Community Association DP 270158 v O'Neill

[2018] NSWCATCD 26

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Community Association DP 270158 v O’Neill [2018] NSWCATCD 26

Hearing dates:

27 February 2018

Date of orders:

12 July 2018

Decision date:

12 July 2018

Jurisdiction:

Consumer and Commercial Division

Before:

J A Ringrose, General Member

Decision:

(1) The respondent is to cause the undertaking of all such works as may be necessary to ensure compliance with the Australian Building Code, the relevant Australian Codes for the swimming pool and fencing works surrounding it constructed on Lot 8 of the Community Association DP 270158 and is to produce evidence of compliance within 60 days of the date of these orders.

 

(2) The enclosure of the decks, including roofing above them in the centre of the house on Lot 8 in DP270158 is to be removed and that area is to be returned to the condition it was prior to the commencement of those works. Such works are to be completed within 60 days from the date of these orders.

 

(3) The respondent is to relocate the water tank at the rear of the house which is currently located outside the designated building area so that the water tank complies with the Community Management Statement for the Community Association of DP 270158. The tank is to be moved to an area located within the designated building area within 30 days of the date of these orders.

  

(4) The respondent is to pay the applicant’s cost as agreed or assessed on a party/party basis within 14 days after an agreement or an assessment under Pt 4.3 Div 7 of the Legal Profession Uniform Law Application Act 2014.

 (5) The Appeal SCS 17/33366 is dismissed and each party is to pay its own costs

Catchwords:

New Constructions and building modifications compliant with Community Management Statement – Whether the By-laws contained in the Community Management Statement are binding upon the parties Costs in respect of a community land management adjudication which has been referred to the Tribunal.

Legislation Cited:

Civil and Administrative Tribunal Act 2013
Community Land Management Act 1989

Cases Cited:

Colgate Palmolive Co. v Cussons Pty Ltd [1993] 46 FCR 225
Cripps v G & M Mawson [2006] NSWCA 94
Owners Corporation SP 68751 v Community Association DP 270281 [2015] NSWCATCD 99
Owners Corporation SP 80412 v Vickery [2018] NSWCATAP 29
Sakkara Landings Trust v The Residents Committee of the Landings Retirement Village [2016] NSWCATAP 52
Sewell v Zelden (No. 2) [2010] NSWSC 1181

Category:

Principal judgment

Parties:

Community Association DP 270158 – Applicant
Patricia May O’Neill – Respondent

Representation:

Mr Bambagiotti of Counsel for the applicant
Mr Woods for the respondent
Grace Lawyers for the applicant
de Mestre & Company Solicitors for the respondents

File Number(s):

SCS 17/29022 (external appeal) SCS 17/33366 (adjudication referred to Tribunal)

Publication restriction:

Nil

reasons for DECISION

Background

1. The applicant is Community Association DP 270158 being a sub-division known as Kelman Estate. The estate is located at X XXX XXX Road Cessnock, being an area previously situated in the District of Pokolbin but now recently rezoned and located in the district of Cessnock.

2. The Community Association is located in the winery district of Cessnock and pursuant to By-law 24 of the Community Management Statement for the Community Association it carries out business of winery and olive production but predominantly as a winery.

3. The Community Management Statement provides for a process whereby development and building works are reviewed by the Executive Committee of the Community Association with a particular concern about the conservation of the winery.

4. The respondent is the registered owner of Lot 8 in DP 270158. She was a tenant of the land for some time and she purchased Lot 8 from the trustee of the estate of the late Thomas Anderson on 23 December 2015.

5. The community plan was registered on 27 April 1998 and the management statement was initially published on the same date. Amendments were made on 29 August 2013.

6. At the time when the property was purchased by the applicant the house was non-compliant in that concrete slabs were protruding beyond the carport area and the decking area was partly covered.

7. On 2 December 2016 the applicant filed applications seeking interim and substantive relief against the respondent, including orders that the respondent be restrained from (a) undertaking or permitting the undertaking of any building works or building modifications and that (b) the respondent be restrained from undertaking or permitting the undertaking of construction work on a swimming pool within Lot 8 of the Community Association DP 270158 (see SCS 16/53040 and SCS 16/53044).

8. An interim order was made on 7 December 2016 and a request for a stay of the interim order was refused on 21 December 2016. The substantive orders were made by Adjudicator De Jersey pursuant to s.71 of the Community Land Management Act on 9 June 2017.

Applications

9. By an application filed on 20 June 2017 (SCS 17/29022) the Community Association brought an Appeal against the orders made by Adjudicator De Jersey and on 8 August 2017 orders were made for evidence and submissions to be filed by the parties. The time for compliance with those orders was extended to allow the material in relation to the Appeal to be filed on or before 16 February 2018. The Appeal was listed for hearing before the Tribunal on 27 February 2018 and orders were made for filing of written submissions by 10 April 2018.

10. On 25 July 2017 a further application (SCS 17/33366) was filed seeking orders that the respondent remove works carried out on Lot 18 and return the Lot to its original condition prior to the commencement of the works in respect of the following items:-

1. The pool and associated works.

2. Roofing and enclosure of the decks in the centre/rear of the house.

3. The platform with playground equipment in the rear yard with an adjoining enclosure for dogs.

4. The lean-to approximately 7 metres long with a polycarbonate roof on the southern side of the property adjacent to the carport.

11. Orders were also sought requiring the respondent to remove the water tank at the rear of the house into an area located within the designated building area. A further order was sought that the respondent carry out works to the carport and the air conditioning unit on the northern side of the house to ensure that they complied with the approvals of the committee.

12. Directions were made for the filing of evidence in relation to the further substantive application and a request was thereafter made on 23 November 2017 for the adjudication to be dealt with by the Tribunal pursuant to s.71 of the Community Land Management Act 1989 and that the further adjudication and the Appeal be dealt with together. Orders were made for both matters to be heard together and that the evidence in one matter would be evidence in the other.

Applicant’s Submissions

13. Written submissions in respect of the further adjudication matter and the external appeal were provided by Mr Colin Grace, solicitor of Grace Lawyers. In his submissions dated 20 July 2017 he sought an order pursuant to s. 71B of the Community Lands Management Act 1989 that the adjudication be referred to the Tribunal and be heard in conjunction with the Appeal from the earlier adjudication (SCS 17/29022). He pointed out that both matters related to the same subject matter and that the Community Association was seeking the same orders in both matters. He argued that if matters were determined separately there was a potential for different decisions to be made and a possible duplication of costs and public resources.

14. In accordance with these requests the adjudication was referred to the Tribunal and both matters have been dealt with together.

15. Mr Grace noted that the Community Association was located in a winery district of Cessnock and pursuant to By-law 24 of the Community Management Statement, the Community Association carried out the business of winery and olive production with a result that development or building works were restricted so as to not have any effect on the winery which was in proximity to Lot 8 owned by the respondent, Patricia O’Neill.

16. By-law 40 of the Community Management Statement required the Community Association to maintain all vineyard areas including irrigation systems in good order and condition and to ensure that the soil was retained in a suitable state to grow grapes as planted.

17. By-laws 1, 2 and 3 of the Community Management Statement relate respectively to architectural and landscape design guidelines, new construction and building modifications and new constructions generally.

18. Pt 7 of the Community Management Statement relating to architectural and landscape design requirements addressed matters such as water storage tanks and swimming pools.

19. It was submitted on behalf of the applicant that the following illegal works had been carried out on Lot 8 without the approval of the Executive Committee of the Community Scheme as required by the Community Management Statement.

1. The construction of a pool and associated works.

2. Extended roofing to the existing building on Lot 8, namely

1. Roofing and enclosures of the decks in the centre/rear of the house.

2. A concrete slab approximately 7 metres long on the southern side of the property adjacent to the carport/garage and it was noted that the concrete slab previously had a polycarbonate roof which was described as the “lean-to”.

3. A platform with playground equipment in the rear yard with an adjoining enclosure for dogs.

4. A water tank at the rear of the house outside the designated building area.

5. Other works which had not been carried out in accordance with the previous approval given by the Executive Committee were:-

1. A carport not constructed in accordance given by the Executive Committee and,

2. An air conditioning unit situated on the outside of the northern wall of the house which was not in accordance with the approval of the Executive Committee.

20. A previous application for an adjudication in respect of these matters was filed on 5 December 2016 and on 7 December 2016 interim orders were made requiring the respondent her contractors and agents to be restrained from undertaking any building works or building modification on Lot 8, or permitting such works to be done.

21. In accordance with directions made on 5 December 2016 the applicant association filed supplementary submissions in which it sought:-

1. Removal of the following works on Lot 8 within 30 days:-

1. The pool and associated works.

2. Roofing and enclosures of the decks in the centre/rear of the house.

3. The platform with equipment in the rear yard with an adjoining enclosure for dogs.

4. The concrete slab approximately 7 metres long on the southern side of the property adjacent to the carport/garage.

2. Variation of the water tank placement at the rear of the house outside the designated building area so that the water tank complied with the Community Management Statement for the Community Association DP 270158.

3. Alter the following works so that compliance is achieved with the approval given by the Executive Committee of the Community Association DP 270158.

1. The carport and

2. The air conditioner on the northern wall of the house

22. On 31 May 2017 the Adjudicator declined or failed to make the original substantive order or the revised substantive orders. She held the orders did not specify the works that were required to be removed or reinstated and on the further basis that there was no power to make the revised orders because the supplementary submission was a new application and was not in the correct form.

23. The previous Adjudicator Ms De Jersey invited the Community Association to make a further adjudication in proper form seeking the further orders sought. As a result of this order the Community Association has filed a further adjudication application separately along with an Appeal which has addressed some of the aspects of the previous Adjudicator’s decision.

24. The applicant relied on material including evidence and submissions which were filed in support of the previous application as well as material which updated the position to the time of the present adjudication. It was submitted that the respondent, as the owner of Lot 8, was continuing to carry out illegal works. Photos of those works were attached as evidence along with a statement of the chairman, Ron Spackman.

25. It was reported that a number of members of the Executive Committee had requested the owner to stop the works but she had ignored those requests and continued to carry out the works referred to in the statement.

26. A copy of the By-laws contained in the Community Management Statement was annexed to the evidence and it was pointed out that By-law 2.3 of the Community Management Statement provided:-

No building modification or new construction may commence or take place until the plans and specifications for it have been approved by the Executive Committee. Such plans and specifications are to be in the format required to be submitted to council for approval for the proposed construction.

27. It was noted that By-law 43 of the Community Management Statement defined new construction to mean building work that was intended to be carried out on a lot or on community property. Building modification referred to any modification, addition, alteration or exterior colour change made on or to an existing building structure on a lot or community property that impacted on the street scape of the land. By reference to By-law 43 it was argued that the owner of lot 8 could not carry out any building works or make any modifications as described to the existing building without approval of the Executive Committee for the Community Scheme.

28. In relation to the pool works and platform works it was noted that they were clearly a new construction in the meaning of By-law 43 and that no approval had been obtained for the pool works or platform works from the Executive Committee. It was pointed out that the Executive Committee was concerned with the conservation of the winery as such and was anxious to obtain a report about the effect of the pool on the vineyard.

29. In relation to the roofing works it was noted that no roofing works had been approved by the committee and the lot owner was carrying out such works in breach of the By-laws.

30. It was argued that the lot owner had failed to provide the Executive Committee with appropriate documentation for any building works on Lot 8 to enable it to consider an application for the works and in accordance with By-law 2.3 the following documents were required:-

1. Plans and specifications for the works

2. A work method or statement for the works

3. A construction program for the works

4. All relevant insurances for the works

5. A report regarding the effect of the pool on the winery to enable a proper decision to be made.

31. It was submitted further that the provisions of By-law 2.2 required new construction or building modifications to be in conformity with the architectural and landscape design guidelines applicable at the time of the works. Those guidelines were contained in Pt 7 of the Community Management Statement and a copy of the guidelines were included with the applicant’s evidence.

32. By reference to the architectural and landscape design guidelines it was indicated that the platform works were located at the rear of Lot 8 and outside of the designated building area. They were also located on an easement at the rear of Lot 8 as shown in photographs which had also been attached to the evidence. It was submitted that the platform works were not capable of being approved by the Executive Committee by reason of By-law 22.

33. The applicant relied on the supplementary evidence and submissions provided for the adjudication SCS 16/53044 including evidence that the pool works were continuing and other illegal works such as the deck roofing works and the platform works were outside the architectural and landscape design guidelines. Reference was also made to the “lean-to works” located on the southern side of the carport. There were concerns that it was outside the designated building area and that there were concerns that the works had not been carried out in a proper and workmanlike manner. It was argued that the lean-to works were clearly not permitted by the Community Management Statement although it should be noted that the lean-to works, as opposed to other roofing works, were completed before the respondent purchased the subject lot.

34. It was also pointed out that the carport works and the air conditioning works on Lot 8 had not been carried out in accordance with the previous approval given by the Executive Committee and accordingly when the order was sought that these works be made compliant.

35. In relation to the Appeal proceedings the appellant notes that on 31 May 2017 Adjudicator De Jersey made a decision in relation to the substantive orders but she declined or failed to make orders requiring the removal of illegal works or provision of documents in relation to illegal works by the lot owner for reasons which she set out in her decision.

36. The Adjudicator invited the Community Association to file a further adjudication in proper form seeking further orders and in paragraph 19 she noted:-

19 I decline to make the order set out in paragraph 14A because it is a matter for the applicant as to whether she wishes to submit the appropriate form of request for approval and documentation, I decline the order set out in paragraph 14C. The terms of the proposed order are quite general and it is unclear precisely what the order expects to have done. It is not clear whether it is merely seeking to have all unauthorised work removed or to have Lot 8 reinstated as it was prior to the unauthorised works. In other words it is not clear as to the precise work that has to be done by the applicant to comply with an order in these general terms. A new application may be filed if necessary for outstanding issues that this determination does not settle.

37. The applicant has relied on a number of grounds of Appeal as follows:-

1. The Adjudicator erred in paragraph 17 in finding that she did not have the power to make the revised orders in circumstances where such a power was conferred by s.71 of the Community and Land Management Act. It is noted that the Ground misstates the reasoning of the Adjudicator in the sense that she did not address the question of power but rather said:-

I cannot make the revised orders as sought in the submission provided by the respondent on 3 February 2017 as the application was not formally amended by way of an amended application form provided to the other party.

38. Ground 2 claims that the Adjudicator erred in finding that the lot owner was not on notice of revised substantive orders. That again appears to be a mis-statement of the Adjudicator’s reasoning in paragraph 17 and it is conceded by the submission suggesting that it appeared that the Adjudicator said the lot owner was not on notice of the revised orders. The question of notice for the revised orders was not referred to in paragraph 17 of the Adjudicator’s reasons.

39. The third Ground of Appeal again refers to par 17 of the Adjudicator’s reasons and suggests that the Adjudicator erred in finding that the supplementary submissions was a new application. The precise wording of the reason, so far as is relevant, was:-

as the application was not formally amended by way of an amended application form provided to the other party I cannot make the revised orders as sought in the submission provided by the respondent on 3 February 2017. The reasoning referred to an amendment of the application by formally filing an amended application form and providing a copy to the other party.

The applicant goes on to argue that there was no difference between the orders sought in the original application and the revised orders. The original order sought is set out in paragraph 20 of the applicant’s external appeal submissions and the revised orders are set out in paragraph 24. A reading of those two paragraphs will make it clear that there was a difference between the orders sought in the original application and the revised orders..

40. The fourth ground of appeal relates to what was said by the Adjudicator in paragraph 19 of her reasons. It is alleged that she erred in declining or failing to make any orders for the reinstatement or review of any works on Lot 8 or any orders for the lot owner to provide documentation in relation to any of these works.

41. It is noted that the making of orders other than by an Adjudicator under s. 71 is a discretionary matter. The Adjudicator made, as her reasoning for declining to make the order, an observation that it was a matter for the respondent as to whether she wished to submit the appropriate form of request for approval of the documentation. Her reasons for declining to make the orders sought in paragraph (c) of the revised orders was because they were quite general and it was unclear as to precisely what the orders were required. In paragraph 19 the Adjudicator proposed that a new application could be filed, if necessary, for outstanding issues which had not been settled by this determination.

42. Ground 5 claimed that the Adjudicator had erred in not having regard to proper considerations in being guided by irrelevant considerations with the result that the exercise of the discretion was unreasonable and unjust. In submissions the applicant conceded that the Adjudicator had a discretion to make orders under s.70 of the Community Land Management Act but stated that she failed to exercise that discretion by acting upon wrong legal principles and by having regard to irrelevant and extraneous matters and by failing to take into account relevant considerations. The general observations made in this ground were not dealt with more specifically at any later time in evidence or submissions.

43. The next ground suggested in general terms that the Adjudicator had erred by failing to adequately consider the weight of evidence of the unauthorised works and thereby a substantial miscarriage of justice had occurred. The ground as stated does little to displace the reasoning provided by the Adjudicator in paragraph 19 of her decision.

44. The final ground of appeal noted that the Adjudicator had found that the lot owner had carried out unauthorised works in breach of By-law 2.3 but then failed to make orders indicating how compliance might not be achieved. These submissions lose sight of the fact that the Adjudicator clearly proposed that a further application be filed to address all matters which were not covered by the orders. That invitation was extended to the parties to file an application in proper form so that the issues raised in their revised submissions could be properly particularised and ventilated. A review of that matter was proposed by the Adjudicator in her suggestion that a further application should be filed. A further application has been filed and additional material which was not initially before the Adjudicator initially has been included for the consideration of the Tribunal.

45. At the conclusion of the evidence both parties were invited to provide submissions in relation to costs. Those submissions were filed in due course after the time for filling was extended. The last of the submissions of costs was filed on or about 10 April 2018 and the papers including submissions were referred to the member sometime thereafter.

Respondent’s Submissions

46. When the matters were listed before the Tribunal on 23 November 2011 directions were made for the respondent to provide all documents on which she wished to rely, by 21 December 2017 with the applicant to provide documents in reply by 22 January 2018. On 4 January 2018 the timetable was amended to require the applicant to provide documents by 19 January 2018 with the respondent to provide any documents in reply by 16 February 2018.

47. No documents were filed by or on behalf of the respondent but on 21 February 2018 Mr Lum of de Mestre and Company Solicitors wrote to the Tribunal indicating that he had that day been instructed by Ms O’Neill to appear in proceedings which were listed on 27 February 2018 for hearing. Mr Lum sought an adjournment of some six weeks to enable full instructions to be obtained and to enable the filing and service of evidence on behalf of the respondent. He also sought a change of venue. The application for change of venue and for adjournment was refused and the matter remained listed for hearing on 27 February.

48. On 23 February 2018 the solicitors for the respondent again sought to have the hearing of the matter adjourned for about six weeks to enable the provision of information to the Community Association for consideration. It was proposed at that stage that the respondent would consent to provide certain information to the applicant in relation to the pool and would provide other plans and specifications for other building works or building modifications. There was a proposal that the respondent would relocate the water tank and it was noted in relation to other matters which were not fully identified that compliance had already been achieved.

49. Written submissions filed on or about 26 February argued that the approval or disapproval by the Executive Committee of plans and specifications could only be made solely on matters set out in the By-laws and the Architectural Landscape Design Guidelines in force at the time of the decision. In relation to the pool, it was argued that there was no evidence to suggest that the pool was not located in the designated building area and therefore there were no other matters set out in the By-laws or Architectural Landscape Design guidelines that would prevent the approval of the pool as currently constructed.

50. It was submitted that documents detailing procedure for authorising additions/pools did not form part of the By-laws and Architectural Landscape Design Guidelines and was not therefore a relevant matter for deciding whether or not the pool should be approved. The document described as a guideline for authorising additions and pools appeared to detail the information which was required before the committee would consider consenting to an addition or a pool.

51. It was claimed the Complying Development Certificate and Occupation Certificate had been obtained from the Cessnock City Council and it was noted the applicant had not identified the part or parts of the Community Management Scheme with which the pool failed to comply.

52. In relation to the roofing works it was argued that the deck roof works were not works which required approval as they were simply undertaken as a replacement of damaged roofing with new roofing. It is noted that there is no evidence to support that submission.

53. A copy of the relevant s.149 Certificate from the contract of sale when the property was purchased by the respondent was annexed. Reference was then made to the effect of the State Environmental Planning Policy relating to exempt and complying development codes and it was submitted that air conditioning units, balconies, decks, patios, pergolas, terraces and minor alterations were exempt developments within the meaning of the code. It was accordingly argued that works undertaken by the previous owner were exempt under the code, as were the works undertaken by the respondent. It was submitted that the respondent had already obtained and supplied a Complying Development Certificate from Cessnock City Council for the pool and the surrounding safety fence and that the applicant had inappropriately commenced an action against the respondent without regard to Cessnock Local Environment Plan 2011 and the provisions of State Environmental Planning Policy. It was submitted finally the actions commenced against the respondent had no legal basis and all NCAT findings and orders issued against her and all associated legal costs should be withdrawn and/or cancelled immediately.

54. On or about 10 April 2018 the respondent’s solicitor provided submissions on costs. Attached to those submissions was a statement of evidence of Stephen Leathley who sought to provide town planning evidence in respect of lot 8 DP 270158. The report was intended to outline his expert opinions relating to town planning issues with respect to existing residential development and associated ancillary structures on the subject property. The evidence was rejected in its totality as evidence in this matter had closed and submissions from parties were the only remaining aspect. Those submissions were restricted to an issue for costs.

55. An application by the respondent for an adjournment to adduce further evidence was rejected because time for provision of evidence had closed and the respondent had not seen fit to engage solicitors or obtain legal advice until approximately 7 days or less before the scheduled hearing date. No leave was granted to enable the respondent to adduce further evidence and consistent with decisions of the High Court Australia and the Appeal Panel of this Tribunal it was determined that the time for evidence had long since passed and there was no basis upon which the Hearing should be reopened. The respondent’s solicitors did not attempt to provide a basis for re-opening the Hearing in any event.

56. The submissions provided by the respondent relating to costs will be read and, except to the extent that reference is made to the report and evidence of Mr Leathley, will be considered. It would appear that his report does not purport to give legal advice or town planning opinions as to the effect of Community Association Management Statements on the Regulations within a Community Association. The extent that he purports, if at all, to give legal advice in that area, he is not qualified to do so.

57. In relation to the cost submissions it is noted that the respondent accepts the applicant’s submissions regarding costs as set out in their email of 13 March 2018. The respondent accepts that the Tribunal does not have power to award costs in respect of the Appeal but accepts the respondent’s submissions in relation to power to make costs in relation to the adjudication. Having accepted that position the respondent submits that an order for costs should be made in favour of the respondent on the basis that:-

1. The applicant has unnecessarily commenced and maintained these proceedings and there was no proper legal basis for doing so.

2. The applicant failed to act reasonably in negotiation with the respondent to try to resolve these proceedings.

3. It was not necessary for the applicant to incur costs if it had considered its proper legal position before commencing these proceedings.

4. The applicant initiated the proceedings and incurred significant expense for all lot owners in the Community Association at Kelman Estate, including the respondent.

5. Contrary to the assertions of the applicant, the respondent had not carried out any illegal work on the property. Any submission made by the applicant to the contrary was misguided.

6. The solicitor for the respondent then went on to address the question of indemnity costs but, having referred to a number of authorities in relation to the basis upon which indemnity costs ought to be ordered he then alleged that the applicant, properly advised, should have known that it had no chance of success but that it had persisted with what should be considered to be a “hopeless case”. On that basis the respondent sought an order that the applicant should pay the respondent total costs in relation to the matter from its commencement on an indemnity basis.

Decision

58. It is appropriate to address the further adjudication in the first instance as Adjudicator De Jersey, on 9 June 2017 authorised the filing of a new application to address new outstanding issues which were not determined or settled by her earlier adjudication. It was always open to the applicant to adopt that course rather than to pursue a fresh application as well as an Appeal to address the outstanding matters. Mr Bambagiotti of counsel for the applicant conceded that the determination of the new adjudication application would render the Appeal from the earlier adjudication unnecessary.

59. The Community Association DP 270158 is the community association for “Kelman Estate” located at 2 Oakey Creek Road Cessnock is located in the winery district of Cessnock and pursuant to By-law 24 of the Community Management Statement, the association carries out the business of winery and olive production.

60. The Community Management Statement enables the Executive Committee of the Community Association to review development and building works under guidelines which ensure that any proposed development or building does not have an effect on the winery or on olive production.

61. The Community Management Statement provides for a process of development and building works to be reviewed by the Executive Committee particularly in relation to concerns about the conservation of the winery and the vineyard.

62. The evidence provided by the applicant clearly indicates that the respondent was undertaking certain works on the property without the approval of the Executive Committee of the Community Association. She was requested to cease the illegal works but she ignored these requests and, at the time when the initial application for adjudication was filed, she continued to carry out those works.

63. Although the solicitors for the respondent appear to suggest that compliance with By-laws is unnecessary where an approval from Council or regulatory authority has been obtained, those submissions overlook the provisions of s. 13 of the Community Land Management Act 1989 which provides:-

Binding effect of Management Statement

1. A Community Management Statement is binding on;

1. The Community Association

2. Each subsidiary body within the community scheme, and

3. Each person who is the proprietor, lessee or occupier or the mortgagee or covenant chargee in possession, of a development lot, neighbourhood lot or strata lot within the community scheme.

2. Subsections (1) and (3) have effect as if, in each case;

1. The Management Statement included mutual covenants to preserve its provisions as if entered into by the persons bound by it and,

2. The person so bound had executed the Management Statement under seal.

64. In Owners Corporation SP 68751 v Community Association DP 270281 [2015] NSWCATCD 99 the Tribunal clearly determined that the Community Management Statement and By-laws thereunder were binding on the association and on each subsidiary body within the community scheme as well as each person who was a proprietor, lessee or occupier of a lot or strata lot within the community scheme.

65. By-law 2.3 of the Community Management Scheme provides:-

No building modification or new construction may commence or take place until the plans and specifications for it have been approved by the Executive Committee. Such plans and specifications are to be in the format required to be submitted to Council for approval of the proposed construction.

66. By-law 43 defined a “new construction” as:-

New construction means building work that is intended to be carried out on

(a) A lot or

(b) Community property

67. Building modification is also defined in By-law 43 to mean:-

Any modification, addition, alteration or exterior colour change made on or to an existing building structure on

(a) A lot or

(b) Community property that impacts on the streetscape of the land.

68. The applicant therefore submits that a lot owner cannot carry out any building works on Lot 8 (or the land) or make some kind of modification to the existing building on the Lot without approval of the Executive Committee or the Community Scheme.

69. By-law 2.2 of the Community Management Scheme provides that no new construction or building modification shall be constructed other than in conformity with the Architectural and Landscape Design guidelines applicable at that time. The Architectural and Landscape Design guidelines are contained within Pt 7 of the Community Management Scheme.

70. Section 3.1 of the Architectural and Landscape Design Guidelines provides that no building can be located outside the designated building area shown on an attached plan.

71. It is in relation to these general principles that the matters raised by the applicant in the present application must be considered.

72. The supplementary submissions for the present adjudication application claim that illegal works have been carried out on lot 8 in the following areas:-

1. The construction of a pool and associated works

2. Extended roofing to the existing building on lot 8 including

1. Roofing and enclosures of the decks in the centre/rear of the house.

2. A “lean-to” approximately 7 metres long, with a polycarbonate roof on the southern side of the property adjacent to the carport/garage.

3. A platform with playground equipment in the rear of the yard and an adjoining enclosure for dogs has also been noted as illegal works.

73. It is further claimed that a water tank at the rear of the house outside the building has not been installed in accordance with the previous approval of the Executive Committee a carport has not been constructed in accordance with the approval previously given, and an air conditioning unit situated outside the wall of the house has not been located in accordance with the previous approval given by the Executive Committee.

74. The applicant relies on a number of affidavits and supplementary affidavits to adduce evidence in the matter. The respondent had not seen fit to provide any statements or affidavit evidence prior to the close of evidence and has simply relied on the submissions prepared by the respondent’s solicitors.

75. The evidence confirms that works have been carried out on Lot 8 without the required approval of the Executive Committee of the community scheme under the Community Management Statement. The owner has been continuing to carry out building work in breach of the interim order made in 2016.

76. The affidavit of Graham Braenthwaite shows the pool works have been carried out on Lot 8 without the consent of the Community Association. Reports of Mark Dodgson state that the pool application is not adequate and in any case the proposed pool would not be permitted under the Community Management Scheme for the following reasons:-

1. The plans do not contain sufficient details to enable the Committee to be satisfied that the proposed pool is compliant with the requirements of the Community Management Statements and other requirements of the Community Association. In particular there are;

1. Insufficient details as to whether the pool is saltwater or chlorine.

2. Insufficient evidence as to filtration.

3. Insufficient evidence as to the manner in which water is to be disposed of, including evidence as to whether water would be disposed of into the stormwater system or the sewerage system.

4. Insufficient detail considering the overflow.

5. No information as to whether the pool complies with BASIX requirements and other building standard and council requirements.

6. No evidence to show how the location of the pool filter pump and pool fence have been set out by reference to the designated building area. It is claimed that these matters are particularly important as, if water is not treated and disposed of properly it may have an adverse effect on the vineyard. If untreated water was to be disposed of into the sewerage treatment this could result in issues with the sewerage.

77. It is noted further that the pool did not have the relevant approvals of Council at the time when the submissions were prepared and this was a mandatory requirement under By-law 2.6 of the Community Management Scheme.

78. Based on the report of Mr Dodgson, even if the lot owner had made a proper application for the pool works in accordance with the Community Management Scheme, the application would not have been capable of approval as the pool works were not permitted by the Community Management Statement.

79. The committee of the scheme has left open the option of the applicant producing evidence to establish compliance and to provide the information which was required by the Executive Committee.

77. Although, on the evidence there was a lean-to covering a part of a deck area when the respondent purchased the property, it is clear that other roof works have been carried out since that time. Deck works require approval of the Executive Committee following an application in accordance with the Community Management Scheme. The affidavit of Mr Peter Bailey shows that he was approached to carry out further deck work for the respondent and that he declined, pointing out that the works he requested would be in breach of the Community Management Scheme. An affidavit of Natalie Drayton sworn 8 June 2017 makes it clear that deck roof works would not be capable of being approved by the Executive Committee because By-law 2.14(b) of the Community Management Scheme provides that no more than 35% of the designated building area of a lot may be occupied by enclosed buildings, covered car spaces and covered verandahs. The deck works were carried out by the respondent in about November 2016 but at the time the deck roof works were already 35% and the limitation has now been exceeded. The affidavit of Natalie Drayton calculates the total built area to be 38.35% as opposed to the maximum of 35% of the designated building area. Ms Drayton, who has a degree in architectural design, notes that from photographs taken in 2016 it was obvious that a colorbond roof was covering the deck area and the deck area was now enclosed and required to be included in the calculation of the built area.

78. Platform works included a child’s play area and an area for dogs. These works were undertaken by the respondent and they required approval of the Executive Committee in accordance with the Community Management Scheme. Evidence of the platform works is detailed in the affidavit of Christine Evans who also deposes that no application has even been received by the Executive Committee. The platform works would not be capable of approval by the Executive Committee in any event because they are situated to the rear of Lot 8 over an easement. This area is outside the designated building area and works in that area are precluded by s. 3.1 of the Architectural and Landscape Design guidelines. They have also been constructed over an easement which prevents any building work including fencing to be constructed thereon. It is claimed further that the materials used for the animal enclosure to not comply with the requirements of s. 7.3 of the Architectural and Landscape Design Guidelines.

79. The “lean-to” works have been described in the affidavit of Ms Evans but it is clear that these works were undertaken by the previous owner of Lot 8. These works are located on the southern side of the carport and it is claimed that there is a question as to whether those works were carried out in a proper and workmanlike manner in any event. The Community Association seeks removal of these works but it is noted that they had been erected on the property prior to the sale of the lot to the respondent and in the period of time that they had been erected before the sale took place no action was taken by the Community Association to have those works removed.

80. A water tank on the property is apparently located outside the designated building area in breach of ss. 5.1 and 3.1 of the Architectural Landscape Design Guidelines. The Community Association is willing to accept the tank as it is, providing it is relocated inside the designated building area and it is appropriate to make that order.

81. Certain carport works and air conditioning works have been carried out in breach of previous approvals given by the Executive Committee. The Community Association requires the lot owner to alter those works so that they comply with the previous approval given by the Executive Committee.

82. The submissions made on behalf of the respondent fail to recognise the obligations of the respondent to comply with the Community Management Statement including the By-laws thereunder. In the circumstances the applicant has made out a case for the relief that it seeks in most instances. At the conclusion of the evidence Mr Bambagiotti, on behalf of the applicant, conceded that it would accept evidence relating to pool compliance and would not seek removal of the pool. The alternate order requires the respondent to provide the applicant with plans and specifications and other documentation in respect of a pool including but not limited to, the information referred to earlier in this decision which includes, but is not limited to, the relevant approvals of authorities showing compliance with the Building Codes and Australian Standards included BASIX requirements and other building standards and council requirements.

83. In relation to the roofing works the Tribunal accepts that the percentage of coverage relevant to the designated building area has been exceeded and that the works undertaken in November 2016 could not have been approved in any event under the management statement. It follows that the roofing and enclosure of the decks in the centre of the rear of the house are to be removed.

84. In relation to the area described as the “lean-to” the polycarbonate roof in that area had been erected for some time prior to the sale of the subject lot to the respondent. In the circumstances the Tribunal is not disposed to make an order in respect of that “lean-to”. The reluctance to make an order in relation to the “lean-to” would not preclude an order that it be repaired or reconstructed in a proper and workmanlike manner if evidence to that effect was provided.

85. The Tribunal is satisfied that the platform works have been erected without approval of the Executive Committee and further that those works have been built outside of the designated building area and in part over an easement. There being no evidence to the contrary it is appropriate to order that those works be demolished and the area be reinstated to its previous condition.

86. In relation to the water tanks the Tribunal is satisfied that the respondent should be directed to remove the tanks from their present location and relocate them in an area which the Executive Committee regards as appropriate and within the designated building area.

87. To the extent that the carport works and air conditioning works would still require alterations to comply with previous approvals, the Tribunal makes an order that the respondent carry out works necessary to enable the carport works and the air conditioner works to comply with the approval which has already been given by the committee.

88. As each of the matters to be dealt with have now been addressed under the new application it is not necessary to consider the Appeal other than to note comments made in relation to the Appeal earlier. The Appeal is formally noted as dismissed on the basis that all of the orders sought by the applicant have been addressed in the related application for an adjudication.

89. It is necessary to address the issue of costs and it is noted that both parties were given the opportunity to provide submissions on costs.

90. Both parties agree that the Tribunal does not have power to award costs in respect of the Appeal and both parties submit that the Tribunal does have power to award costs in respect of the adjudication. Mr Grace, for the applicant, noted that the adjudication had been referred to the Tribunal pursuant to s.71B of the Community Land Management Act 1989 and he observed that s.76 of that Act provided that where an adjudication was referred to the Tribunal it had the same powers as the Adjudicator (other than the power to make an interim order).

91. It was submitted that the Adjudicator’s powers contained in s.71(1) of the Community Land Management Act 1989 enabled an Adjudicator to make an order for settlement of a dispute or complaint and it was submitted that the Tribunal’s powers under that referral were wide enough to include a power to make a cost order.

92. Section 29 of the Civil and Administrative Tribunal Act 2013 provides the jurisdiction of the Tribunal to hear an adjudication under the Community Land Management Act whilst s. 29(2) of the Act gives the Tribunal power to make and ancillary decisions which are defined in s. 4 to include an order for costs.

93. The parties recognise that s. 60 of the Civil and Administrative Tribunal Act 2013 sets out the Tribunal’s power to make a costs order under the Act and both parties note that the provisions of section 60 enable the Tribunal to make orders only “in special circumstances”. The applicant made reference to the provisions of section 60(3) which detail the matters which the Tribunal can take into account in determining whether “special circumstances” exist. It was noted that the list in section 60(3) was not exhaustive and special circumstances could also include circumstances that are out of the ordinary but not necessarily extraordinary or exceptional. (See Sakkara Landings Trust v The Residents Committee of the Landings Retirement Village [2016] NSWCATAP 52 relying on Cripps v G & M Mawson [2006] NSWCA 94.)

94. The applicant submitted that the Tribunal has power to make a costs order under the Civil and Administrative Tribunal Act 2013 in addition to powers conferred by the Community Lands Management Act. It was pointed out that the Adjudicator’s powers under the Community Lands Management Act were wider than an Adjudicator’s powers under strata legislation and it was noted that the provisions of s.196(1) of the 1996 Strata Legislation specifically prohibited an Adjudicator from making a costs order. It was pointed out that there was no equivalent prohibition in the Community Lands Management Act and reference was made to the decision of the Appeal Panel in Owners Corporation SP 80412 v Vickery [2018] NSWCATAP 29.

95. Mr Grace, on behalf of the applicant submitted that the Tribunal should exercise its discretion to make an order for costs in the matter noting that there were special circumstances for the following reasons:-

1. In regard to the conduct of the respondent it was pointed out that throughout the entire process the respondent has conducted the matter in a way which has caused the applicant to incur unnecessary legal costs. The respondent has ignored a number of warnings from the applicant to stop work and although the applicant has attempted to discuss the matter with the respondent she has refused to cooperate.

2. It was submitted that the respondent had repeatedly failed to comply with procedural orders in the present proceedings and related proceedings.

It should be noted at this point that related proceedings are a matter for costs orders, if appropriate in those proceedings. The Tribunal is obliged to consider the conduct of the respondent in the present proceedings and no specific delays have been noted apart from the fact that the respondent failed to provide any evidence or submissions until a matter of days before the Hearing was due to commence.

99. It was submitted further that the respondent had failed to cooperate with the Tribunal and had shown contempt for orders made by the Tribunal. Again it can be said that contempt of Tribunal orders is a matter for penalty and not a matter to consider as special circumstances in the present proceedings alone.

100. The respondent accepted that the Tribunal had power to award costs in the application for adjudication but not in respect of the Appeal. It was argued that the order for costs should be made in favour of the respondent on the basis that the applicant had unnecessarily commenced and maintained matters where there was no proper legal basis for so doing. It was noted that the applicant had unreasonably failed to enter into negotiations with the respondent and as a result legal costs were incurred both by the applicant and by the respondent.

101. In addressing the question of indemnity costs the solicitor for the respondent maintained that indemnity costs may be awarded where a party has instituted a claim on the basis that, properly advised, it should have known it had no real prospect of success. Reference was made to the decision of Sheppard J in Colgate Palmolive Co. v Cussons Pty Ltd [1993] 46 FCR 225 where Sheppard J noted:-

Where indemnity costs may be awarded is where proceedings have been carried on in lawful disregard of known facts or clearly established law.

102. In Sewell v Zelden (No. 2) [2010] NSWSC 1181 Reain J awarded indemnity costs on the basis that the relevant defendant had no realistic prospects of success in defending the claim brought against him. In taking those matters into account he felt that it was appropriate to order Mr Zelden to pay Mr Sewell’s costs on an indemnity basis.

103. Relying on this authority the respondent submitted that the applicant, properly advised, should have known that he had no chance of success. Applying these principals to the present case and in particular having regard to the findings which the Tribunal has made, it is the respondent and not the applicant who has persisted in ignoring requests and then indeed directions to cease works. The respondent apparently believed that she was not obliged to comply with the Community Management Statement notwithstanding the provisions of s. 13 of the Act. Her persistence in totally disputing the application and totally failing to heed the findings of Adjudicator De Jersey thereby necessitating further action on the part of the applicant could well be seen to constitute circumstances similar to those referred to by Reain J in Sewell v Zelden (No. 2) supra.

104. The Tribunal is not persuaded that an order for indemnity costs is warranted. Even though the repeated failure to respond to previous orders made by Adjudicators may amount to such conduct it is nevertheless appropriate to order the respondent to pay the applicant’s costs on a party/party basis as agreed or assessed in respect of the adjudication. The costs agreed or assessed under Pt 4.3 Div 7 of the Legal Profession Uniform Law Application Act 2014 are to be paid within 14 days of the date of the agreement or of the determination of the Assessor.

J A Ringrose

General Member

Civil and Administrative Tribunal of New South Wales

12 July 2018

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

Registrar

Decision last updated: 27 September 2018