Linney v The Owners - Strata Plan No. 11669

[2021] NSWCATCD 123

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Linney v The Owners - Strata Plan No. 11669 [2021] NSWCATCD 123

Hearing dates:

28 July 2021

Date of orders:

8 December 2021

Decision date:

08 December 2021

Jurisdiction:

Consumer and Commercial Division

Before:

G Sarginson, Senior Member

Decision:

1. By 31 January 2022, The Owners-Strata Plan No 11669 is to perform, using suitably licensed tradespersons exercising due care and skill, the following repairs to a common property bathroom bulkhead proximate to Lot 4 of the strata scheme:

(a) Repair damaged bulkhead (timber frame area).

(b) Tape and set all joins and apply base coat (x 1).

(c) Apply paint top coats (x 2).

(d) Paint to match existing area.

2. The owner of Lot 4 is to take all reasonable measures to ensure that reasonable access to the Lot is given to The Owners-Strata Plan No 11669 so that Order 1 above can be complied with.

3. By 31 January 2022, The Owners-Strata Plan No 11669 is to record in the strata roll the by-laws for the time being in force for the strata scheme in accordance with s 178 (2) (e) of the Strata Schemes Management Act 2015 (NSW).

4. The application is otherwise dismissed.

Catchwords:

LAND LAW — Strata schemes — Conduct of annual general meeting — Whether breach of ss 24 and/or 25 of the Strata Schemes Management Act 2015 (NSW) established — Content of strata roll — Whether compliant — Removal of strata committee member from office — Whether grounds for removal established — Common property of strata scheme —Duty to maintain and repair — Whether duty breached

Legislation Cited:

Civil and Administrative Tribunal Act 2013 (NSW)

Strata Schemes Development Act 2015 (NSW)

Strata Schemes Management Act 2015 (NSW)

Strata Schemes Management Regulation 2016 (NSW)

Strata Titles Act 1973 (NSW)

Cases Cited:

Glenquarry Park Investments Pty Ltd v Hegyesi [2019] NSWSC 425

McCue v The Owners - Strata Plan No 38444 [2021] NSWCATCD 35

Read v The Owners - Strata Plan No 2533 [2021] NSWCATAP 218

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Gayle Marie Linney (Applicant)
The Owners-Strata Plan No 11669 (First Respondent)
Susanne Parks (Second Respondent)

Representation:

M Kuskis (Applicant)
G Lumley (First and Second Respondent)

Solicitors:
Kerin Benson Lawyers (First and Second Respondent)

File Number(s):

SC 21/11877

Publication restriction:

Nil

REASONS FOR DECISION

1. This is an application by a Lot owner in a strata scheme for various orders under the Strata Schemes Management Act 2015 (NSW) (‘the SSMA’).

2. The applicant is the owner of Lot 4. The strata scheme is located on the northern beaches of Sydney, NSW. The strata scheme comprises of 8 Lots. The applicant and Mr Kuskis do not reside in the strata scheme, with their Lot being rented for the purpose of investment.

3. The applicant seeks the following orders of the Tribunal:

1. Orders under ss 24 and 25 of the SSMA in respect of the Annual General Meeting of the owners corporation on 24 August 2020 invalidating all Motions passed at that meeting. The meeting was held electronically. The basis of the application is, in essence, that the strata manager who chaired the meeting, Ms Hopkins, terminated the connection of the applicant after a dispute about whether the applicant’s partner, Mr Kuskis, could observe and/or participate at the meeting.

2. Order under s 187 of the SSMA correcting the strata roll.

3. Order under s 188 of the SSMA that the owners corporation keep records of decisions and supply them on request.

4. Order under s 238 of the SSMA removing the second respondent, Ms Parks, as a member of the strata committee.

5. Order under s 106 of the SSMA that the owners corporation conduct repairs to common property.

4. The applicant filed proceedings in the Tribunal on 11 March 2021. The matter was listed for a directions hearing on 20 April 2021, where procedural directions were made and the matter was listed for hearing. One of the procedural directions made was that all parties were granted leave to be legally represented in the proceedings.

5. The applicant had also filed separate proceedings (Matter SC 21/28658) seeking a the Tribunal order a stay of the Annual General Meeting of the owners corporation scheduled for 20 July 2021 until these proceedings in Matter SC 21/11877 be heard and determined. On 16 July 2021, Titterton SM dismissed that application, with written reasons provided.

6. The Annual General Meeting of the owners corporation on 20 July 2021 proceeded.

7. At no stage of the proceedings has leave been granted for the applicant to amend the application to seek any orders regarding the Annual General Meeting of the owners corporation on 20 July 2021. To the extent that it was referred to in evidence and submissions its relevant, if any, is limited to the issues in dispute in these proceedings.

8. The matter was listed for hearing on 28 July 2021. The hearing was conducted by audio-visual link. The applicant appeared with her partner Mr Kuskis. Ms Lumley, Solicitor, appeared for both respondents. The second respondent, Ms Parks, also appeared at the hearing.

9. At the hearing, Ms Linney gave evidence and was cross examined. Ms Parks gave evidence and was cross examined. Ms Hopkins gave evidence and was cross examined.

DOCUMENTARY EVIDENCE AND SUBMISSIONS OF THE PARTIES

Applicant

10. The applicant filed and served a folder of documents and submissions on 18 May 2021.

11. The applicant’s folder of documents was not paginated, but contained the following:

1. Affidavit of Ms Linney dated 14 May 2021.

2. An outline of submissions and chronology of events titled “Application of Gayle Maria Linney” and “Supplement to Application of Gayle Maria Linney”.

3. Copy of registered strata plan.

4. Written strata settlement agreement at a strata mediation by NSW Fair Trading Strata Mediation dated 10 October 2019. The agreement pertains to matters involving a common property rights by-law being submitted by the applicant in respect of renovation works to the Lot that alter common property. The agreement also states:

5. Agreed by the owner of Lot 4 that should there be an instance in the future where the bathroom bulkhead in Lot 4 needs to be cut in to investigate the source of a leak or similar, the owner of Lot 4 is responsible for all costs of reinstatement and painting.

6. Registered By-laws of the strata scheme.

7. An undated photograph of the bathroom ceiling of the applicant’s Lot, showing a large hole in the ceiling.

8. Agenda for Annual General Meeting (‘AGM’) of the owners corporation on 24 August 2020. The Agenda states the meeting will be held “via Blue Jeans App”.

9. Minutes of the AGM conducted on 24 August 2020.

10. Tax invoices of Paul Whitfield Plumbing Pty Ltd to the strata manager dated 21 October 2019 and 14 November 2019.

11. Strata Roll of the strata scheme.

12. Agenda for Strata Committee Meeting on 1 December 2020.

13. Minutes of Strata Committee Meeting on 1 December 2020.

14. Motions that the applicant proposed for the AGM on 20 July 2021.

15. Amended Minutes of the AGM conducted on 24 August 2020 that were sent to Lot owners by the strata manager under covering letter dated 4 March 2021.

16. Agenda for an Extraordinary General Meeting of the owners corporation conducted on 14 April 2021.

17. Email correspondence between the applicant and the strata manager in late March/early April 2021 regarding the agenda for the EGM, and whether it accurately reflects the Motions put forward by the applicant.

18. Minutes of the Extraordinary General Meeting of the owners corporation dated 15 April 2021.

19. Copies of legal authorities.

12. Subsequent to the hearing, the applicant filed and served a written outline of submissions on 12 August 2021 and 1 September 2021.

Respondents

13. The respondents filed and served documentary evidence on 15 June 2021. Such evidence was:

1. Statutory declaration of Ms K. Hopkins, strata manager, dated 15 June 2021.

2. Statutory declaration of Ms S. Parks, strata committee member, dated 15 June 2021.

14. On 20 July 2021 the first respondent filed and served a brief supplementary statement of Ms Hopkins dated 20 July 2021. On 26 July 2021, the respondents filed and served a second brief statement of Ms Parks dated 26 July 2021.

15. The supplementary statement of Ms Parks was not relied upon.

16. Although the supplementary statement of Ms Hopkins was served outside the applicable timetable obligation in the directions of the Tribunal and was objected to, leave was granted to admit it into evidence as it was brief and created no procedural unfairness to the applicant, in circumstances where the matters raised could be dealt with in cross examination.

17. Subsequent to the hearing, the first and second respondents filed and served written submissions on 25 August 2021.

CONSIDERATION

Application for Orders Under ss 24 and 25 of the SSMA Arising from the Annual General Meeting on 24 August 2020

18. This aspect of the application arises from the manner in which the strata manager Ms Hopkins conducted the meeting and dealt with the applicant and Mr Kuskis.

19. Prior to the 2020 Annual General Meeting of the owners corporation there had been disputation between the parties in 2019 involving renovations and repairs to Lot and common property. The parties had participated in mediation at NSW Fair Trading on 10 October 2019, where a signed agreement was entered into.

20. At an Extraordinary General Meeting of the owners corporation on 6 November 2019, a common property rights by-law was passed authorising alterations to common property by the Lot owner as part of renovations to the Lot.

21. The 2020 Annual General Meeting was held remotely using the ‘Blue Jeans’ videoconferencing system. The meeting was scheduled to commence at 5.30 pm.

22. According to the applicant, she logged in at approximately 5.20 pm. Mr Kuskis was present with her.

23. The evidence of the applicant was that she and Mr Kuskis were effectively excluded from participating in the AGM by the strata manager terminating her connection to the meeting.

24. Mr Kuskis did not hold a proxy to vote on behalf of the applicant.

25. The applicant asserted that the strata manager opposed Mr Kuskis speaking at the meeting on behalf of the applicant. According to the applicant, the strata manager proposed that owners take a vote whether to exclude her from the meeting. The vote was taken, and other Lot owners voted to exclude the applicant from the meeting. The strata manager then terminated the connection. The applicant was not able to vote on the Motions at the meeting.

26. The applicant asserted that neither the applicant nor Mr Kuskis stated that he would speak at the meeting; and he had attended the 2019 AGM of the owners corporation “as an observer” without speaking and without objection.

27. According to the applicant, she had “informed the strata managing agent” (although it was not clear from the evidence as to whether this was orally or in writing) on about 10 August 2020 that Mr Kuskis would be attending the meeting “as an observer” and that the strata manager had informed her that Mr Kuskis “would not be permitted to attend”.

28. The evidence of Ms Hopkins was that prior to the AGM, the “branch manager” of the strata manager had informed the applicant that Mr Kuskis could not attend the meeting unless other Lot owners agreed, and an email had been sent on 17 August 2020.

29. The email referred to states that:

…Owners may attend a meeting or a proxy of the owner. A proxy cannot vote if the person appointing proxy votes…if it refers to your partner attending this should be done sending through your proxy for your partner so he can attend…

30. Prior to the email of 17 August 2020, Ms Hopkins had sent an email to the applicant on 10 August 2020 that stated that due to COVID-19 restrictions physical meetings were “not recommended”; which was the reason the meeting was being held remotely. The email concluded:

I note that any persons who are not holding a proxy will only be able to be an observer should the rest of the owners agree.

31. According to Ms Hopkins, the relevant events at the AGM were as follows:

1. Prior to the meeting, Ms Hopkins was given a proxy to vote on behalf of one of the Lot owners (the owner of Lot 2).

2. Ms Hopkins asked the other Lot owners in attendance who had logged on (being Ms Parks; Ms Fisher and Mr Bourke) if they agreed to Mr Kuskis attending.

3. The 3 other Lot owners each stated they did not want Mr Kuskis to attend.

4. Ms Hopkins requested Mr Kuskis leave the meeting.

5. Mr Kuskis and the applicant became “argumentative” that Mr Kuskis had a right to attend, including Mr Kuskis stating that “tenants have a right to attend”.

6. Ms Hopkins stated that Mr Kuskis was not a tenant. Ms Hopkins asked the applicant on two occasions if she would attend the meeting without her partner. The applicant refused. The applicant and Mr Kuskis were “yelling” and being loudly argumentative. Ms Hopkins put the applicant and Mr Kuskis on mute.

7. Ms Hopkins asked other Lot owners whether the applicant and Mr Kuskis needed to be removed from the meeting. The other Lot owners agreed.

8. Ms Hopkins unmuted the applicant and again asked whether she would attend the meeting without Mr Kuskis. The applicant again refused and “yelled” at Ms Hopkins.

9. Ms Hopkins disconnected the applicant from the meeting. The applicant did not attempt to reconnect to the meeting.

10. The meeting then proceeded. Motions were voted upon. A strata committee was elected.

32. Ms Parks version of events as to what occurred at the meeting was broadly consistent with the recollection of Ms Hopkins.

33. The Minutes of the 2020 AGM relevantly noted the following:

At the commencement of the meeting, G. Linney joined via Blue Jeans with her partner, M Kuskis. The managing agent asked the owners if they agreed that this non-owner and non-proxy holder M. Kuskis be allowed to attend the meeting, which they unanimously agreed not to provide their consent. It is noted that G. Linney has been advised by the Branch Manager of Robinson Strata Management in writing prior to the AGM that M Kuskis would be able to attend should a proxy be provided in accordance with the legislation, which it was not. The managing agent requested more than twice that only the owner for the lot to attend, to which G. Linney refused on each occasion and then both the lot owner and her partner proceeded to become disruptive and argumentative. M Kuskis also asserted his legal right to attend the meeting. The Chairperson then asked them to leave the meeting as it was impossible to continue. The owners were all in support of this decision and the meeting continued with no further disruption.

34. The applicant gave evidence that the content of the Minutes of the meeting setting out what had occurred was inaccurate. According to the applicant, neither she nor Mr Kuskis were aggressive, argumentative or disruptive. The applicant accepted that she and Mr Kuskis were upset, but that was because they believed that Mr Kuskis had a right to observe at the meeting and could not be excluded from doing so.

35. The evidence of Ms Hopkins and Ms Parks was that the notation in the AGM Minutes as to what had occurred was accurate and that the applicant and Mr Kuskis were unreasonably disruptive.

36. Sections 24 and 25 of the SSMA state:

24   Order invalidating resolution of owners corporation

(1)  The Tribunal may, on application by an owner or first mortgagee of a lot in a strata scheme, make an order invalidating any resolution of, or election held by, the persons present at a meeting of the owners corporation if the Tribunal considers that the provisions of this Act or the regulations have not been complied with in relation to the meeting.

(2) The Tribunal may, on application by an owner or first mortgagee of a lot in a strata scheme, make an order invalidating any resolution of, or election held by, the persons present at a meeting of the owners corporation if the Tribunal considers that the provisions of Part 10 (other than Division 6 or 7) of the Strata Schemes Development Act 2015 have not been complied with in relation to the meeting.

(3)  The Tribunal may refuse to make an order under this section only if it considers—

(a)  that the failure to comply with the provisions of this Act or the regulations, or of the Strata Schemes Development Act 2015, did not adversely affect any person, and

(b)  that compliance with the provisions would not have resulted in a failure to pass the resolution or affected the result of the election.

(4) The Tribunal may not make an order invalidating a resolution under subsection (2) if an application for an order has been made under Division 6 of Part 10 of the Strata Schemes Development Act 2015 in relation to the same or a related matter.

(5) The Tribunal may not make an order under this section invalidating a decision by an owners corporation to approve, or not to approve, the appointment of a building inspector under Part 11.

25   Order where voting rights denied or due notice of item of business not given

(1)  The Tribunal may, on application by a person entitled to vote on a motion for a resolution of an owners corporation at a general meeting, order that a resolution passed at the general meeting be treated as a nullity on and from the date of the order.

(2)  The Tribunal must not make the order unless the Tribunal is satisfied that the resolution would not have been passed but for the fact that the applicant for the order—

(a)  was improperly denied a vote on the motion for the resolution, or

(b)  was not given due notice of the item of business in relation to which the resolution was passed.

(3)  An application for an order may not be made unless—

(a)  an application for mediation of the dispute was made not later than 28 days after the date of the meeting at which the resolution was passed, or

(b)  if an application for mediation was not made, the application for the order was made not later than 28 days after the date of the meeting at which the resolution was passed.

(4)  If a resolution that is to be treated as a nullity by an order changes the by-laws and the order has been recorded in the Register under this Act, the by-laws have force and effect on and from the date the order is so recorded to the same extent as they would have had if the change had not been made.

(5)  Subsection (4) is subject to the by-laws having been or being changed in accordance with this Act and to any relevant order made by a superior court.

(6) The Tribunal may not make an order under this section if an application for an order has been made under Division 6 of Part 10 of the Strata Schemes Development Act 2015 in relation to the same or a related matter.

(7) The Tribunal may not make an order under this section invalidating a decision by an owners corporation to approve, or not to approve, the appointment of a building inspector under Part 11.

37. The first issue for determination is whether 2020 AGM complied with the provisions of the SSMA and the Strata Schemes Management Regulation 2016 (NSW) (‘the SSM Regulations’). The applicant must establish the meeting was non-compliant with the SSMA or the SSM Regulations (including the provisions of Part 10 of the SSMA dealing with information such as strata roll information) as a starting point under s 24 (1) and (2) of the SSMA.

38. Only if the Tribunal is satisfied that the meeting was non-compliant with the SSMA or SSM Regulations does the Tribunal need to determine the matters in s 24 (3) of the SSMA.

39. The 2020 AGM on 24 August 2020 was chaired by the strata manager Ms Hopkins. The evidence of Ms Hopkins and Ms Parks was that the procedure that had been adopted by the owners corporation at general meetings over a number of years (since about 1991) was that the strata manager would chair meetings rather than the Chairperson of the strata committee.

40. Section 13 (1) (f) of the SSMA allows an owners corporation; strata committee; or officer of the owners corporation to delegate to the strata manager the conduct of meetings of the owners corporation.

37. Under the strata managing agency agreement (a copy of which was attached to Ms Hopkins statement of 15 June 2021), Schedule A1 and A2 identify that the strata manager has delegated authority to arrange and undertake administrative duties in relation to meetings of the owners corporation, including acting as Chairperson at annual general meetings.

38. There was no evidence that the strata managing agency agreement was not validly entered into and the Tribunal is satisfied that, pursuant to the strata managing agency agreement, Ms Hopkins was able to perform the duties of Chairperson of the strata committee at the 2020 AGM on 24 August 2020. Ms Hopkins was exercising the power of the Chairperson to “preside” at a general meeting under Sch. 1 Cl. 12 (1) of the SSMA, and there is nothing in the applicant’s evidence or submission to satisfy the Tribunal that this was not a power that could be delegated; or that the delegation was improper.

39. In this regard, the Tribunal notes that the strata scheme was small, comprising of 8 Lots and there does not appear to be anything improper or unusual about a licensed strata manager (provided they have been duly appointed and authorised) exercising by way of delegation the power to preside at a general meeting of a strata scheme when the strata scheme is a small scheme.

40. The 2020 AGM on 24 August 2020 was conducted by way of videoconference. Although the submissions of the applicant are critical of the manner in which the meeting was conducted, there is nothing in the evidence or submissions of the applicant to satisfy the Tribunal that the decision to hold the meeting electronically contravenes Clause 10 of Schedule 2 of the SSMA; Reg. 14 of the SSM Regulations; or Part 11 of the SSM Regulations.

41. The focus of the applicant’s submissions and evidence was that the meeting had been improperly held not because it had been conducted by videoconference, but because she had unreasonably been excluded from the meeting.

42. The SSMA and the SSM Regulations do not proscribe the general procedures to be adopted by the Chairperson of a strata committee (or their delegate) when presiding over a meeting of the owners corporation.

43. Rather, the provisions focus upon matters including tenants who are occupants in the strata scheme having a right to attend a meeting but not vote (unless the holder of a proxy from a person entitled to vote at the meeting-Sch. 1 Cl. 21 of the SSMA); who is entitled to vote and voting procedures (Sch. 1 Cl. 23-25 of the SSMA); appointment of proxies (Sch. 1 Cl. 26 of the SSMA); manner of voting (Sch. 1. Cl. 28 and 29 of the SSMA).

44. In this matter, it is clear that that Mr Kuskis was not a tenant of a Lot owner in the strata scheme; he was not the Lot owner; and he was not given a proxy to vote at the annual general meeting of the owners corporation on 24 August 2020 by a Lot owner. Accordingly, he had no right to “attend” the meeting under the SSMA or the SM Regulations.

45. The applicant asserts that Mr Kuskis was attending the meeting only as an “observer”. The Tribunal is not satisfied on the evidence that this was the case. Mr Kuskis did not provide any sworn statement as to his version of events; nor did the applicant make any application for him to be granted leave to give oral evidence. Mr Kuskis appeared at the hearing before the Tribunal solely in the capacity as representative of the applicant under s 45 of the Civil and Administrative Tribunal Act 2013 (NSW).

46. Rather, the Tribunal is satisfied having considered the versions of events by the applicant; Ms Hopkins; and Ms Parks that Mr Kuskis did seek to participate in the meeting beyond being a mere observer, by strongly asserting that he had a right to attend the meeting.

47. As discussed previously, even if Mr Kuskis sought to appear only as an “observer” without speaking or prompting the applicant to speak, there is nothing in the SSMA or SSM Regulations that gave him the right to do so. The SSMA and/or SSM Regulations did not give Mr Kuskis a right to attend the meeting as a mere observer, even if he had attended previous meetings of the owners corporation in that capacity as the partner of the Lot owner.

48. Ultimately, in the circumstances of this matter, for the applicant to succeed under s 24 (1) of the SSMA, the Tribunal must be satisfied that Ms Hopkins conducted the strata meeting in such an unreasonable, unfair, or oppressive way when exercising the power to prescribe the procedure of the meeting that the applicant was denied her right as a Lot owner to attend the meeting and vote on Motions. “Attendance” at a meeting includes being able to make submissions about the Motions on the Agenda; and vote on Motions (provided that the Lot owner is not in levy arrears).

49. The Tribunal is not satisfied that the meeting was conducted in such an unreasonable, unfair, or oppressive manner that the applicant was denied a reasonably opportunity to attend and vote. The applicant was informed prior to the meeting that Mr Kuskis could only attend as an observer or participant only with the consent of other Lot owners.

50. The Tribunal accepts the evidence of Ms Hopkins that the meeting became heated, due to Mr Kuskis strongly asserting he had a right to attend; although he described the capacity in which he was attending as an “observer”. The Tribunal accepts that prior to Ms Hopkins terminating the connection of the applicant the applicant was told on a number of occasions that she could attend the meeting without Mr Kuskis; and was given warnings that the connection would be terminated if she insisted that Mr Kuskis also attend.

51. Under these circumstances, it was the action of the applicant that led to her not participating and voting at the meeting without Mr Kuskis being in attendance, rather than her being precluded from doing so in a manner that contravened the SSMA or the SSM Regulations. The Tribunal also accepts the evidence of Ms Hopkins that after the applicant’s connection was terminated by Ms Hopkins she did not further attempt to log into the meeting.

52. The applicant submits that Ms Hopkins had no power to do anything other than rule Motions out of order, and had no power to “exclude” Mr Kuskis from the meeting. However, as discussed previously, part of the role of the Chairperson (Ms Hopkins exercising delegated powers) is to “preside” at the meeting. This involves providing direction, guidance and control of the meeting. The manner in which Ms Hopkins presided over the meeting was not, assessed objectively, unreasonable or inconsistent with the power provided in Sch. 1 Cl. 12 (1) of the SSMA, irrespective of the subjective views of the applicant and Mr Kuskis.

53. Having heard the evidence of the parties, the Tribunal infers there was pre-existing animosity due to the previous dispute about renovations to the applicant’s Lot and alterations to common property. Considering the manner in which the persons who gave evidence at the hearing presented, the Tribunal is satisfied that the meeting became heated over the issue of whether Mr Kuskis could attend the meeting.

54. The applicant, Mr Kuskis and Ms Hopkins could have all acted in a much more conciliatory manner towards each other on 24 August 2020 but did not do so. It is unfortunate that cooler heads did not prevail. All persons involved may reflect that their behaviour could have been better. However, the Tribunal is not satisfied that the actions of Ms Hopkins in terminating the connection of the applicant to the meeting in all the circumstances of the matter, constitutes a failure to comply with the SSMA or SSM Regulations pursuant to Section 24 (1) of the SSMA.

55. There is nothing in the evidence or submissions of the applicant to suggest there was any failure to comply with any applicable provision of Part 10 (other than Division 6 or 7) of the Strata Schemes Development Act 2015 (NSW). Accordingly, s 24 (2) of the SSMA is inapplicable.

56. For the sake of completeness, the Tribunal will also consider s 24 (3) of the SSMA in the event that its conclusion regarding s 24 (1) of the SSMA is erroneous.

57. In Read v The Owners-Strata Plan No 2533 [2021] NSWCATAP 218 (‘Read’) the Appeal Panel referred to the principles applicable to s 24 (3) of the SSMA as follows at [50]-[56]:

Whilst the late provision of the minutes was a breach of the Act, it was not a breach which affected the conduct or outcome of the meeting. The intention of section 24 is to confer a discretion on the Tribunal to invalidate resolutions where there has been non-compliance with the Act or Regulations in relation to the meeting. In our view the late provision of the minutes after the meeting did not affect the resolutions passed at the meeting and is not a breach of the Act in relation to the meeting within the meaning and intent of section 24. If we are wrong in this view, then we consider that it is clear that the late provision of the minutes did not adversely affect any person or have any bearing on the resolutions passed at the meeting and could not have resulted in an order invalidating any resolution under section 24.

In these circumstances, we see no error in the Tribunal focusing on the breaches of the Act which it identified and considered, namely the failure to allow Dr Read to chair the meeting and the failure to comply with the notice provisions of the Act.

The appellants submit that the Tribunal made further errors of law in the way in which it interpreted section 24 of the Act, by failing to decide the issues raised by section 24(3)(a) and (b), namely whether any person was adversely affected by each non-compliance with the Act which was found to have taken place and whether compliance with the provisions of the Act would have resulted in a failure to pass the relevant resolution.

We consider that this submission is incorrect. The Tribunal correctly identified the questions which it was required to consider at [35(a) and (b)] of the Reasons. The Tribunal then proceeded to answer those questions in substance at [51] – [57] of the Reasons. The Tribunal identified a number of matters which had a bearing on the question of whether any person was adversely affected by the breaches of the Act, principally that:

Four of the 12 lot owners attended the AGM. There had been no complaint from any other owner regarding notice and it was reasonable in the circumstances to assume that an owner who was prevented from attending the AGM as a result of inadequate notice would have come forward and complained.

A considerable period of time had elapsed since the AGM and an EGM had subsequently been held which gave the Owners another opportunity to come together and potentially address matters of concern from the previous meeting;

Even though the appellants sought to overturn all of the resolutions made at the AGM, several of those resolutions were decided unanimously. Those which were not decided unanimously were generally amendments proposed by Dr Read which were not of a substantive nature. These amendments were defeated.

The Tribunal expressly held at [56] that there were no issues arising from the AGM which would be decided differently should resolutions be invalidated.

The Tribunal identified other considerations which also emphasised a conclusion that the resolutions should not be invalidated, such as that invalidation of the resolutions now would be counter-productive and an unnecessary cost to the Owners. We see no error in the Tribunal taking into account additional considerations which justified a conclusion that the resolutions should not be invalidated, provided that the Tribunal had found the matters required to be established by sub-section 24 (3) (a) and (b) of the Act. We are satisfied that the Tribunal did address those matters and found both of those matters established, justifying the refusal of orders under section 24.

It follows that we are satisfied that the Tribunal made no error of law in the manner in which it interpreted section 24 of the Act.

62. In its written submissions filed on 25 August 2021, the first respondent submits that even if the applicant had voted on the Motions at the meeting, the Motions would have passed in any event due to the Lot entitlements of those who voted at the meeting compared to the Lot entitlements of the applicant (paragraphs [12]-[17] of the submissions).

63. The Tribunal accepts those submissions; and accordingly the Tribunal is not satisfied that had the applicant continued to attend and vote at the meeting that the resolutions that were passed would not have passed (Section 24 (3) (b) of the SSMA).

64. In respect of the election of the strata committee, Motion 17 called for nominations for persons to be elected to the strata committee. No written nomination to stand for election to the strata committee had been given by the applicant before the AGM on 24 August 2020. However, by reason of Reg. 9 (1) (b) of the SSM Regulations, an eligible person can orally nominate for election to the strata committee at the meeting, when the Chairperson calls for oral nomination.

65. The applicant submits that by reason of her connection being terminated she “lost the right” to nominate. However, the applicant’s affidavit of 14 May 2021 does not state that she intended to nominate for election to the strata committee at the annual general meeting on 24 August 2020, nor was there sufficient evidence at the hearing by way of answers to questions in cross examination for the Tribunal to be satisfied that she did intend to nominate.

66. Further, even if the applicant intended to nominate, the Tribunal accepts the submission of the first respondent that the evidence of Ms Hopkins and Ms Parks regarding voting intentions of Lot owners was that even if the applicant had nominated, she would not have been elected as a strata committee member. At the meeting, Ms Parks (owner of Lot 1), Ms Fisher (owner of Lot 6); and Mr Bourke (owner of Lot 7) were elected to the strata committee; and the Tribunal is not satisfied the outcome would have been different had the applicant nominated at the meeting.

67. Section 25 of the SSMA involves the denial of voting rights; or absence of due notice of an item of business that was voted on at the meeting. By reason of s 25 (1) of the SSMA, the Tribunal has a discretionary power to declare any Motions passed as a “nullity”. It is not a mandatory power; but a discretionary power.

68. However, by reason of s 25 (2) of the SSMA, the Tribunal must not exercise its discretion in favour of making such a declaration unless it is satisfied that (a) the applicant was improperly denied a vote on the Motion(s) for the resolution(s); or (b) the applicant was not given due notice of the item of business on which the resolution was passed.

69. In respect of s 25 (2) (b) of the SSMA, there is nothing to satisfy the Tribunal that the Agenda for the meeting did not properly reflect the Motions that were to be voted upon; or any Motion was passed that was not set out in the Agenda that had been circulated prior to the annual general meeting on 24 August 2020. Accordingly s 25 (2) (b) of the SSMA does not apply.

70. The Tribunal accepts that the applicant not participating in the AGM and voting on Motions potentially adversely affected the applicant under s 24 (3) (b) of the SSMA. However, because the Tribunal is not satisfied of the matters under s 24 (1) and 24 (3) (b) of the SSMA, it makes no difference whether the applicant was adversely affected under s 24 (3) (a) of the SSMA.

71. In respect of s 25 (2) (a) of the SSMA, the Tribunal is not satisfied that the applicant was improperly denied a vote at the meeting, for the same reasons as set out previously dealing with s 24 (1) of the SSMA.

72. Finally, to the extent it is relevant to ss 24 and 25 of the SSMA (Read at [55]), there are discretionary reasons not to set aside the Motions passed at the AGM on 24 August 2020. There has been an AGM since that date. To set aside Motions passed at the 2020 AGM; or declare them to be a nullity; would likely create significant uncertainty and potential cost to the owners corporation by reason of retrospectively invalidating Motions passed at the meeting; the election of the strata committee; and contracts entered into by the owners corporation in the period between the 2020 AGM and the 2021 AGM.

Conclusion-Sections 24 and 25 of the SSMA

73. The Tribunal is not satisfied the applicant has established grounds under ss 24 and/or 25 of the SSMA for an order invalidating or declaring as a nullity the Motions passed at the Annual General Meeting of the owners corporation dated 24 August 2020.

Order Under s 187 of the SSMA Correcting the Strata Roll

74. Section 187 of the SSMA states as follows:

187   Order confirming information for strata roll

(1)  The Tribunal may, on application by an owners corporation, owner or other person having or acquiring an estate or interest in a lot in a strata scheme, order an owners corporation to enter information contained in a strata interest notice in the strata roll if a person fails to provide the required written confirmation of the notice.

(2)  In making the order, the Tribunal may amend the information in the strata interest notice to which the order relates in any manner the Tribunal thinks fit.

(3)  The Tribunal must dismiss an application for an order if the Tribunal considers that the rights of any person would be prejudiced if the order were made.

(4)  A copy of an order under this section given to an owners corporation is taken to be a strata interest notice given to the owners corporation and information entered on a strata roll in accordance with the order is taken to have been entered from a notice with any written confirmation required.

75. A “strata interest notice” is defined in s 22 of the SSMA. It is a notice that sets out a person’s interest in a Lot that gives the person a right to cast a vote at meetings of the owners corporation. The strata interest notice must contain the person’s full name; an address for services of notices; the Lot concerned and the person’s interest in the Lot; the date the person acquired the interest in the Lot; and if a voting entitlement is to be exercised by a nominee, the full name and an address for service of the nominee.

76. There is no evidence to indicate that any strata interest notice in accordance with s 22 of the SSMA has been issued. Accordingly, there is no basis for making any order under s 187 of the SSMA.

77. What the applicant appears to be seeking is not an order under s 187 of the SSMA, but an order under either s 232 or 241 that the owners corporation amend its strata roll because it has not been kept up to date or is in some respect non-compliant with the provisions in Div. 1 of Part 10 of the SSMA.

78. In written submissions, the only purported “deficiencies” of the strata roll that were clearly identified (paragraphs [64]-[65] of the written “application” of the applicant contained in the folder of documents and submissions filed on 18 May 2021) were:

1. No copy of the strata by-laws in force.

2. 3 pages of a Register of Orders with no details filled in and a reference to the Strata Titles Act 1973 (NSW) (which has been repealed).

3. A one page Bank Transaction Report which has “no place in a strata roll”.

79. Section 178 of the SSMA states:

178   Content of strata roll

(1) Information about lots The following information must be recorded in the strata roll in relation to a particular lot in the strata scheme—

(a)  the name of the holder of the estate in fee simple in the lot (in the case of a freehold strata scheme) or the holder of the leasehold estate in the lot (in the case of a leasehold strata scheme),

(b)  an address for service of notices,

(c)  an Australian postal address, and an email address if the holder has one, if not provided as the address for service,

(d)  the name of the holder’s agent (if any) appointed in accordance with this Act and the agent’s address for service of notices,

(e)  information provided under a strata interest notice,

(f)  information provided under a tenancy notice.

(2) Information about common property and strata scheme The following information must be recorded in the strata roll in relation to the common property of the strata scheme and the scheme in general—

(a)  the strata plan number and the address of the strata scheme building,

(b)  the names of the original owner and any strata managing agent of the owners corporation and their addresses for service of notices,

(c)  the aggregate unit entitlement of the scheme and the unit entitlement of each lot,

(d)  particulars of insurance taken out by the owners corporation, including the following—

(i)  the name of the insurance company,

(ii)  the number of the insurance policy,

(iii)  the nature of the risk insured,

(iv)  the amount of the insurance,

(v)  the due date for payment of the premium,

(vi)  the date on which the premium was last paid,

(e)  the by-laws for the time being in force for the strata scheme,

(f) if the scheme was registered before the commencement of Part 10 of the Strata Schemes Development Act 2015, whether that Part applies to the scheme.

80. The only deficiency in the strata roll which is contained in the applicant’s documents under s 178 of the SSMA is the absence of a copy of the by-laws in force for the strata scheme.

81. Although the applicant has not clearly referred to ss 232 and 241 of the SSMA in regard to the strata roll issue, the Tribunal is satisfied that the substance of the order sought was that the information in the roll was deficient and the applicant sought an order that the provisions of the SSMA be complied with in respect of the strata roll.

82. The Tribunal is satisfied that it is appropriate to make an order under s 232 or s 241 that the owners corporation attach to the strata roll the by-laws for the time being in force for the strata scheme (s 178 (2) (e) of the SSMA).

Order Under s 188 of the SSMA

83. Section 188 of the SSMA states as follows:

188   Order to supply information or documents

(1)  The Tribunal may, on application by a person, order an owners corporation, strata managing agent, officer or former strata managing agent of an owners corporation to supply to the applicant information that the Tribunal considers that the owners corporation, strata managing agent, officer or former strata managing agent has wrongfully withheld from the applicant and to which the applicant is entitled under this Act.

(2)  The Tribunal may, on application by a person, order an owners corporation, strata managing agent, officer or former strata managing agent of an owners corporation to supply or make available to the applicant a record or document if—

(a)  the Tribunal considers that the owners corporation, strata managing agent, officer or former strata managing agent has wrongfully failed to make the record or document available for inspection by the applicant or the applicant’s agent, and

(b)  the applicant is entitled under this Act to inspect the record or document.

(3)  The order may specify the manner in which information is to be supplied or made available.

84. Under s 188 (1) of the SSMA, the applicant must establish that the owners corporation or strata manager “wrongfully withheld” information that the applicant “is entitled” under the SSMA.

85. Under s 188 (2) of the SSMA, the applicant must establish that the owners corporation, strata manager, or officer of the owners corporation: (a) “wrongfully failed to make the record or document available for inspection” and (b) the applicant is entitled under the SSMA to inspect the record or document.

86. The applicant’s evidence and submissions are vague as to what information has been withheld from the applicant to which the applicant “is entitled” under the SSMA. The applicant’s submissions refer generally to “records of decisions” but does not clearly set out what information the applicant is entitled to under the SSMA, nor that an application for information has been made to the owners corporation (or strata manager) that sets out with precision what information is sought to which the applicant is entitled under the SSMA, and that the owner corporation (or strata manager) has refused to provide such information.

87. Further, the applicant has not made a request to inspect documents to the owners corporation or strata manager under s 182 of the SSMA, noting that the items to be made available for inspection is set out in s 182 (3) of the SSMA.

88. The applicant has not satisfied the Tribunal that any order should be made under s 188 of the SSMA for documents, records or information to be provided to the applicant.

Order to Disqualify Ms Parks From Holding Office Under s 238 of the SSMA

89. Section 238 of the SSMA states:

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.

90. There was no evidence or submission that Ms Parks ceased to hold office as a strata committee member after the 2021 AGM. Accordingly, the Tribunal has jurisdiction to consider the application under s 238 of the SSMA on the basis that Ms Parks was a strata committee member as of the date of the Tribunal hearing.

91. The applicant submits that Ms Parks is not a “fit and proper person” to hold office as a strata committee member. That is a serious allegation to make. There is no evidence to establish Ms Parks is not a “fit and proper person” in the sense of any improper or illegal conduct.

92. In the applicant’s written “final submissions” filed on 1 September 2021, the applicant asserts that she was only “expressing an opinion” that Ms Parks was not a fit and proper person to hold office as a strata committee member, and did not submit that the Tribunal should apply a “fit and proper person” test under s 238 of the SSMA. The applicant’s subjective opinion whether Ms Parks is a “fit and proper person”: to be a strata committee member is irrelevant.

93. In any event, the matters that are to be considered under s 238 of the SSMA are the matters set out in s 238 (2), being:

1. Failure to comply with the Act, the Regulations or the By-laws; or

2. Failure to exercise due care and skill, or engaging in serious and wilful misconduct.

94. Further, even if any of the matters set out in s 238 (2) are established, the applicant must additionally satisfy the Tribunal that the matters are of sufficient magnitude to justify exercising its discretion in favour of removing the strata committee member from office.

95. There is no evidence upon which the Tribunal is satisfied Ms Parks has engaged in any serious and wilful misconduct.

96. The applicant has made extensive written submissions regarding why Ms Parks should be removed from the strata committee. Most, if not all, of the submissions revolve around the assertion that Ms Parks was responsible for actions and failure to act of the strata manager by reason of the operation of ss 37 and 260 of the SSMA.

97. Section 37 of the SSMA states:

37   Duty of members of strata committee

It is the duty of each member of a strata committee of an owners corporation to carry out his or her functions for the benefit, so far as practicable, of the owners corporation and with due care and diligence.

Note—

Section 260 provides protection from personal liability for members of strata committees who act in good faith.

98. Section 260 of the SSMA states:

260   Personal liability of officers of owners corporations and others

(1)  A matter or thing done or omitted to be done by any of the following persons, or a person acting under the direction of any of those persons, does not, if the matter or thing was done or omitted to be done in good faith for the purpose of executing functions as such a person under this or any other Act, subject any of the following persons or person so acting personally to any action, liability, claim or demand—

(a)  an officer of an owners corporation,

(b)  a member of a strata committee.

(2)  Any such liability of an officer of an owners corporation or a member of a strata committee attaches instead to the owners corporation.

99. Section 260 of the SSMA has no application to the issues to be considered under s 238 of the SSMA. Section 260 of the SSMA relevantly states that an officer of the owners corporation cannot be held personally liable for any cause of action arising from the exercise of their functions if they were acting in good faith for the purpose of executing their functions; and any such liability attaches to the owners corporation.

100. The issue for consideration is whether grounds have been established under s 238 of the SSMA sufficient for the Tribunal to exercise its discretion to remove Ms Parks from office as a strata committee member; not whether she or the owners corporation is liable for any cause of action, liability, claim or demand under the SSMA. Section 238 of the SSMA is a separate and discrete cause of action.

101. As discussed previously, the applicant asserts that Ms Parks should be removed from office by reason of not only her actions, but the actions of the strata manager Ms Hopkins in respect of the management of the strata scheme.

102. The grounds upon which the applicant submits that Ms Parks should be removed from office as a strata committee member are summarised as follows:

1. Ms Parks rather than Ms Hopkins should have chaired the Annual General Meeting on 24 August 2020.

2. Ms Parks “actively participated” in “excluding” the applicant from the 2020 AGM.

3. The strata roll was deficient.

4. The strata committee had not kept minutes of its meetings and provided them to the applicant on request.

5. There had been a delay in convening the 2020 AGM.

6. The applicant was not notified by email or by post that a strata committee meeting was being held on 1 December 2020 (although the applicant accepts in her submissions filed on 18 May 2020 that notice of the meeting was posted on the noticeboard of the strata building).

7. The applicant was not provided with a copy of the minutes of the strata committee meeting on 1 December 2020 by email or by post, although the applicant conceded that the Minutes could be accessed by the applicant through a Community Hub digital portal.

8. The strata committee “refused to participate in Mediation” and Ms Parks “participated” in that decision.

9. The applicant submitted 5 Motions for an Extraordinary General Meeting (‘EGM’) of the owners corporation on 15 April 2021. Her Motions did not appear on the initial Agenda for the meeting, and it was only after raising this issue with the strata manager that a revised Agenda was circulated.

10. The positioning of her Motions in the Agenda for the EGM on 15 April 2021 was “very prejudicial”.

11. The applicant accepts that a Motion was passed at the EGM on 15 April 2021 for the owners corporation to obtain legal services, but this was not justified considering the nature and scope of the dispute.

12. The owners corporation had failed to comply with its duty to keep and maintain common property in a state of good repair under s 106 of the SSMA pertaining to the dispute about the hole in the bathroom ceiling of the applicant’s Lot.

13. The applicant did not agree that the contents of the Minutes of various meetings of the owners corporation were accurate.

103. The first and second respondent’s written submissions at paragraphs [28]-[41] respond in detail to the issues raised by the applicant in the context of the application for an order under s 238 of the SSMA.

104. The Tribunal does not propose to repeat the submissions of the first and second respondent.

105. In essence, the submission made by the first and second respondents is that Ms Parks had not engaged in any conduct sufficient to satisfy the Tribunal that she should be disqualified from office; the issues identified by the applicant did not involve any breach of the SSMA and the SSM Regulations (for example, the Agenda for the EGM on 15 April 2021 left off the applicant’s proposed Motions because of an honest mistake of the strata manager that was corrected expeditiously by the circulation of an amended Agenda); much of the applicant’s complaints were focussed on matters where there had been a proper delegation of power to the strata manager (e.g. the role of Chairperson presiding at general meetings of the owners corporation).

106. It is unnecessary for the Tribunal to make factual findings about each and every complaint raised by the applicant. The Tribunal has considered the matters raised by the applicant. The Tribunal accepts the submission of the first and second respondent that most, if not all, of the matters raised by the applicant do not establish contraventions of the SSMA or SM Regulations by Ms Parks; let alone a failure to exercise due care and skill or serious misconduct in the exercise of her duties as a strata committee member.

107. The Tribunal is not satisfied that the applicant has established that Ms Parks should be removed from office as a strata committee member under s 238 of the SSMA.

The Application for Orders Under s 106 of the SSMA.

108. This issue arises from renovations to the applicant’s Lot affecting common property where a hot water system was installed.

109. Ms Hopkins statutory declaration dated 15 June 2021 contains evidence of relevant events; together with reference in the submissions of the Lot owner and her documentary evidence.

110. There had been a dispute between the Lot owner and the owners corporation regarding works to the bathroom of the Lot were a hot water system had been installed. The bathroom bulkhead had been replaced and man holes in the bulkhead had not been re-installed to access pipes and services.

111. On 10 October 2019 the applicant; Mr Kuskis and Ms Parks attended mediation at NSW Fair Trading Strata Mediation.

112. A written agreement was entered into. That agreement reflects that the applicant had drafted and submitted to the owners corporation a “retrospective common property rights By-law” (i.e. a common property rights by-law required to approve alterations to common property by a Lot owner under ss 108, 111 and 142 of the SSMA).

113. The written agreement was that the common property rights By-law would be put to an EGM of the owners corporation, together with associated matters. The written agreement also stated:

1. Agreed by the owner of Lot 4 that should there be an instance in future where the bathroom bulkhead in Lot 4 needs to be cut in to investigate the source of a leak or similar, the owner of Lot 4 is responsible for all the costs of reinstatement and painting.

114. Ms Hopkins states that on 11 October 2019, the owners corporation was notified of a leak into the bathroom of Lot 4. She then arranged for a contractor to inspect the leak. The contractors removed part of the bulkhead to inspect the source of the leak which “is the hole in the bulkhead subject to this application”.

115. According to the submission of the applicant, in October 2019 the tenant of Lot 4 reported a water leak to the applicant’s managing agent. A licensed plumber attended the Lot and the Lot above (Lot 8) to investigate) “on at least two occasions”. The plumber made a “rough hole in the bathroom ceiling bulkhead to investigate” which was not repaired by the owners corporation.

116. At a general meeting of the owners corporation on 6 November 2019 the proposed common property rights By-law was passed. It was subsequently registered. A copy of that By-law was contained in the applicant’s documentary evidence.

117. The works identified the common property rights By-law were:

(a) Installation of a continuous flow gas hot water system to the exterior wall of the Lot in accordance with Special By-law 3, including the following additional works to service the new gas hot water system:

(i) Cutting of the existing pipe ware and installation of a new (white) pipe;

(ii) Installation of a new on/off switch;

(iii) Installation of new piping;

(iv) Installation of new ancillary fittings and fixtures including but not limited to brackets and clips;

(v) Gouging of the common property wall; and

(b) Renovation of the bathroom in the Lot, relevantly encompassing removal and replacement of wall and floor tiles, and waterproofing.

118. The common property rights By-law stipulated that the Lot owner was responsible for the maintenance and repair of the works set out in the By-law.

119. Ms Hopkins states that, because of the written agreement entered into on 10 October 2019 and the terms of the common property rights by-law, the owners corporation has refused to repair the hole in the bathroom bulkhead.

120. The applicant obtained a quotation from a builder, Sydney Coastal Living dated 30 April 2021. The quote sets out a scope of works to repair the damaged bathroom bulkhead at a cost of $1,408. The applicant has not arranged for repairs to be conducted.

121. The application filed by the applicant only sought an order that the owners corporation conduct repairs of the bathroom bulkhead. At the hearing the applicant sought to amend the application to seek an order for damages under s 106 (5) of the SSMA, on the basis that if the tenant vacated the property at the end of the lease in late July 2021 the applicant may not be able to rent the property due to the unrepaired hole in the ceiling. The owners corporation objected to the proposed amendment.

122. The Tribunal refused to grant the applicant leave to amend the application, due to the lateness of the application to amend and the unfairness it would cause to the first respondent if the amendment was allowed. In any event, the evidence regarding loss would not likely have supported any such application as of the date of hearing.

123. Accordingly, when dealing with the claim under s 106 of the SSMA, the Tribunal is only dealing with the issue of whether a work order should be made against the owners corporation, not any claim for damages under s 106 (5) of the SSMA. Any claim for damages under s 106 (5) of the SSMA is not part of these proceedings.

124. The duty of the owners corporation to keep and maintain in a state of good repair the common property of the strata scheme is well established. The applicable principles were summarised in McCue v The Owners-Strata Plan No 38444 [2021] NSWCATCD 35 as follows at [63]-[64}:

In The Owners Strata Plan SP 20211 v Rosenthal; Rosenthal v The Owners Strata Plan SP 20211 [2018] NSWCATAP 243, the Appeal Panel summarised the relevant principles arising from the decision of Brereton J in Seiwa Australian Pty Ltd v Owners Strata Plan 25042 [2006] NSWSC 1157 as follows at [35]:

Section 106(1), (2) and (3) are in the same terms as 62(1), (2) and (3) of the 1996 Act. The decision of Brereton J in Seiwa summarises the relevant principles:

3. ……Section 62(1) imposes on an owners corporation a duty to maintain and keep in a state of good and serviceable repair, the common property. That duty is not one to use reasonable care to maintain and keep in good repair the common property, nor one to use best endeavours to do so, nor one to take reasonable steps to do so, but a strict duty to maintain and keep in repair.

4. The duty to maintain involves an obligation to keep the thing in proper order by acts of maintenance before it falls out of condition, in a state which enables it to serve the purpose for which it exists [Hamilton v National Coal Board [1960] AC 633, 647 (Lord Keith of Avonholm); Haydon v Kent County Council [1978] QB 433, 464 (Shaw LJ); Ridis v Strata Plan 10308 [2005] NSWCA 246, [161]]. Thus the body corporate is obliged not only to attend to cases where there is a malfunction, but also to take preventative measures to ensure that there not be a malfunction [Greetings Oxford Koala Hotel Pty Ltd v Oxford Square Investments Pty Limited (1989) 18 NSWLR 33 (Young J); Ridis, [162]-[163]]. The duty extends to require remediation of defects in the original construction of the common property [Proprietors Strata Plan No. 6522 v Furney [1976] 1 NSWLR 412, 416 (Needham J); Ridis [164]-[165]]. And it extends to oblige the owners corporation to do things which could not be for the benefit of the proprietors as a whole or even a majority of them [Proprietors Strata Plan 159 v Blake (1986) CCH Strata Titles Cases ¶30-068 (Yeldham J); Ridis, [166]].

5. It follows that as soon as something in the common property is no longer operating effectively or at all, or has fallen into disrepair, there has been a breach of the s 62 duty [cf Ridis [177]]. Insofar as Ridis held that s 62 did not oblige an owners corporation to conduct or procure the conduct of an expert assessment of every possible source of danger in the common property, personal property vested in it, and fixtures and fittings comprised in the common property, that was in the context of a submission that by imposing the statutory duty to maintain and repair, s 62 had the ancillary effect of extending the common law duty of care of an owners corporation as an occupier of the common property to include rigorous duties of inspection. The Court of Appeal rejected the submission that s 62 expressly or implicitly resulted in the imposition of such a common law duty. But that is beside the point; in this case, unlike in Ridis, the plaintiff relies on a statutory cause of action said to arise on s 62, rather than a duty of care said to arise consequentially from s 62 [cf Ridis, [87]-[88]].

6. The duty of an owners corporation under s 62 is owed to each lot owner, and its breach gives rise to a private cause of action under which damages may be awarded to a lot owner for breach of statutory duty. This conclusion was reached by Young J, as his Honour the Chief Judge then was, in respect of the predecessor of s 62, namely Strata Titles Act 1973, s 68, in Lubrano v Proprietors Strata Plan No 4038 (1993) 6 BPR 97,457, at 13,310-13,311, upon a thorough consideration of earlier authorities to like effect [Jaklyn v Proprietors Strata Plan No 2795 [1975] 1 NSWLR 15, 24 (Holland J); Proprietors Strata 464 v Oborn (1975) 1 BPR 9623, 9624 (Holland J); Proprietors Strata Plan 159 v Blake, 50,654 (Yeldham J); Proprietors Strata Plan 30234 v Margiz Pty Ltd (NSWSC, Brownie J, 30 June 1993). Gzell J has since followed it in the context of the 1996 Act [Lyn v Owners Strata Plan No 50276 [2004] NSWSC 88, [90]].

In The Owners Strata Plan No 80412 v Vickery [2021] NSWCATAP 98 (‘Vickery’) the Appeal Panel stated at [36]:

It is uncontroversial that the statutory duty in s 106(1) (and in s 62(1) of the 1996 Act) is a continuing one. An owners corporation has a continuing obligation to properly maintain and keep in a state of good and serviceable repair the common property. The statutory duty may be breached continuously or intermittently over a period of time.

125. The written submissions of the first respondent filed on 25 August 2021 do not dispute that the owners corporation sent a plumber on two occasions in October and November 2019, or that the works of the plumber engaged by the owners corporation made an unrepaid hole in the bathroom bulkhead. The owners corporation does not dispute that the bathroom bulkhead is common property.

126. Importantly, the written submissions of the first respondent do not assert that the hole in the bathroom bulkhead falls with the obligation of the Lot owner to repair under the terms of the common property rights By-law, nor point to any special resolution passed under s 106 (3) of the SSMA. In any event, the hole appears to have been made before the registration of the common property rights By-law was registered.

127. The only basis advanced in the written submissions for the owners corporation not conducting repairs to the bathroom bulkhead is the written agreement dated 10 October 2019.

128. The first respondent cannot rely on that written agreement to avoid responsibility for repairing the bathroom bulkhead.

129. Section 270 of the SSMA states as follows:

270   Contracting out prohibited

(1)  The provisions of this Act and the regulations have effect despite any stipulation to the contrary in any agreement, contract or arrangement entered into after the commencement of this section.

(2)  No agreement, contract or arrangement, whether oral or wholly or partly in writing, entered into after the commencement of this section operates to annul, vary or exclude any of the provisions of this Act or the regulations.

130. The written submissions of the first respondent do not address s 270 of the SSMA. In any event, it is clear that the owners corporation cannot contract out of its obligations under s 106 (1) of the SSMA unless a specific provision of the SSMA applies (e.g. s 106 (3) of the SSMA). An exception would be if the works fell within the scope of the common property rights By-law (which, by reason of the operation of s 108 of the SSMA, can make provision that the Lot owner be responsible for repairs and maintenance), but that is not the case in this dispute.

131. The Tribunal is satisfied that the bathroom bulkhead is common property, and the failure by the owners corporation to repair the hole is a breach of its duty under s 106 (1) of the SSMA.

132. The Tribunal is satisfied that the quotation of Sydney Coastal Living dated 14 May 2021 contains a sufficiently detailed scope of works for the Tribunal to make a work order under ss 232 and/or 241 of the SSMA that the owners corporation perform repairs (Glenquarry Park Investments Pty Ltd v Hegyesi [2019] NSWSC 425 at [100]-[114]).

133. Accordingly, the Tribunal is satisfied that a work order be made that the owners corporation conduct repairs to the bathroom bulkhead. Considering that Christmas and the new year holiday is approaching, it is appropriate to give the owners corporation until 31 January 2022 to comply with the order.

ORDERS

1. By 31 January 2022, The Owners-Strata Plan No 11669 is to perform, using suitably licensed tradespersons exercising due care and skill, the following repairs to a common property bathroom bulkhead proximate to Lot 4 of the strata scheme.

1. Repair damaged bulkhead (timber frame area).

2. Tape and set all joins and apply base coat (x 1).

3. Apply paint top coats (x 2).

4. Paint to match existing area.

2. The owner of Lot 4 is to take all reasonable measures to ensure that reasonable access to the Lot is given to The Owners-Strata Plan No 11669 so that Order 1 above can be complied with.

3. By 31 January 2022, The Owners-Strata Plan No 11669 is to record in the strata roll the by-laws for the time being in force for the strata scheme in accordance with s 178 (2) (e) of the Strata Schemes Management Act 2015 (NSW).

4. The application is otherwise dismissed.

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

Registrar

Decision last updated: 10 February 2022