical matter, the Tribunal should take that consideration into account.
Accordingly, where, in a case such as that which presented in Sahade, there was a very small number of lots in the strata scheme and the lot owners opposed the proposed variation on the basis of a submission that they would suffer prejudice because a single lot owner would effectively gain control over the affairs of the owners corporation, the Tribunal "could hardly ignore such a submission".
In my respectful view, the Appeal Panel was correct in stating at [40] of the AP decision that the plaintiffs did not raise any issue concerning voting rights of the kind which were prominent in Sahade and, to the extent that Sahade was cited by way of analogy in support of the plaintiffs' case of prejudice arising from a reduction of lot value, that part of their case was addressed by the Appeal Panel and was rejected for good and stated reasons.

(e) "Error on the face of the record"

For the above reasons, the plaintiffs have failed to identify any error of law which raises a question of law and, to the extent that this ground claims that there are errors of fact on the face of the record, that does not involve a question of law.

Grounds 2 and 3

These grounds relate to [27] of the AP decision and the Appeal Panel's rejection of the plaintiffs' claim that NCAT failed to take into account the effect of increasing levies in determining whether or not to exercise its discretion to reallocate unit entitlements (see above at [29]-[30]).
I shall address each of the errors which the plaintiffs say vitiate this finding.

(a) Misconceiving the scope of the discretion under s 236 of the SSM Act where the strata fees which will be levied on the plaintiffs are "absurdly large and unprecedented in the history of Australian strata schemes in any similar circumstances", the detriments to the plaintiffs are "dreadful and unjustified", and NCAT was not obliged to grant an unreasonable application

This claim, which was expressed in various ways, dominated the plaintiffs' case. They claimed that the Appeal Panel failed to have regard to what they say was a mandatory relevant consideration, namely the substantial prejudice which they will experience if they are required to pay significantly increased strata levies. They describe those levies as being "absurdly large and unprecedented in the history of Australian strata schemes in any similar circumstances" and as involving detriments to them which are "evidently dreadful and unjustified", and they add that neither NCAT nor the Appeal Panel is obliged, or indeed entitled, to grant an unreasonable application under s 236 of the SSM Act.
For the following reasons, I reject these arguments. It is evident from the second Appeal Panel's reasons that it considered that the second NCAT had turned its mind to the following four factors, as put forward by the plaintiffs and as identified at [10] of the AP decision: 1. the effect of the proposed reallocation on the level of the plaintiffs' strata levies; 2. the reduction in the value of the plaintiffs' two lots which would follow from increased outgoings associated with the increased unit entitlements; 3. the plaintiffs' reliance upon existing entitlements in purchasing the two relevant lots; and 4. the greater revenue recoverable by the owners of commercial lots when contrasted with the potential revenue available to the owners of residential lots.
Moreover, at [26] of the AP decision, the Appeal Panel noted that the second NCAT had accepted that it should take into account that the levies on lots 31 and 32 would increase substantially, as well as the extent to which a disproportionate liability for costs of the strata scheme would fall on non-commercial lots.
Similarly, at [36]-[38], the Appeal Panel noted that the second NCAT had accepted that a substantial increase in strata levies was likely to reduce the value of a lot by reducing the revenue which might be generated from such a lot.
Finally, at [55], the Appeal Panel noted that, of the various matters put forward by the plaintiffs as relevant to whether there should be a reallocation of unit entitlements, NCAT had accepted that two such relevant matters were the extent to which a reallocation would impose an unfair burden upon any lot and the extent to which it could be assumed that lot owners generally had relied upon existing unit entitlements in making decisions, such as to buy or sell. The Appeal Panel then explained, at [56], that, while regarding those matters as relevant considerations, the second NCAT did not give them a particular weight (and certainly not the prominent weight advanced by the plaintiffs) due to the substantial disproportionality between the existing unit entitlements and values of the lots at the relevant time. In assessing the weight to be given to those factors, the second NCAT correctly emphasised several times that the assessment of these matters was one which had to be made based on the evidence before the Tribunal.
In these circumstances, I reject the plaintiffs' claim that the Appeal Panel erred in affirming these parts of the second NCAT decision. The Appeal Panel was correct to conclude that the second NCAT had considered the matters raised by the plaintiffs and determined which of those matters it considered to be relevant. Having made that determination, it was then a matter for NCAT to decide what weight it should give to those matters.
The plaintiffs' grievance, which I understand to be a genuine grievance, is directed not to the lawfulness of the AP decision, but to the outcome and their profound disagreement with the merits of that outcome. This does not present a question of law.
I shall deal separately with the plaintiffs' complaint of Wednesbury unreasonableness.

(b) Misconceiving s 236 of the SSM Act

I repeat and adopt my reasoning at [93]-[94] above.

I repeat and adopt my reasoning at [95]-[114] above.

(d) Endorsing a decision of NCAT that exhibited Wednesbury unreasonableness

By analogy with the decision in Minister for Immigration and Border Protection v SZVFW (2018) 264 CLR 541; [2018] HCA 30, I accept that, in conducting a review on a question of law in relation to this ground, the Appeal Panel was obliged to determine for itself whether the second NCAT decision was legally unreasonable. In my view, the Appeal Panel undertook that exercise. At [26] of the AP decision, the Appeal Panel summarised the second of NCAT's reasons for rejecting grounds 2 and 3. The Appeal Panel found at [27] that NCAT did not fail to take into account the increase in levies in exercising its discretion, nor did it ignore the plaintiffs' claim that the reallocation would impose an unfair burden upon them.
The Appeal Panel then deferred further consideration of the Wednesbury unreasonableness argument to later in the reasons for the AP decision (at [54]-[59]). I accept that a question of law is involved where a litigant asserts that the outcome of the exercise of a discretionary power manifests Wednesbury unreasonableness, but I reject this part of the plaintiffs' case for the following reasons.
First, it is an oversimplification to say that unit entitlement allocations dictate the level of strata fees. As the defendant pointed out, the number of unit entitlements is one factor which will affect the level of strata levies, but there are additional factors. They include the efficiency of the management of the strata scheme, the nature and quality of the facilities, the condition of the common property and whether special levies need to be imposed (see at [77]ff above).
Secondly, I consider that the Appeal Panel was correct to emphasise the deficiencies and shortcomings in the plaintiffs' own evidence pertaining to the alleged prejudice. None of the evidence relating to the level of strata fees for luxury apartments in Sydney or Perth related to a mixed commercial-residential strata scheme of the kind here. In particular, none of that evidence related to a strata scheme in which commercial lots outnumbered residential lots by approximately ten-to-one. Similarly, the evidence adduced by the plaintiffs regarding significantly lower strata fees in other residential strata schemes in Wagga Wagga took the matter no further, because they did not comprise a mixed commercial-residential scheme of the unusual kind here.
In all those circumstances, the second Appeal Panel did not err in rejecting the plaintiffs' claim that the second NCAT decision was one to which no reasonable tribunal could come in the Wednesbury sense (or in any other legal sense of unreasonableness). Rather, the Appeal Panel's analysis of the second NCAT's reasons demonstrated that there was a rational and intelligible basis for making the reallocation order, notwithstanding that it might cause significant detriment to the plaintiffs.
This is not a case such as that described in Minister for Immigration and Border Protection v MZYTS [2013] FCAFC 114 at [54], where a distinction was drawn between emphatically disagreeing with the merits of a tribunal's reasoning process as opposed to identifying a level of irrationality, unreasonableness or lack of proportionality which reveals a constructive failure to exercise jurisdiction by a tribunal.

(e) Endorsing NCAT's decision that the detriments to the plaintiffs were not evident, relevant, real and significant detriments to which Sahade would apply

I repeat and adopt what is said at [95]-[114] above regarding Sahade.

(f) Endorsing a decision of NCAT in which NCAT's conclusions or inferences were seriously irrational or illogical, to the extent that NCAT's decision amounted to jurisdictional error (citing Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002)

As I have already stated, it is difficult to see the relevance in a statutory appeal of the concept of "jurisdictional error". In any event, this aspect of the plaintiffs' appeal should also be rejected, for similar reasons to those which apply to the rejection of their claims regarding Wednesbury or other legal unreasonableness.

Ground 4

The Appeal Panel's reasons for dismissing ground 4 of the notice of appeal below are summarised at [31]-[35] above.
I shall address each of the following errors raised by the plaintiffs in respect of this aspect of the AP decision.

(a) No evidence

This ground is directed to the Appeal Panel's reasons at [30] and [31] of the AP decision and the rejection of the significance which the plaintiffs attach to their evidence before the second NCAT regarding the proposed levies on lot 31 being akin to those typically levied on "luxurious capital city apartments in expensive locations" in Sydney and Perth. As previously mentioned, the Appeal Panel said that it did not view the plaintiffs' evidence as indicating that strata levies for residential lots in the strata scheme here were substantially and disproportionately for the benefit of the commercial lots. The Appeal Panel added that there was "no evidence of apportionment of such costs between lots before the Tribunal" and that the only cogent relevant evidence was that referred to by NCAT.
I accept that a question of law may be presented by a claim that there is no evidence to support a material finding of fact (see, for example, Anderson Stuart at [36]-[41] per Santow J). The difficulty for the plaintiffs, however, is that the evidence they adduced related to residential lots in residential strata schemes in Sydney and Perth as well as residential lots in residential strata schemes in Wagga Wagga. None of this evidence related to the levels of unit entitlements or, indeed, the levels of strata levies on residential lots forming part of a mixed commercial-residential strata scheme, particularly where the commercial lots significantly outnumbered the residential lots, as was the case here.
If this ground is intended to challenge the Appeal Panel's failure to find that the second NCAT erred in finding that the plaintiffs' had not provided any evidence in support of their argument concerning diminution in value, this would constitute a challenge to a question of fact, not law.

(b) Misstating the plaintiffs' argument

The difficulty with this alleged error is that the arguments which they identify at [5] of their summons as being arguments put by them relate not to arguments put to the Appeal Panel but rather to arguments put to NCAT below. The plaintiffs have not identified any argument put by them to the Appeal Panel which was not addressed by that body.
I do not accept that the Appeal Panel misstated the plaintiffs' arguments concerning the evidence of strata levies in other locations. Those arguments were adequately and appropriately summarised by the Appeal Panel at, for example, [30] and [31] of the AP decision.

For similar reasons to those given above, I reject the claim that the Appeal Panel failed to address the plaintiffs' arguments.

(d) Other errors concerning ground 4

The plaintiffs' summons also contends that the Appeal Panel erred in relying on the concept of "workability" in rejecting their arguments.
Once it is accepted that the correct construction of s 236 focuses upon valuation evidence as at, in this case, 17 June 2014, it was not wrong of the Appeal Panel to view the plaintiffs' approach as "unworkable". This was because, under that approach, valuation evidence must relate to the same point in time when the Tribunal is considering whether the allocation of unit entitlements was unreasonable (that point in time here being when the strata plan of subdivision was registered) and also whether there should be a reallocation order. That is not to deny, however, that notwithstanding the valuation evidence, NCAT might determine not to reallocate unit entitlements because there are other relevant matters which weigh against making such a determination.
As the moving party seeking relief under s 236 of the SSM Act, it may be accepted that the Owners needed to adduce sufficient evidence to enable NCAT to be satisfied that this was an appropriate case to exercise the discretion under s 236. That evidence was contained in the Keen Report.
As a party opposing the order sought by the Owners, the plaintiffs had the onus of adducing evidence to show that some other matter was a "relevant" matter under s 236(2) to which NCAT had to have regard. The Appeal Panel correctly explained why the plaintiffs' evidence was deficient.

Grounds 5 and 6

In broad terms, these grounds relate to the plaintiffs' claims regarding the adverse impact of increased strata levies on the value of their two lots, relying in particular on what Sackville AJA said in Sahade at [91]. The plaintiffs also challenge the Appeal Panel's reasons at [42]-[44] in which the Appeal Panel rejected their contentions that NCAT erred in failing to take "judicial notice" of "obvious facts".
The reasons of the Appeal Panel for rejecting these grounds are summarised at [36]-[41] above.
I shall now address each of the errors which the plaintiffs contend apply to those reasons. Although the summons deals with the two grounds together, there are in fact two separate sets of alleged errors, which substantially overlap. I will address the two sets of errors accordingly.
The first set of errors in respect of grounds 5 and 6 relates to the reasons at [36]-[41] of the AP decision.

(a) Misapplying s 236 of the SSM Act

I repeat and adopt my reasoning at [93]-[94] above.

(b) Misapplying Sahade

I repeat and adopt my reasoning at [95]-[114] above.

I repeat and adopt my reasoning at [128]-[133] above.

(d) Endorsing NCAT's decision that the detriments to the plaintiffs were not evident, relevant, real and significant detriments to which Sahade would apply

I repeat and adopt my reasoning at [95]-[114] above.

(e) Endorsing a decision of NCAT in which NCAT's conclusions or inferences were seriously irrational or illogical, to the extent that NCAT's decision amounted to jurisdictional error (citing Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002)

I repeat and adopt my reasoning at [135] above.

(f) Endorsing a decision of NCAT in which NCAT's conclusions or inferences were seriously irrational or illogical and amounted to jurisdictional error, to the extent that NCAT's decision amounted to jurisdictional error (citing Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002)

This alleged error simply repeats the asserted error in (e) and is rejected for similar reasons.
The second set of errors in respect of grounds 5 and 6 relates to the reasons at [42]-[44] of the AP decision. I shall deal with each in turn.

(a) Misapplying s 236 of the SSM Act

I repeat and adopt my reasons at [93]-[94] above.

(b) Misapplying Sahade

I repeat and adopt my reasoning at [95]-[114] above.

I repeat and adopt my reasoning at [128]-[133] above.

(d) Endorsing NCAT's decision that the detriments to the plaintiffs were not evident, relevant, real and significant detriments to which Sahade would apply

I repeat and adopt my reasoning at [95]-[114] above regarding Sahade.

I repeat and adopt my reasoning at [135] above.

(f) With particular reference to the Appeal Panel's rejection of the plaintiffs' submission that the Owners carried the onus of providing relevant evidence of diminution of value, the plaintiffs contend that the Appeal Panel erred by endorsing NCAT's decision which failed to take into account that the strata fees of a bottom of the market flat to top of the market rates is evidently, in itself a relevant detriment"

I have explained above why I reject the plaintiffs' submissions regarding the issue of onus. The Owners did not have the burden of adducing valuation evidence apart from that contained in the Keen Report. As the party which contended that diminution in value was a mandatory relevant consideration, it was for the plaintiffs to adduce relevant evidence on that matter. They failed to do so.

(g) Endorsing a decision of NCAT in which NCAT's conclusions or inferences were seriously irrational or illogical and amounted to jurisdictional error, to the extent that NCAT's decision amounted to jurisdictional error (citing Re Minister for Immigration and Multicultural Affairs; Ex parte Applicant S20/2002)

This alleged error simply repeats the asserted error in (e) above and is rejected for the same reasons.

Grounds 7 and 8

The Appeal Panel's reasons for rejecting grounds 7 and 8 of the notice of appeal below are summarised at [42]-[43] above. The plaintiffs claim that the Appeal Panel erred in not accepting their claim that they were denied procedural fairness because the second NCAT did not advise them, as self-represented litigants, of the need to adduce valuation evidence to show the depreciation of the value of their lots.
I reject the claim of procedural unfairness. It is true that, unlike the proceeding before the second Appeal Panel, the plaintiffs were self-represented in the second NCAT proceeding. It may be accepted that procedural fairness requires a judge or administrative tribunal to ensure that an unrepresented litigant has sufficient information concerning practice and procedure so as to be able to make informed choices and to ensure a fair trial to all parties. The relevant principles are summarised in cases such as Hamod v State of New South Wales [2011] NSWCA 375 and Di Liristi v NSW Public Trustee [2021] NSWSC 1347.
The plaintiffs' solicitor was unable, however, to point me to any authority which goes so far as to hold that procedural fairness requires a litigant-in-person to be given advice from a body such as NCAT regarding the nature and extent of the evidence which the party should adduce. That proposition is untenable. Its acceptance is likely to see NCAT entering the fray and abrogating the fundamental requirement that it conduct a hearing with procedural fairness to all parties. Moreover, the proposition is inconsistent with the well-established principle that the decision-maker is not obliged to give a running commentary of its thought processes or divulge for comment its deliberate processes (see Commissioner for the Australian Capital Territory Revenue v Alphaone Pty Ltd (1994) 49 FCR 576 at 591-592; Minister for Local Government v South Sydney City Council (2002) 55 NSWLR 381 at 439; [2002] NSWCA 288; and SZBEL v Minister for Immigration and Multicultural and Indigenous Affairs (2006) 228 CLR 152; [2006] HCA 63 at [29]).
I shall now address the other alleged errors of law concerning these grounds.

(a) Misstating the plaintiffs' arguments

The plaintiffs' arguments in relation to grounds 7 and 8 were summarised by the Appeal Panel at [45]ff of the AP decision (see also at [42]-[43] above). The plaintiffs have failed to persuade me that their arguments were misstated.

(b) Failing to address the plaintiffs' arguments

Nor do I accept this claim. The plaintiffs' contentions relating to procedural fairness requirements applying to self-represented litigants were addressed and rejected by the Appeal Panel at [46]-[52] of the AP decision. The plaintiffs have failed to persuade me that the Appeal Panel erred in its identification and application of the relevant principles.

I repeat and adopt my reasoning at [93]-[94] above.

(d) Misapplying Sahade

I repeat and adopt my reasoning at [95]-[114] above.

(e) Endorsing a decision of NCAT that exhibited Wednesbury unreasonableness

I repeat and adopt my reasoning at [128]-[133] above.

(f) Endorsing NCAT's decision that the detriments to the plaintiffs were not evident, relevant, real and significant detriments to which Sahade would apply

I repeat and adopt my reasoning at [95]-[114] above regarding Sahade.

I repeat and adopt my reasoning at [135] above.

Grounds 9, 10 and 11

The Appeal Panel's reasons for rejecting these grounds are summarised at [44]-[45] above.
I shall now address each of the alleged errors relating to those reasons.

(a) Misapplying s 236 of the SSM Act

I repeat and adopt my reasoning at [93]-[94] above.

(b) Misapplying Sahade

I repeat and adopt my reasoning at [95]-[114] above.

I repeat and adopt my reasoning at [128]-[133] above.

(d) Endorsing NCAT's decision that the detriments to the plaintiffs were not evident, relevant, real and significant detriments to which Sahade would apply

I repeat and adopt my reasoning at [95]-[114] above regarding Sahade.

I repeat and adopt my reasoning at [135] above.

This alleged error simply duplicates the error immediately above. It is rejected for the same reasons.

Ground 12

As noted above (see at [46]), this ground overlaps with ground 4. I repeat and adopt my reasons for rejecting the alleged errors.

Ground 13

The Appeal Panel's reasons for rejecting this ground are set out at [47] above. The summons simply states that the Appeal Panel erred in law as set out in respect of "the grounds above". In their outline of written submissions, the plaintiffs contended that the Appeal Panel erred by affirming NCAT's decision "that was based on such a tenet as workability". In addition, the plaintiffs contended that the Appeal Panel misunderstood its task, should have considered the plaintiffs' evidence and, in not doing so, failed to take into account mandatory considerations.
This ground appears to duplicate other grounds, which I have rejected for reasons set out above.

Ground 14

As noted above at [48], the Appeal Panel rejected this ground on the basis that it was viewed as a "catchall" and necessarily failed because all the earlier grounds had failed.
In their outline of written submissions, the plaintiffs claim that the Appeal Panel erred in asserting at [65] that the plaintiffs had not identified the basis on which they had sought leave to appeal and that they were merely seeking to reagitate matters already determined by the first Appeal Panel. In this sense, the plaintiffs have merged their appeal in respect of ground 14 as determined by the Appeal Panel and the Appeal Panel's refusal to grant leave to appeal.
There appear to be two limbs to this ground. As to the first limb, if ground 14 is characterised as a "catchall" it necessarily fails because all the other grounds of appeal have been rejected.
As to the second limb, which relates to the Appeal Panel's refusal to grant leave to appeal in respect of the alleged "methodological errors" in the Keen Report, I am not persuaded that the Appeal Panel erred in requiring the plaintiffs to identify the basis upon which they sought leave to appeal in relation to this matter as required by cl 12 of Sch 4 to the CAT Act.
Also as to the second limb, the Appeal Panel did not err in concluding that there was no error in the approach of the second NCAT, which simply implemented the orders of the first Appeal Panel (which were not the subject of any appeal) and proceeded on the basis that the values of the lots at the relevant time (for both establishing unreasonableness and determining whether to make a reallocation order) were the values set out in the Keen Report.

(d) The purported questions of law

As noted, the annexure to the plaintiffs' written submissions in reply, which purports to identify 22 questions of law, is a schedule to these reasons for judgment.
In my view, many of these purported questions of law are not truly questions of law. I am prepared to accept that, viewed substantively, the following questions of law can be derived from the annexure: 1. Did the Appeal Panel misconstrue s 236 of the SSM Act? 2. Did the Appeal Panel fail to have regard to mandatory relevant considerations and/or take into account irrelevant considerations? 3. Did the Appeal Panel fail to perform its statutory function? 4. Did the Appeal Panel err in failing to find that the plaintiffs had been denied procedural fairness by the second NCAT? 5. Did the Appeal Panel err in not finding that there was no evidence to support a finding of fact made by the second NCAT? 6. Did the Appeal Panel err in failing to find that the second NCAT decision was unreasonable in the relevant legal sense?
These questions of law broadly reflect the five core topics which were identified by the plaintiffs' solicitor in the course of the oral hearing, namely: 1. misconstruction of s 236 of the SSM Act; 2. the Appeal Panel's failure to take relevant material into account and its taking into account of irrelevant consideration; 3. the failure of the Appeal Panel to perform its statutory function; 4. Wednesbury unreasonableness; and 5. denial of procedural fairness.
When the Court invited the plaintiffs' solicitor to adopt those five topics as reflecting the questions of law relied upon, she declined to do so, stating that "it would confuse the material to a great extent". In fact, for the reasons I have given above, some of the confusion in the plaintiffs' case can be attributed to their failure precisely to identify the questions of law to which the proceeding relates.
Ultimately, however, I have addressed and rejected all the alleged errors raised by the plaintiffs, with particular reference to the six questions of law described at [194] above which I have derived from the plaintiffs' annexure. In these circumstances, no basis has been demonstrated to warrant the grant of leave to appeal.

Conclusion

For all these reasons, the summons seeking leave to appeal will be dismissed, with costs.

Annexure to plaintiffs' written submissions in reply identifying questions of law (609926, pdf) 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: 19 December 2024

Conveyancing (Strata Titles) Act 1961(NSW)

Strata Schemes (Freehold Development) Act 1973(NSW)

Strata Schemes Management Act 1996(NSW)

Under the Strata Schemes (Freehold Development) Act 1973(NSW)

York & Edwards v The Owners - Strata Plan No 675

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