Zouk v The Owners Corporation of Strata Plan 4521 & Anor [2005] NSWSC 845 | Case summary

JUDGMENT 1 His Honour: The plaintiff is the owner and occupier of Lot 27 in Strata Plan 4521. The first defendant is the owners' corporation for the strata scheme. 2 The plaintiff has a garage. It forms part of the common property. 3 It is her case that for many years she has experienced problems by reason of water entering into her garage. She had endeavoured to bring the first defendant to the undertaking of repairs to rectify the problems. Since about March 2003, it had been taking steps to rectify them. 4 The first defendant engaged a firm of civil engineers (Boyden & Partners). The engineer provided a report which proposed a method of rectification. It also provided costings for the rectification. 5 The plaintiff did not find the proposed method of rectification as being satisfactory. 6 She made application to the Consumer Trader & Tenancy Tribunal (the Tribunal). The application came before an adjudicator. 7 The plaintiff did not rely on any expert material before the adjudicator. As a consequence, there was no evidence that challenged the report of the engineers and there was no evidence of an alternative method of rectification. 8 The plaintiff's application failed because the adjudicator came to the view that she had failed to discharge the onus of proof borne by her. The adjudicator dismissed her application on 14 October 2003. 9 The plaintiff then brought an appeal against the decision of the adjudicator. The appeal was determined by the Tribunal pursuant to s181 of the Strata Schemes Management Act 1996 (the Act). The section forms part of Chapter 5 Part 4 Division 12 of the Act. The Division is headed "Appeal against orders of adjudication". The section enables the Tribunal to admit new evidence. 10 The appeal was heard on 24 and 25 March 2004. The plaintiff relied on new evidence and it was admitted by the Tribunal. She had obtained a report from another engineer (Dr Hasham). That report proposed an alternative method of rectification. It took issue with the approach taken by Boyden & Partners. However, it did not offer any evidence of "costings, details, specifications or otherwise" of the alternative method of rectification. 11 What took place before the Tribunal could hardly be described as an appeal. It was in the nature of a fresh hearing of the issue of whether or not the first defendant was in breach of its duty to maintain and repair common property. The introduction of the new material presented the Tribunal with considerations which differed from that which confronted the adjudicator. It was no longer the decision of the adjudicator that was the subject of scrutiny. There was a redetermination of the plaintiff's application and it was done having regard to the new evidence tendered by the plaintiff. 12 I should digress to mention that the Tribunal has a discretion under s181 of the Act to receive new evidence in an appeal. The discretion is to be exercised having regard to its statutory context. It is a weapon provided to facilitate the hearing of an appeal. It was not intended to have the function of converting an appeal into a fresh hearing. 13 The Tribunal came to the determination that the appeal should fail. It is common ground that paragraph 10 of the amended summons sets out in general terms the reasons for that determination. In a general sense, the reasons may be expressed as a failure to discharge the onus of proof in the making of her case. The appeal was dismissed. 14 During the hearing of the appeal, no question of whether it should be dismissed because it was misconceived or lacking in substance was agitated. No application for costs was made and the question was not sought to be reserved. 15 The dismissal of the appeal took place on 22 July 2004. Following the dismissal, the first defendant raised the question of costs. Written submissions were made and the question was decided on 7 April 2005. The plaintiff did not ventilate any question of the Tribunal being functus officio or complain about earlier failure to raise the question of costs. The parties appear to have joined issue on the question of whether or not the appeal was misconceived or lacking in substance. The Tribunal decided that the first defendant was entitled to an order for costs. It did so because it came to the view that the appeal was lacking in substance. It came to that view relying on the findings made in the deciding of the appeal. 16 The order for costs was made pursuant to s192 of the Act. The section is as follows:- 192 Orders relating to costs The Tribunal may not make any order for the payment of costs except as specifically authorised by this Act or in relation to an order dismissing an application or appeal because: (a) the application or appeal is frivolous, vexatious, misconceived or lacking in substance, or (b) a decision in favour of the applicant or appellant is not within the jurisdiction of the Tribunal. 17 On 28 April 2005, the plaintiff filed a summons in this court. It sought to propound an appeal against the costs order made on 7 April 2005. The plaintiff now proceeds on an amended summons. It was filed on 1 July 2005. It sought, inter alia, to add an application for leave to appeal. The first defendant has filed a notice of contention. 18 The application for leave has been brought out of time. It cannot be maintained without an extension of time. 19 The proceedings are brought pursuant to s200 of the Act. The effect of the provision is to provide appellate relief as if the order were a determination of the Local Court. It is contended that the proceedings concern either a question of law or a mixed question of law and fact. 20 If it is necessary to address the matter of leave, the first question to be considered is that of the granting of an extension of time. It is opposed by the first defendant. 21 The court has a discretionary power to grant an extension. The power is exercised having regard to the relevant circumstances of the case and the dictates of justice. 22 In this case, the period of default is not significant, but the explanation offered for it is less than satisfactory. The substance of it seems to be ignorance on the part of the legal advisors. 23 In addition to these matters, the court also has regard to the merits of the leave application. It would be futile to grant an extension of time if it is without merit. 24 It needs to be borne in mind that the mere establishment of error does not of itself lead to the upholding of an appeal. There must be relevant error that justifies the disturbing of the decision. 25 The appeal has been argued at length. The parties have relied on written submissions supported by oral argument. It has thrown up novel questions of statutory construction. 26 In the written submissions, the plaintiff's case is summarised as follows:- 30. The Second Defendant's Second Decision was beyond power and there was no statutory or other basis upon which the Second Defendant could legitimately make the orders the subject of the Second Decision . 31. In any event, the Defendants were bound by the express reasons for dismissal of the Plaintiff's application by the First Decision : that dismissal was not expressed, and could not give rise to an implication, that on 22 July, 2004, the appeal was dismissed because the application was "lacking in substance" or "misconceived". Further, if that was then the case it was open to the Second Defendant to so hold, but it did not. Nor, on the face of the First Decision , was it invited to do so by the First Defendant. 32. In any event, the Second Defendant has misdirected itself as to what constitutes a lack of substance, or misconception as to either jurisdiction or availability of relief or basis for seeking relief in an application, and confused a shortfall in evidentiary proof with the absence of any real possibility of there being an issue between the parties calling forth the jurisdiction of the Second Defendant and the determination of or resolution of an issue between the parties. At all times there was a legitimate issue as to the adequacy or reasonableness of a method of repair chosen by the First Defendant and an alternative method of repair asserted by the Plaintiff. 33. Such legitimate issue renders invalid any basis for finding that the appeal to the Second Defendant was either "lacking in substance" or "misconceived". [Emphasis in original] 27 In this summary, "Second decision" refers to the decision made on the question of costs and "First decision" refers to the decision made in dismissing the appeal. 28 In oral argument is was said that the functus officio argument was the real thrust or the primary ground of appeal. 29 The summary is founded on what is said to be the statutory framework of the Act. There is reference to a number of sections (including ss185, 191 and 192). 30 Part 5 of the Act is headed "Orders of tribunal". It has a Division 2 which is headed "Provisions relating to orders of tribunal". Sections 185, 191 and 192 form part of that division. 31 Section 185(5) enables the Tribunal by order to dismiss an appeal (this power appears to have been intended as being additional to those conferred by s181). It is the only provision contained in that section which may have relevance to the present proceedings. The other provisions concern matters of orders that may be made in dealing with an "application" (as opposed to an "appeal") for an order under Part 5 (which earlier contains provisions that enable the making of an order by the Tribunal). 32 Sections 189-191 make provisions inter alia for the variation of an order. These provisions have no relevance to the circumstances of this case. 33 It seems to me that the crucial consideration in this case is the question of the proper construction to be given to s192. I am informed that it is not a question that has been the subject of previous consideration. 34 The section prohibits the Tribunal from making any order for the payment of costs save in the cases of the exceptions specified therein. 35 In the present case, the court is concerned with an exception involving the dismissal of an appeal because it was misconceived or lacking in substance. 36 The effect of the section is to empower the Tribunal to make an order for the payment of costs in such a case. It is a discretionary power. The discretion is exercised having regard to relevant provisions and the circumstances of the particular case before the Tribunal. 37 This power is granted in relation to an order dismissing an appeal and where the appeal has been dismissed because it is misconceived or lacking in substance. 38 It could be expected that Parliament had intended that each of the words "frivolous", "vexatious", "misconceived" and "lacking in substance" be given a different meaning. Minds may differ as to what meaning should be given to each of the words. Such a collocation of words has appeared in other contexts (including other New South Wales statutes). There has been judicial consideration of some of them (see, inter alia, Langley v Niland [1981] 2 NSWLR 104 and Cocks Macnish & Anor v Biundo [2004] WASCA 194) and the cases throw up different views. These views have to be seen in the context in which they have been expressed. 39 It seems to me that "lacking in substance" in its present context was intended to have the connotation of the appeal lacking in merit in an essential sense and embracing matters of fact and/or law. What may fall within that category may be left to be determined having regard to the particular circumstances of the case before the court. 40 In the light of what has been said concerning the matter of statutory construction, I turn to what happened in this case. 41 The court has before it the written reasons for both of the decisions made by the Tribunal. The reasoning process which led to the dismissing of the appeal appears therein under the heading, "Decision". 42 The appeal was dismissed for those reasons. It was not dismissed because it was "lacking in substance". It may have been open in the light of those reasons to make the further finding that the appeal was "lacking in substance" and to dismiss it because of that finding. Whether or not that be so, the Tribunal did not make that finding and did not dismiss the appeal because of it. 43 The reasoning process of the making of the order for costs also appears under the heading "Decision". The Tribunal relied on what had been decided in the earlier decision and made a further finding that the failure to present evidence of costings and methodology of the alternative repair was sufficient to show that the appeal was lacking in substance. 44 As the Tribunal had already dealt with the question of the dismissal of the appeal, it was not then open to it to make this purported further inding thereafter. 45 In my view, no significance can be placed on any failure to agitate the question of costs prior to the disposition of the appeal. The Tribunal does not acquire jurisdiction to make an order for payment of costs until it has dismissed an appeal because of one of the specified exceptions. 46 The plaintiff has not identified any provision which enables an application to be made for an order for the payment of costs. I see no impediment to the seeking of an order for costs once the relevant dismissal has taken place. 47 An order for the payment of costs does not follow merely because the relevant dismissal has taken place. Such dismissal only satisfies the jurisdictional requirement to make the order. There remains the discretionary exercise (which did not take place in this case). 48 There are restrictions on allowing appellate grounds to be argued when these matters have not been ventilated before the Tribunal. However, there are good grounds in this case to allow the argument to proceed. The failure to ventilate the grounds before the Tribunal would not have had any affect on the evidentiary matters before it. More importantly, the grounds go to the question of the jurisdiction of the Tribunal to make the order for payment of costs. 49 In the circumstances, I consider that the plaintiff has discharged the onus of satisfying the court that the appeal should be allowed. It is therefore unnecessary to give further consideration to the question of whether or not time should be extended for the bringing of the application for leave. 50 The appeal is allowed. The order for payment of costs made on 7 April 2005 is set aside. The first defendant is to pay the costs of the appeal incurred subsequent to 1 July 2005, otherwise the parties are to pay their own costs. If it is so entitled, the defendant is to have a certificate under the Suitors' Fund Act 1951. The exhibits may be returned. **********

Zouk v The Owners Corporation of Strata Plan 4521 & Anor

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