Lu v Community Association DP 270682

[2022] NSWCATCD 47

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Lu v Community Association DP 270682 [2022] NSWCATCD 47

Hearing dates:

21 February 2022

Date of orders:

01 March 2022

Decision date:

01 March 2022

Jurisdiction:

Consumer and Commercial Division

Before:

Graham Ellis SC, Senior Member

Decision:

1.   The application is dismissed.

2.   Any application for costs, supported by any evidence and submissions not exceeding five pages in length, is to be provided to the Tribunal and the other party on or before 15 March 2022.

3.   Any response to any such application, supported by any evidence and submissions not exceeding five pages in length, is to be provided to the Tribunal and the other party on or before 29 March 2022.

4.   Any such submissions are to indicate whether the party agrees that costs can be determined on the papers, without a further hearing.

Catchwords:

COMMUNITY ASSOCIATION – Whether to appoint a compulsory managing agent – Compliance with Act and by-laws – Conduct by executive committee members – New managing agent already appointed

Legislation Cited:

Building and Construction General On-Site Award 2010 (NSW)

Civil and Administrative Tribunal Act 2013 (NSW)

Community Land Management Act 1989 (NSW)

Community Land Management Regulation 2021 (NSW)

Property and Stock Agent Regulation 2014 (NSW)

Public Health (COVID-19 Gathering Restrictions) Order (No 2) 2021 (NSW)

Strata Schemes Management Act 2015 (NSW)

Work Health and Safety Regulation 2017 (NSW)

Cases Cited:

Bischoff v Sahade [2015] NSWCATAP 135

Falvey v Community Association DP 270469 NSW CTTT 410 (15 August 2013)

Hoare v The Owners – Strata Plan No. 73905 [2018] NSWCATCD 45

Mitchell v Cullingral Pty Ltd [2012] NSWCA 389

Mortlock v Owners of Strata Plan No 55434 [2006] NSWSC 363

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Guitang Lu (Applicant)
Community Association DP 270682 (Respondent)

Representation:

Applicant (Self-represented)

Solicitors:
Muellers (Respondent)

File Number(s):

SCS 21/32569

Publication restriction:

Nil

Reasons for decision

Outline

1. In his application dated 27 July 2021 the applicant sought an order pursuant to s 85 of the Community Land Management Act 1989 (CLMA) on the basis that: “The management structure of the Respondent’s scheme is not functioning, or functioning unsatisfactorily, in that the Respondent’s scheme has demonstrated continuing and systematic breaches of the Act, the Regulations and the community management statement.”

2. Having considered the evidence and submissions of both parties, the Tribunal determined there was no basis for the order sought and that, even if it could be said there was a basis for the order sought, in the exercise of its discretion the Tribunal did not consider it appropriate to make the order sought.

Background

3. The applicant is a lot owner in Community Association DP 270682 (the respondent) which is located at Norwest and has a total of 26 lots. After the first annual general meeting (AGM) was held on 29 October 2012, on 8 May 2014 a new managing agent (the agent) was appointed. To that managing agent was delegated the powers of the owners association but not the powers of the executive committee (the EC) or its officers.

4. On 16 December 2020 the applicant was elected to the EC. Just under three months later, on 11 March 2021, a resolution was passed to remove him from the EC.

5. At a meeting held on 3 February 2022, it was resolved to terminate the agreement with that managing agent and a new managing agent was appointed.

Hearing

6. At the hearing, which was conducted using audio-visual link (AVL) facilities and telephone lines due to the COVID-19 pandemic, the applicant was self-represented, and Mr Van Ede represented the respondent.

7. Documents admitted as evidence were as follows:

Exhibit A   Applicant’s documents (pages 1-397)

Exhibit R   Respondent’s documents (pages 1-250)

Exhibit 1   Minutes of meeting held on 3 February 2022

8. The applicant was cross-examined as were two the respondent’s three witnesses, namely Mr Smith and Ms Reily (but not Ms Bourne). Following that cross-examination, it remained to provide an opportunity for oral submissions as to what should be the outcome and why.

Jurisdiction

9. It is clear the respondent is a community association and, since s 62 of the Community Land Management Act 1989 (CLMA) entitles the applicant to commence these proceedings, it is clear the Tribunal has jurisdiction to hear and determine this application.

Relevant law

10. This application is based on s 85 of the CLMA which is in the following terms:

(1)   The Tribunal may, by order, appoint a managing agent:

(a)   to perform all the functions, or

(b)   to perform specified functions, or

(c)   to perform all the functions, other than specified functions,

of an association, or of a strata corporation.

(2)   Application for an order under subsection (1) may be made:

(a)   by a person who obtained an order under this Part that imposed a duty on the association or the strata corporation, or on its executive committee or council, or on its chairperson, secretary or treasurer, or

(b)   by a person who has an estate or interest in a development lot, neighbourhood lot or strata lot within the scheme under which the association or strata corporation was constituted, or

(c)   if the object of the application is payment of a judgment debt—by the judgment creditor.

(3)   An order under subsection (1) may be made by the Tribunal to which an Adjudicator has referred a matter if the Adjudicator, whether or not on application, is satisfied that the management structure of the scheme that would be affected by the order is not functioning, or is not functioning satisfactorily.

(4)   An appointee:

(a)   must hold any licence required by law to be held by a managing agent performing the functions to which the order relates, and

(b)   must have consented to the appointment.

(5)   Unless sooner revoked, an order made under subsection (1) ceases to have effect at the expiration of such period after its making (not exceeding 12 months) as is stated in the order.

(6)   A managing agent may be appointed under this section:

(a)   on such terms and conditions relating to remuneration of the managing agent by the association or the strata corporation, and

(b)   on such other terms and conditions,

as are stated in the order making the appointment.

(7)   In this section:

functions includes:

(a)   performance of a duty imposed by an order under this Part, and

(b)   payment of a judgment debt.

11. As s 85 of the CLMA is the equivalent of s 237 of the Strata Schemes Management Act 2015 in that both provide for the appointment of a compulsory managing agent, decisions which have considered s 237 (or its predecessor) assist in relation a decision in relation to an application based on s 85.

12. First, in Mortlock v Owners of Strata Plan No 55434 [2006] NSWSC 363 (Mortlock) at [18] there is quoted the words of the decision-maker being challenged in that appeal. Those words describe the earlier equivalent of s 237 of the SSMA as draconian on the basis that it removes the democratic process established by statute but goes on to suggest that there must be objective evidence that the management of the owners corporation is dysfunctional before an order is made for the appointment of a compulsory strata managing agent. Those words serve as a reminder that s 85 of the CLMA contains a significant power that requires an evidentiary basis before an order is made under that section.

13. Secondly, the decision in Hoare v The Owners – Strata Plan No 73905 [2018] NSWCATCD 45 (Hoare) at [202] suggests the fact that some lot owners do not agree does not make a strata scheme dysfunctional and there is no reason why the same approach should not be taken in relation to a matter under the CLMA.

Evidence of the applicant

14. The applicant’s first statement (A171-186), dated 23 August 2021, indicated that he purchased his lot in February 2015. He said that, after living there for about a year, he moved to another suburb in June 2016, and moved back to live in his lot in July 2020.

15. It was the applicant’s evidence that, between 12 November 2015 and 15 December 2020, the respondent’s EC had only two members, namely Mr Smith and Ms Reily. He set out his version of a conversation with Mr Adams on 17 December 2020, the day after the applicant was elected to the EC.

16. This statement went on to refer to a 4 January 2021 breach notice he received from the agent which alleged his car was parked contrary to BL 1.12 which he saw as a personal attack. Subsequent topics in this statement were the applicant’s removal from the EC, the removal of the playground equipment, his claim for damages of $185.90 due to a tree falling on his fence, his 4 June 2020 request to replace an olive tree, the requests of other lot owners, pest control matters, followed by complaints in relation to general meetings, the records, his inspection of them, matters relating to communication which included the lack of a notice board, and the appointment of the solicitor who represented the respondent in these proceedings.

17. The applicant’s second statement (A333-336), dated 6 December 2021, referred to the relocation of a metal signage pole in front of his lot. He went to suggest that, when he inspected the respondent’s records in 2020 and 2021, he observed “no record about the owners’ ethnic identity”. He referred to a lack of translators, to a 5 February 2021 CJC mediation at which his claim for damages was refused, and to a 16 April 2021 Fair Trading mediation.

18. This statement also set out what the applicant says occurred on 11 August 2021 when he saw playground equipment being removed. He indicated that he called the Police on that occasion and that, after speaking with the people doing the work, a Police officer told him what was happening was a community matter then the Police left. The last matter raised in this statement related to a photo the applicant took on 1 November 2021 of what was said to be the car of Ms Reily, the chairperson of the EC, parked in a visitor parking space.

19. Cross-examination revealed the combative approach of the applicant, such as when he did not accept that the minutes of a meeting held on 11 March recorded his removal from the EC and it turned out that his answer was based on his view that those minutes were wrong. He also sought to debate whether a storage unit he erected in his back yard was a fixture, suggesting it was a chattel. There were a number of instances where, despite being a practising solicitor, the applicant gave a non-responsive answer, preferring to say what he wished to say rather than answer the question.

20. When it was put to the applicant that the agent cautioned him about his aggressive behaviour at the 2020 AGM, after giving two non-responsive answers, when the question was asked for the third time he replied yes but then changed his answer to no, adding that agent muted him on the system being used to hold that meeting. He accepted that he lodged a complaint with Fair Trading in relation to the minutes of that meeting. When it was put to him that an 11 March 2021 decision resolved to accept those minutes, the applicant gave an answer which included multiple suggestions, namely that he did not think so, was not sure, did not know and did not agree. It appeared the applicant was seeking to give any answer except the “Yes” which the question plainly warranted.

21. The applicant accepted that, in relation to his claim for damages of $185.90, he prepared and sent a letter from his law firm to the respondent. It became clear that the applicant believed that, when strong language was used in a conversation with Mr Adams, it was because he was Asian and not because of his behaviour.

22. Although the applicant conceded that requests made by the owners of Lot 16 and Lot 28 had been approved, he denied that he was trying to suggest that things happened without approval, suggesting those matters were handled privately and disagreeing that they were approved by the EC.

23. The applicant accepted that he had called the Police, lodged a complaint with the Human Rights Commission, had made a CJC request for mediation and had lodged multiple complaints with Fair Trading. He suggested he had tried his best to communicate and that his complaints raised appropriate questions.

Evidence of Mr Smith

24. Mr Smith, who said his wife is of Chinese background, suggested the applicant’s 25 October 2021 statement contained so many inaccuracies and distortions that it was difficult to deal with each of them. He suggested that the association enjoyed seven years of peace and harmony prior to the applicant’s involvement. It was his evidence that, when elected to the EC, the applicant demonstrated an inability to work with other persons and to accept any view other than his own. Mr Smith said he was approached lot owners who expressed dissatisfaction with the applicant’s “dictatorial style”.

25. In relation to the playground incident, Mr Smith said he spoke to the applicant after his proposal to change the managing agent was defeated at a meeting held on 15 April 2021 and that a resolution to remove the playground equipment was passed at a meeting held on 5 August 2021. According to Mr Smith, when he began working to remove the playground equipment the next day, the applicant suggested he did not have authority to do that as the meeting held on 5 August 2021 was illegal.

26. Almost a week later, on 11 August 2021, the applicant came towards the playground area yelling for the work to stop, suggesting it was illegal. After being told to go away, the applicant called the Police who arrived, spoke to both parties but took no action and then left. Mr Smith said that a number of the lot owners working on the playground equipment were of an Asian background.

27. Mr Smith’s statement also referred to a number of photos of the applicant’s vehicle, taken on seven occasions between 23 December 2020 and 8 February 2021.

28. The focus of the applicant’s cross-examination of Mr Smith was what occurred in relation the removal of the playground equipment. He was also asked questions in relation to car parking and a number of meetings. However, none of those questions undermined the evidence-in-chief of Mr Smith.

Evidence of Ms Reily

29. In her statement, Ms Reily noted that, of the 26 lots, 16 are owned by people with an Asian background. She noted there had been a delegation of powers to the agent on 9 April 2014 and recounted her involvement on the EC.

30. As to the 2020 AGM, Ms Reily said the meeting was long and protracted because the applicant disputed everything. She said that when the names of the five elected EC members were announced, there was no comment from the applicant. It was her evidence that there was no abusive language during that meeting but the person chairing that meeting “cautioned [the applicant] to refrain from being so aggressive”.

31. It was the evidence of Ms Reily that early in the afternoon of 17 December 2020 she heard the applicant and Mr Adams having “a heated discussion”. While she said she could not hear what was being said, her assessment was that “they were both giving as good as they were getting”.

32. The position in relation to the car parking was said by Ms Reily to be that his lot has a double garage and on 4 January 2021 the agent advised the EC members that there were two cars improperly parked. The applicant did not want letters sent to the lot owners as he was one of those two lot owners. It was said that the problem was that the applicant’s car was not parked parallel to the kerb but was parked at 90^o to the kerb, and was thus protruding onto the roadway.

33. In relation to the removal of the applicant from the EC, Mr Reily’s evidence was that on 23 March 2021 she received notification of a meeting to be held on 7 April 2021, that she received a 6 April 2021 email from the applicant which appeared to accept his removal and nominated his wife as a replacement member, and that IT experts who searched the agents files had confirmed that the two votes which the applicant suggested were not counted were not received.

34. The statement of Ms Reily set out her version of events in relation to the removal of the playground equipment which confirmed the evidence of Mr Smith and indicated that the applicant called the Police not only on 11 August 2021 but also on 2 September 2021, his complaint being that masks were not being worn when that work was being done. It was suggested the reasons for the removal of the playground equipment, being a decision made at the 2020 AGM, were (1) that the majority of the children in the community were of school age and did not want to play on that equipment, (2) that equipment was too hot to sit on in summer, (3) the local council has established a play area across the road, and (4) that council has installed a refuge island the facilitate crossing the road. Ms Reily noted that any places of danger during that work were taped off with red and white tape.

35. Ms Reily’s statement also covered the situation in relation to the boundary fences with land owned by Sydney Water and the applicant’s claim for damages which was said to be the result of lightning striking a tree at 8pm on 31 January 2019. She noted that the applicant requested a CJC mediation in relation to this matter. The outcome of that mediation was that the applicant’s claim for $185.90 would be put to the next meeting of the respondent.

36. In relation to the applicant’s desire to remove an olive tree, the additional matter that was mentioned in Ms Reily’s statement was that tree was near an electrical box which was why cutting them back was suggested. However, the applicant pursued this matter with Fair Trading but, prior to that hearing, it was agreed that the applicant could remove the tree provided he would bear the cost of any resulting damage.

37. As to the applicant’s request for the removal of a small, healthy tree between Lots 7 and 8, it was noted that Lot 8 was tenanted and there was no way of contacting the owner in relation to that matter.

38. On the topic of the request to install whirlybirds on the roof of Lot 15, the evidence of Ms Smith was that request was made on Christmas Eve in 2020 and the work was carried out, without approval, on Christmas Day. The 4 November 2020 request to install an awning at the rear of Lot 31 was the subject of discussions which resulted in approval being granted on 15 February 2021.

39. Ms Reily also set out the position in relation to pest control, checking the trees, what she says occurred at various general meetings, and matters relating to association records, storage bins and visitor parking. In relation to the applicant’s suggestion there should be a notice board, Ms Reily noted that the respondent was a Torrens title housing development and not a strata scheme with the result that there was nowhere to put a notice board. Finally, Ms Reily said that all members received a copy of the Tribunal’s notice dated 4 August 2021.

40. The questions asked of Ms Reily during her cross-examination by the applicant related to notice provided for meetings, what occurred at meetings and the minutes of meetings. She was also questioned in relation to matters which included the applicant’s heated conversation with Mr Adams, the removal of the playground equipment, her role as chairperson of the EC, trees, including the falling branch(es) which damaged the applicant’s fence, pest inspections, garbage bins and car parking. On the last aspect, it transpired that Ms Reily had not parked in the visitor parking area, that it was her husband who had done so, that he had a disability sticker, and that it only occurred while her driveway was being resealed.

41. It is sufficient to note that, during her cross-examination, Ms Reily did not depart from her evidence-in-chief and there is nothing arising from that cross-examination which would provide a basis for not accepting her evidence.

Evidence of Ms Bourne

42. It is a basic principle, adopted by courts and tribunals, that contested evidence should not be accepted when there has been no opportunity to cross-examine the witness in relation to that evidence. Accordingly, the statement of Ms Bourne, who was not available for cross-examination, although summarised below, has not been taken into consideration when determining this application.

43. As the employee of the firm which was the respondent’s agent from mid-2004 to 3 February 2022, Ms Bourne set out what had been done in relation to property, maintenance, insurance, records, finance, and meetings. She also said that the Management Statement for the Respondent has been kept up to date.

Applicant’s submissions

44. The written submissions of the applicant (A343-362) contained details which it was contended demonstrated the following matters:

1. Breaches of cl 7(3) of Schedule 1 of the CLMA in relation to providing notice of meetings.

2. Breaches of s 34 of the CLMA in relation to the appointment of officers.

3. Breaches of BL 10.4 and 12.1 arising from the applicant’s conversations with Mr Smith in January 2018 and conversation with Mr Adams on 17 December 2021.

4. A breach of BL 9.12 in relation to voting on 11 March 2021.

5. Breaches of cl 3 of Schedule 6 of the CLMA in relation to calling meetings.

6. Breaches of cl 2 and cl 4 of Schedule 1 of the CLMA in relation to property maintenance based on a pest inspection report and damages to the applicant’s fence from a falling tree branch or branches.

7. A breach of s 110 of the CLMA, based on the respondent being a lot owner in relation to the falling tree branch(es) since the respondent is the owner of the community property which is Lot 1.

8. A breach of cl 2 and cl 4 of Schedule 1 of the CLMA in relation to a fence of adjoining land owned by Sydney Water.

9. A breach of BL 12.1 based on the alleged behaviour of EC members in relation to the removal of the playground equipment.

10. A breach of s 110 of the CLMA and BL 12.1 based on the alleged behaviour of Mr Smith on 11 August 2021.

11. Breaches of s 29, cl 6 of Schedule 1, cls 2, 4 and 18 of Schedule 6 of the CLMA, as well as reg 14 of the Community Land Management Regulation 2021, in relation to the 2020 AGM.

12. A breach of cl 18 of Schedule 6 of the CLMA in relation to the 2021 AGM.

13. A breach of s 32 of the CLMA and BLs 9.2 and 9.5 in relation to an EC meeting in 2018.

14. A breach of cl 3 of Schedule 6 of the CLMA in relation to the special general meeting held on 5 August 2021.

15. Non-compliance with BLs in relation to the respondent seeking to recover its cost of attending the CJC mediation in relation to the applicant’s claim for damages of $185.90.

16. A breach of s 26 of the CLMA based on an alleged failure to make records available for inspection.

17. A breach of cl 11 of Schedule 6 of the CLMA based on what occurred at meetings held on dates which included 15 April 2021, 5 and 27 August 2021 and 1 October 2021.

18. A breach of BL 9.10 in relation to what were described as “3 free plants”.

19. Breaches of s 38(2) of the CLMA in relation to decisions made at seven meetings, held between 22 June 2020 and 9 July 2021.

20. Breaches of BL 1.4 based on alleged failure to promptly decide lot owners’ requests, namely the 4 June 2020 request from the owner of Lot 11, the 24 December 2020 request from the owner of Lot 15, ther 2 February 2021 request from the owner of Lot 8 and the January 2021 request from the owner of Lot 31.

21. Breaches of cl 19 of Schedule 1 of the CLMA in relation to the implementation of decisions, including six made between 31 July 2017 and 16 April 2021.

22. Alleged selective issue of breach notices in that breach notices were not issued to Ms Reily in relation to parking in visitor parking and Mr Smith in relation to bin storage. Reference was made to cl 3(1) of Schedule 1 in the Property and Stock Agent Regulation 2014.

45. The applicant summarised his case as follows (A361 at [130]):

With the above circumstances supported by evidence, it is a reasonable conclusion that the management structure of the Respondent’s community schemes is not functioning satisfactorily, and it may be an appropriate solution for the Tribunal to order the appointment of a managing agent for the community schemes which is seeking conflicts in such nature as in the case of Falvey v Community Association DP 270469 (Strata and Community Schemes) NSW CTTT 410 (15 August 2013).

46. A total of seven additional orders were sought (A362 at [132]):

1)   The Respondent’s special resolution at the special general meeting of 11 March 2021 is amended as not passed.

2)   The Respondent’s special resolution at the special general meeting of 5 August 2021 and any resolutions passed at that meeting are invalidated.

3)   The Respondent is to re-determine the playground equipment by a unanimous resolution only.

4)   The Respondent is to refund the extra charge of $71.30 from s 26 inspections to the Applicant within 28 days.

5)   The Respondent is to pay the applicant the sum of $185.90 for fence damages within 28 days.

6)   The Respondent is to recover 3 plants from Ms Robyn Reily, and Ms Robyn Reily is removed from the chairperson position.

7)   The Respondent is to engage qualified professionals to inspect trees safety and pest activities in the community property.

47. However, it is noted that none of those orders were sought in the application, the applicant never sought or obtained leave to amend his application.

48. The oral submissions of the applicant, at the conclusion of the hearing, were that there were breaches of applicable requirements, and that the EC was not functioning according to law. Reference was made to various meetings but there was nothing additional to the applicant’s evidence and written submissions, summarised above. It is to be noted that the applicant’s oral submissions were confined to advancing his case and did not reply to the case of the respondent.

49. In conclusion, the applicant suggested that a compulsory managing agent was needed so he could not be ambushed and threatened which he suggested was occurring because he was an “ethnic member” of the respondent association. He urged the Tribunal to exercise its discretion in favour of making the order he sought under s 85 of the CLMA.

Respondent’s submissions

50. The written submissions for the respondent contended that any dysfunction is due to the applicant and that his disruptive actions cannot create circumstances which warrant the compulsory appointment of an agent under s 85 of the CLMA.

51. It was noted that s 85(3) of the CLMA and s 237(3) of the Strata Schemes Management Act 2015 both contain words to the effect that the management of the scheme is not functioning or is not functioning satisfactorily. As a result, it was contended that decisions which considered the application of s 237(3) assisted with an assessment of the application in this case.

52. Reference was made to Bischoff v Sahade [2015] NSWCATAP 135 and Hoare v The Owners – Strata Plan No. 73905 [2018] NSWCATCD 45 at [199]. It was also noted that s 5(5) of the CLMA provided that the respondent had the functions set out in Schedule 1, the contents of which were noted.

53. The respondent’s case was that a failure to comply with some technical aspect of the CLMA did not provide a valid basis for making the order sought. On the applicant’s question of why he had to pay GST when the respondent was not registered for GST, it was noted that he was being billed by the agent which was registered for GST.

54. As to what occurred at the 2020 AGM, it was contended that Ms Reily had dealt with that issue in her statement and that the evidence of what occurred on that occasion reflected poorly on the applicant. In relation to the heated argument between the applicant and Mr Adams, it was noted that Mr Adams is no longer a member of the association.

55. The suggestion of any racial attack was denied, and it was suggested that the applicant’s complaint about his removal from the EC reflects a lack of insight into his own behaviour. It was contended that the applicant’s evidence in relation what was termed ‘the playground issue’ was selective and should not be accepted.

56. Issues such as the fence and the damages claim were said to reflect that the applicant’s approach is to escalate matters rather than co-operate and communicate. It was submitted that the issues in relation to the applicant’s olive tree on his lot, the tree on lot 8, the request of Lt 15 to install whirlybirds and pest control matters were said to be in the same category.

57. By way of summary, it was submitted that such matters did not reflect dysfunction on the part of the respondent but the difficulty the applicant has in dealing with other people. The respondent’s submissions suggested that the time the applicant spent poring over records to try to find technical breaches would have been better spent on improving relations with his neighbours.

58. It was also noted that the inclusion of the word “may” in s 85 of the CLMA meant that the Tribunal has a discretion as to whether to make an order under that section. The respondent’s contention was that the Tribunal’s discretion should not be exercised in favour of the applicant (1) based on technical non-compliance, (2) when incidents upon which the applicant relies were escalated by him.

59. The respondent also submitted that the applicant failed to disclose that he is legally qualified when the question of whether to grant the respondent leave to be legally represented was being considered by the Tribunal. Reliance was placed on the evidence of Mr Smith that the association operated harmoniously prior to the applicant’s attempt to join the EC. It was contended that the applicant’s claims of racial discrimination were bizarre and that this was a clear case where the appointment of a compulsory managing agent was not warranted.

60. In his oral submissions, Mr Van Ede noted that the respondent had recently changed its agent. He submitted that the difficulties began to occur when the applicant returned to live in his lot and became a member of the EC. It was suggested that, since then, there has been strife, turmoil, conflict, and allegations and that a significant cause of the problems is when decisions go against what the applicant wants. Further, that Mr Adams going to speak with the applicant provides support for the view that the applicant cannot accept any suggestion that he is wrong.

61. The respondent’s contention is that the applicant is upset due to his removal from the EC. It was submitted that, even if there have been what was referred to as technical breaches, the respondent has entered into an agreement with a new managing agent. Further, it was contended that the allegations or racist conduct were without foundation. The sequence of events was said to be that the applicant behaved badly at the 2020 AGM but when Mr Adams went to speak with him, the result was the applicant making a racial slur against Mr Adams and reporting him to the Human Rights Commission.

62. Reference was made to Hoare in support of the proposition that the appointment of a compulsory managing agent was a serious step because it removed the democratic process. It was suggested the applicant prefers to complain with the benefit of hindsight rather than attend meetings. His conduct in complaining to the Human Rights Commission, calling the Police more than once in relation to the removal of the playground equipment, taking his $185.90 claim for damages to a CJC and his multiple complaints to Fair Trading, including in relation to the minutes of a meeting provided support for the view that the applicant is determined to pursue his desired outcome by whatever means possible.

63. In short, the respondent’s case was that a new agent has been appointed, that there was evidence of harmony prior to the applicant involving himself in the affairs of the respondent, and that this was a case where the compulsory appointment of a new managing agent was not warranted.

Consideration

64. In reaching a decision in relation to this application, the Tribunal has considered the entirety of the documents admitted as evidence and the submissions. These reasons focus on the material central to the issues but, to the extent that any evidence or a submission is not referred to, it should not be assumed that evidence or submissions has been ignored.

65. That approach is consistent with what was said by Allsop P in Mitchell v Cullingral Pty Ltd [2012] NSWCA 389 at [2]:

[A] judge may, in dealing with large bodies of evidence, be forced to economise in expressions and approach in order to be coherent in resolving the overall controversy. The need for coherent and tolerably workable reasons sometimes requires a truncation of reference and expression. Judgement writing should not become a process that is oppressive and produces unnecessary prolixity. Not every piece of evidence must be referred to. That said, central controversies put up for resolution by the parties must be dealt with. The competing evidence directed or relevant to such controversies must be analysed or resolved …”

66. A chronology of the main events relevant to these proceedings is set out below:

29 Oct 12   The Respondent held its first AGM

08 May 14   A new (second) managing agent was appointed

16 Dec 20   Applicant elected as a member of the EC

11 Mar 21   Applicant removed as a member of the EC

27 Jul 21   The Applicant commenced these proceedings

03 Feb 22   A new (third) managing agent was appointed

21 Feb 22   The proceedings were heard

67. The breaches of the CLMA and the by-laws (BLs) alleged by the applicant in the documents lodged with his application, set out at A2-8 (ie pages 2 to 8 in Exhibit A), may be summarised as follows:

1. A breach of s 13(1)(a) of the CLMA and BL 9.5 in that the agent notified owners on 1 June 2018 of an EC meeting to be held on 6 June 2018 and, after that meeting, did not distribute the minutes of that meeting to lot owners.

2. A breach of s 34(1) of the CLMA and BL 9.1, in that no officers were appointed at that meeting which was said to have been the only EC meeting during the period between 13 October 2015 and 11 March 2021.

3. That breach was said to have been a continuing breach.

4. A further breach of s 34(1) of the CLMA and BL 9.1 in that the agent convened and chaired an EC meeting via Zoom on 7 April 2021 which appointed a chairperson after which the agent, not being a member, was appointed as secretary and treasurer.

5. A breach of s 38(1) and s 38(7) of the CLMA and BLs 1.4, 9.2 and 9.5 in relation to the events surrounding the applicant’s request to remove an olive tree from his lot.

6. A breach of s 13 of the CLMA and BL 1.4 in relation to the request of the owner of Lot 15 to install whirlybirds in the roof of that lot.

7. A further breach of s 13 of the CLMA and BL 1.4 in relation to the request of Lot 8 to have a small tree cut down.

8. A breach of s 29 of the CLMA and BL 14(2)(a) at the 16 December 2020 AGM when the agent permitted a candidate for the EC to be nominated verbally, without any written nomination.

9. A breach of s 13 of the CLMA in that the agent excluded two votes when considering a resolution to remove the applicant from the EC at a meeting held on 11 March 2021.

10. A breach of cl 3 of Schedule 6 to the CLMA in that the agent convened a special general meeting “without valid authority and due process”.

11. A breach of s 38(1), cl 19 of Schedule 1 and cl 3 of Schedule 6 in the CLMA in relation to what occurred after a tree branch fell and damaged the applicant’s fence which led him to claim damages of $185.90.

68. The applicant sought the appointment of Zhi Qi (Felix) Xie of Professionals Strata Team as agent. A letter of consent dated 20 July 2021 was provided (A80) along with a proposed management agency agreement (A81-94).

69. There was also a group of three matters upon which the applicant relied (A95-105). Those matters were headed “A background – racial discrimination”, “a playground – safety and risks”, and “A latest ground – continuing breach”.

70. As to the first of those matters, it was alleged that, the day after the applicant was elected to the EC on 16 December 2020, another member of the EC came to his home and verbally abused him. He then lodged a complaint with the Australian Human Rights Commission. On 11 March 2021, as a special general meeting, the applicant was removed from the EC. The applicant also alleged he was denied access to the playground area on 11 August 2021.

71. In relation to the playground area, the applicant referred to a March 2021 safety report and a 5 August 2021 resolution to remove the playground equipment. As to the use of volunteers to remove that equipment, the respondent suggested they should be paid, referring to the Building and Construction General On-Site Award 2010. He said that when he asked those volunteers if they had a “white card” (based on cl 326 of the Work Health and Safety Regulation 2017) they were unable to respond. He also said that when he asked if there was a COVIOD safety plan in place (based on cl 10 of the Public Health (COVID-19 Gathering Restrictions) Order (No 2) 2021), the agent was unable to respond. It was suggested that considerations of work entitlements, work safety and public health constituted evidence and the lack of a valid resolution was “evidence to show that the community scheme has lost control and is out of management”. The applicant suggested that removing the playground equipment deprived the lot owners of a benefit.

72. The third matter raised by the applicant was based on (1) his 18 December 2020 application for mediation at a Community Justice Centre (CJC) “for a claim of damages in tort as the Respondent’s tree branches dropped and damaged the Applicant’s fence …”, (2) his 18 February 2020 application to Fair Trading for mediation in relation to alleged breaches in relation to the 2020 AGM, and (3) the agent’s conduct in relation to the notice provided to lot owners in relation to this application. Those three topics were said to amount to breaches of cl 7 of Schedule 1 in the CLMA.

73. It is not necessary to consider the breaches alleged by the applicant since, even assuming they are each established, the appropriate action would be to appoint a new managing agent which has already occurred. Put another way, since functions were delegated by the respondent to its managing agent, the alleged breaches reflect against the managing agent rather than the respondent. As the managing agent has recently been replaced by the respondent, it would be a curious exercise of discretion to replace that recently appointed managing agent as that agent was not involved in any of the alleged breaches.

74. The other aspect of the applicant’s case is what might be called the matters of conduct alleged by the applicant. They go to the question of whether the powers exercised by the lot owners, who are members of the respondent association, should be removed from them and placed in the hands of a managing agent appointed by the Tribunal.

75. Having considered both parties’ written and oral evidence as well as their written and oral submissions, the Tribunal finds that there was no racist conduct towards the applicant, noting that a majority of the lot owners (ie members of the association) are of Asian descent as is the wife of Mr Smith. While it is clear the applicant perceives there is racist conduct towards him by others, the Tribunal is comfortably satisfied that is because the applicant does not perceive the impact of his conduct on others.

76. As a solicitor, the applicant must be aware of the need to put his case to the witnesses for the other party. In many respects that was not done. Further, to the extent that the evidence of Mr Smith and Ms Reily conflict with that of the applicant, their evidence is preferred to his. In contrast to the direct, responsive answers of those two witnesses, the applicant was a pugnacious witness who gave non-responsive answers which were consistent with the suggestion that he is a person who is fixated on getting his own way.

68. The Tribunal considers the evidence to have established that the applicant engaged in aggressive behaviour during the 2020 AGM and that his removal from the EC on 11 March 2021 was due to his conduct and poor relationships with other members of the association and that such a decision had nothing to do with the applicant’s ethnicity.

69. It is convenient to here note the curious suggestion of the applicant, in his second statement, that when he inspected the respondent’s records, there was “no record about the owners’ ethnicity”. That is not surprising because the owners’ ethnicity is irrelevant and keeping a record of that might be considered to be racist.

70. It has also been established that the applicant prefers confrontation to cooperation as is evidence from his escalation of a variety of matters, when he did not get his own way. That has included approaches to the Human Rights Commission, the Police, the CJC and Fair Trading. A simple example of that escalation is that, when he wanted to claim $185.90 in damages when a tree that was struck by lightning caused damage to his fence, he wrote a letter from his own law firm in support of his claim for damages.

71. In other words, rather than one lot owner seeking to be reimbursement a small amount by the respondent, a letter from a law firm, was sent. After the matter was further escalated by taking it to the CJC, the outcome was what should have originally occurred without any escalation, namely that his claim would be considered at the next meeting of the respondent.

72. There is a common ingredient in each of what may be called the conduct matters, as distinct from the alleged breaches, which have been raised by the applicant: they each involve conduct on the part of the applicant. It is not just that cases such as Hoare suggest that disagreement between lot owners does not necessarily mean a strata scheme or, in this case, a community association, is dysfunctional: if the order sought by the applicant were to be granted then that would give rise to a situation where a single lot owner could, by his/her conduct, create a situation which justifies the appointment of a compulsory managing agent.

73. The Tribunal is not satisfied that the conduct of the applicant provides an adequate basis for an appointment that would deprive all other lot owners of their democratic rights. In this case, where the applicant was removed from the EC, that would create a situation where the applicant, who cannot participate on the EC by reason of his democratic removal is able to prevent anyone else from participating on the EC by obtaining the compulsory appointment of a managing agent.

74. Given that the applicant was removed from the EC on 11 March 2021, his 27 July 2021 application suggests an attempt to create a situation where if he cannot be a member of the EC then neither can anyone else be a member of the EC.

75. By way of summary, to the extent that the applicant relies on what have been termed matters of conduct, the Tribunal is not satisfied that he has proved that the respondent either not functioning or is not functioning satisfactorily. To the extent that the applicant relies on what have been termed breaches, the Tribunal is not satisfied that its discretion should be exercised in his favour by reason of the respondent’s recent appointment of a new managing agent.

76. Further, any order under s 85 of the CLMA would only address the effect of the problem and not the causes which the Tribunal is satisfied are the applicant’s approach to communication, his desire to get his own way, his unwillingness to accept the majority decision, and his preference to escalate matters rather than to resolve them. Were an order to be made under s 85 of the CLMA for a period of twelve months then the Tribunal is not satisfied that the position would be any different at the end of that term.

77. The answer to the matters raised by the applicant is not an order under s 85 of the CLMA but a change in the attitude and approach of the applicant so that matters which arise are dealt with in a co-operative rather than a confrontational manner. Support for that view is to be found in the unchallenged evidence led by the respondent that there was co-operation and harmony in the respondent association, over a period of some seven years, prior to the applicant taking an active interest in its affairs.

78. For these reasons, the application for an order under s 85 of the CLMA is rejected. As to the seven additional orders sought (as set out at [46] above), the Tribunal is not satisfied the applicant has established, on the evidence, a basis for any of those orders. Accordingly, the application must be dismissed.

Costs

88. The effect of s 60 of the Act is that s 60(1) provides that “Each party to proceedings in the Tribunal is to pay the party’s own costs” but s 60(2) relaxes that default position by providing that “The Tribunal may award costs in relation to proceedings before it only if it is satisfied that there are special circumstances warranting an award of costs”. The following non-exhaustive list of considerations is set out in s 60(3):

(a)   whether a party has conducted the proceedings in a way that unnecessarily disadvantaged another party to the proceedings,

(b)   whether a party has been responsible for prolonging unreasonably the time taken to complete the proceedings,

(c)   the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law,

(d)   the nature and complexity of the proceedings,

(e)    whether the proceedings were frivolous or vexatious or otherwise misconceived or lacking in substance,

(f)   whether a party has refused or failed to comply with the duty imposed by section 36(3),

(g)   any other matter the Tribunal considers relevant.

89. Although it common for parties to focus upon whether any of those individual considerations apply, the Tribunal is required to make a global assessment of whether there are special circumstances, having regard to the matters set out in subsection 60(3).

90. It is well-established that the adjective “special” requires circumstances that are out of the ordinary but do not need to be extraordinary or exceptional: Megerditchian v Kumond Homes Pty Ltd [2014] NSWCATAP 120, adopting what was said in Cripps v G & M Mawson [2006] NSWCA 84 at [60].

91. Since s 60(2) commences with the words “The Tribunal may award costs …”, it is clear the Tribunal has a discretion which must be exercised. It is necessary to consider not only whether there are special circumstances but also whether those circumstances warrant an award of costs.

92. Accordingly, in the event that an order for costs is sought, any submissions should address two issues: whether there are special circumstances and, if so, whether those circumstances warrant an award of costs.

Orders

93. For the reasons set out above, the following orders are made:

1. The application is dismissed.

2. Any application for costs, supported by evidence and submissions not exceeding five pages in length, is to be provided to the Tribunal and the other party on or before 15 March 2022.

3. Any response to any such application, supported by evidence and submissions not exceeding five pages in length, is to be provided to the Tribunal and the other party on or before 29 March 2022.

4. Any such submissions are to indicate whether the party agrees that costs can be determined on the papers, without a further hearing.

**********

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: 17 May 2022