Laws v The Owners Strata Plan 97230

[2022] NSWCATCD 131

Civil and Administrative Tribunal

New South Wales

• Amendment notes

Medium Neutral Citation:

Laws v The Owners – Strata Plan 97230 [2022] NSWCATCD 131

Hearing dates:

26 July 2022

Date of orders:

11 August 2022

Decision date:

11 August 2022

Jurisdiction:

Consumer and Commercial Division

Before:

K Ross, Senior Member

Decision:

1. The application to remove Mr Leis from his position on the strata committee is dismissed.

2. Pursuant to s 149 of the Strata Schemes Management Act 2015 the Tribunal prescribes the making a common property rights by-law in and to the effect of the by-law referred to in motion 14 in the minutes of the annual general meeting of SP 97230 on 23 September 2021, a true copy of which is annexed to these orders.

3. The Owners Corporation is to ensure that the common rights by-law is registered in accordance with s 246 of the Strata Schemes Management Act2015.

Catchwords:

STRATA SCHEMES – Whether a member of the committee should be removed from office, whether

the Owners Corporation has unreasonably refused to

make a By-law permitting the installation of solar

panels on common property

Legislation Cited:

Strata Schemes Management Act 2015

Cases Cited:

Ainsworth v Albrecht [2016] HCA 40

Capcelea v The Owners-Strata Plan No 48887 [2019] NSWCATCD 27

Charitable Islamic Association of Beirut City Incorporated v The Owners-Strata Plan No 75506 [2019] NSWCATCD

Endre v The Owners - Strata Plan no. 17771 [2019] NSWCATAP 93

Fong v The Owners – Strata Plan 82783 [2022] NSWCATCD

McCann v Owners SP 11318 [1998] NSWSSB 44

Milman v Owners SP 1389 [2005] NSWCTTT 196

Owners Corporation SP 7596 v Risidore & Ors [2003] NSWSC 966

Owners SP 69140 v Drewe [2017] NSWSC 845

Owners SP 69481 v Want [2013] NSWCTTT 440

Category:

Principal judgment

Parties:

Rosamond Laws (Applicant)
The Owners - Strata Plan 97230 (First Respondent)
Peter Leis (Second Respondent)

Representation:

Applicant (self-represented)
J Schoonbeck (First Respondent)
Second Respondent (self-represented)

File Number(s):

SC22/00115

Publication restriction:

Nil

REASONS FOR DECISION

1. This dispute involves a 6 lot strata scheme in Ettalong. The applicant Ms Laws is the owner of Lot 3 in the strata plan. She wishes to install solar panels on the roof of her unit. There is no dispute that the roof is common property, and that the applicant requires the consent of the Owners Corporation to install the panels. The applicant proposed that the Owners Corporation approve a By-Law to enable her to install the panels. Because the solar panels are sustainability infrastructure, a simple majority of lot owners was required. The Owners Corporation refused the request. The applicant says that the Owners Corporation’s refusal is unreasonable, and she seeks orders from the Tribunal to enable the panels to be installed.

2. Ms Laws also seeks an order removing Mr Leis from “any office he holds” on the strata committee. At the hearing evidence was given that Mr Leis is a member of the strata committee but holds no other position. The applicant alleges that no meeting has been held since the AGM to elect office holders. In addition, she alleges that Mr Leis’ behaviour disqualifies him from office.

The refusal to consent to the solar panels and make the By-Law

3. Ms Laws would like to install solar panels on the roof of her unit. She has requested the Owners Corporation to consent, but they have refused to do so. The owner of lot 6 supports Ms Laws’ request but does not wish to install solar panels herself at this time.

4. At a meeting held on 23 September 2021 Ms Laws proposed two motions. Motion 13 sought consent to the installation of the panels. Motion 14 sought that the Owners Corporation make a By-Law pursuant to ss 141 and 142 of the Strata Schemes Management Act 2015 (“the Act”) to enable the installation of the panels and sought authorisation under s 108 of the Act for the addition of the panels pursuant to the By-Law. Both motions were defeated.

5. Ms Laws says that the Owners Corporation’s refusal to consent to her request, and its refusal to approve the By-law was unreasonable because no reasons were given and her attempts to communicate with members of the committee were unsuccessful.

The Owners Corporation’s reasons for refusal

6. The minutes of the meeting do not record any reasons for the Owners Corporation’s decision. The applicant points to an email dated 11 February 2021 from the strata manager Mr Schoonbeck to all owners in the scheme, sent at 4.25 pm which says:

“As the panels will be on the roof space of the lots (common property), special

bylaws will need to be introduced….. The voting process will be by special

resolution. Voting by special resolution means that if 25% or more of owners

vote against the proposal then the motion is not passed….

I believe it is important firstly to get an idea from each of the owners to

determine who would be in favour of, or against the proposal. I will then be able

to make a decision whether or not to proceed with the meeting”.

7. Mr Schoonbeck says that he included all the information which the applicant had provided to all owners. The applicant says that he did not. The email makes no reference to any attachments.

8. Mr Leis responded at 4.51 pm:

“Villa 4 votes against the proposal for solar panels”

9. The applicant sent the information which she had provided to the strata manager to all owners by email on 14 February 2021.

10. When the meeting was held on 23 September 2021, the owners of units 1, 2, 4 and 5 all voted by pre vote, and all voted against the motion.

11. At the hearing Mr Leis, one of the owners of lot 4, and Mr and Mrs Svetey, the owners of lot 2, gave evidence of their reasons for voting against the motions. Mr Leis said that he had read an article in the Sydney Morning Herald which discussed the fire danger associated with solar panels. He had also seen a program on channel 9 and read some information from the Fire Brigade. He is concerned that the installation of the panels may cause a fire.

12. Mr and Mrs Svetey gave evidence of their concerns about the manufacturing process for the panels. Mrs Svetey said they had seen a documentary on Foxtel which examined the conditions in countries where the minerals are mined. They had also considered issues surrounding the disposal of the panels at the end of their life. Mr Sevetey also said that he would not buy a property with solar panels installed and he is concerned that some potential purchasers may not be prepared to purchase his property if there are solar panels in the scheme.

13. The strata manager Mr Schoonbeck gave evidence that owners had raised concerns with him about the appearance of the panels. He said that the applicant’s proposal at the meeting was to have the panels placed on the front of her roof. The applicant said that she could place some of the panels on the rear roof but because of shadowing, some panels need to be on the front of the roof. She insisted that the panels would not be able to be seen from the street. Mr Leis stated that they would be visible from the driveway, whilst the applicant said that they would be visible only from outside the garage of Mr Leis’ lot. She said that she has chosen sleek panels which are not visually intrusive.

14. An issue relating to insurance was also raised. However the Owners Corporation has not made any investigations as to whether the installation of solar panels on the applicant’s lot would increase the insurance premiums.

The Law

15. The Tribunal’s power to make the order sought by the applicant is found in s 149 of the Strata Schemes Management Act 2015 (“the Act”) which provides:

149 ORDER WITH RESPECT TO COMMON PROPERTY RIGHTS BYLAWS

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

the Tribunal finds--

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

(b) on application made by an owner or owners corporation, that an owner of a lot, or the lessor of a leasehold strata scheme, has unreasonably refused to consent to the terms of a proposed common property rights by-law, or to the proposed amendment or repeal of a common property rights by-law, or

(c) on application made by any interested person, that the conditions of a common property rights by-law relating to the maintenance or upkeep of any common property are unjust.

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

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

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

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

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

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

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

16. In Fong v The Owners – Strata Plan 82783 [2022] NSWCATCD the Tribunal discussed the application of this power:

58 The authorities which have considered s. 149(1)(a) of the Act or its equivalent provision in previous legislation dealing with the same topic, direct attention to the unreasonableness of the owners corporation and owners’ conduct in refusing consent to the proposed common property rights by-law or alteration to the common property. This is an objective inquiry based on the ordinary meaning of reasonableness and unreasonableness: McCann v Owners SP 11318 [1998] NSWSSB 44. An “unreasonable” refusal is one that is not endowed with reason, not guided by reasonable good sense, not based on or in accordance with reason or sound judgment, immoderate, capricious or exorbitant: see Owners SP 69481 v Want [2013] NSWCTTT 440.

59 The authorities also indicate that the issue for the Tribunal must be approached by considering what was before, or reasonably available to the owners corporation or owners at the time they refused consent to the by-law or the common property alteration, rather than material which subsequently came into existence: Owners Corporation SP 7596 v Risidore & Ors [2003] NSWSC 966 at [11] – [13]; Owners SP 69140 v Drewe [2017] NSWSC 845 at [27] and compare in the context of s. 126 of the Act, Endre v The Owners - Strata Plan no. 17771 [2019] NSWCATAP 93 at [29].

60 Particular lot owners in the strata plan the subject of proceedings can, on one view even should, adduce evidence of their reasons for their opposition to the proposed common property rights by-law: Milman v Owners SP 1389 [2005] NSWCTTT 196.

17. In Charitable Islamic Association of Beirut City Incorporated v The Owners- Strata Plan No 75506 [2019] NSWCATCD 53 the Tribunal noted:

40. A Lot owner bringing an application that the refusal of a proposed special privileges by-law must demonstrate the unreasonableness of the refusal, not the reasonableness of the proposed change (Ainsworth v Albrecht [2016] HCA 40 at [55]; [63]-[64]; [74]; [84]-[90]). Regarding this issue, and the relevant considerations under s 149 of the SSMA, the Tribunal stated in Capcelea v The Owners-Strata Plan No 48887 [2019] NSWCATCD 27 at [56]-[59]:

“The fundamental assessment, on which the challenging owners bear the onus of proof as further discussed below, is whether or not, taking into account those interests, rights and expectations, the decision to refuse the proposed by-law was unreasonable.

But the exercise required by s 149(2), unlike the exercise in Ainsworth, requires not only the consideration of an objective rational basis for refusal taking into account the interests of all owners in their lots and the common property but, also, an assessment of that basis by taking into account the rights and expectations of the owners propounding the by-law and anticipating a benefit from them.

It is not a simple balancing exercise to test for reasonableness of the proposal being rejected, as the adjudicator engaged in and the Queensland Court of Appeal endorsed, in Ainsworth.

But it is an exercise in which the unreasonableness of a refusal is assessed by, not only the interests of the refusing owners in their perception and expression of the status quo property rights, but also by the rights and reasonable expectations of the proponent owners that the refusing owners ought (to avoid acting unreasonably) have taken into account in coming to a decision. The Tribunal intrudes into the decision because it is required by the wording of s 149(2) to have regard to the matters in s 149(2) as they presented at the time of the refusal, and on an objective basis, in assessing the quality of the decision made by the refusing owners.”

Consideration

18. When considering whether the refusal was unreasonable I need to consider the interests of the refusing owners but also the interests of the applicant in the use and enjoyment of her lot. I am not assessing the reasonableness of the proposal but the quality of the decision made to refuse the proposal. When considered through that lens it is apparent that the refusing owners did not take into account the benefits of the proposal to the proponent, set out in the note to the motion. The failure to do so makes the decision unreasonable.

19. It is also apparent that at least some owners came to a decision to refuse the proposal without considering all of the material provided. Owners were in fact invited to express their position before the meeting was convened. There was no opportunity for discussion at the meeting, as all of the refusing owners voted by pre poll.

20. I need then to consider whether to make an order which would permit the installation of the panels and mandate the making of the by-law. I am satisfied that I should do so. In coming to this decision I have considered:

1. The panels will not be visible from the street. I accept that they will be able to be seen from the driveway at various locations. However, solar panels are increasingly found on rooftops, and objectively cannot be said to adversely affect the visual amenity of the scheme.

2. The concerns raised about fire risk relate to solar systems which are not properly installed and maintained. The terms of the by-law address these matters.

3. There is no evidence that the installation of the panels will increase the insurance premiums.

4. No concerns have been raised by the Owners Corporation about the terms of the proposed by-law which appear to adequately protect the Owners Corporation.

5. Solar panels are sustainability infrastructure. The Act has been amended so that the motion would be passed so long as less than 50% are opposed to the motion. This amendment reflects the importance of sustainability infrastructure to the broader community and balances the concerns raised by the refusing owners about the manufacture and disposal of the panels.

6. There are cost savings to the applicant (and any other lot owner who might wish to seek to have solar panels on their roof).

The application to remove Mr Leis from the committee

The Law

21. Section 238 of the Act provides:

238 ORDERS RELATING TO STRATA COMMITTEE AND OFFICERS

(1) The Tribunal may, on its own motion or on application by an interested

person, make any of the following orders--

(a) an order removing a person from a strata committee,

(b) an order prohibiting a strata committee from determining a specified matter

and requiring the matter to be determined by resolution of the owners

corporation,

(c) an order removing one or more of the officers of an owners corporation from

office and from the strata committee.

(2) Without limiting the grounds on which the Tribunal may order the removal

from office of a person, the Tribunal may remove a person if it is satisfied that

the person has--

(a) failed to comply with this Act or the regulations or the by-laws of the strata

scheme, or

(b) failed to exercise due care and diligence, or engaged in serious misconduct,

while holding the office.

The allegations

22. The applicant alleges that Mr Leis should be removed from office because his behaviour makes him unfit. She also complains that meetings have not been called, and that the roles of Chairperson, Secretary and Treasurer have not been filled, or if they have, there has been no transparency in that process. She complains that Mr Leis has trespassed on lot property, used her water without her consent, fenced an area of common property so that his dogs can play, and has been intimidating towards her.

Consideration

23. None of the allegations, even if proven, would support a finding that Mr Leis has failed to exercise due care and diligence or engaged in serious misconduct whilst holding office.

24. The applicant alleges that there has been conflict arising from Mr Leis and his family parking on common property. She alleges that Mr Leis has sworn at her and tried to intimidate her. Mr Leis denies these allegations. I can make no findings in respect of them.

25. The applicant also alleges that Mr Leis trespassed on the property of Ms Kiely, in relation to some building work being undertaken. She alleges that Mr Leis gave instructions to the builder without authority. Mr Leis disputes the applicant’s version of events, says he went on to the lot only to loan a ladder to the builder, and denies giving instructions to the builder.

26. Even if I accepted the applicant’s evidence about these matters they do not amount to grounds to remove Mr Leis form his positions.

27. There is one matter raised where there has been a failure to comply with the Act, and that is the failure to elect the office bearers at a properly convened meeting of the strata committee. However this failure is not that of Mr Leis alone. Indeed it seems that the strata manager believes he holds these positions. This is not the case. Section 41 makes it mandatory for the strata committee to appoint a Chairperson, Secretary and Treasurer. Whilst s 54 states that the strata manager may exercise the functions of the Chairperson, Secretary and Treasurer, it also states that the Chairperson, Secretary and Treasurer may continue to exercise the functions delegated to the strata manager.

28. I am not satisfied that there are grounds to remove Mr Leis form his position and I decline to make the order sought.

Orders

29. The application to remove Mr Leis from his position on the strata committee is dismissed.

30. Pursuant to s 149 of the Strata Schemes Management Act 2015 the Tribunal prescribes the making a common property rights by-law in and to the effect of the by-law referred to in motion 14 in the minutes of the annual general meeting of SP 97230 on 23 September 2021, a true copy of which is annexed to these orders.

31. The Owners Corporation is to ensure that the common rights by-law is registered in accordance with s 246 of the Act.

**********

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

Amendments

29 September 2023 - Formatting amendments.

Decision last updated: 29 September 2023