Colman v The Owners - Strata Plan 61131

[2025] NSWSC 63

Supreme Court

New South Wales

Medium Neutral Citation:

Colman v The Owners – Strata Plan 61131 [2025] NSWSC 63

Hearing dates:

21 August 2024

Date of orders:

20 February 2025

Decision date:

20 February 2025

Jurisdiction:

Common Law

Before:

Kirk J

Decision:

(1) Grant leave to appeal with respect to:

(a) grounds 1 and 4 to the extent they allege a constructive failure to exercise jurisdiction and a misconstruction of s 106(5);

(b) ground 2 to the extent it raises construction of by-law 44; and

(c) ground 3(2).

(2) To the extent that leave to appeal is granted the appeal is dismissed.

(3) The plaintiff’s summons is otherwise dismissed.

(4) Plaintiff to pay the defendant’s costs.

Catchwords:

LAND LAW – Strata title – Construction of poorly drafted by-law – Heading of by-law at least part of context in which terms to be construed whether or not part of by-law and whether or not by-law regarded legislative in character – By-law in question does not encompass approval of relevant works – By-law could not authorise strata committee to approve works that are not minor renovations

LAND LAW – Strata title – No reason why special resolution referred to in s 108(2) authorising change to common property cannot take form of special resolution passing a by-law – Possible challenge of failure to pass such by-law under s 149 does not preclude application under s 126(2) – Tribunal has no power to make order under s 126(2) of the Strata Schemes Management Act 2015 (NSW) to retrospectively approve owner’s work on common property unless consent for work has been sought from owners corporation – Refusal of consent may be constructive

LAND LAW – Strata title – Powers and obligations of owners corporation – Owners corporation may undertake repairs to common property without need for resolution at general meeting – Owners corporation may give approval to work already done on common property – Insofar as damages or compensation can be claimed under s 106(5) or other provisions for work by lot owner to repair common property then they cannot be claimed for works not approved in required manner by owners corporation or Tribunal

Legislation Cited:

Civil and Administrative Tribunal Act 2013 (NSW), ss 80(2)(b), 83

Strata Schemes Management Act 1996 (NSW), s 62

Strata Schemes Management Act 2015 (NSW), ss 3(b), 5, 9, 19, 36(3), Pt 6, 141, 149, Pt 12, Sch 1 cll 4 and 14

Cases Cited:

Attorney-General (Cth) v Oates [1999] HCA 35; (1999) 198 CLR 162

Colman v The Owners-Strata Plan No 61131 [2023] NSWCATCD

Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; (2003) 77 ALJR 1088

Endre v The Owners – Strata Plan No. 17771 [2019] NSWCATAP 93

Ferella (as Executor of Estate of late Ferella) v Chief Commissioner of State Revenue [2024] NSWSC 166

Fisher v Nonconformist Pty Ltd [2024] NSWCA 32; (2024) 114 NSWLR 1

Independent Liquor and Gaming Authority v Whitebull HTL Pty Ltd [2023] NSWCA 224

Ming v Director of Public Prosecutions (NSW) [2022] NSWCA 209; (2022) 109 NSWLR 604

Minister for Immigration and Ethnic Affairs v Mayer [1985] HCA 70; (1985) 157 CLR 290

Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2020] HCA 29; (2020) 271 CLR 495

Owners - Strata Plan 32735 v Lesley-Swan [2012] NSWSC 383; (2012) 17 BPR 32,311

Owners Corporation SP6534 v Elkhouri [2024] NSWCA 279

Owners Strata Plan 50276 v Thoo [2013] NSWCA 270; (2013) 17 BPR 33,789

Seiwa Pty Ltd v Owners Strata Plan 35042 [2006] NSWSC 1157; (2006) 12 BPR 23,673

Smith v Owners – Strata Plan No 3004 [2022] NSWSC 1599

Targeted Property Investments Pty Ltd v Look Up Technologies Pty Ltd (No 2) [2023] NSWSC 416; (2023) 20 BPR 43,135

The Owners – Strata Plan No 2661 v Selkirk [2024] NSWSC 760

The Owners – Strata Plan No 63607 v Kinsella [2022] NSWCATAP 184

The Queen v A2 [2019] HCA 35; (2019) 269 CLR 507

Vickery v The Owners – Strata Plan No 80412 [2020] NSWCA 284; (2020) 103 NSWLR 352

Young v Chief Executive Officer (Housing) [2023] HCA 31; (2023) 278 CLR 208

Category:

Principal judgment

Parties:

Gary Colman (Plaintiff)
The Owners – Strata Plan 61131 (Defendant)

Representation:

Counsel:
P Afshar (Plaintiff)
D F Elliott (Defendant)

Solicitors:
StevensVuaran Lawyers (Plaintiff)
Grace Lawyers (Defendant)

File Number(s):

2023/454959

Publication restriction:

Nil

 Decision under appeal 

Court or tribunal:

Civil and Administrative Tribunal Appeal Panel

Jurisdiction:

Appeal Panel

Citation:

[2023] NSWCATAP 308

Date of Decision:

17 November 2023

Before:

D Robertson, Senior Member;
G Ellis SC, Senior Member

File Number(s):

2023/212397

JUDGMENT

1. There is a residential building known as “The Palladium” located at 102 Miller Street in Pyrmont, Sydney, comprised of 279 strata lots. Mr Gary Colman, the plaintiff, owns Lot 147 in the building. That lot comprises an apartment on level 10 and a rooftop area on level 11, being an eastern and western terrace which are linked by a corridor. The defendant is the owners corporation of the building. Pursuant to s 9 of the Strata Schemes Management Act 2015 (NSW) (SSM Act), the owners corporation of a strata scheme is responsible for the management of the scheme, including control over the use, maintenance and repair of the common property.

2. Section 111 of the SSM Act provides that a lot owner must not carry out work on the common property without proper authorisation. Mr Colman, together with his wife Ms Jackie Colman, relevantly sought approval in 2019 and 2020 to make a range of alterations to the western terrace in Lot 147, some of which affected common property. They put in a number of building work applications. As explained below, the only application said to be directly relevant to the proceeding in this Court is one dated 7 January 2020. Further, only some of the work proposed in that application is said to be relevant.

3. The failure to identify with precision what works are the subject of what arguments is a problem that has bedevilled this matter. In this Court the work Mr Colman emphasised in submissions was removing and replacing tiles and waterproofing on the western terrace of Lot 147. Although not clear, the work at issue here may also have included other matters, such as some work done affecting a shed and a water feature on the western terrace. These works affected common property – the tiles and waterproofing membrane at least were clearly such. The Colmans undertook these works without first obtaining permission from the defendant. I will refer to the subset of work at issue in this Court as the Relevant Works. In the period from late 2019 to late 2021 the Colmans also caused other works to be completed affecting both common and Lot 147 property.

4. In September 2021 Mr Colman lodged an application in the Civil and Administrative Tribunal seeking, relevantly: an order under s 126 of the SSM Act that the defendant approve identified works (including the Relevant Works); damages under s 232 of the SSM Act for alleged breach by the defendant of its maintenance and repair duties under s 106, which encompassed a claim for the costs of carrying out the Relevant Works; and, albeit not clearly articulated, a finding that the works either were in fact approved under by-law 44 of the Strata Plan or should have been so approved by the strata committee.

5. The Tribunal, constituted by Senior Member Sarginson, dismissed Mr Colman’s application: Colman v The Owners-Strata Plan No 61131 [2023] NSWCATCD (SM; note that, contrary to usual practice, the decision has not been published on the NSW Caselaw website). Mr Colman brought an internal appeal to the Appeal Panel. Such an appeal may be brought as of right on any question of law or with leave of the Appeal Panel on any other grounds: Civil and Administrative Tribunal Act 2013 (NSW) (CAT Act), s 80(2)(b). The Appeal Panel refused leave to the extent required and otherwise dismissed the appeal: Colman v The Owners – Strata Plan 61131 [2023] NSWCATAP 308 (AP).

6. Section 83 of the CAT Act entitles Mr Colman to appeal that decision to the Supreme Court, with leave, on a question of law. He now seeks that leave, alleging errors in the Appeal Panel’s decision on questions of law. 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: Targeted Property Investments Pty Ltd v Look Up Technologies Pty Ltd (No 2) [2023] NSWSC 416; (2023) 20 BPR 43,135 at [38]; Ferella (as Executor of Estate of late Ferella) v Chief Commissioner of State Revenue [2024] NSWSC 166 at [25].

7. Mr Colman’s summons raised six grounds. His written submissions identified three issues arising from those grounds, although how those issues related to the six grounds was not very clear. In oral submissions the subject of his complaint was further explained, but even then there was a lack of precision in identifying what questions of law were said to be raised. Ground 1 was said to be partially captured by Issue 1 in Mr Colman’s written submissions, and the rest of the ground was not pressed. Ground 4 was said to be related to and consequential upon ground 1, thus also within the scope of Issue 1. Ground 2 was said to be captured by Issue 3. Ground 3, to the extent pressed, was said to be captured by Issue 2 (which I understood to mean picking up only ground 3(2)). Grounds 5 and 6 were not pressed on the basis that they did not raise additional issues beyond the other grounds. All of Mr Colman’s complaints referred back to alleged errors in the Tribunal’s decision; he says the Appeal Panel erred in failing to find those errors.

8. It transpired at the hearing that certain questions of statutory construction of s 106 of the SSM Act and related issues, as articulated by counsel for the plaintiff, had not been sufficiently raised or dealt with by the parties. I therefore granted leave for further written submissions from both parties to be filed addressing those matters. Both sides, helpfully, took up that opportunity.

9. The three issues raised by Mr Colman, as clarified in oral submissions, can be summarised as follows:

1. Did the Tribunal and Appeal Panel err in law in finding that Mr Colman could not claim damages under s 106(5) of the SSM Act to cover the costs of carrying out the Relevant Works:

1. by constructively failing to exercise jurisdiction in relation to matters put; or

2. on the basis that he had not sought or been granted approval for those works prior to undertaking them, where Mr Colman asserted that doing so was not required by the statutory scheme (grounds 1 and 4 of the summons)?

2. Did the Tribunal err in law in declining to make an order under s 126(2) of the SSM Act retrospectively approving the Relevant Works because the defendant had not unreasonably refused its consent as there had been no motion seeking such consent put to a general meeting of the owners corporation (ground 3(2))? Mr Colman submitted that it was not necessary that a refusal be manifest in this way.

3. Does by-law 44, correctly construed, constitute either an approval of the Relevant Works or an authorisation for the defendant’s strata committee to grant such approval (ground 2)? Mr Colman submitted that it was either one or the other.

10. It is convenient and logical to address the issues in reverse order, after first setting out the context in which these questions arise.

11. For the reasons which follow I will grant leave to appeal under s 83 of the CAT Act in relation to the three issues, albeit to a somewhat limited extent with respect to Issues 1 and 3. To the extent leave is granted the appeal will be dismissed with costs.

12. For convenience I note that, in summary, I reach the following conclusions on the operation of the SSM Act:

1. There is no reason why the special resolution referred to in s 108(2) could not take the form of a special resolution passing a by-law (see below at [78]). Where approval is sought under s 108 in that way, the fact that a failure to pass the by-law might be capable of challenge under s 149 does not preclude an application being made to the Tribunal under s 126(2) (below at [100]).

2. An owners corporation may decide to undertake repairs to common property without the need for an ordinary or special resolution passed at a general meeting, and it may authorise a lot owner to carry out such repairs by the same decision-making process (below at [79]-[80]).

3. The Tribunal is authorised under s 126(2) retrospectively to approve works already undertaken (see at [82]-[83]). Similarly, the various powers an owners corporation has to give approval for work on common property (being those expressed in ss 108 and 110 and implicit in s 106) can also be taken to extend to giving approval to work already done (below at [84]-[87]).

4. The Tribunal is not empowered to make a works approval order under s 126(2) unless the relevant type of approval has first been sought from the owners corporation (below at [88]-[89]).

5. It is possible for there to be a constructive refusal of consent attracting the operation of s 126(2) even though no formal decision has been taken by the owners corporation in its relevant emanation (below at [94]-[96]).

6. Insofar as damages or compensation can be claimed under s 106(5) or other provisions for work undertaken by a lot owner to repair common property (where it is not necessary to decide here if such damages can be claimed), then they cannot be claimed for works which have not been approved in the required manner (either prospectively or retrospectively) by the owners corporation or the Tribunal (see below at [127]-[134]).

Background

Facts

13. This is an application for review of the Appeal Panel’s decision on questions of law only. The course of events was convoluted and need not be recited in full. The following key facts are as found by the Senior Member and were not disputed in this Court.

14. From 2015 Mr and Ms Colman had been communicating to the defendant their desire and intention to renovate the rooftop terrace area on Lot 147. They did not crystallise that communication into any formal application for work approval until much later.

15. In December 2018 a significant storm damaged the pergola roof sheeting on the terrace of Lot 147, and damaged other parts of the building. That damage to Lot 147 was repaired in January 2020 at the instigation of the defendant, around the same time as the key events in question here, but it has little to do with the matters at issue apart from being background to the introduction of by-law 44.

16. In early 2019 the owner of the apartment located immediately below Lot 147 – Mr George Efthimiadis, also known as Mr Midas – complained to the defendant about water ingress from Lot 147 into his lot. The Tribunal at first instance found that “for reasons that were not clearly set out in the evidence, the owners corporation was satisfied that the water leak was caused by failure of waterproofing proximate to an expansion joint in the floor of the open courtyard of Lot 147” (SM [15]). Mr Efthimiadis happened also to be the operator of a building company which traded under the name “AussieBuild”. The defendant ended up engaging AussieBuild to fix the leak.

17. On 26 March 2019 AussieBuild sent the defendant a quote outlining the scope of work to be done, which relevantly included:

◦ Remove hob and bricks over and around expansion joint and 2 rows of surrounding tiles.

◦ Clean out expansion joint make ready for installation of Unison joint.

◦ Expose Exhaust Fan – Fix leaking air – Will remove brick work and re-do it and stop leaking air.

◦ Remove all rubbish and make good for retiling.

…

2 x men x 5 days to make area ready and install Unison joint.

18. The scope of works went on to note that the expansion joint was covered by a brick hob and bench/table top which would need to be removed. It is apparent from the reference to “leaking air” that the works were not only addressing the leak issue but also some problem with an air venting system going through the terrace area. The quoted cost was $13,320 excluding GST. Mr and Ms Colman received a copy of that quote around the same time.

19. On 3 April 2019 the Colmans sent an email to the defendant. It began as follows:

We write regarding the proposed works to deal with water ingress to the apartments below from the expansion joint on the roof terrace within our Lot 147.

We are hoping to use this period of disruption to make some needed improvements to our rooftop terrace, along with dealing with ageing waterproofing/tiling and remediating the incorrect fall/slope which currently runs rainfall towards the back of our terrace.

20. The email raised concerns that works proposed by AussieBuild, which involved the removal of brickwork, would be “possible/likely” to cause “collateral damage” to their lot property, including a water feature, the table top and a small shed next to the table top. They suggested that those features need not be rebuilt by the defendant. They said that they were “intending to progress plans to remodel the terrace”, which involved constructing walls, rebuilding the shed, complete re-tiling of the western terrace, and moving a support column, amongst other things. That was followed by an outline of further changes for which the Colmans sought the defendant’s “consideration”. In a further email sent on the same day Ms Colman described the foregoing as “preliminary to the formal applications”.

21. Mr Shaw, the chair of the strata committee of the defendant, replied within a few days explaining that the above proposals would likely involve some expenditure by the owners corporation which needed to be approved at a general meeting, and in any event the defendant was not a “design service” and could “only respond to a formally submitted proposal”.

22. By 1 November 2019 the defendant had approved AussieBuild’s scope of work. On that day Ms Colman sent a further email to various representatives of the defendant saying that the waterproofing for all the rooftops in the building appeared to be failing, and requesting the re-waterproofing and re-tiling of both the western and eastern terrace at the defendant’s expense. The email then listed 12 additional changes that the Colmans wished the defendant “to consider … in preparation for our DA”, which included the re-tiling, but also other matters such as installation of a lift and a toilet. Mr Shaw replied the next day, indicating that further information was needed for the requested works to be considered; that the defendant would be unlikely to agree to pay for the proposed re-waterproofing and re-tiling; and that the proposals would need to be included in the agenda for the upcoming annual general meeting (AGM) of the defendant.

23. The AGM occurred on 3 December 2019. There is nothing in evidence to indicate that the Colman’s proposed additional works were discussed. One of the resolutions passed was to enact by-law 44, which is headed “Past Works Roofing”. It is central to Issue 3 and is discussed further below.

24. There were several subsequent exchanges between the Colmans and the defendant about details of the approved works to repair the expansion joint. In one, an email of 10 December 2019, Mr Colman said that they were concerned about “a sort of a domino effect, with the adjacent parts of our terrace, eg shed wall and water feature and the connecting tiles, creating the need for repair or reinstatement”. On 16 December 2019 the building manager sent the Colmans a schedule of works to be undertaken by AussieBuild, commencing on that day.

25. The representative of AussieBuild undertaking and overseeing the works was Mr Peter Lucas. He was not called to give evidence by either party. A report from him sent on 29 January 2020 to the strata manager, and forwarded to Ms Colman, was in evidence. It relevantly said:

This is a report regarding the removal of the waterproof membrane on the balcony roof top of apartment 147/102 Miller St Pyrmont.

We were engaged by the owners corporation to fix the expansion joint as it was leaking into unit 169 …

As we started to remove the tile bed, it was coming off in large blocks, crumbling and was drummy. We discovered the tile bed waterproofing was wet underneath, delaminated from the slab and mouldy with water still present.

We were advised by the waterproofer that he could not guarantee the waterproofing for the original area as the rest of the area was affected. For the waterproofing to be guaranteed the whole balcony tiling and bed needed to be removed, slab preparation to be done and the new proposed footprint needed to be installed before any waterproofing could be done. If any walls were installed after the waterproofing was done it would compromise the new waterproofing membrane and void the guarantee and certification.

The owners of apartment 147 advised us that they were planning to renovate the whole balcony. Accordingly, based on their proposed new works they instructed us to remove the rest of the tiles, bed and waterproofing and reinstate the new waterproofing at apartment 147 rooftop balcony at their expense.

The reinstatement of the waterproofing is in line with the plans of the owners of apartment 147.

26. Notably, the email indicates that lifting of some of the tiles exposed a broader waterproofing problem than had been understood. That problem had ramifications for whether the limited waterproofing work being done could be “guaranteed”. The waterproofing issue was one involving common property – that was why the defendant was covering the cost of the work being done. Thus the absence of a guarantee was an issue for the owners corporation. However, the Colmans made their own decision to instruct AussieBuild to undertake that broader work. That broader work was consistent with what they had previously raised with the defendant, but for which they had not previously put in a formal building works application, and for which they had not been given approval. The Colmans also apparently told AussieBuild that this work was to be “at their expense”. Yet in the Tribunal proceedings they sought that the defendant pay for that work, amongst other things.

27. It is not entirely clear when the Colmans gave that instruction to AussieBuild, nor when that additional work was done. The waterproofing membrane and new tiles were installed between about 21 February 2020 and 2 March 2020.

28. The Tribunal found that there was no documentary evidence that in the period from 16 December 2019 to early January 2020 the Colmans informed the defendant that they had instructed AussieBuild to perform works to common property. It found that the first time the defendant was informed of this was when it was sent the building works application of 7 January 2020, which is described below.

29. More broadly, over the course of the following two years, through to late 2021, the Colmans caused further “extensive alterations” to be made to both common and lot property on the terraces which “significantly altered the common property of the rooftop terrace” (SM [41] and [45]). That work included, for example, installing a toilet on the rooftop and connecting it to the common property sewerage system, and replacing a kitchenette. The Tribunal observed that Mr and Ms Colman “gave a very confusing account of what works were performed and when” (SM [41]).

30. The Tribunal’s decision records that the Colmans submitted the following five building works applications to the defendant:

1. On 24 December 2019 an application was submitted regarding “BBQ area re-waterproofing and tiling”. It seems that this application may also have related to installing a lift to replace the spiral staircase between levels 10 and 11 in Lot 147, as that proposed work was raised in order 7 sought in the Tribunal. The Tribunal noted that neither this application nor the subsequent one on 31 December 2019 was in evidence, and nor were they referred to in submissions to the Tribunal (SM [42]).

2. On 31 December 2019 an application relating to “gas fire installation on the terrace area” was submitted.

3. On 7 January 2020 an application was submitted which is central to the proceedings in this Court. It encompassed both the work which the Colmans had instructed AussieBuild to undertake along with proposed “new work” which was said to be “connected to our forthcoming DA”. With respect to the waterproofing and re-tiling works, the application said the following (emphasis added):

1. 1 November we were notified that the joint repair urgently needed to be rectified (leaks below and throughout the building), but we were going to be away 11 to 30 November. George said he intended to start work on 16 December. The joint repair required the removal of tiles, large concrete table on top of the plenum, the storage shed on one side which was attached to the table/plenum and the water fall and pond feature that was attached to the table/plenum on the other side.

2. Because the waterproofing on the rooftops generally is known to be failing, and because it was better to waterproof in one complete go rather than piecemeal - we took the opportunity of the joint repair and demolition of the adjoining structures to re-do the area properly. I rushed to get tiles delivered before the Christmas closures so that the works would not be held up and agreed to pay for all the waterproofing, demolishing and re-tiling for all the areas outside the actual joint repair sited. As George Efthimiadis (AussieBuild, living directly below our western rooftop terrace, who has just completed a year long renovation, including partly enclosing his own terrace) and I assessed what needed to be done, we came to realise that we needed to integrate the footprint of our intended DA floor plan so as to not have to jackhammer up new tiles and interfere with the just laid down waterproofing.

4. On 30 December 2020 an application was submitted relating to “minor works – plumbing, gas fire, toilet, sink” (this application appears to overlap with, and perhaps replace, the application dated 31 December 2019).

5. On 22 February 2021 another application was submitted relating to the installation of blinds.

31. The application of 7 January 2020 – which informed the defendant of the instruction given by the Colmans to AussieBuild – prompted correspondence between the parties. The Colmans asserted that the works were not significant, were urgent, should be approved with urgency, and that at least some of the further work was needed only because of the work undertaken at the instigation of the defendant. They also argued that the further work was effectively covered by the approval already given to the AussieBuild works. Representatives of the defendant did not accept that that was so, indicating that further approval was needed. Notably, on 20 January 2020 the strata manager wrote stating, amongst other things, that: the works formed by the Colmans had not been approved by the owners corporation; they went well beyond the scope of works approved to repair the expansion joint; the owners corporation had not been informed there were any problems or issues with the waterproofing membrane of the western terrace prior to the commencement of works engaged by the Colmans to remove and replace the tiles; the works involved alteration of common property and the Colmans needed to reinstate the waterproofing membrane that had been removed as soon as possible; and the strata committee had concerns about aspects of the works being proposed.

32. The first three building applications were considered at a strata committee meeting of the defendant on 16 March 2020 (as noted, the waterproofing and re-tiling had in fact been done by then). None were approved at that meeting. It seems that the committee took the view that any approval needed to be addressed by the owners corporation in a general meeting. There was then ongoing correspondence about holding a general meeting, which was complicated by the COVID-19 pandemic.

33. On 16 November 2020 the Colmans proposed five common property rights by-laws permitting certain works, to go before the forthcoming AGM by way of motions. The AGM was held on 14 December 2020. Three of the by-laws were approved by special resolutions, and the other two did not achieve sufficient support to be passed. One of those voted down was proposed special by-law 56, which is pertinent here. The by-law was expressed to encompass works which were “part of” the building works application of 7 January 2020 and “the whole of” the 31 December 2019 application. It was thus addressed to authorising not only the Relevant Works but also additional works, such as rebuilding the kitchenette, connecting a toilet and sink to the existing sewerage, and installing a new gas outdoor fireplace.

34. Further correspondence ensued. In February 2021 the strata committee resolved to obtain a report from a building consultant firm, Diagnostech, to review the works carried out by the owners of Lot 147 before considering certain works applications. A report was provided in May 2021. Some concerns were raised about the work done on the western terrace, such as that the method of waterproofing was unclear and the tiling did not appear to have expansion joints installed. The report recommended, amongst other things, that the Colmans provide more detailed information about what had been done and what was proposed. More correspondence ensued. In late 2021, the Colmans caused the installation of the gas fireplace, toilet, sink and part of the blinds.

The proceedings below and what work is now the focus of the dispute

35. On 16 September 2021 Mr Colman initiated proceedings in the Tribunal, seeking 12 substantive orders. A wide range of issues was raised, not limited to the Relevant Works. The orders sought raised issues connected with four of the five building works applications identified above at [30], the exception being the one of 31 December 2019 (which may have been overtaken by the one of 30 December 2020). That being said, most of the orders were focused on issues connected with the 7 January 2020 application, including but seemingly not limited to the Relevant Works on the western terrace.

36. The Tribunal heard the matter on 27-28 April 2022. Further written submissions concluded on 27 July 2022. The Tribunal dismissed the proceedings on 7 June 2023. It is not necessary to summarise the Tribunal’s lengthy reasons here as the aspects impugned in this Court are discussed below. It is relevant to note that the Senior Member said that the orders sought in, and the evidence and submissions in support of, Mr Colman’s application were set out in a “prolix, convoluted and confusing manner” (SM [4]). The Appeal Panel agreed with that characterisation of the documents at first instance (AP [43]). The Tribunal rejected the claim that all or most of the works for which orders and compensation were sought were simply caused as a “domino effect” of the works the defendant approved to repair the expansion joint. It said:

[195] The tribunal is satisfied that the applicant decided to have the waterproofing membrane replaced and all tiles to be removed and replaced as part of the applicant’s intention to renovate the area, as set out in the contemporary emails of Mr Colman and/or Ms Colman in the period between April 2019 and December 2019.

37. Mr Colman appealed to the Appeal Panel on questions of law and sought leave to appeal on issues of fact. Leave to appeal on facts was refused by the Panel and the appeal was otherwise dismissed. The leave aspect of the decision has not been challenged here. As for the claimed questions of law, various grounds were raised before the Panel, not all of which are pursued in this Court.

38. It is important to note that the issues raised in this Court – at least in the end – focused on a narrower set of facts and circumstances than had been raised before the Tribunal. In part that seems to reflect some lack of clarity and precision in the arguments put to the Tribunal. In any event, counsel appearing for Mr Colman in this Court indicated that all factual issues now relevant were “directed to the western terrace” and, as I understood it, focused only on a subset of works which was the subject of the building works application made on 7 January 2020, which I have labelled the Relevant Works. As I indicated above at [2]-[3], quite what the Relevant Works consisted of was not made clear, but the key focus in this Court seemed to be on the complete replacement of the waterproofing and tiling. Thus, for example, Mr Colman’s primary written submissions complained that the defendant “refused to decide whether or not to consent to the works”, where it was “quite clear that the works – the tiling and waterproofing – to the western terrace were urgent in late 2019 and 2020”.

Issue 3: by-law 44

39. Mr Colman submitted that both the Tribunal and the Appeal Panel construed by-law 44 as applying only to roofing works. This was said to be a misconstruction, being unduly narrow. In particular, it was said that the Tribunal and Appeal erred in applying the by-law only to roofing works, having distracted themselves with the heading to the by-law, which is “Past Roofing Works”. There were said to be two effects of the misconstruction. First, the effect of the by-law, properly construed was said to be that by-law 44 of itself constituted the defendant’s authorisation of the Relevant Works, or at least those completed up to the date of registration of the by-law in early May 2019.

40. Secondly, the by-law was said to have the effect of delegating the power to approve those works to the strata committee, which in turn could and should have approved the works. In that regard Mr Colman submitted that the strata committee of the defendant wrongly concluded that it did not have power to authorise the Relevant Works, as his counsel explained:

AFSHAR: ... So because of by-law 44, the decision was the strata committee’s to make. We applied for that decision. The strata committee refused to make a decision, pushed us down the other path.

HIS HONOUR: I see. So you’re saying the strata committee wrongly considered it couldn’t approve the decision itself.

AFSHAR: That’s right. ...

41. As noted above, by-law 44 was passed at the defendant’s AGM held on 3 December 2019. Pursuant to s 141 of the SSM Act, a change to the by-laws of a strata scheme has no effect until notified to and recorded by the Registrar-General. The notification must be made within six months after the passing of the resolution to make the by-law. By-law 44 was registered on 29 May 2020, just within the time limit.

42. The imperatives leading to it being passed are not clear. However, given the focus on roofs – as manifest in the title and the schedule – it can be inferred that a significant feature of the context was the storm damage that had occurred in December 2018 (note above at [15]). Counsel for Mr Colman suggested that the 2018 hailstorm damage was the imperative for the creation of the by-law.

43. The relevant parts of the by-law are as follows:

44. Past Works Roofing

PREAMBLE

1.1 The purpose of this by-law is to:

(a) Provide a programme for the seeking of approval from the Owners Corporation to the carrying out of Works to a Lot and to regulate the maintenance, repair and replacement of those Works retrospectively or otherwise.

(b) Delegate to the Strata Committee the power to approve Minor Works applications.

PART 2

DEFINITIONS & INTERPRETATION

2.1 Definitions

In this by-law, unless the context otherwise requires:

…

(k) Past Works means any works undertaken to a Lot or the common property as at the date of registration of this by-law, including but not limited to:

(i) works listed in Schedule 1; and

(ii) all ancillary works in relation to or in connection with the above.

…

(m) Works means Past Works.

…

PART 3

CONDITIONS

3.1 Past Works

(a) The respective Owners have exclusive use and enjoyment of those parts of the common property occupied by the Past Works and special privilege to retain the Past Works subject to the provisions of this by-law.

…

3.3 Statutory and other requirements

(a) The Owner must:

(i) comply with all requirements of the Owners Corporation, the by-laws applicable to the strata scheme and all directions, orders and requirements of all relevant statutory authorities, including the local council relating to the Works;

…

3.4 Specific Conditions – Past Works

3.4.1 To the best of their knowledge, the Owner warrants to the Owners Corporation that the Past Works:

(a) were carried out with due care and skill;

(b) were carried out in compliance with the Home Building Act 1989 or any other applicable law;

(c) comprise of materials that are good and suitable for the purposes for which those materials were used;

(d) were carried out by persons who were properly qualified to carry out such works.

3.4.2 The Owner must:

(a) not carry out any alterations or additions or do any work other than the Past Works unless applied for and approved by the Owners Corporation in accordance with the act [sic – Act];

(b) properly maintain and keep in a state of good and serviceable repair the Past Works and any part of the common property affected by the Past Works and, where necessary, replace and renew, the Past Works and those parts of the common property affected by the Past Works;

(c) ensure that the Past Works do not damage the common property and other lots in the Building;

(d) promptly rectify any damage to the common property and to any other Lot in the Building arising out of, caused by or in connection with the Past Works.

(e) indemnify and keep indemnified the Owners Corporation against any costs or losses arising out of or in connection with the Past Works; and

(f) do all things necessary to restore the common property to a reasonable condition if the Past Works are removed or altered and, in those circumstances, the warranties in clause 3.3 above would apply to such works.

…

44. Schedule 1 contains a table of 13 separate works with lot and unit number references and a description of the “nature of works” which is the same for all 13 works: “Roofing Works which covers open area of the lot”. No other works are identified. Although the label “Roofing Works” is capitalised the term is not defined in the by-law.

45. The drafting of by-law 44 is poor, verging on being entirely mysterious. The preamble refers to “Minor Works” but does not define the term. Clause 2.2.1(c) provides that subject to context, “any terms in the by-law will have the same meaning as those defined in the [SSM] Act”. Section 110 of the SSM Act addresses “minor renovations”, and it is possible that it was that notion which was meant to be invoked. That would be consistent with the fact that it is permissible that approval of minor renovations be delegated to the strata committee (s 110(6)), which approval is taken to be the decision of the owners corporation (s 36(2)). On the other hand, as Mr Colman noted, minor renovation does not extend to structural changes (see s 110(7)(b)), and the roofing works referred to in Schedule 1 may fall within that category – although that gets into factual matters not before me. It is unnecessary to resolve this issue.

46. It is significant that the term “Works” is defined to mean “Past Works”, which term is itself then defined. Counsel for Mr Colman submitted, and I accept, that coherence requires that the reference to Minor Works ought to be read together with the definition of Works. The most sensible understanding of “Minor Works” thus is that it refers to those works which are Past Works.

47. The preamble says that the purpose of the by-law is to “provide a programme for the seeking of approval from the Owners Corporation” to carry out the Works (being what is captured by the definition of Past Works), to regulate the maintenance (etc) of those Works, and to delegate to the Strata Committee the power to approve such works. One mystery is that the by-law does not go on to say anything further whatsoever about the supposed “programme for the seeking of approval”, nor about the strata committee having a role to play in approving applications for “Minor Works”. In construing the by-law some allowance should be made for the fact that it does not appear to have been drafted by a lawyer (certainly not by a capable one). It is possible that cl 1.1(b) could be read as itself effecting a s 110(6) delegation to the strata committee to give approval for “Minor Works” (construed as minor renovations), even though a lawyer would expect this to be provided for in more detail and in an operative provision not headed “Preamble”. It is not necessary to resolve this issue.

44. Whether or not by-law 44 gives some approval role to the strata committee, what it does do is give rights to relevant owners with respect to Past Works regardless of whether the committee has expressly given approval. That is the effect, in particular, of cl 3.1(a).

45. Section 110(6)(a) of the SSM Act provides that the by-laws of a strata scheme may identify additional work (ie beyond what is defined in s 106(3)) as being a minor renovation for the purposes of the section. It is possible that by-law 44 was intended also to provide that the Past Works were deemed to be minor renovations. It is again not necessary to resolve this issue.

46. As noted, Mr Colman argued that the Relevant Works were themselves approved per se by the by-law or were capable of being approved on application to the strata committee. As I understood it, both variants of the argument depend on characterising the Relevant Works as Past Works within the meaning of the definition of that term in cl 2.1(i). In my view the by-law cannot sensibly be construed as an ongoing delegation to the strata committee to determine applications for minor renovations which are not Past Works. That would be inconsistent with cl 3.4.2(a), which provides that an owner must not “carry out any alterations or additions or do any work other than the Past Works unless applied for and approved by the Owners Corporation in accordance with the act [sic – Act]”. The reference to approval in accordance with the Act suggests that the by-law, in going beyond what was provided for under the Act, only addressed Past Works. I did not understand Mr Colman to suggest to the contrary. So construction of the definition of “Past Works” is at the heart of the issue.

47. The definition is troublesome. A literal construction would take the references to “works listed in Schedule 1” and to “all ancillary works in relation to or in connection with the above” as there merely to make clear that those matters were encompassed by the term without limiting it. That construction would be that the reference to “any works undertaken to a Lot or the common property as at the date of registration of this by-law” means what it says. So construed, any works undertaken prior to the date of registration of the by-law – which could be up to six months later – would be taken to be authorised and the subject of rights such as those in cl 3.1(a).

48. Such a construction is most unlikely to have been intended. Nor is it one that would readily be adopted. As the Appeal Panel said:

[71] … Even if it were open to the owners corporation to enact a by-law which provided general approval to unspecified works which had yet to be constructed, it would require the clearest and most unambiguous wording to effect that result. By-law 44 is neither clear nor unambiguous.

53. In oral submissions counsel for Mr Colman conceded, sensibly, that the definition cannot reasonably be taken to extend to any type of work:

I don’t think I can tell your Honour that it extends to everything - every set of works. But it must extend to the work that was previously approved or … the consequences of the works previously approved. And this is against me, but if I say to your Honour it includes everything that would make this by-law meaningless. I accept that. But it would at least be what was previously approved or the consequences of that. And the consequences of what was previously approved [in this case] is what occurred on 16 December onwards, which is the requirement to remove the membrane and the tiles. If read otherwise, your Honour wouldn’t be giving any meaning to “including but not limited to”.

54. An effect of that construction – “what was previously approved or the consequences of that” – is to introduce limits of time and the requirement for approval: what had been approved as at the date (it seems) that the by-law was passed. Yet, even allowing for the poor drafting, neither concept finds any support in the text of the by-law. As to time, the definition of Past Works makes clear that it includes works undertaken after passage of the by-law, up to the time of registration. As to approval, nothing in the definition or in Schedule 1 or elsewhere refers to the defendant having previously approved the Past Works. The main point of the by-law seems to be to itself grant approval to such works.

55. There is another reading of the by-law which does give some work to do to all of the words in the definition of Past Works. The best way in context to reconcile the broad words in the chapeau of the definition with the narrow ambit of subparagraphs (i) and (ii), is to limit the scope of works to those of the same nature as the works described in the two subparagraphs, that is, works of the same nature as those listed in Schedule 1 together with works ancillary to such works. In practical terms that limits the subject matter of by-law 44 to roofing works and matters ancillary to such works for any lot, even if the works are carried out in the period between passage of the by-law and its registration.

56. That construction enables a sensible line to be drawn which limits the literal construction of the definition, being one which Mr Colman in the end did not seek to defend. That line is drawn directly from the content and context of what is in the definition. It gives some, if limited, recognition to the fact that the definition goes beyond what is listed in the two subparagraphs. It is consistent with the fact that the only actual works identified – being those in Schedule 1 – are all roofing works. And it is consistent with the heading to the by-law, “Past Roofing Works”, which supports the view that that was the subject matter being addressed. The Appeal Panel discussed, without deciding, the issue of whether or not the heading could strictly be considered part of the by-law (AP [60]-[69]). Whether or not it is considered strictly part of the by-law, it is at the least part of the context in which the terms of the by-law fall to be construed: see analogously The Queen v A2 [2019] HCA 35; (2019) 269 CLR 507 at [40] and [155]; Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2020] HCA 29; (2020) 271 CLR 495 at [17] (the footnote). That is so whether or not the by-law is regarded as legislative in character: note Owners Corporation SP6534 v Elkhouri [2024] NSWCA 279 at [118].

57. The question for the Tribunal was thus whether the Relevant Works (being works undertaken prior to registration of the by-law) were:

1. works listed in Schedule 1, that is, “Roofing Works which covers open area of the lot”;

2. ancillary works in relation to or in connection with such work; or

3. any other work of the same nature for any lot, that is, roofing works generally or works ancillary to such.

58. The Appeal Panel expressed its construction in the following terms:

[73] … Thus, we consider that by-law 44 is confined to work covered by the words “Past Works Roofing” or which has been approved by either the owners corporation or the strata committee and not merely completed prior to the date of registration of that by-law.

59. The first aspect of this construction involves focusing on the heading “Past Works Roofing”. Quite what that encompassed was not developed by the Appeal Panel, although it appears to involve a focus on “Roofing Works” (so much seems to be suggested at AP [71]). That construction does not appear to differ significantly from the construction I prefer, as just articulated. The limits of what is encompassed by the second aspect of the Appeal Panel’s construction is not clear. If the Panel was suggesting that the strata committee had a power of approval beyond “Past Works” – and it may not have been – then I disagree for the reason given above at [50].

60. Thus the construction I have adopted is not identical to that of the Appeal Panel. However, the main point that the Panel was addressing, and rejecting, was Mr Colman’s argument that “Past Works” encompassed “any work on his lot or with respect to the common property, which he carried out before the registration of the by-law on 29 May 2020 … regardless that it could not have been in the contemplation of the lot owners at the time they passed the resolution” (quoting AP [59]). Although the Appeal Panel did not express its preferred construction in the same terms as I have done, it was correct to reject Mr Colman’s broad construction. Insofar as there is a difference between the construction the Panel adopted and the one just articulated, it does not establish that the conclusion of the Panel and the Tribunal was incorrect. In other words, if there was any error it was not material.

61. It can be accepted that construction of by-law 44 raises a question of law. Given its obvious ambiguity, it can also be said that there is a possible injustice going beyond what is merely arguable. That is so even given my conclusion that no material error has been established in the construction adopted below. I will thus grant leave to appeal with respect to that issue, albeit that the appeal will be dismissed on the point.

62. Beyond that, Mr Colman argued that the Relevant Works were in fact either roofing works or works ancillary to such works. His counsel said:

the facts were that the wall of the shed needed to be removed … because it was sitting on the tiles. This is the initial works, this is the scope of works, that tiles had needed to be removed. At that point, before we even get to the expanded set of works that came about because of the failure – we say – of the membrane, what was sitting on top of the tiles also needed to be removed. And that then necessitated rebuilding what had been removed by the block work that the expert said needed to be done in this way because this is a high wind area. It is not a stretch, in my respectful submission, to say that when the substratum of that that supports the roof is removed and replaced, that is something that at least is ancillary to the works in relation to the roof.

63. The problem with this argument is that it involves a factual assessment of whether and to what extent the Relevant Works – especially the removal of all the tiles and replacement of the waterproofing on the western terrace – was so linked to roofing issues as to be characterisable as falling within the notion of Past Works. The Tribunal considered that they could not be so characterised: “[t]he generic description ‘roofing works’ does not engage with the extent and magnitude of the alterations to Lot property that are the subject of this dispute” (SM [166], see also [190]-[194]). It can hardly be said to be inherently unreasonable to conclude that replacement of tiles and waterproofing on the floor of the western terrace could not be characterised as roofing works or works ancillary thereto, even given the fact that the shed was built between the tiles and the roof.

64. I will not grant leave to appeal insofar as a separate issue was raised beyond construction of by-law 44 to the effect that the Tribunal and the Appeal Panel erred in not accepting that the Relevant Works fell within the terms of by-law 44. No clear question of law was identified in that regard: cf Targeted Property at [33]. Even if it had been, it does not involve any issue of principle or public importance; I am not persuaded that there is an injustice which is reasonably clear in the sense of going beyond what is merely arguable; nor can I see any other reason for granting leave to appeal. Ground 2 was expressed in terms of constructive failure to exercise jurisdiction. That is not how the Issue 3 was put in submissions. In any case, as the defendant pointed out, Mr Colman did not identify any submissions put to the Appeal Panel or Tribunal which it failed to consider. In substance, beyond the construction argument, the submissions seemed to be an invitation to engage in merits review: cf Ming v Director of Public Prosecutions (NSW) [2022] NSWCA 209; (2022) 109 NSWLR 604 at [15].

65. In the result, leave will be granted in part with respect to Issue 3 (ground 2) but no material error has been established warranting that the appeal be upheld.

Issue 2: the order sought under s 126

What was decided below and Mr Colman’s complaint

66. In the proceedings before the Tribunal Mr Colman had sought, amongst other things, an order under s 126(2) of the SSM Act that the Tribunal approve the works identified in the building works application of 7 January 2020 and proposed special by-law 56, which included the Relevant Works. The Tribunal declined to make the orders sought, and that decision was upheld by the Appeal Panel. As the Appeal Panel summarised the Tribunal’s reasoning (AP [9(1)]), s 126 “did not apply as there had been no relevant refusal at a general meeting of the respondent”, where such was required. The Appeal Panel did not itself address the issue (although the defendant did not dispute that it had been raised). The Panel contented itself with a generic statement that “[t]o the extent that the reasons deal with issues of statutory construction, we are unable to discern any error of law” (AP [46]). To be fair, that statement may have reflected the Panel’s difficulty in discerning exactly what argument was being made.

67. The Tribunal reasoned as follows:

[156] … if the works in question require a resolution of the owners corporation be passed at a general meeting of the owners corporation (either by general resolution if the works fall within s 110; or special resolution if the works fall within s 108 (1)), then a “refusal” usually occurs when the Motion is not passed at a general meeting, not simply by reason of correspondence between the Lot owner and the strata committee; or the Lot owner and the strata manager; or failure to respond to correspondence. It is consistent with the purpose of ss 108 and 110 of the SSM Act that all lot owners who have standing to vote should have the opportunity to consider and vote on the works that have been performed (or are proposed to be performed) at a general meeting of the owners corporation (provided they do not fall within s 109 of the SSM Act, where no approval of the owners corporation is required).

68. That articulation was qualified by two possible exceptions. The first was said to be if the owner in question is entitled to carry out the relevant work under an existing by-law (SM [157]). In truth that is not an exception; it is simply a matter of further approval not being required. The second, expressed tentatively, was said to arise if the strata scheme is small – the Senior Member gave an example of a scheme with four lots – and a majority of the owners strongly oppose the works being carried out. In that case it was said to be arguable that it was “unnecessary for the proposed works to be formally refused by the failure to pass a Motion at a general meeting” for s 126 to be engaged (SM [159]).

69. The Tribunal went on to hold that “the works have never been considered at a general meeting of the owners corporation, and in the circumstances of this matter, there is not a ‘refusal’ to consent to the works under s 126(2) of the SSM Act” (SM [176], see also [181], [187] and [200]). The statement of fact that the issue had not been put to a general meeting is wrong, as discussed further below, but the statement has not been the subject of complaint by Mr Colman.

70. Mr Colman argued that s 126 “is not enlivened only after a failed vote” at a general meeting of the defendant. He said that the statutory language relating to refusing consent was not limited to resolutions and voting. He argued that s 126 may capture what can be called constructive refusals. He said there “may be a myriad of reasons why deciding not to decide as opposed [to] deciding against granting consent may constitute unreasonable conduct”. He submitted that the phrase “‘refused its consent” in s 126(2) may “mean ‘to [decline its] consent’, ‘to [express a determination not to] consent’, ‘to [decline to give] its consent’ or ‘to [deny] its consent’”. He submitted that in this matter the defendant had constructively refused its consent by neither rejecting nor approving his applications for the Relevant Works. In response, the defendant sought to defend the reasons given by the Senior Member in arguing that there needed to be a vote at a general meeting over the Relevant Works before the defendant can be seen to have refused consent.

71. Issue 2 raises issues of legal principle, involving matters of statutory construction. It is appropriate to grant leave to appeal with respect to the ground which raises it, ground 3(2).

The statutory scheme, retrospective approval, and the need to seek approval

72. Before addressing the issue raised it is necessary to place s 126(2) in context, including by identifying what powers the owners corporation and Tribunal had to approve work that had already been completed. It will be recalled that it is not apparent when the Relevant Works commenced but it was sometime in the period 16 December 2019 to 2 March 2020 (by when they had been completed). The owners corporation was first notified of those works by way of the building works application submitted on 7 January 2020. The application was thus seeking approval for works which may have already been started. No particular decision of the strata committee has been identified as constituting a refusal of that works application (as noted above at [32], it was discussed by the strata committee at a meeting on 16 March 2020). Rather, Mr Colman submits that there was a constructive refusal by the strata committee precisely because it declined to make a decision on the application. He has not identified by precisely when the decision should have been made, but has not suggested that it should have been made prior to 2 March 2020. Thus an issue arises as to whether approval can be given by an owners corporation and by the Tribunal retrospectively for work that has already been done.

73. The relevant parts of s 126 are as follows:

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.

(2) Order consenting to owner’s work on owners corporation property The Tribunal may, on application by a lessor of a leasehold strata scheme or an owner of a lot in a strata scheme, make an order (a work approval order) approving of minor renovations or alterations or repairs already made by an owner to common property or any other property of the owners corporation directly affecting the owner’s lot if the Tribunal considers that the owners corporation unreasonably refused its consent to the minor renovations or alterations or repairs.

(3) A work approval order is taken to be the consent of the owners corporation to the renovations, alterations or repairs and may provide that it has effect from a day specified in the order that occurred before the order was made.

(4) In deciding whether to grant a work approval order or to provide for the order to have effect from a day that occurred before the date of the order, the Tribunal may take into account the conduct of the parties in the proceedings, for example, if an owner did not first seek the consent of the owners corporation before carrying out the renovations, alterations or repairs.

…

74. Subsection (2) identifies three categories of work carried out by an owner to common property or other property of the owners corporation directly affecting the owner’s lot: minor renovations, alterations and repairs. Those types of work are also referred to in subs (1). These types of work are referred to disjunctively, as was noted in Endre v The Owners – Strata Plan No. 17771 [2019] NSWCATAP 93 at [26]-[27].

74. As to the first, the term “minor renovations” is defined in inclusive, non-exhaustive terms in s 110(3) of the SSM Act. The list of works set out there includes such things as kitchen renovations or installing or replacing hard flooring. Subsection (7) sets out a list of works which are not minor renovations, including “work involving structural changes” (s 110(7)(b)), “work that changes the external appearance of a lot” (s 110(7)(c)) and “work involving waterproofing” (s 110(7)(d)). Under subs (1), minor renovations to common property connected with an owner’s lot are required to be approved by the owners corporations by an ordinary resolution at a general meeting (as to which, note Sch 1, cl 14 of the SSM Act). However, under s 110(6) the by-laws of a strata scheme may permit the corporation to delegate its functions under the section to the strata committee. Where that has been done a resolution passed at a general meeting is not required to give approval to such minor renovations.

75. Here, the Tribunal found that the works which included the Relevant Works were not “minor renovations” (SM [186]). That conclusion was not challenged in this Court. That is unsurprising given that s 110(7)(d) provides that the notion does not include “work involving waterproofing”.

76. As to the second category of work, although subss (1)-(3) of s 126 only use the word “alterations”, this reference is sensibly understood as a reference to all of the types of work referred to in s 108, including adding to the common property or erecting a new structure on common property. Section 108 relevantly provides:

108 Changes to common property

(1) Procedure for authorising changes to common property An owners corporation or an owner of a lot in a strata scheme may add to the common property, alter the common property or erect a new structure on common property for the purpose of improving or enhancing the common property.

(2) Any such action may be taken by the owners corporation or owner only if a special resolution has first been passed by the owners corporation that specifically authorises the taking of the particular action proposed. …

(3) Ongoing maintenance A special resolution under this section that authorises action to be taken in relation to the common property by an owner of a lot may specify whether the ongoing maintenance of the common property once the action has been taken is the responsibility of the owners corporation or the owner.

…

(5) A special resolution under this section that allows an owner of a lot to take action in relation to certain common property and provides that the ongoing maintenance of that common property after the action is taken is the responsibility of the owner has no effect unless—

(a) the owners corporation obtains the written consent of the owner to the making of a by-law to provide for the maintenance of the common property by the owner, and

(b) the owners corporation makes the by-law.

…

(7) Sections 143(2), 144(2) and (3) and 145 apply to a by-law made for the purposes of this section in the same way as they apply to a common property rights by-law.

78. Whereas s 110 only addresses what owners may do, s 108 applies to both owners and the owners corporation itself. They may only add to or alter the common property, or erect a new structure on it, if a special resolution authorising the taking of the particular action has been passed at a general meeting of the owners corporation (as to special resolutions, see s 5). Unlike s 110, the provision does not authorise this type of decision being delegated to the strata committee (note also s 36(3)). Section 108(5) provides that in cases where an owner is to undertake the works and it is proposed that that owner is to thereafter take responsibility for maintenance of the common property in question, then that proposal has no effect unless a by-law to that effect is made with the consent of the owner in question. New by-laws must themselves be passed by special resolution: s 141. There is no apparent reason why an owner seeking approval for work under s 108, in circumstances where the owner proposes that they take ongoing responsibility for maintenance, could not combine the two proposals into one by-law both giving approval and providing for the ongoing maintenance. In other words, there is no apparent reason why the special resolution referred to in subs (2) could not take the form of a special resolution passing a by-law.

79. The third type of work referred to in s 126 is repairs. Section 106(1) provides that the owners corporation “must properly maintain and keep in a state of good and serviceable repair the common property and any personal property vested in the owners corporation”. That provision implicitly empowers the owners corporation to undertake repairs without the need for further authorisation by, say, an ordinary or special resolution passed at a general meeting. That is unsurprising, for otherwise prompt compliance with the s 106(1) duty would be impaired. Decisions on repairs could be made, for example, by the strata committee.

80. Section 126 provides that an owner may be given consent by the Tribunal to undertake repairs to common property (either prospectively, per subs (1), or retrospectively pursuant to subs (2)). There is no provision expressly authorising an owners corporation to consent to the owner undertaking such repairs, and equally no provision addressing how such consent might be given. However, subss (1) and (2) of s 126 presuppose that the owners corporation has refused its consent to the owner undertaking such repairs prior to the owner seeking authorisation from the Tribunal. A statutory provision which presupposes the existence of a power in a government decision-maker may be taken impliedly to grant the decision-maker that power if no other source of power is apparent and if the presupposition may otherwise be rendered ineffective: Minister for Immigration and Ethnic Affairs v Mayer [1985] HCA 70; (1985) 157 CLR 290 at 302-303; Attorney-General (Cth) v Oates [1999] HCA 35; (1999) 198 CLR 162 at [16]; Independent Liquor and Gaming Authority v Whitebull HTL Pty Ltd [2023] NSWCA 224 at [74]. In that context, either s 106 implicitly empowers owners corporations to authorise owners to undertake repairs to common property, or such a power is implied by s 126(2). The simplest and preferable understanding is that it is implied by s 106 taking account of s 126(2), but it does not matter. The Act does not appear to specify, expressly or by implication, any restriction on how that authorisation can be given by an owners corporation. There is no reason why that consent could not be given by the same decision-making process (eg by decision of the strata committee) as when the owners corporation decides to undertake repairs itself.

81. It is relevant to note a fourth type of work that an owner may undertake, being “cosmetic works”, as defined and regulated by s 109. These may be carried out without the approval of the owners corporation. There was thus no reason to address them in s 126, which relates to where approval has unreasonably been withheld.

82. Returning then to the issue of whether consent can be given retrospectively to works already undertaken by an owner, the difference between subs (1) and (2) of s 126 is that subs (1) addresses where consent is sought from the Tribunal for work not yet done, whereas subs (2) involves seeking consent to “minor renovations or alterations or repairs already made by an owner to common property …”. It is thus inherent in s 126(2) that an owner may seek the Tribunal’s approval for work already undertaken and thus the Tribunal necessarily has a power to give retrospective approval. That is confirmed by subs (3) which deems an order under subs (2) to be the consent of the owners corporation, and allows the Tribunal to specify that the order has effect from an earlier day.

83. Section 111 provides that an owner of a lot “must not carry out work on the common property unless the owner is authorised to do so” under Pt 6 of the Act, under a by-law made under Pt 6 or a common property rights by-law, or by an approval given by the owners corporation by special resolution or other manner authorised by the by-laws. On its face that might be taken to suggest that work by an owner cannot be undertaken if not authorised when it was done. However, s 126 is itself within Pt 6 of the Act, and thus a Tribunal order is a relevant form of authorisation under s 111(a). Section 111 does not undermine the clear provision in s 126(2) for the Tribunal retrospectively to authorise work.

84. What of the owners corporation? There is no express power to grant approval retrospectively, but in my view the various powers an owner corporation has to give approval (being those expressed in ss 108 and 110 and implicit in s 106) can also be taken to extend to giving approval to work already done on common property. That is so because of the text and structure of s 126, understood in context. I note that such a power was also assumed by the Appeal Panel in Endre at [70]-[71].

85. Section 126(2) empowers the Tribunal to make a works approval order if it “considers that the owners corporation unreasonably refused its consent to the minor renovations or alterations or repairs”. The notion of the owners corporation having unreasonably refused its consent implies that it had the power to consent. Taking account of the principle of construction identified at [80] above, s 126 can be read together with the other powers as indicating that such other powers as the owners corporation have must extend to approval of works already undertaken. That understanding is reinforced by the fact that s 126(3) provides that a work approval order “is taken to be the consent of the owners corporation”, which itself tends to imply that the owners corporation could have given consent itself.

86. Moreover, referring to the broader context of the SSM Act, the role of the Tribunal is to resolve disputes (note s 3(b) and Pt 12). There is no apparent reason why works the subject of a works approval order is the sort of thing that could only be authorised by the Tribunal and not by the owners corporation itself. The role of the Tribunal here is to resolve a dispute if an owner and the owners corporation cannot agree, in circumstances where the owners corporation is empowered to make the decision itself in the particular ways specified in the statutory scheme. Put simply, where the Tribunal can authorise works retrospectively and where its role is to resolve disputes, the owners corporation can also be understood to have such power to authorise. That is so even though s 108(2), dealing with changes to common property, refers to such action being taken only if a special resolution “has first been passed”. The language of “first” can be understood to refer to the common situation of prospective approval being sought. That word is not sufficient to overcome the contextual imperatives indicating that this power is capable of being exercised retrospectively.

87. I raised with the parties whether s 111 could be regarded as the, or a, source of power for owners corporations to given retrospective approval to works done by an owner to common property. On reflection, there is force in the respondent’s submission that s 111 is not a source of power but a provision indicating that owners are not empowered to carry out work on common property unless authority to do so is found in one of the three sources of power identified in the section. In any event, it is not necessary to consider the issue further.

88. This understanding of the nature of the powers at play then leads to resolution of whether approval must have been sought by the owner before the Tribunal can make a works approval order under s 126(2). The Tribunal is not empowered to make a works approval order unless the relevant type of approval has first been sought from the owners corporation. The power in s 126(2) may only be exercised if the owners corporation has unreasonably refused its consent. An owners corporation cannot have unreasonably refused its consent unless consent has been sought, and sought in the proper manner under the statutory scheme (eg by proposing a special resolution in circumstances where that is required). This understanding is again supported by the point that the role of the Tribunal is to resolve disputes. It is unlikely that the Parliament intended that the Tribunal should have a role to play here – with the concomitant costs and delays – if the owner has not even sought approval from the owners corporation. The Tribunal’s order is taken to be an approval of the owners corporation under s 126(3), in effect substituting the Tribunal’s decision for what the owners corporation should have decided, having been asked.

89. This construction is not undercut by s 126(4). That subsection provides that the Tribunal may take into account the conduct of the parties, including “if an owner did not first seek the consent of the owners corporation before carrying out the renovations, alterations or repairs”. The provision refers to not seeking consent prior to undertaking the work. It does not refer to not seeking consent prior to coming to the Tribunal. It is consistent with this provision to understand s 126(2) as requiring that the owner has sought and been refused approval prior to the Tribunal being asked to determine the matter.

90. In sum, then, both owners corporations and the Tribunal may give retrospective approval to minor renovations, alterations or repairs already carried out by an owner to common property directly affecting the owner’s lot. However, the Tribunal is not authorised to grant such approval under s 126(2) unless it has first been sought by the owner from the owners corporation in the manner relevantly required for the type of work at issue.

Can there be an unreasonable refusal even if no vote has been taken?

91. The question that then arises is what type of works the Relevant Works constituted. That question affects which emanation of the defendant was authorised to grant approval and in what way, thus affecting from whom approval should have been sought. And that issue, in turn, affects the issues of whether there has been a refusal of consent and whether or not any refusal was unreasonable.

92. As noted, the Tribunal held that the western terrace works, including what I have called the Relevant Works, were not minor renovations under s 110, and that finding has not been challenged. There was no suggestion they were cosmetic works as addressed by s 109. There was a dispute below as to whether the western terrace works were repairs. Mr Colman submitted that they were. The Tribunal held that they were not (SM [190]-[194]). There is a challenge to that finding, which I address and reject below when considering Issue 1.

93. In that context, the Relevant Works were appropriately understood as alterations to common property as governed by s 108 of the SSM Act. That being so, the work was required to be authorised by a special resolution at a general meeting of the owners corporation, together with (or constituted by) a by-law insofar as Mr Colman was proposing that he was to have responsibility for the ongoing maintenance of the common property in question (as required by s 108(5)). Thus, consistently with the construction of s 126 explained above, the Tribunal was not empowered to make the order Mr Colman sought under s 126(2) unless he had sought approval from the owners corporation by way of a special resolution consistent with the requirements of s 108.

94. In my view, the necessity to have sought approval in this way does not mean that the Tribunal is not empowered to make an order unless the application has been refused by way of a vote at a general meeting. The question under s 126(2) is whether the Tribunal considers that “the owners corporation unreasonably refused its consent”. Where approval of the owners corporation in a general meeting is required, most commonly such a refusal will be manifest by a resolution not achieving the requisite support at a general meeting. But whether there has been a refusal, and whether any such refusal is unreasonable, involves assessing and characterising the facts. In particular circumstances it is possible that there will meaningfully have been a refusal of consent, and perhaps unreasonably so, even though the application has not been voted on at a general meeting. The SSM Act is intended to create a practical and fair regulatory system, governing countless buildings in the State. That system extends to facilitating the resolution of disputes. The Act should be construed in a practical way: note The Owners – Strata Plan No 2661 v Selkirk [2024] NSWSC 760 at [166]. Doing so militates against reading in hard and fast rules such as that there must always be a vote before there can be said to be a refusal of approval.

95. It is possible, for example, that the application for approval is urgent but the strata committee and the strata secretary refuse to convene a general meeting to consider the issue (as to which see s 19), or decline to do so within a reasonable time, or accidentally omit it from the agenda of the AGM (cf Sch 1 cl 4 of the SSM Act). In such circumstances, as far as the owner in question is concerned, there may have meaningfully been a refusal of approval in the sense that approval has not been given within the time reasonably expected for the taking of the decision in question. The owners corporation might say, for example, that “the owner could put it on the agenda of the AGM in nine months time”. Yet that would be of bleak comfort to a lot owner with a leaking roof desperate to have it repaired, in circumstances where the proposed works involved other alterations such that they could not be characterised as only repairs.

96. In my view, thus, Mr Colman is correct to submit that in some cases there could be a constructive refusal of consent even though no formal decision has been taken by the owners corporation in its relevant emanation. It is not necessary to determine here whether or not the deeming provision in s 232(2) of the SSM Act applies for the purposes of s 126.

97. Mr Colman asserts that the Tribunal (as upheld by the Appeal Panel) determined to the contrary and in so doing erred in law. However, I am not persuaded that the Tribunal’s decision was as definitive as he submits it was. The Tribunal stated that “if” the works in question require approval by a resolution of the owners corporation passed at a general meeting “then a ‘refusal’ usually occurs when the Motion is not passed at a general meeting”, and not simply by reason of correspondence between the Lot owner and the strata committee or the like (SM [156], emphasis added). That statement is consistent with what I have just explained, where “usually” implies “but not invariably”. That the Tribunal appeared to accept that whether or not there had been a refusal of approval might depend upon all the circumstances was also manifest by the second possible exception noted at SM [159], relating to a small strata scheme (see above at [68]). The Tribunal went on to hold that for it to be able to exercise power “in the circumstances of this matter” there had to have been a refusal by reason of a motion having been put to a general meeting and failing to pass (SM [161]). Properly understood, the Tribunal did not hold (as suggested by Mr Colman) that the statutory scheme invariably required that there had been a refusal by way of vote at a general meeting, but instead held that in this case there had been no refusal because it had not been put to the vote.

The limited nature of Mr Colman’s challenge

98. As I have noted above (at [69]), the Tribunal said that the works had never been considered at a general meeting of the defendant. That was incorrect but it should be understood as the Tribunal stating its understanding of the effective position in terms of how the issues had been presented to it by Mr Colman. The Tribunal well understood the true factual position. It explained how Mr Colman sought passage of five by-laws at the AGM on 14 December 2020, with three being passed and two rejected, where one of those rejected (special by-law 56) would have given approval for works including the Relevant Works (SM [79]-[82]). The Tribunal later indicated that there had been no application made under s 149 of the SSM Act in the proceedings with respect to those rejected by-laws. It said that had such a challenge been brought then “a large component of the case would have been entirely different” (SM [146]-[147]). Section 149 is a provision relating to common property rights by-laws, being by-laws conferring on particular owners a right of exclusive use and enjoyment of, or special privileges relating to, common property (see s 142). Section 149(1), notably, empowers the Tribunal to make an order prescribing a change to a by-law if it finds that the owners corporation has unreasonably refused to make a common property rights by-law.

98. A significant oddity of this litigation is the fact that Mr Colman did not seek to make an argument that the rejection by the owners corporation at the 2020 AGM of his special resolution seeking the making of special by-law 56 constituted an unreasonable refusal of consent to, at least, the Relevant Works. This position was reiterated in submissions in this Court, as manifest in this exchange:

AFSHAR: Your Honour is not concerned with the motion not passing at the AGM. Your Honour is concerned with an application for similar works that was made earlier in 2020 that was not determined at all by the committee. The reason for that is there was no claim under section 149 of the Strata Schemes Management Act [to] impugn the reasonableness of the rejection of the motion that sought to have by-law 56 passed.

I just wanted to tell your Honour what happened, in terms of the chronology of the matter, because we say that the application that was made to the strata committee, its consent was unreasonably refused, that’s what was said below, and that it was either approved by by-law 44 or needed to be approved under by-law 44. It wasn’t done. There was no case brought under section 149 in relation to the rejection of the motion.

HIS HONOUR: You said a second ago “consent was unreasonably refused”; but it was not, in fact, formally, at least, refused?

AFSHAR: No. As I’ve described in my submissions, the committee simply didn’t deal with it.

HIS HONOUR: It might be said the committee dealt with it by saying this is appropriately dealt with by a special by-law, so make an application for a special by-law?

AFSHAR: That, in my respectful submission, is one of the reasons we say that the actions of the committee was unreasonable. It ought to have dealt with it because it was empowered to do it under by-law 44 and it just simply refused to do it.

100. It is not apparent why Mr Colman took this position. It is possible that he considered that the failure of the owners corporation to pass special by-law 56 could only be challenged under s 149 of the SSM Act. If that was his view it is difficult to see the basis for it. As discussed above (at [78]), there is nothing preventing an owner seeking approval for alterations to common property by way of a special resolution seeking the passage of a by-law. Such a proposed by-law might also address other issues, such as whether the owner would have responsibility for ongoing maintenance of the common property (note s 108(5)). If such a special resolution failed to pass then, to the extent that the by-law sought the s 108 approval, it would be a refusal of approval for the purposes of s 126. That is so even if it might also be possible to challenge that refusal pursuant to s 149 if the by-law was a common property rights by-law (a term which is not coterminous with the type of by-law required by s 108(5) – see ss 108(7) and 142). Section 149 is not expressed in terms which preclude a s 126 challenge to such a by-law to the extent it involves a refusal of consent to alterations. In Endre the Appeal Panel upheld a s 126 challenge relating to a failure to pass a special by-law where the proposed by-law had also addressed other issues (see at [31]-[33]).

101. In any event, whatever the reason for Mr Colman’s position, it is clear that no challenge was made with respect to the defendant’s actual refusal of approval for the Relevant Works, as decided at the 2020 AGM. Rather, he was challenging only the failure of the strata committee to approve the works earlier in 2020, as raised by the building works application of 7 January 2020. And his basis for saying that the strata committee was empowered to give approval was, only, by-law 44.

Mr Colman fails on Issue 2

102. In this context Mr Colman fails on Issue 2 for three independent reasons. First, as stated above at [97], I am not persuaded that the Tribunal adopted the erroneous construction imputed to it, namely that the statutory scheme invariably required that there had been a refusal by way of vote at a general meeting. That being so, Mr Colman fails insofar as Issue 2 raises a question of law.

103. Second, by-law 44 does not encompass the Relevant Works, as I have found above when addressing Issue 3. Mr Colman’s whole argument on this front is founded on a false premise, namely that by-law 44 authorised the strata committee to decide the issue itself. This Court’s power to make orders in such appeals is discretionary: CAT Act, s 83(3). Relief will not in general be granted unless any error on a question of law is established to be material, in the sense that there is a realistic possibility that the error could have made a difference to the result: see analogously Fisher v Nonconformist Pty Ltd [2024] NSWCA 32; (2024) 114 NSWLR 1 at [50]. Here, even if the Tribunal had erred in its construction of s 126 as alleged by Mr Colman, the error would not be material as his argument was bound to fail in any event.

104. Third, even if I am wrong in my conclusion on Issue 3, there is another reason why by-law 44 could not authorise the strata committee to approve the Relevant Works. Under s 110(6) the by-laws of a strata scheme may delegate to a strata committee the ability to approve minor renovations for the purposes of that section. As noted, the Tribunal held that works including the Relevant Works were not minor renovations, and that conclusion has not been challenged. The relevant section here was s 108, which requires passage of a special resolution at a general meeting (see above at [93]). The provision does not authorise delegation of that decision to the strata committee. Thus even if by-law 44 had purported to allow the strata committee to approve the Relevant Works it would have been ineffective. Again, thus, any error by the Tribunal would not have been material.

Issue 1: the claim under s 106(5)

105. Issue 1 is whether the Tribunal erred in rejecting Mr Colman’s claim for damages under s 106(5) of the SSM Act to cover the costs of carrying out the Relevant Works (raised by grounds 1 and 4 of his summons). In his summons Mr Colman did not identify with precision the part of the decisions below which he alleged to be in error, nor what questions of law were said to arise. Some light was thrown on the issue in written and oral submissions. The relevant parts of the decision below under challenge were identified to be the Tribunal’s reasons at [190]-[197] as affirmed by the Appeal Panel at [46]-[47].

106. As I understood it, in the end Mr Colman’s complaint was in substance two-pronged. First, his complaint was framed in terms of constructive failure to exercise jurisdiction in determining whether the defendant had breached its obligations under s 106 in relation to the waterproofing on the western terrace by failing to consider a claimed admission noted at SM [15], by failing to deal with certain “unchallenged evidence”, and in circumstances where there was no evidence or submission to the contrary. This argument was also expressed in terms of unreasonableness, but it is not apparent how that argument adds anything.

107. Whether there has been a constructive failure to exercise jurisdiction does raise a question of law. Mr Colman’s complaint focussed predominantly on the primary decision of the Senior Member, rather than the Appeal Panel’s decision which is the subject of these proceedings: cf Targeted Property at [33(10)]. That being said, if an appeal body wrongly affirms a legally erroneous decision by the primary decision-maker then that will generally manifest legal error on the part of the appeal body: Fisher at [48]. It is appropriate in the circumstances that the argument be addressed, thus leave will be granted on that limb. I will not grant leave to appeal on the unreasonableness argument, which was undeveloped and seemingly superfluous.

108. Second, he alleged that the rejection of his claim for damages under s 106(5) was based on the Tribunal’s view that an owner who carries out repair and maintenance work on common property is not entitled to damages for breach of s 106(1) unless they have raised the requirement for the work with the owners corporation prior to completing the work, and that this view is erroneous. This aspect of Issue 1 raises issues of statutory construction, involving matters of law and principle. Leave to appeal should also be granted for that part of the complaint. To the extent grounds 1 and 4 in the summons raised other points I understood them not to be pressed, and thus leave will not be granted in relation to any such points.

The alleged constructive failure to exercise jurisdiction

109. Constructive failure to exercise jurisdiction arises where the decision-maker purports to have exercised their jurisdiction but in substance has not undertaken or completed the task of doing so because of failure to address some essential matter: Ming at [12]. The type of constructive failure seemingly invoked here falls under the category discussed in Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; (2003) 77 ALJR 1088 at [24], being one of failure “to respond to a substantial, clearly articulated argument relying upon established facts”. A risk with this type of argument is that “claims about failure to address matters can shade into claims about arguments having been resolved incorrectly because misunderstood, or not really grappled with, which tends towards merits or appellate review”: Ming at [15].

110. The key impugned parts of the Tribunal’s reasoning were as follows:

[190] The Tribunal does not accept that the applicant’s works were a necessary repair of common property that the Lot owner was authorised to perform, nor that there is a causal nexus between all of the works performed to the Western Terrance by the Lot owner, and any alleged failure of the owners corporation to comply with its duty under s 106 (1) of the SSM Act.

[191] Usually, a Lot owner cannot perform repairs to common property without the prior knowledge and consent of the owners corporation (The Owners-Strata Plan 32735 v Lesley-Swan [2012] NSWSC 383 at [191] and [197]-[197]). That principle may be departed from in limited circumstances, such as where a strata committee has approved the original repair works and then subsequently seeks an order that the Lot owner restore the common property because no special resolution or common property rights by-law has been passed (The Owners-Strata Plan No 63607 v Kinsella [2022] NSWCATAP 184); or in unusual circumstances such as where limited and urgent repairs are required and the Lot owner cannot reasonably seek prior consent of the owners corporation to the performance of the works.

[192] As discussed previously, in this matter the applicant asserts that due to Mr Lucas stating that when some terrace floor tiles were removed he noticed that there was moisture between the tiles and the membrane, and from this (and advice purportedly given by the builder) the applicant decided it was appropriate to replace the entire waterproofing membrane and the tiles of the Western Terrance.

[193] However, even if this version of [sic] is accepted, neither the builder nor the applicant immediately notified the owners corporation and sought approval for the purported repairs to the waterproofing membrane.

[194] Further, the very limited evidence does not establish that the owners corporation was in breach of its duty under s 106 (1) of the SSM Act in respect of the condition of the waterproofing membrane of the Western Terrace balcony as of 16 December 2019 in any event. There was no evidence of any water ingress from the balcony (as distinct from the expansion joint) that affected any other Lot. AussieBuild Pty Ltd or Mr Midas had never raised with the owners corporation that the membrane may need to be replaced in the course of repairing the expansion joint. The evidence does not establish that replacement of the entire waterproofing membrane was necessary for the owners corporation to comply with its duty under s 106 (1) of the SSM Act as a result of the works to repair the expansion joint, or otherwise.

111. Mr Colman’s first criticism on this limb was to assert that there was a contradiction between the statement at [194] that there “was no evidence of any water ingress from the balcony (as distinct from the expansion joint) that affected any other Lot”, and what the Tribunal had said earlier in its reasons:

[15] It appears that, for reasons that were not clearly set out in the evidence, the owners corporation was satisfied that the water leak was caused by failure of waterproofing proximate to an expansion joint in the floor of the open courtyard of Lot 147.

112. It was said that the Tribunal constructively failed to exercise jurisdiction in not resolving this contradiction. Mr Colman submitted that a waterproofing failure “proximate to an expansion joint” must be one that concerns the waterproofing membrane of the balcony. If that was so then replacement of the membrane would have been necessary, and the failure to do so (or approving Mr Colman to do so) would constitute a failure on the part of the defendant to carry out its statutory duty under s 106.

113. As I understood it, the defendant ultimately did not dispute that some version of Mr Colman’s argument had been raised before the Appeal Panel, such that it was open to say that it erred in law in failing to find such an error. The Appeal Panel did say – albeit more directed to an inadequate reasons ground – that it “is clear the reasons challenged in this appeal follow that sequence of considering the evidence, then the relevant law, before indicating conclusions and providing reasons for those conclusions” (AP [42]; see also [47]).

114. Mr Colman’s argument to this Court is not persuasive. The natural reading of SM [15] is that it was referring to a failure of waterproofing connected to issues with the expansion joint. As Mr Colman’s counsel conceded, his argument involved reading the word “membrane” into the Tribunal’s reasons at [15]. It cannot reasonably be said that the Tribunal must have meant at [15] that the membrane had failed as a whole. If that is what was meant then the Tribunal would be expected to have said so in terms. That is especially so given that in the next paragraph the Tribunal went on to quote the builder’s scope of works which referred to replacing the expansion joint and said nothing about replacing the membrane (the relevant portions are quoted above at [17]). And at SM [39] the Tribunal quoted the letter from Mr Lucas of AussieBuild (see above at [25]), which said “[w]e were engaged by the owners corporation to fix the expansion joint as it was leaking into unit 169”. On this understanding of [15] there is no contradiction of [194]. It is unnecessary to decide if any such contradiction would have sufficed to establish a constructive failure to exercise jurisdiction.

115. The second criticism was that, contrary to SM [194], the letter from Mr Lucas of AussieBuild did establish that the membrane needed to be replaced. Mr Colman submitted that the Tribunal had not “dealt with the unchallenged evidence from the builder”. Yet the Tribunal had quoted Mr Lucas’ letter at length at [39], having noted that neither party provided a witness statement from Mr Lucas. Mr Lucas’ letter said that the waterproofer had said that in light of the broader problem revealed “he could not guarantee the waterproofing for the original area”. As I have noted above at [26], whether or not there was such a guarantee was a matter for the defendant. In any case, the Tribunal referred back to what Mr Lucas had said, and Mr Colman’s claim that it was appropriate to replace the whole membrane, at [192]. At [193] the Tribunal said that “even if this version of [sic] is accepted …”, indicating scepticism about the evidence.

116. Mr Colman’s complaint here is really a challenge to the Tribunal’s fact finding dressed up as one of failure to exercise jurisdiction. The Tribunal did consider the evidence and arguments raised by Mr Colman. It just was not persuaded by them. That does not establish legal error in the manner alleged.

117. In written submissions filed (with leave) after the hearing, Mr Colman raised a new argument that “the position of the owners corporation before the Tribunal was consistently that the waterproofing had failed and the issue was not new”. This argument was supported by a quotation from the defendant’s written submissions before the Tribunal which offered some support to the claim. However, three paragraphs further on in those submissions the defendant referred to Mr Colman’s claim that the waterproofing under the majority of the western terrace tiles had failed, and said “[t]here is no evidence of that – only that an area of the terrace was ‘affected’”. The submission then added that the “opportunity to properly investigate the extent and degree to which the waterproofing was affected was destroyed by the Colmans’ unilateral conduct”. In this context it cannot be said that the claimed failure of the membrane was not in issue before the Tribunal.

118. The alleged constructive failure to exercise jurisdiction is not made out.

119. In that context Mr Colman fails on Issue 1 and it is not strictly necessary to address the issue of statutory construction as to whether a claim can be made under s 106(5) for repair works to common property which have not been approved. That is so because the constructive failure argument having been rejected, the Tribunal’s conclusion at [197] that it “is not satisfied the applicant has established any breach by the owners corporation of its duty under s 106(1)” stands. Without any breach of that duty then there could be no claim for damages under s 106(5). Lest I am wrong in my conclusion about constructive failure, however, I will go on to address the question raised.

Whether consent of the owner’s corporation is needed to be able to claim for repairs

120. Section 106 relevantly provides as follows:

106 Duty of owners corporation to maintain and repair property

(1) An owners corporation for a strata scheme must properly maintain and keep in a state of good and serviceable repair the common property and any personal property vested in the owners corporation.

(2) An owners corporation must renew or replace any fixtures or fittings comprised in the common property and any personal property vested in the owners corporation.

…

(5) An owner of a lot in a strata scheme may recover from the owners corporation, as damages for breach of statutory duty, any reasonably foreseeable loss suffered by the owner as a result of a contravention of this section by the owners corporation.

121. As the defendant accepted, it seems implicit in SM [191] and [193]-[194] that the Tribunal reasoned that an owner cannot claim damages under s 106(5) for repairs to common property unless the work has been notified to and approved by the owners corporation, even if in retrospect. The Appeal Panel summarily dismissed arguments that the Tribunal misunderstood or misapplied ss 106 or 108 (AP [47]).

122. In my view the Tribunal’s conclusion was correct in relation to the need for approval, as I shall shortly explain. Insofar as the Tribunal also suggested that damages cannot be claimed unless notice is given in advance of the works, that would be in error (and assuming here that damages or compensation for such works can be claimed at all under s 106(5) or some other provision of the Act). I have held above (at [84]-[85]) that the powers given to the owners corporation to approve works to common property may be exercised retrospectively, after the work has been done. The Tribunal also has power to approve such works in retrospect (see above at [82]). That being so, there is no imperative arising from the statutory scheme to say that damages or compensation could not be claimed for work which was undertaken without notice or approval being given in advance.

123. An issue was raised as to whether a damages claim could be made under s 106(5) for work on common property undertaken by an owner which the owners corporation should itself have undertaken. Brereton J had held with respect to a predecessor of s 106 that, by analogy to assessing damages for the tort of nuisance, an owner could not claim under that provision for the cost of abating work which threatened the interests of the owner: Seiwa Pty Ltd v Owners Strata Plan 35042 [2006] NSWSC 1157; (2006) 12 BPR 23,673 at [27]-[28], considering s 62 of the Strata Schemes Management Act 1996 (NSW) (1996 Act). His Honour held that the owner could recover damages for loss of value to, and rectification of, the owner’s property. Hall J echoed that view in Owners – Strata Plan 32735 v Lesley-Swan [2012] NSWSC 383; (2012) 17 BPR 32,311 at [191]-[198]. Subsequently the Court of Appeal held that s 62 of the 1996 Act did not create a right to recover damages for a breach of the obligation to maintain common property: Owners Strata Plan 50276 v Thoo [2013] NSWCA 270; (2013) 17 BPR 33,789. That decision was then reversed when the SSM Act was passed in 2015 by the inclusion of s 106(5), as the Court of Appeal explained in Vickery v The Owners – Strata Plan No 80412 [2020] NSWCA 284; (2020) 103 NSWLR 352.

121. Mitchelmore J, sitting at first instance, subsequently said that there “is no suggestion in the text of s 106(5) that the enactment of a statutory right to damages which the Supreme Court had previously considered to be available was intended to depart from the basis on which damages had previously been assessed”: Smith v Owners – Strata Plan No 3004 [2022] NSWSC 1599 at [34]. Leeming JA, also sitting at first instance, agreed with her Honour: Selkirk at [140].

122. The defendant submitted in this case, based upon Seiwa and Lesley-Swan, that it was not open to award damages under s 106(5) for work done analogous to abating a nuisance. Mr Colman disagreed. The limited view taken by Brereton J and echoed by Hall J was Supreme Court authority, and the issue has not been considered by the Court of Appeal or High Court. Brereton J’s analysis was based on an analogy to the common law of nuisance applying between two neighbouring landholders. That context is distinct to the statutory construct of strata title where a statutory corporation holds common property for the benefit of the lot owners (note s 9(2) of the SSM Act), subject to a detailed statutory scheme which empowers the Tribunal to override decisions of owners corporations, and where common property frequently encases the property of the lot owners both vertically and horizontally. Moreover, insofar as the conclusion previously reached was based upon a concern about lot owners exercising self-help remedies, that concern is ameliorated by the need under the SSM Act for approval by the owners corporation or the Tribunal (as I am about to explain).

123. For my part, it is far from clear that Brereton J’s view with respect to the provision in the 1996 Act should be applied to s 106(5) of the SSM Act, let alone applied as a restriction to any compensation orders which might be made under ss 229 or 232 (as to which see further below). An acceptance of the point made by Justices Mitchelmore and Leeming as to the relevance of the prior case law does not necessarily mean that all aspects of that case law remains applicable under the current Act. Both of their Honours thus carefully took account of the statutory context of the SSM Act when considering the issues raised before them. However, it is not necessary for me to determine whether Brereton J’s view about abatement should be applied in relation to s 106(5).

124. Section 106(5) gives the owner an ability to claim damages for “any reasonably foreseeable loss suffered by the owner as a result of a contravention of this section by the owners corporation”. The provision, unsurprisingly, imposes a causation requirement. As Leeming JA pointed out in Selkirk at [138], the High Court said the following about statutory invocations of causation in Comcare v Martin [2016] HCA 43; (2016) 258 CLR 467 at [42]:

Causation in a legal context is always purposive. The application of a causal term in a statutory provision is always to be determined by reference to the statutory text construed and applied in its statutory context in a manner which best effects its statutory purpose.

128. Leeming JA then said in Selkirk at [139] that regard was thus to be had “to the purposes of the statute to determine what (if any) of the limiting doctrines developed by the common law, including remoteness and mitigation, are imported into the causal connection required by ‘as a result of’ in s 106(5)”. Similarly, the measure of damages provided by s 106(5) must be understood as a coherent part of the broader statutory scheme in which it exists: see analogously Young v Chief Executive Officer (Housing) [2023] HCA 31; (2023) 278 CLR 208 at [20], [24]-[29] and [59]. As I have explained, the SSM Act authorises owners corporations and, failing that, the Tribunal to grant approval to works on common property undertaken by lot owners. That approval can be given retrospectively.

129. In Lesley-Swan Hall J said the following of the predecessor legislation:

[197] … The statutory provisions that establish a strata scheme … are directed towards maintaining an order amongst strata lot owners and with the owners corporation. They neither authorise nor permit a lot owner to determine the nature and extent of construction to be undertaken on common property. Nor do they permit an individual owner to engage a contractor to perform work on common property without the consent or approval of the owners corporation.

130. Under the SSM Act, a lot owner can now perform some cosmetic works affecting common property without authorisation (s 109). Otherwise, his Honour’s words remain apposite to the SSM Act. The need for approval of works, even if given retrospectively, is an important part of the way in which the Act balances the rights and interests of lot owners and owners corporations. That being so, to construe s 106(5) (or ss 229 or 232) as permitting recovery of the cost of works that have not been approved would undermine that statutory imperative. To construe the provision in that way would not be coherent with the Act.

131. Counsel for Mr Colman made the following submission:

there is no room for a blanket disentitlement of an owner who does certain works to common property and comes back to the owners’ corporation and says “This is the work that you needed to have done; you didn’t do it; I did it; I ought to be paid damages or compensated for the costs of those works.” And then one goes back to the statute, and if the damage is reasonably foreseeable and as a result of the breach and that’s a matter of fact, then the claimant ought to be, in the Tribunal’s discretion, granted an award of damages.

132. There is force in the argument. It does not require, however, that s 106(5) be construed so as to support a claim for damages which has not been through the statutory process for obtaining approval. As suggested by counsel, cases can be postulated where fairness would support a lot owner being able to recover costs of work done to repair common property where the owners corporation had failed to comply with its s 106(1) duty. The owners corporation may have been incompetent, or recalcitrant, or motivated by the self-interest or animus of other lot owners, in declining to undertake necessary work or reimburse the claimant owner for having done it.

133. The defendant submitted that the appropriate, and only, remedy is for the owner to seek an order from the Tribunal compelling the owners corporation to do the work. In the sorts of circumstances I have described that may be a quite inadequate remedy, potentially productive of further disputation. Whether or not damages for such work could be awarded under s 106(5) in light of Brereton J’s decision in Seiwa, it appears reasonably arguable that the Tribunal might be able to make a remedial compensatory order under s 232 (noting Vickery, especially at [28], [153]-[156] and [165]-[167]), and/or that in some cases the Tribunal might make such an order under s 229 (note The Owners – Strata Plan No 63607 v Kinsella [2022] NSWCATAP 184 at [61]). Section 229 authorises the Tribunal to make an order “that provides for any ancillary or consequential matter the Tribunal thinks appropriate”. In cases where the Tribunal made other orders directed to works on common property, such as an order under s 126, then a claim for compensation for those works might be regarded as ancillary or consequential to such an order. However, again, it is not necessary to resolve these questions.

134. It suffices here to note the following. Insofar as damages or compensation can be claimed under s 106(5) or other provisions in the Act for work undertaken by a lot owner to repair common property, then they cannot be claimed for works which have not been approved in the required manner (either prospectively or retrospectively) by the owners corporation or the Tribunal. No such approval has been granted to Mr Colman to undertake the Relevant Works. Given that fact, he cannot claim the cost of undertaking those works pursuant to s 106(5). The Tribunal did not err in law in so holding. For this further reason therefore – beyond my rejection of his argument of constructive failure to exercise jurisdiction – Mr Colman fails on Issue 1.

Orders

135. Mr Colman has not succeeded on any of the issues he has raised. There is no reason why costs should not follow the event. The Court’s orders are as follows:

1. Grant leave to appeal with respect to:

1. grounds 1 and 4 to the extent they allege a constructive failure to exercise jurisdiction and a misconstruction of s 106(5);

2. ground 2 to the extent it raises construction of by-law 44; and

3. ground 3(2).

2. To the extent that leave to appeal is granted the appeal is dismissed.

3. The plaintiff’s summons is otherwise dismissed.

4. Plaintiff to pay the defendant’s costs.

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Decision last updated: 20 February 2025