Beitzel v The Owners Strata Plan No. 67504

[2023] NSWCATCD 96

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Beitzel v The Owners – Strata Plan No. 67504 & Ors [2023] NSWCATCD 96

Hearing dates:

21 and 22 November 2022 (last submissions received 3 March 2023)

Date of orders:

29 August 2023

Decision date:

29 August 2023

Jurisdiction:

Consumer and Commercial Division

Before:

D Moujalli, Senior Member

Decision:

The Application is dismissed.

Catchwords:

STRATA TITLES LAW - strata schemes - common property – refusal to make common property rights by-law – whether refusal unreasonable – challenge to credibility of witnesses – application of rule in Browne v Dunn to proceeding in Tribunal

Legislation Cited:

Body Corporate and Community Management Act 1997 (Qld), s 276

Civil and Administrative Tribunal Act 2013 (NSW), s 38

Strata Schemes Management Act 2015 (NSW), ss 126, 149, 226

Strata Schemes Management Act 1996 (NSW), s 140

Cases Cited:

Ainsworth v Albrecht (2016) 261 CLR 167

Ashbee v The Owners - Strata Plan No 11761 [2018] NSWCATCD 80

Boston Clothing Co Pty Ltd v Margaronis (1992) 27 NSWLR 580

Bruce v Knight [2021] NSWCATAP 224

Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588

Fong v The Owners – Strata Plan No. 82783 [2022] NSWCATCD 56

Kaye v The Owners - Strata Plan No 4350 [2022] NSWSC 1386

Makita (Australia) Pty Limited v Sprowles (2001) 52 NSWLR 705

Owners Corporation SP7596 v Risidore [2003] NSWSC 966

The Owners – Strata Plan No 12289 v Donaldson [2019] NSWCATAP 213

The Owners — Strata Plan No 69140 v Drewe [2017] NSWSC 845

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Rebecca Ann Beitzel (Applicant)

The Owners – Strata Plan No. 67504 (Respondent)

Richard Christian (Respondent)

Heidi Danilewitz and Cindy Radomsky (Respondent)

Q’s Investment (Int) Pty Ltd (Respondent)

Harry Haber and Jaffa Haber (Respondent)

Representation:

Counsel:
Mr R J Pietriche (Applicant)
Mr M Forgacs (Respondents)

Solicitors:
Bartier Perry (Applicant)
J S Mueller & Co Lawyers (Respondents)

File Number(s):

SC 22/08841

Publication restriction:

Nil

REASONS FOR DECISION

Introduction

1. On 22 February 2022 the applicant, Rebecca Ann Beitzel, lodged an application with the Tribunal which named The Owners – Strata Plan No. 67504 as the respondent (the Application). By order of the Tribunal made on 18 March 2022, certain lot owners, referred to below, were added as respondents to the Application.

2. The applicant is a lot owner, specifically lot 2, in the strata scheme in respect of Strata Plan 67504. The strata scheme comprises 7 residential lots/units.

3. Although it is named as a respondent, the owners corporation has not taken an active part in the proceeding. The Application is opposed by four lot owners in the strata scheme, who I shall refer to collectively as the respondents. The respondents are:

1. Q’s Investment (Int) Pty Ltd, the owner of lot 3;

2. Heidi Danilewitz and Cindy Radomsky, the owners of lot 4;

3. Dr Harry Haber and Jaffa Haber, the owners of lot 5; and

4. Richard Christian, the owner of lot 6.

4. The applicant wishes to construct a swimming pool in the rear garden of her lot. The proposed construction of the pool will impact on a retaining wall which constitutes part of the common property. As a result, the applicant requires the consent of the owners corporation to construct the pool. The respondents oppose the construction of the pool.

5. The Application seeks orders under the Strata Schemes Management Act 2015 (NSW) (the SSMA). As is explained in further detail below, the central question in this proceeding is whether the respondents have “unreasonably refused” consent to the construction of the pool.

6. The specific orders sought by the applicant include:

1. an order pursuant to s 126(1) of the SSMA directing the owners corporation to consent to the construction of the proposed pool on the applicant’s lot; and

2. an order pursuant to s 149(1)(a) of the SSMA that a common property rights by-law proposed by the applicant be prescribed as a change to the by-laws of Strata Plan 67504.

7. The Application was listed for hearing on 21 and 22 November 2022.

8. At the hearing on 21 and 22 November 2022, affidavit evidence was relied upon and witnesses were cross-examined.

9. At the hearing, the parties commenced their submissions by way of oral submissions. As time did not permit the oral submissions to be completed during the hearing, a timetable was agreed for further submissions to be made in writing. The last of these submissions was received by the Tribunal on 3 March 2023.

Jurisdiction

10. The applicant is a lot owner in the relevant strata scheme and therefore has standing as an “interested person” as defined by s 226 of the SSMA to make an application to the Tribunal under the SSMA.

11. The Tribunal is specifically vested with power to make orders with respect to common property under s 126 of the SSMA.

12. The Tribunal is specifically vested with power to prescribe a change to a by-law under s 149 of the SSMA.

13. Accordingly, the Tribunal has jurisdiction to consider and determine the Application on the basis that it seeks orders under ss 126 and 149 of the SSMA.

Evidence

14. In determining the Application, the Tribunal has had regard to the following evidence and submissions:

The applicant’s evidence

1. The matters stated in the Application. The Application was marked Exhibit A1 at the hearing.

2. The affidavit of Joanne Marie Richards made on 31 March 2022. This was marked Exhibit A2 at the hearing.

3. The affidavit of Rebecca Anne Beitzel, the applicant, made on 1 April 2022. This was marked Exhibit A3 at the hearing.

4. The second affidavit of Rebecca Anne Beitzel made on 10 June 2022. This was marked Exhibit A4 at the hearing.

5. The affidavit of Anthony Mitchell, a registered surveyor, made on 10 June 2022. This was marked Exhibit A5 at the hearing.

6. The report of David Haskew, a planning consultant, dated 10 June 2022. This was marked Exhibit A6 at the hearing.

The respondents’ evidence

1. The affidavit of Richard Christian made on 5 May 2022. This was marked Exhibit R1 at the hearing.

2. The affidavit of Beibei (Jane) Wu made on 5 May 2022. This was marked Exhibit R2 at the hearing.

3. The affidavit of Heidi Danilewitz made on 5 May 2022. This was marked Exhibit R3 at the hearing.

4. The affidavit of Malcolm Danilewitz made on 5 May 2022. This was marked Exhibit R4 at the hearing.

5. The affidavit of Dr Harry Haber made on 5 May 2022. This was marked Exhibit R5 at the hearing.

6. Documents tendered and marked Exhibits R6, R7 and R8.

The oral evidence

1. The oral evidence of Rebecca Beitzel, Richard Christian, Beibei (Jane) Wu, Heidi Danilewitz, Malcolm Danilewitz and Dr Harry Haber given at the hearing on 21 and 22 November 2022.

The submissions

1. The submissions made at the hearing on 21 and 22 November 2023.

2. The applicant’s written submissions dated 18 November 2022.

3. The applicant’s written closing submissions dated 27 January 2023 (AS).

4. The applicants written reply submissions dated 3 March 2023 (ARS).

5. The respondents’ written submissions dated 21 November 2022.

6. The respondent’s written closing submissions dated 16 February 2023 (RS).

15. The findings made by the Tribunal on the basis of the above evidence and submissions is set out below.

Findings of Fact

16. I will commence by setting out certain factual matters in respect of which there does not appear to be any significant controversy.

17. Strata Plan 67504 was registered on 17 May 2002. As I have already mentioned, there are 7 residential lots/units in the strata scheme constituted by Strata Plan 67504.

18. The applicant has lived in lot 2 since 2004. The lot was initially owned by the applicant’s parents on trust for the applicant. The applicant has been the registered owner of lot 2 since 2020.

19. The applicant currently resides in lot 2 with her husband and young son (who was 6 years old as at the date of the applicant’s affidavit evidence).

20. The applicant’s lot is located on the ground floor of the strata premises. The applicant’s lot includes a rear yard.

21. From early 2021, the applicant has wished to install a pool in the rear yard of her lot. The proposed design and placement of the pool would require the removal of a retaining wall which forms part of the strata scheme’s common property. It is common ground between the parties that because the retaining wall is common property, the applicant’s proposal to install a swimming pool in her lot required the passage of a common property rights by-law under s 142 of the SSMA before the works could be carried out: see [2] of AS and [16] of RS.

22. Between August and September 2021, the applicant had various communications with the other lot owners in relation to her proposal to install a swimming pool in her lot.

23. The owners of lots 1 and 7 indicated to the applicant that they would support her proposal.

24. On 13 August 2021, the applicant sent an email to Mr Christian, the owner of lot 6, and Mr Danilewitz, the husband of one of the owners of lot 4. Mr Christian and Mr Danilewitz were members of the strata committee. The email set out some preliminary details in relation to the applicant’s proposal to install the swimming pool.

25. On 27 August 2021, the applicant spoke to Mr Christian about her proposal. The applicant gives evidence that Mr Christian said to her words to the effect of “leave it with me”. Mr Christian gives evidence that he said words to the effect of: “I will have a good read of them. Leave it with me”. I do not think a great deal turns on the different recollections between the applicant and Mr Christian which is understandable with the passage of time. Even if all Mr Christian said was “leave it with me”, this would have conveyed to the applicant that Mr Christian would consider the proposal and then revert to the applicant.

26. On 2 September 2021, the applicant sent a further email to Mr Christian and Mr Danilewitz. The email attached engineering drawings for the proposed works and a proposed common property rights by-law prepared by the applicant’s solicitors.

27. On 2 September 2021, Mr Danilewitz sent a Whatsapp message to the applicant in which he stated “… I will have a look at what you have sent and give comments. You have Unit 4 support”. As will be seen, the owners of unit 4 subsequently withdrew their support.

28. On 6 September 2021, Mr Christian indicated to the applicant in a voicemail that he would not support her proposal and subsequently in a telephone conversation stated to her that he did not need to provide her with reasons for his position.

29. In a Whatsapp message sent on 8 September 2021, Ms Wu, a representative of the corporate owner of lot 3, indicated to the applicant that she would support her proposal. As with the owners of unit 4, Ms Wu also subsequently withdrew her support.

30. Yaffa Haber, one of the owners of lot 5, had initially indicated to the applicant that her proposal “sounds good”. However, on 10 September 2021, Dr Haber and Mrs Haber sent a letter to the applicant which stated: “We are opposing your plan for the pool, as it is not in our interest to have another pool on the property. We will not discuss this any further”. The reference to “another pool” is attributable to there being a pre-existing pool as part of lot 1 which was built as part of the original construction of the strata premises.

31. On 10 September 2021, Mr Danilewitz informed the applicant “we have some concerns about the pool installation”. On 12 September 2021, Mr Danilewitz and his wife had a meeting with the applicant during which they discussed the proposed works. They indicated that they could not indicate whether they would vote in favour of the proposed by-law as they wished to discuss the proposed works with Mrs Radomsky, who was the other owner of unit 4. Ms Radomsky and Mrs Danilewitz are sisters and unit 4 is occupied by their mother.

32. On or about 18 September 2021, the owners corporation gave notice of a general meeting to be held on 7 October 2021. The notice of general meeting included the following documents:

1. a letter from the applicant to the owners concerning her proposal;

2. the proposed common property rights by-law (First Proposed By-Law);

3. a motion for the owners corporation to vote on the proposed by-law;

4. drawings of the proposed swimming pool;

5. a statement of environmental effects; and

6. a letter from the applicant’s structural engineer dated 2 September 2021 stating that the proposed swimming pool “will not adversely affect the structural integrity of the existing residences and mansonry garden walls adjacent the proposed swimming pool”.

33. The notice of general meeting indicated that the meeting was to be held “via pre-meeting electronic voting”.

34. The First Proposed By-Law defined the relevant works to include the installation of “an inground concrete swimming pool” and granted to the owner of lot 2, ie, the applicant, the right, subject to specified conditions, to “carry out, keep, maintain, repair and replace the Works and so much common property as is necessarily affected by the Works”.

35. At the general meeting on 7 October 2021, the motion to approve the First Proposed By-Law was not carried. All of the respondents voted against the motion. They had a combined unit entitlement of 50. The applicant, together with the owners of units 1 and 7, who also had a combined unit entitlement of 50, voted for the motion.

36. On 8 October 2021, Ms Wu sent a Whatsapp message to the applicant in response to a request from the applicant to explain why she voted against the motion. Ms Wu stated: “One of the main reasons is prefer to keep the same environment or surroundings”.

37. On or about 22 October 2021, the applicant’s solicitors wrote to the respondents in terms which include the following:

Our client is keen to address any concerns that you may have with respect to the proposed works. To this end, we invite you to provide any comments or concerns you may have in relation to the By-Law and indicate the reason(s) why you do not support the By-Law being passed.

38. There was no response to the correspondence from the applicant’s solicitors.

39. In about November 2021, the applicant amended the proposed common property rights by-law (the Amended Proposed By-Law). The “Works” in the Amended Proposed By-Law were defined as “construction of an inground concrete swimming pool, including all works related or incidental to the construction of an inground concrete swimming pool, including (without limitation) … (b) demolition of existing garden walls, where necessary…”

40. As with the First Proposed By-Law, the Amended Proposed By-Law proposed conferring on the applicant the right, subject to the specified conditions, to “… repair and replace the Works and so much common property as is necessarily affected by the Works”.

41. On or about 1 December 2021, notice was given of an annual general meeting (AGM) to be held on 15 December. The notice of the AGM included the following documents:

1. a letter from the applicant to the owners dated 25 November 2021 concerning her proposal;

2. the Amended Proposed By-Law;

3. a motion for the owners corporation to vote on the Amended Proposed By-Law (item 21 of the notice);

4. drawings of the proposed swimming pool;

5. a statement of environmental effects; and

6. the letter from the applicant’s structural engineer dated 2 September 2021 which had been included in the notice of the general meeting held on 7 October 2021.

42. On 15 December 2021, the AGM was conducted via Zoom. It appears to be common ground that there was very limited discussion on the motion concerning the Amended Proposed By-Law. Again, the lot owners refused to approve the Amended Proposed By-Law with the votes falling in the same way as had occurred at the general meeting held on 7 October 2021.

Assessment of the evidence in relation to the respondents’ reasons for voting against the proposed by-law

43. I will now turn to consider certain factual matters in respect of which there is controversy between the parties. This largely relates to the respondents’ evidence in relation to their reasons for voting against the First and Amended Proposed By-Laws. It will be convenient to consider separately the evidence given by each respondent.

Mr Christian’s evidence

44. Mr Christian is the owner of lot/unit 6 and has lived in the unit with his wife since June 2016. He gives evidence that he enjoys the peace, quiet and serenity offered by living in the unit.

45. Mr Christian gives evidence that he had a number of concerns in relation to the First and Amended Proposed By-Laws including deficiencies in the statement of environmental effects, the engineer’s letter provided by the applicant and the lack of specificity in the definition of the proposed works in the proposed by-laws. Mr Christian was concerned that the engineer’s letter did not precisely identify or specify the proposed works on which the engineer’s opinion stated in the letter was based.

46. It is also clear from Mr Christian’s affidavit evidence that another of his concerns in relation to the proposed by-laws was that if approval was given, there would be a risk of increased noise from the applicant’s lot if the applicant and her friends and family had the use of a pool in the rear yard of the applicant’s unit. In his affidavit, Mr Christian said that the proposed swimming pool would be only a few metres away from the communal areas of his unit. He also deposed that the applicant “had not been prepared to do anything when I have repeatedly asked her over the years to reduce the level of noise in her rear yard”.

47. In his oral evidence, Mr Christian elaborated on his experience of noise emanating from the applicant’s lot. He said that in the six years of living in his unit, he had complained to the applicant on about six occasions in respect of excessive noise from her unit. This included being able to hear the television, loud music, loud conversations to the point where he could comprehend the words being spoken, and the applicant’s son being “over enthusiastic”. There were occasions when these disturbances “would occur for hours on end”.

48. Mr Christian said that the frequency of disturbance had in fact been greater than the six occasions on which he had brought the matter to the applicant’s attention. He said that there were occasions when disturbances had occurred and he had not complained to the applicant. That is because in his experience, complaining to the applicant had been “rather fruitless” in that it had not resulted in any change in behaviour. He also said that bringing excessive noise to the attention of the applicant had involved “unpleasant conversations” with the applicant which he wished to avoid. In his words, he said he would “cop another earful” when he raised complaints with the applicant about the noise emanating from her unit.

49. I accept Mr Christian’s evidence as set out above. He presented to the Tribunal as someone who took seriously his affirmation to tell the truth and who was conscientious in discharging his obligation to assist the Tribunal in its fact-finding function.

50. Mr Christian’s evidence as to the level and frequency of noise emanating from the applicant’s unit is corroborated by the evidence of Mrs Danilewitz (which I discuss further below).

51. Further corroboration for Mr Christian’s evidence is provided by an email sent by his wife to the applicant and copied to Mr Christian on 4 February 2020 (Ex R6). In that email, Ms Christian stated:

Williow is barking relentlessly – again. This just can’t go on; she is very distressed. It was so peaceful here while she has obviously been away somewhere after the ghastly weekend when you were away and she barked all day and all night. This situation is not fair either to the dog nor to the residents and our neighbours.

On a personal note I’m trying to write a thesis; I can’t hear myself think…

52. In her response to Ms Christian’s email, the applicant stated:

We heard from Lynette about the awful weekend we were away and she [a reference to the dog] should not have been left alone and we will ensure this will never happen again.

53. The above email exchange indicates that noise from the applicant’s unit had materially and adversely affected the use and enjoyment of other units in the strata premises by their occupants on more than one occasion. While the applicant’s response to Ms Christian was apologetic, it indicates that the applicant had allowed a further disruptive incident to occur with her dog after she had been made aware of the disturbance caused by relentless barking from her dog.

54. In her second affidavit, the applicant deposed that she had never received any communications “directly” from Mr Christian asking her to reduce the level of noise in her backyard. In this respect, the applicant’s evidence conflicts with that of Mr Christian. The applicant’s evidence is also difficult to reconcile with the email exchange on 4 February 2020. It could be said that as the email of 4 February 2020 was sent by Ms Christian, it was not received “directly” from Mr Christian, albeit he was copied to the email.

55. It was submitted on behalf of the applicant (see ARS [37(c)]) that I should not accept Mr Christian’s evidence as it was not put to the applicant that her evidence was false. However, it was also not put to Mr Christian that his evidence that he had complained to the applicant on about six occasions about noise from her unit was false.

56. Where I am faced with conflicting evidence on a material issue, I need to decide which evidence is to be preferred. For the reasons stated in paragraphs 49 to 53 above, I prefer the evidence of Mr Christian on the number of times he has complained to the applicant about noise emanating from her unit.

Mrs Danilewitz’s evidence

57. Mrs Danilewitz and her sister, Ms Radomsky, are the owners of lot/unit 4. Their mother has lived in the unit since late 2006. Their mother is currently 85 years of age. Unit 4 is directly above the applicant’s unit and has a large balcony which overlooks the rear garden of the applicant’s unit.

58. In her affidavit, Mrs Danilewitz gives evidence that she and her sister purchased the unit for their parents to live in during their retirement. She says that she was attracted to its quiet and peaceful environment.

59. In her affidavit, Mrs Danilewitz sets out her reasons for voting against the proposed by-laws. She states that she has personally observed her mother having to contend with loud noise and other disturbances, such as barbeque smoke, from the applicant’s unit. She was concerned that these disturbances would be increased if the applicant had a pool in the rear yard of her unit to be used by the applicant and her family and friends.

60. Mrs Danilewitz also gives evidence that she was concerned that the noise and vibrations from the construction of the pool would disturb her mother’s peaceful enjoyment of the unit. She also gives evidence that the construction of a pool in the rear yard of the applicant’s unit would alter the outlook for her mother from a green space of lawns and plants to a space occupied by a swimming pool.

61. Mrs Danilewitz was cross-examined. She elaborated on her concerns in relation to noise in her oral evidence. She said there was “often music, loud music” emanating from the applicant’s unit on weekends. She said that when her mother has complained to the applicant, the volume of the music has been turned down. She said, however, that her mother does not like confrontation of any sort and “it takes a lot for mum to complain”. She said “on many occasions [her mother] just goes inside or does something else to alleviate the confrontation”. She disagreed that the risk of noise coming from the applicant’s unit could be easily managed. She was of this view because she believed that “past behaviour indicates future behaviour and there have been many times when [the applicant] has been unreasonable”. She was concerned not “to create any more stress on [her mother]”.

62. Mrs Danilewitz presented as an honest and conscientious witness. She readily made concessions, eg, she accepted that the loud music did not occur on weekdays and that when complaints were made to the applicant, she turned the music down. I accept that the concerns which she identifies in her affidavit were genuinely held by her at the time she voted on the First and Amended Proposed By-Laws. I also accept her evidence of her observations and experience of the noise and disturbances which have emanated from the applicant’s unit.

Mr Danilewitz’s evidence

63. Mr Danilewitz is not a lot owner. He is the husband of Mrs Danilewitz. As I have already indicated, Mrs Danilewitz and her sister, Ms Radomsky, are the owners of lot/unit 4 which is occupied by their 85 years old mother.

64. Mr Danilewitz did not vote on the First Proposed By-Law. He voted against the Amended Proposed By-Law as proxy for Mrs Danilewitz and Ms Radomsky.

65. In his affidavit, Mr Danilewitz states that his reasons for opposing the Amended Proposed By-Law included that:

1. The constriction work associated with building the swimming pool would generate noise and vibration that would disturb his mother in law’s enjoyment of the unit;

2. The installation of the swimming pool would alter the applicant’s rear garden from a lush, green garden to a swimming pool with tiled surrounds;

3. The use of a swimming pool by the applicant and her family and friends would create more noise in a part of the strata premises which is very close to the unit occupied by his mother in law and which would disturb his mother in law’s peaceful enjoyment of the unit.

66. Mr Danilewitz also gives evidence that he did not give reasons to the applicant for voting against the Amended Proposed By-Law because he did not believe that he was required to do so. Mr Danilewitz expanded on this aspect of his evidence in his oral evidence. He gave evidence that the relationship between lot owners had previously been “a really good relationship” but it had “collapsed” and “become very toxic”. As I understand his evidence, this was attributable to “quite a few issues” which included noise emanating from the applicant’s unit. He also gave evidence that he found this situation to be “very sad”.

67. Mr Danilewitz was cross-examined and he presented to the Tribunal as a reliable and conscientious witness. He made appropriate concessions and appeared to take care to answer questions as accurately as possible to the best of his recollection.

68. I accept Mr Danilewitz’s evidence as to why he did not vote in favour of the Amended Proposed By-Law and that the reasons he sets out in his affidavit were genuinely held by him at the time he voted. I also accept his evidence as to why he preferred not to give his reasons for voting the why he did to the applicant.

Dr Haber’s evidence

69. Dr Haber and his wife are the owners of lot/unit 5. They have lived in unit 5 since about June 2002.

70. Dr Haber gives evidence that he is 83 years old and has underlying health issues. He states that he wishes to have “a quiet life in my home”. As he is retired, he spends a lot of time in the unit.

71. Dr Haber gives evidence in his affidavit that at the time of voting on the proposed by-laws he was concerned that the constriction works for the proposed pool “would affect the foundations and structural integrity” of the strata premises. He states that he read the engineer’s letter dated 2 September 2021 and noted that it “did not include any structural details prepared by the engineer and it was not at all clear to [Dr Haber] that the engineer had prepared any such details”. He also noted that the engineer’s letter “did not certify that the construction of the pool would not cause any damage” to the strata premises. As a result, the letter did not ally his concerns about the risk of the proposed construction works causing damage to the strata premises.

72. Dr Haber maintained this evidence in cross-examination saying “I have not seen any engineering plans even today, so I don’t know what the plans are”.

73. Dr Haber also gave evidence that he was concerned that if the proposed by-laws were approved, the noise and vibrations from the construction works “would have a substantial detrimental impact on [his] amenity whilst in [his] unit and would ruin the peaceful nature of [his] unit”. He was also concerned that the noise generated by the use of a pool by the applicant and her friends and family would have a substantial detrimental impact on his use and enjoyment of his unit.

74. Dr Haber was cross-examined. At times, he answers were non-responsive to the questions put to him. I do not consider that was because he was being evasive or unco-operative. When pressed to give a direct answer, sometimes at the intervention of the Tribunal, he did so. My overall assessment is that Dr Haber was a credible witness but felt some frustration with the requirement to confine his answers to the questions put to him and to answer those questions directly.

75. I accept that the reasons Dr Haber puts forward in his evidence for not voting to approve the proposed by-laws were genuinely held by him at the time of voting on the proposed by-laws.

Ms Wu’s evidence

76. Ms Wu lives in unit/lot 3. The lot is owned by a corporate entity in which Ms Wu’s family have a financial interest. Ms Wu is the nominee of the corporate entity which owns lot 3 in relation to SP No. 67504.

77. Ms Wu gave evidence that her reasons for voting against the proposed by-laws included the following:

1. She was concerned that the construction works would be noisy and disruptive and would have a significant detrimental impact on her use and enjoyment of the unit;

2. She was concerned that the applicant’s use of a swimming pool in her lot would create more noise which would make it difficult for her to concentrate when working from home and would be disruptive to her when she wanted to relax in the unit; and

3. Her preference was to keep her outlook over the applicant’s unit as a green and leafy space and not one occupied by a new swimming pool surrounded by a large tiled area.

78. Ms Wu was cross-examined. As with Dr Haber, at times her answers were non-responsive to the questions put to her. However, when asked to give a direct answer, sometimes at the intervention of the Tribunal, she did so. My overall assessment is that she was a credible witness who genuinely desired to assist the Tribunal in its fact finding function.

79. I accept that the reasons Ms Wu gave to the Tribunal for voting against the proposed by-laws were genuinely held by her at the time of voting on the proposed by-laws.

Mr Haskew’s evidence

80. The applicant provided an expert report from Mr Haskew, a qualified town planner with 26 years of experience.

81. In paragraph 79 of his report, Mr Haskew states “I would expect on average, the use of a private swimming pool would result in more noise than the use of an identically sized patch of private open space or grass in residential area”.

82. In his cross-examination, Mr Haskew accepted that all swimming pool applications to a local government authority would be accompanied by an acoustics report, the preparation of which is an important aspect of seeking council approval for a swimming pool.

Relevant legislative provisions and legal principles

83. Section 126(1) of the SSMA states:

126   Orders relating to alterations and repairs to common property and other property

(1) Order requiring owners corporation to carry out work on common property The Tribunal may, on application by a lessor of a leasehold strata scheme or an owner of a lot in a strata scheme, order the owners corporation to consent to work proposed to be carried out by an owner of a lot if the Tribunal considers that the owners corporation has unreasonably refused its consent and the work relates to any of the following—

(a)  minor renovations or other alterations to common property directly affecting the owner’s lot,

(b)  carrying out repairs to common property or any other property of the owners corporation directly affecting the owner’s lot.

84. Section 142 of the SSMA defines a common property rights by-law as follows:

142   Common property rights by-law

For the purposes of this Act, a common property rights by-law is a by-law that confers on the owner or owners of a specified lot or lots in the strata scheme—

(a)  a right of exclusive use and enjoyment of the whole or any specified part of the common property, or

(b)  special privileges in respect of the whole or any specified part of the common property (including, for example, a licence to use the whole or any specified part of the common property in a particular manner or for particular purposes),

or that changes such a by-law.

85. Section 149 of the SSMA relevantly states:

149   Order with respect to common property rights by-laws

(1)  The Tribunal may make an order prescribing a change to a by-law if the Tribunal finds—

(a)  on application made by an owner of a lot in a strata scheme, that the owners corporation has unreasonably refused to make a common property rights by-law, or

…

(2)  In considering whether to make an order, the Tribunal must have regard to—

(a)  the interests of all owners in the use and enjoyment of their lots and common property, and

(b)  the rights and reasonable expectations of any owner deriving or anticipating a benefit under a common property rights by-law.

(3)  The Tribunal must not determine an application by an owner on the ground that the owners corporation has unreasonably refused to make a common property rights by-law by an order prescribing the making of a by-law in terms to which the applicant or, in the case of a leasehold strata scheme, the lessor of the scheme is not prepared to consent.

(4)  The Tribunal may determine that an owner has unreasonably refused consent even though the owner already has the exclusive use or privileges that are the subject of the proposed by-law.

(5)  An order under this section, when recorded under section 246, has effect as if its terms were a by-law (but subject to any relevant order made by a superior court).

(6)  An order under this section operates on and from the date on which it is so recorded or from an earlier date specified in the order.

86. The manner in which the Tribunal is to approach an application under s 149 of the SSMA was recently considered by Basten AJ in Kaye v The Owners - Strata Plan No 4350 [2022] NSWSC 1386. At [46] to [48], his Honour said:

[46] … Relying on a potential loss of privacy for those entitled to enjoy the Lot 8 roof area, the stairwell of Lot 8, and possibly the living of area of the lot, did not reveal legal error. The owners of other lots were not obliged to ignore privacy concerns and the Appeal Panel was not obliged to reject such concerns as invalid reasons for rejecting the proposal; nor was it required to find that the factual basis of the concerns was "speculative" or not supported by the evidence.

[47] Underlying this challenge (and that to (4)) was an assumption that the owners corporation would act unreasonably by having regard to "speculation" as to any possible disadvantage that might accrue to other lot owners from the proposed common property rights by-law. That was a false assumption. Those voting at the extraordinary general meetings were not required to disregard all considerations which were not established by some objective material placed before the meeting. Nor were they required to give particular weight to particular matters. Lot owners were entitled to have regard to their own interests and, so long as they did not act unreasonably, have regard to their own experience and beliefs as to how a particular change might affect them.

[48] Further, the interests of the proponents and the interests of other lot owners were likely to be in conflict. It was not for the Appeal Panel to seek to "balance" those interests by apportioning weight between them, so as to conclude that a refusal would be unreasonable if the balance favoured the proponents. The function of the Appeal Panel was to determine whether the refusal was "unreasonable". In making that assessment, it was entitled to treat as a valid reason for voting against the proposal a belief or opinion, whether or not it was supported by "evidence". The Management Act does not require that the owners corporation accept any proposal which was objectively reasonable. Nor should the Tribunal, in applying s 149(1)(a) of the Act, decide that a refusal was unreasonable merely because it considered the proposal to be reasonable. The plaintiffs' contentions came close to such an assertion. [emphasis added]

87. At [42], his Honour gave examples of legitimate reasons for an owners corporation refusing to approve a proposed common property rights by-law. His Honour said:

There are more nuanced reasons which might justify a conservative approach to the approval of a common property rights by-law. For example, an owners corporation might legitimately be reluctant to grant such a consent if not satisfied that sufficient information had been presented, or because one approval might open a floodgate to other applications which could not then reasonably be rejected, or because the same lot owner might in the future seek to expand the rights in a piecemeal fashion.

88. I respectfully adopt Basten AJ’s interpretation of s 149 of the SSMA as set out in Kaye. His Honour’s reasoning makes clear that the relevant question under s 149 of the SSMA is whether the owners corporation has acted unreasonably in refusing to approve a common property rights by-law. It also follows from his Honour’s reasoning that the following circumstances would not, of themselves, indicate that an owners corporation has acted unreasonably, namely, where:

1. lot owners had regard to their own interests in voting on a proposed by-law;

2. lot owners had regard to their concerns, beliefs, opinions or experience as to how a proposed by-law might affect them;

3. the concerns, beliefs, opinions or experience of lot owners were not established by some objective material or evidence;

4. lot owners had not given particular weight to particular matters; and

5. the proposed by-law was objectively reasonable.

89. Considerable guidance can also be derived from the decision of the High Court in Ainsworth v Albrecht (2016) 261 CLR 167. In Ainsworth, the High Court was concerned with the proper construction of Queensland legislation, namely, s 276 of the Body Corporate and Community Management Act 1997 (Qld). However, the question which the High Court had to consider was similar to the question which arises for consideration under s 149 of the SSMA.

90. In Ainsworth, a lot owner in a community title scheme wished to amalgamate two balconies on his lot to form one deck. As the airspace between the two balconies was common property, he required exclusive use of the airspace to implement his proposal. The other lot owners refused to approve an “exclusive use by-law” for this purpose.

91. The High Court characterised the relevant question as being whether the lot owners’ opposition to the proposed exclusive use by-law was unreasonable. In the joint judgment of French CJ, Bell, Keane and Gordon JJ, their Honours said at [55]:

It is no light thing to conclude that opposition by a lot owner to a resolution is unreasonable where adoption of the resolution will have the effect of: appropriating part of the common property to the exclusive use of the owner of another lot, for no return to the body corporate or the other lot owners; altering the features of the common property which it exhibited at the time an objecting lot owner acquired his or her lot; and potentially creating a risk of interference with the tranquillity or privacy of an objecting lot owner.

92. At [57] and [58], their Honours continued:

[57] ... Nothing in the BCCM Act suggests that an opponent to a proposal acts unreasonably in failing to act sympathetically or altruistically towards a proponent who seeks to diminish the property rights of the opponent. The BCCM Act does not contemplate that the rights of a lot owner genuinely opposed to the reduction of his or her rights to common property attached to his or her lot may be overridden where that might be thought by an adjudicator to be a reasonable course to adopt, having regard to some standard of sympathy or altruism applicable between lot owners.

[58] Such a standard is not prescribed or suggested by the BCCM Act; rather, the Act allows opposition to a resolution to be overridden only where opposition by lot owners other than the proponent is unreasonable. The unreasonableness of the opposition to the first respondent’s proposal is to be determined in a context in which lot owners voting in respect of the proposed resolution are exercising their right to vote as an aspect of their proprietary rights as owners of lots included in the Scheme. In this context, the unreasonableness with which Item 10 of Sch 5 is concerned is unreasonableness on the part of the opposing lot owners having regard to those lot owners’ interests under the Scheme.

93. At [63], their Honours said:

… opposition to a proposal that could not, on any rational view, adversely affect the material enjoyment of an opponent’s property rights may be seen to be unreasonable. Opposition prompted by spite, or ill-will, or a desire for attention, may be seen to be unreasonable in the circumstances of a particular case. [emphasis added]

94. The applicant bears the onus of demonstrating that the owners corporation acted unreasonably in refusing to approve the Proposed Amended By-Law. In The Owners — Strata Plan No 69140 v Drewe [2017] NSWSC 845, the relevant question was whether an owners corporation had unreasonably refused consent to proposed work. That question arose by reference to s 140 of the Strata Schemes Management Act 1996 (NSW). At [16], Latham J suggested that there would have been unreasonable refusal if the decision was “not guided by sound judgment or good sense”. At [43], her Honour considered that the onus lay upon the party seeking the consent of the owners corporation to establish that the owners corporation had acted unreasonably. I consider that the question which arises under s 149 of the SSMA is sufficiently analogous to that which arose under s 140 of the Strata Schemes Management Act 1996 (NSW) so as to engage her Honour’s observations in relation to onus.

95. I also consider Latham J’s decision to be applicable to the present circumstances to the extent that her Honour considered that the question of whether there had been unreasonable refusal by the owners corporation was to be determined “having regard to the circumstances at the time of the refusal of consent”: see [27]-[28] of Drewe; see also Owners Corporation SP7596 v Risidore [2003] NSWSC 966 at [13].

96. I do not accept the respondents’ submissions (see [38] of RS) that the decisions of the Appeal Panel in The Owners – Strata Plan No 12289 v Donaldson [2019] NSWCATAP 213 at [102] and Bruce v Knight [2021] NSWCATAP 224 at [50]-[53] are “plainly wrong” and “at odds” with the decision in Drewe to the extent that they held that evidence not existing at the time of the owners corporation’s decision is admissible on an application pursuant to s 149 of the SSMA.

97. As the Appeal Panel explained in Donaldson and Bruce, evidence which did not exist at the time of the owners corporation’s decision may be admissible to the extent that it exposes circumstances existing at the time of the decision. For example, it would appear to me that this would cover an affidavit or witness statement by a lot owner explaining why they voted in a particular way. The affidavit or statement is subsequent evidence not existing at the time of the decision but it evidences a circumstance existing at the time of the decision, that is, the lot owner’s reasons for voting the way they did.

Consideration

The applicant’s attacks on the respondents’ credibility generally

98. It is appropriate to commence with addressing the applicant’s attack on the credibility of the respondents and their witnesses. The applicant submits that the reasons given by the respondents in their evidence for refusing to approve the proposed by-law were in “in many cases disingenuous” (AS [9]); that the basis for their belief is “dubious, spurious or lacking in any proper basis” (AS [23]); that the reasons stated in their affidavits were not those which “genuinely actuated” their decision at the time the vote was taken (AS [41]); and that their reasons are “referable to feelings of ‘confusion’ which are … not credible” (AS [43]). This submission is put most starkly in AS [33] where it is contended that the reasons put forward by the respondents in their affidavit evidence for refusing to consent to the proposed by-laws were not “the reasons actually held by the Respondents at the time of casting their votes against it”.

99. It is a serious matter to contend that the respondents have advanced reasons in their affidavits which were not genuinely held at the time they voted on the proposed by-laws. This is tantamount to a contention that the respondents have given false evidence. In my view, for the reasons explained below, the applicant’s attack on the credibility of the respondents’ witnesses is unwarranted and I reject it.

100. I am not satisfied that the bases on which the applicant seeks to impugn the credibility of the respondents and their witnesses was sufficiently put to them in their cross-examination. As explained by Kirby P in Boston Clothing Co Pty Ltd v Margaronis (1992) 27 NSWLR 580 at 590 it is a practical rule of procedural fairness enshrined in the Browne v Dunn principle that if a witness’ credibility is to be impugned, the basis for such challenge should be put to the witness so that the witness is given an opportunity of explaining the basis of the challenge to their evidence. While the Tribunal is not bound by the rules of evidence in this proceeding, it is bound by the dictates of procedural fairness: Civil and Administrative Tribunal Act 2013 (NSW), s 38(2).

101. Having regard to the gravity of the matters which are advanced against the respondents and their witnesses, that is, that their evidence is disingenuous, not credible, dubious and spurious, these matters should have been put clearly and specifically to the witnesses. I am not satisfied they were.

102. As I have already indicated, Mr Christian, Mr and Mrs Danilewitz, Dr Haber and Ms Wu were cross-examined at some length. They all presented to me as reliable and credible witnesses. I have no doubt that they took very seriously their affirmation to tell the truth and their obligation as witnesses to assist the Tribunal in its fact-finding function. They took care to state matters correctly to the best of their recollection irrespective of whether it assisted the respondents’ case or the applicant’s case. They were careful not to over-state or exaggerate their concerns with the proposed by-laws. They also made appropriate concessions, some of which are relied upon in the applicant’s submissions.

103. As I have already indicated above, I find that the reasons which the respondents state in their evidence for refusing to vote in favour of the proposed by-laws were genuinely held by them at the time of the votes on the proposed by-laws.

The respondents’ concerns about increased noise

104. It appears to me that the applicant’s unjustified attacks on the credibility of the respondents and their witnesses are predicated on a mis-characterisation of the nature and effect of the evidence given by the respondents in cross-examination, especially the evidence relating to their concerns about increased noise that would occur if the proposed by-laws were approved.

105. In respect of Mrs Danilewitz’s evidence, it is submitted that her cross-examination revealed that the “loud noises” about which she was concerned involved “no more than the barking of Ms Beitzel’s dog… and the occasional playing of music on weekends” (AS [64(b)]). However, a close and careful understanding of Mrs Danilewitz’s oral evidence indicates that this submission cannot withstand scrutiny. Mrs Danilewitz gave evidence that there was “often music, loud music” emanating from that applicant’s unit; that there were “many occasions” on which her mother could not sit on the balcony because of the noise from the applicant’s unit; and that there were “many times when [the] applicant has been unreasonable”.

106. The applicant contends that Mrs Danilewitz’s evidence does not establish that there has been “an environment of persistent and excessive noise emanating from Ms Beitzel’s lot” (AS [64(b)]). It is not clear to me, based on my understanding of the relevant authorities, why the respondents need to establish that there has been a history of “persistent and excessive noise” to demonstrate that their concerns in relation to increased noise are justified. In my view, Mrs Danilewitz’s evidence establishes that there has been sufficient frequency and loudness of noise emanating from the applicant’s unit to materially adversely affect Mrs Danilewitz’s mother’s use and enjoyment of Mrs Danilewitz’s unit. That indicates that Mrs Danilewitz’s concerns about increased noise from the applicant’s unit was based on actual experience of how the applicant had made use of her unit. That also suggests that Mrs Danilewitz had regard to her interests in voting on the proposed by-laws in a manner that she was entitled to, that is, in a manner based on sound judgment or good sense.

107. In my view, the attack on Mr Christian’s evidence is also based on an unfair and inaccurate characterisation of the overall nature and effect of his evidence. It is submitted that Mr Christian “only had cause to complain to Ms Beitzel about excessive noise emanating from her lot on ‘half a dozen’ occasions”. I do not consider this to be an accurate statement of Mr Christian’s evidence. He said that when there had been disturbances from the applicant’s unit, they “would occur for hours on end”. He also said that that there had been more than six occasions which gave cause for complaint, however, he had not complained because he did not want to have an unpleasant conversation with the applicant which had been his experience when he had previously complained – in his words, it had resulted in him ‘copping an earful’. He also said that there had been no change in the applicant’s behaviour when he had previously complained – in his words, he understood from prior experience that complaining to the applicant would be “rather fruitless”.

108. While Mr Christian appropriately conceded that he had only complained to the applicant on six occasions, his evidence, properly understood, does not establish that there had only been “cause to complain” on six occasions. There had been other occasions when there had been cause to complain but, for the reasons given by him, he had not complained.

109. I am not persuaded that it was unreasonable for Mr Christian to have regard to his interests in minimising disturbance to his use and enjoyment of his unit caused by noise from the applicant’s unit, especially when his judgment and belief of how his interests might be adversely affected was based on his experience of past conduct by the applicant.

The respondents’ concerns about the sufficiency of the information presented by the applicant

110. I am also not persuaded that Mr Christian was unreasonable in his assessment that the proposed by-laws lacked sufficient specificity in the definition of the proposed works. The by-laws proposed granting to the applicant a very broad license to affect changes to common property, ie, the right to “… repair and replace the Works and so much common property as is necessarily affected by the Works”. I do not consider that the present task for the Tribunal is to determine whether the proposed by-laws contained a reasonable specification of how the proposed works could impact on the common property. The question for the Tribunal is whether the respondents were unreasonable in their assessment that it did not.

111. I accept Mr Christian’s evidence that he reviewed carefully the terms of the proposed by-laws before he decided to vote against them. That is consistent with the applicant’s evidence that Mr Christian said to her “leave it with me” before he made a decision on how he would vote on the First Proposed By-Law. Having regard to the definition of the works in the proposed by-laws, I do not consider that it was unreasonable for Mr Christian to form the view that they did not define the works with sufficient specificity. In other words, I am not persuaded that his assessment in this respect lacked a rational basis. As Basten AJ pointed out in Kaye at [42], an owners corporation might legitimately be reluctant to grant consent to a proposed by-law if not satisfied that sufficient information had been presented.

112. I also reject the applicant’s submissions (see AS [26] and [71]) to the effect that it was unreasonable of the respondents to have had reservations about the opinion in the letter from the applicant’s structural engineer dated 2 September 2021. The letter was provided by the applicant in support of the proposed by-laws. The letter stated that the proposed swimming pool “will not adversely affect the structural integrity of the existing residences and mansonry garden walls adjacent the proposed swimming pool”.

113. Dr Haber was concerned about the letter as he did not know what tests had been undertaken by the engineer or what structural details had been prepared to arrive at the opinion stated in the letter.

114. Mr Christian gave similar evidence to the effect that he did not know by what process of certification the engineer had undertaken to arrive at the opinion expressed in the letter.

115. I reiterate that I do not consider the present task for the Tribunal is to determine whether the engineer’s letter provided by the applicant was reasonable or whether its provision or contents should lead to a conclusion that the proposed by-laws were reasonable. However, it is instructive to note that if that were the relevant question, the Tribunal would have to have regard to the fact that the engineer’s letter asserted an opinion without any reasoning to demonstrate how the opinion was arrived at. An expert’s opinion presented in such a manner would generally not be regarded as reasonable or acceptable by a Tribunal or Court.

116. The High Court in Dasreef Pty Limited v Hawchar [2011] HCA 21; (2011) 243 CLR 588 considered whether the principles stated by Heydon JA in Makita (Australia) Pty Limited v Sprowles (2001) 52 NSWLR 705 are to be satisfied as a condition of admissibility or as a matter of weight.

117. In Dasreef, the High Court concluded that non-compliance with the principles stated in Makita goes to admissibility, not weight. At [37] in a joint judgment of six justices, their Honours said:

... it remains useful to record that it is ordinarily the case, as Heydon JA said in Makita, that "the expert's evidence must explain how the field of 'specialised knowledge' in which the witness is expert by reason of 'training, study or experience', and on which the opinion is 'wholly or substantially based', applies to the facts assumed or observed so as to produce the opinion propounded".

118. At [42], their Honours continued:

A failure to demonstrate that an opinion expressed by a witness is based on the witness's specialised knowledge based on training, study or experience is a matter that goes to the admissibility of the evidence, not its weight.

119. The relevant question for the Tribunal is whether the respondents acted unreasonably in refusing to consent to the proposed by-laws because of reservations in relation to the engineer’s letter provided by the applicant.

120. I find the challenge to Dr Haber’s evidence on the basis that “he simply couldn’t trust the opinions expressed by those engineers” to be without merit (RS [26]). No reason is given why Dr Haber should have accepted implicitly the bald assertion of an opinion by an expert, without any substantiation or reasoning, when a Court or Tribunal would not accept an opinion expressed in such a manner.

121. In my opinion, I do not consider that it was unreasonable for the respondents to have reservations about the engineer’s letter. I do not consider that it was unreasonable for the respondents to be concerned as to whether the proposed construction works could have an impact on the structural integrity of the existing strata premises.

122. I also do not consider it unreasonable for the respondents’ concerns not to have been allayed by an engineer’s letter which:

1. did not reveal what tests, certifications or investigations had been undertaken for the purpose of arriving at the opinion expressed in the letter;

2. did not specify the proposed works on which the opinion was based (a matter specifically noted by Mr Christian); and

3. did not set out any of the reasoning process or analysis which had been undertaken to arrive at the opinion expressed in the letter.

The respondents’ failure to provide reasons to the applicant for their refusal to consent to the proposed by-laws

123. A significant focus of inquiry during the hearing, by both the applicant and respondents, was on the respondents’ failure to provide reasons to the applicant for voting against the proposed by-laws prior to doing so in their affidavit evidence in this proceeding.

124. Much is said in the applicants’ written submissions about the respondents’ failure to provide reasons to the applicant for their refusal to consent to the proposed by-laws at the time of voting on the proposed by-laws: AS [29], [30], [31], [32], [33], [42], [43]. In the ARS at [19] and [20], this refusal is said to have been “staunch” and “stubborn” and part of “a co-ordinated strategy to obstruct Ms Beitzel’s proposal”. It is contended that the failure to provide reasons is a manifestation of unreasonable conduct by the respondents and consistent with the conclusion that the concerns which are expressed by the respondents in their evidence in this proceeding “were either not genuinely held nor the real reason for refusing consent”: ARS [20].

125. The respondents give evidence that they did not articulate their reasons to the applicant because they were under no legal obligation to do so and they were concerned that if they did so, it could result in a deterioration in relationships between lot owners.

126. While the AS could be read as suggesting that that there was a legal obligation of some sort on the part of lot owners to state their reasons to the applicant for voting against the proposed by-laws, the ARS appear to accept that there is no such legal obligation (albeit the applicant’s position in this respect from her written submissions is not entirely clear to me).

127. I consider that the respondents are correct in stating that they were under no obligation to provide reasons in the sense that there was no legal requirement for them to indicate their reasons to the applicant for refusing to vote in favour of the proposed by-laws.

128. In Ashbee v The Owners - Strata Plan No 11761 [2018] NSWCATCD 80 at [37], the Tribunal said that it would be reasonable and procedurally fair for the reasons for refusal by other lot owners to be recorded so that the lot owner proposing a change had knowledge of the reasons for refusal. I do not consider that the Tribunal in Ashbee intended to state that there is a legal requirement for an owners corporation to state its reasons for refusing to consent to a proposed by-law. I agree with the respondents’ submission (RS [61]) that, apart from other considerations, it is difficult to see how such a legal requirement could be given practical effect as each lot owner will have their own individual and particular reasons for the way they vote on a proposed by-law.

129. I accept that in certain circumstances, the failure of lot owners to articulate their reasons at the time of voting on a proposed by-law may be relevant to the question of whether their refusal to approve it has been unreasonable. But all the relevant circumstances of each case need to be considered.

130. I do not accept the submission that the failure of the owners to disclose their reasons at the time of voting on the proposed by-laws to have been part of “a co-ordinated strategy to obstruct Ms Beitzel’s proposal”. There is no evidentiary basis for this submission.

123. In the present circumstances, there were factors which made the reluctance of the lot owners to disclose their reasons to the applicant reasonable and understandable in the circumstances.

124. Mr Christian gave evidence, which I accept, that he had had a history of unpleasant exchanges with the applicant when he had complained to her about noise emanating from her unit.

125. I also accept the evidence of Mrs Danilewitz that she was mindful that her mother, who lived in the unit above the applicant’s unit, preferred to avoid confrontation.

126. Mr Danilewitz gave evidence, which I have accepted, that the relationship between the lot owners had previously been a “really good relationship” but it had “collapsed” at the time of voting on the proposed by-laws to the point where it had “become very toxic”. Some context to Mr Danilewitz’s evidence about the regrettable collapse in relations between the lot owners is provided by the applicant. She gave evidence (T79.18-21) that she had previously had “a strong relationship” with Mrs Danilewitz’s mother which included having her at her house for Christmas every year and assisting her with looking after her elderly husband until his death. It is clear from the expression of this evidence in the past tense that this is no longer the case.

127. There are two incidents which give substance to the respondents’ concerns that if they engaged with the applicant about their reasons for voting against the proposed by-laws, it could result in a further deterioration in the relationship between lot owners.

128. The first incident occurred on the day after the vote on the Amended Proposed By-Law at the AGM. The applicant’s mother phoned Mrs Danilewitz’s mother, a woman of advanced years, and said to her words to the effect of “you have the rudest family… they will pay big time”. On 3 January 2022, Mrs Danilewitz and her sister, who I have already noted are the owners of lot 4, sent an email to the applicant stating that their mother was very shaken after receiving the telephone call. A copy of the email is in evidence as Exhibit R8. The applicant, when cross-examined on the email sent to her, said that she did not believe that her mother would have said the words attributed to her in the email but also said that as she was not a party to the conversation, she could not give direct evidence of what was said. I find that it is more likely than not that words were said by the applicant’s mother to the effect recorded in the email as the email provides contemporaneous evidence as to what was said during the telephone conversation.

129. The second incident involved Mrs Haber who, as I have already noted, is a co-owner with Dr Haber of unit 5. Mrs Haber is also a woman of advanced years. Dr Haber gives evidence that after the vote on the First Proposed By-Law, the applicant approached Mrs Haber and said to her words to the effect of “I won’t help you anymore because you objected to us having a pool”. This was said in the context of Mrs Haber having locked herself out of the building on one occasion and needed assistance to get into the building. There was no challenge to Dr Haber’s evidence on this issue and I accept that words to the effect of the evidence given by him were said by the applicant to Mrs Haber.

130. I am mindful that the incidents involving Mrs Danilewitz’s mother and Mrs Haber occurred after the voting on the proposed by-laws. Nevertheless, I consider that these incidents provide substance to the respondents’ concerns that, given the state of relations between lot owners at the time of voting on the proposed by-laws, there was a risk of further deterioration in the relationships between lot owners if the respondents engaged with the applicant about their reasons for voting against the proposed by-laws.

131. I have considered it appropriate to address in some detail the submissions and evidence concerning the respondents’ refusal to articulate to the applicant their reasons for voting against the proposed by-laws. That is because this is something which the applicant relies on heavily to submit that the concerns which the respondents state in their evidence in relation to the proposed by-laws “were either not genuinely held nor the real reason for refusing consent”. I have already stated that I consider this submission to involve a very serious allegation and one which is tantamount to an allegation that the respondents have given false evidence.

132. I do not consider it relevant to determine the underlying reasons, or to attribute responsibility, for the “collapse” (to use the word adopted by Mr Danilewitz) in relationships between lot owners at the time of voting on the proposed by-laws. It is, however, relevant that there was a collapse in relationships between lot owners at the time of voting on the proposed by-laws as this provided context and substance to the respondents’ concerns about disclosing their reasons to the applicant for opposing the proposed by-laws.

133. In my assessment, based on the evidence which has been set out above, it was reasonable for the respondents to wish to keep their reasons to themselves for voting against the proposed by-laws rather than to risk any unpleasant interactions with the applicant or other lot owners and a further deterioration in relations between lot owners in the event that they disclosed their reasons for voting against the proposed by-laws. I reject the submission that the respondents’ refusal to disclose their reasons to the applicant as being capable in any way of providing support for a conclusion that the concerns expressed by the respondents in their evidence in relation to the proposed by-laws were not either genuinely held or the real reason for refusing consent.

134. In any event, in circumstances where I am satisfied that the reasons stated by the respondents in their affidavits for voting against the proposed by-laws were genuinely held by them at the time of casting their votes, it is difficult to see the relevance of the respondents’ failure to indicate their reasons at the time of voting on the question of whether there was unreasonable refusal to approve the proposed by-laws, especially in circumstances where there was no legal requirement for the lot owners to state their reasons.

The respondents’ failure to obtain an acoustics report

143. The applicant submits that the failure of the respondents to procure an acoustics report, or to otherwise “investigate or validate” their concerns in relation to noise, indicates unreasonableness on the part of the respondents: AS [65].

144. The applicant does not indicate what steps other than obtaining an acoustics report were available to the respondents to “investigate or validate” their concerns.

145. I have noted above that the report of Mr Haskew states “I would expect on average, the use of a private swimming pool would result in more noise than the use of an identically sized patch of private open space or grass in residential area”. It appears to me that this provides, if it were required, objective material corroborating the respondents’ concerns about the risk of increased noise emanating from the applicant’s unit if she had the private use of a swimming pool as part of her unit.

146. Mr Haskew is of the opinion that there are certain “variables” that influence the “likelihood of acoustic impacts occurring”. These include the residential density of the area as this operates as a “societal cue” as to acceptable behaviour and the socio-economic characteristics of the relevant area. However, I accept the evidence of Mr Christian and Mrs Danilewitz as to the level and frequency of noise which has emanated from the applicant’s unit and the adverse material impact which this has caused on the use and enjoyment by occupants of other units. I consider this actual past experience by the respondents to be a better basis for assessing the likelihood of increased noise from the applicant’s unit if she had the use of a pool in her unit than the “variables” identified by Mr Haskew.

147. In any event, in circumstances where I have found that the respondents’ concerns in relation to noise were genuinely held and had a rational basis in that they were based on the respondents’ experience of the applicant’s past behaviour in the use of her unit, I do not consider it was incumbent on the respondents to provide some further evidence or objective material to corroborate or “validate” their concerns. The applicant’s submissions in this respect appear to me to be directly at odds with the reasoning of Basten AJ in Kaye, especially at [47] and [48] of his Honour’s decision.

Overall assessment of the owners corporations’ refusal to consent to the proposed by-laws

148. I accept that the respondents’ reasons, taken collectively, for refusing to vote in favour of the First and Amended Proposed By-Laws were that:

1. the noise and vibration from the construction works associated with the installation of the proposed pool created a risk of interference with the enjoyment of their units;

2. there was a risk of increased noise and barbeque smoke emanating from the applicant’s unit if she had the use of a pool in her unit which also created a risk of disturbance and interference with the enjoyment of their units;

3. information provided by the applicant was insufficient in relation to how the common property would be impacted by the proposed works and whether the proposed construction works posed any risk to the structural integrity of the existing strata premises; and

4. the alteration in the respondents’ outlooks from their units would adversely affect their preferences.

149. When the evidence as a whole is reviewed, I do not consider that it could be said that the proposed by-laws could not, on any rational view, adversely affect the material enjoyment of the respondents’ property rights: see Ainsworth v Albrecht at [63]. The respondents were entitled to have regard to their own interests in deciding how to vote on the proposed by-laws. For the reasons explained above, I am not persuaded that their opposition to the proposed by-laws lacked a rational or proper basis or that it was not guided by sound judgment or good sense.

150. It necessarily follows from the above that I am not persuaded that the owners corporation unreasonably refused to make the proposed by-laws.

151. There was a dispute between the parties as to whether it was appropriate, in the circumstances, for the applicant to seek an order under s 126(1) of the SSMA. The applicant relies in her submissions on the decision in Fong v The Owners – Strata Plan No. 82783 [2022] NSWCATCD 56 at [51] where the Tribunal noted that it had jurisdiction to make orders pursuant to ss 126 and 149 of the SSMA. However, it is to be noted that in that decision the Tribunal only made an order pursuant to s 149 of the SSMA and declined to make an order pursuant to s 126 of the SSMA.

152. Where the applicant had sought unsuccessfully the making of a common property rights by-law by the owners corporation and s 149(1) of the SSMA specifically gives the Tribunal power to prescribe a change to a by-law if it finds that the owners corporation has unreasonably refused to make a common property rights by-law, I have reservations as to whether it would have been appropriate for the Tribunal to make an order under s 126(1) in these circumstances if the Tribunal’s discretion to make an order was enlivened.

153. However, it is unnecessary for me to decide whether it was available to the Tribunal to make an order under s 126(1) of the SSMA.

154. The discretion to make an order under s 126(1) could only arise if the Tribunal “considers that the owners corporation has unreasonably refused its consent” to work proposed to be carried out. The discretion to make an order under s 149(1) could only arise if the Tribunal “finds” that the owners corporation “unreasonably refused to make a common property rights by-law” [emphasis added].

155. It was not suggested that there was any material difference between s 126(1) and s149(1) of the SSMA in terms of what had to be established for the Tribunal’s discretion to make an order to arise. The applicant appears to have accepted that the question of whether or not relief was available under s 126(1) was unlikely to have any practical effect on the ultimate outcome as the applicant would have to demonstrate that the owners corporation unreasonably refused to make the Amended Proposed By-Law for the purposes of both s 126(1) and s 149(1) of the SSMA.

156. As the Tribunal’s discretion to make an order under s 126(1) and 149(1) can only arise if the Tribunal is satisfied that there has been unreasonable refusal by the owners corporation, and that pre-condition has not been established, the application must be dismissed.

Decision and orders

157. For the above reasons, the Tribunal orders:

1. The Application is dismissed.

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I hereby certify that this is a true and accurate record of the reasons for decision of the Civil and Administrative Tribunal of New South Wales.

Registrar

Decision last updated: 22 September 2023