Pike v The Owners - Strata Plan No 9370

[2025] NSWCATCD 113

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Pike v The Owners - Strata Plan No 9370 [2025] NSWCATCD 113

Hearing dates:

7 July 2025

Date of orders:

11 August 2025

Decision date:

11 August 2025

Jurisdiction:

Consumer and Commercial Division

Before:

K Merrick, Senior Member

Decision:

(1) Order under section 24 of the Strata Schemes Management Act 2015 (NSW) (SSMA) invalidating the resolution made at the special general meeting held on 3 December 2024 (SGM) in respect of motion 2.1.1.

(2) Order under section 24 of the SSMA invalidating the resolutions made at the SGM in respect of motion 2.1.2, 9.2 and 9.2 [sic] (9.3).

(3) Order under section 87(1)(b) of the SSMA that the manner by which payment of the contributions required by the Levies Motion are to be made is varied such that payments will be due on 28 August, 28 September and 28 October.

(4)   The balance of the Applicants’ case is dismissed.

(5)   The parties may apply to the Tribunal within 28 days of this decision in support of any claim for costs.

Catchwords:

STRATA TITLE – common property – maintenance and repair – alteration and addition – relationship between ss 106 and 108 of the Strata Schemes Management Act 2015 (NSW) – invalidation of resolution – s 24 of the Strata Schemes Management Act 2015 (NSW) - special levies – when a special levy is required – s 81(4) of the Strata Schemes Management Act 2015 (NSW) – variation of special levy – s 87 of the Strata Schemes Management Act 2015 (NSW) - when the Tribunal may make orders under ss 232 and 241 of the Strata Schemes Management Act 2015 (NSW)

Legislation Cited:

Civil and Administrative Tribunal Act 2013 (NSW).

Environmental Planning and Assessment Act 1979 (NSW)

Strata Schemes Management Act 2015 (NSW)

Strata Schemes Management Act 1996 (NSW)

Cases Cited:

Gannon v The Owners - Strata Plan No 14403 [2013] NSWSC 1916

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

Greetings Oxford Koala Hotel Pty Ltd v Oxford Square Investments Pty Limited (1989) 18 NSWLR 33

Lonergan v The Owners – Strata Plan No. 16519 [2020] NSWCATAP 177

Proprietors Strata Plan No. 6522 v Furney [1976] 1 NSWLR 412

Ridis v Strata Plan 10308 (2005) 63 NSWLR 449; [2005] NSWCA 246

Seiwa Australia Pty Ltd v Owners Strata Plan 25042 [2006] NSWSC 1157

Stolfa v Hempton [2010] NSWCA 218

Stolfa v Owners Strata Plan No. 4366 [2009] NSWSC 589

The Owners - Strata Plan No 33368 v Gittins [2022] NSWCATAP 130

The Owners – Strata Plan No 37762 v Pham [2006] NSWSC 1287

The Owners Strata Plan 50276 v Thoo [2013] NSWCA 270

Walsh v The Owners - Strata Plan No 10349 [2017] NSWCATAP 230

Hamilton v National Coal Board [1960] AC 633

Texts Cited:

Nil cited

Category:

Principal judgment

Parties:

Nicholas John Pike, Gregory Wayne Segal, Roslyn Hakim, Nilay Gencturk, Gerard Eugene Farrell (Applicants)
The Owners – Strata Plan No 9370 (Respondent)

Representation:

Applicants: Ahmed Rizk, Counsel for the Applicants, instructed by Sachs Gerace Lawyers
Respondent: Jerry Li, Counsel for the Respondent, instructed by JS Mueller & Co Lawyers

File Number(s):

2024/00468365

Publication restriction:

Nil

BACKGROUND

1. The Applicants in the proceedings are the owners of lot 1 (Gerard Eugene Farrell), lot 4 (Nicholas John Pike), lot 5 (Gregory Wayne Segal), lot 13 (Roslyn Hakim) and lot 16 (Nilay Gencturk) in Strata Plan 9370. The Owners Corporation is the Respondent.

2. The Strata Plan involves an apartment building complex located at [address].

3. The proceedings concern a number of motions passed at a special general meeting on 3 December 2024 (the SGM) which the Applicants say should be set aside or the subject of further orders from the Tribunal, in accordance with the Strata Schemes Management Act 2015 (NSW) (SSMA).

4. The motions that require particular consideration are:

1. Motion 3.0 - Remediation Works to Common Property, for the remedial works pertaining to the roof, sunrooms and window replacements (the Remedial Works Motion);

2. Motion 2.1.1 - Fire Order Works (Option 1) Pump in Existing Bin Room (the Bin Enclosure Motion);

3. Motion 8.1 - Special Levy for Fire Order Works and Remediation Works (the Levies Motion).

5. Each of these Motions (and all other motions which were passed at the meeting on 3 December 2024) was passed by way of ordinary resolution at the meeting.

THE ISSUES

Motion 3.0 - Validity or invalidation of the Remedial Works Motion

6. The Applicants challenge the Remedial Works Motion on the basis that it was only passed as an ordinary resolution. The Applicants argue that the motion needed to be passed as a special resolution because the works the subject of the Remedial Works Motion (the Remedial Works) go beyond the ‘minimum necessary’ to comply with the obligation under section 106 of the SSMA and amount to enhancements or improvements of common property which require a special resolution under section 108 of the SSMA (Changes to common property).

7. The Applicants say further that if the Remedial Works Motion required a special resolution, then passing the resolution by way of ordinary resolution amounted to an irregularity and the Tribunal can and should invalidate the motion either under section 24 of the SSMA (Order invalidating resolution of owners corporation) in circumstances where the Applicants are adversely affected by the irregularity, or under section 232 of the SSMA (Orders to settle disputes or rectify complaints).

8. In response the Respondent notes that the Owners Corporation has a strict duty to maintain and repair the common property pursuant to section 106 of the SSMA (Duty of owners corporation to maintain and repair property). The Respondent further notes that it is sufficient for a motion to be passed by way of ordinary resolution if the motion concerns remedial works to be carried out pursuant section 106: Stolfa v Owners Strata Plan No. 4366 [2009] NSWSC 589 (Stolfa at first instance). The Respondent submits that in the present case the clear purpose of the work proposed by the Remedial Works Motion is to repair and maintain the common property in a state of good repair, and that as such a special resolution was not required.

9. As to whether the Tribunal should invalidate the motion, the Respondent submits that the orders sought by the Applicants should not be made because the motion has been validly resolved. The purpose of the works the subject of the Remedial Works Motion is to make necessary repairs to the Strata Scheme. Further, the Tribunal should not exercise its discretion to grant the orders in circumstances where the works sought are for the benefit of the entire Strata Scheme to conduct remedial works

Restraint of the Owners Corporation from carrying out the Remedial Works

10. The Applicants say further that even if the Remedial Works Motion has been validly passed under section 106 of the SSMA, the Owners Corporation should be restrained from carrying out the Remedial Works pursuant to section 232 or section 241 (Tribunal may prohibit or direct taking of specific actions) of the SSMA in circumstances where it is presently unlawful for the works to be carried out because development consent has not been obtained.

11. In response the Respondents submit that (a) the Tribunal does not have jurisdiction to determine whether development consent is required, (b) even if development consent was required, any contract for works will include standard terms that all necessary planning approvals are obtained by the Owners Corporation, and (c) the Tribunal does not have jurisdiction to injunct contraventions of the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act) even if there was any potential breach of the planning regime under that Act.

12. As to the exercise of the Tribunal’s powers to make orders under sections 232 and 241, the Respondents say that the Tribunal should not make the orders sought because the Applicants have not established any underlying cause of action to enliven the Tribunal’s power under s 232.

Motion 2.1.1 - Validity of the Bin Enclosures Motion

13. The Applicants challenge the Bin Enclosure Motion on the basis that it was only passed as an ordinary resolution. The Applicants argue that the works go beyond the ‘minimum necessary’ to comply with the obligation in section 106 of the SSMA and amount to improvements or enhancements within the meaning of section 108 of the SSMA, and as such the motion needed to be passed as a special resolution pursuant to section 108.

14. The Applicants say that if the Bin Enclosures Motion required a special resolution, then passing the resolution by way of ordinary resolution amounted to an irregularity and the Tribunal can and should invalidate the motion under section 24 of the SSMA in circumstances where the Applicants are adversely affected by the irregularity, or under section 232 of the SSMA.

15. In response the Respondent submits that the motions were validly passed by ordinary resolution because they relate to remedial works to discharge the Owners Corporation’s obligations under section 106 of the SSMA. Even if both sections 106 and 108 are engaged, it is sufficient to pass a resolution by way of ordinary resolution.

16. As to whether the Tribunal should invalidate the motion, the Respondent submits that the orders sought by the Applicants should not be made because the motion has been validly resolved. The purpose of the works the subject of the Bin Enclosure Motion is to maintain and keep the common property in a state of good and serviceable repair in compliance with a fire order served on the Strata Scheme. Further, the Tribunal should not exercise its discretion to grant the orders in circumstances where the works are for the benefit of the entire Strata Scheme.

Motion 8.1 - Validity of the Levies Motion

17. The Applicants challenge the validity of the Levies Motion on the basis that at the time it was passed, the Owners Corporation was not faced with ‘other expenses it could not at once meet’ (as per section 81(4) of the SSMA (Owners corporation to set contributions to administrative and capital works funds)).

Motion 8.1 - Variation of the Levies Motion

18. In the alternative the Applicants submit that the Levies Motion should be varied under section 87 of the SSMA (Orders varying contributions or payment methods) having regard to the sizable sum involved and the fact that the funds will not be needed for some time.

MOTION 3.0 – THE REMEDIAL WORKS MOTION

19. The questions for the Tribunal to determine in respect of the Remedial Works Motion are:

1. Did the Remedial Works Motion require a Special Resolution?

2. If so, should the Tribunal invalidate the motion?

3. Alternatively, can and should the Tribunal make orders under section 232 or section 241 restraining the Owners Corporation from carrying out the Remedial Works?

Did the Remedial Works Motion require a Special Resolution?

20. To answer this question the Tribunal must

1. consider the nature and scope of the Remedial Works as proposed, and whether they fall within the scope of the Owners Corporation’s section 106 duty to maintain and repair common property, or whether they amount to enhancements or improvements of common property which require a special resolution under section 108; and in so doing

2. address the issue of the interplay between section 106 and section 108, and when an ordinary resolution for works under section 106 is sufficient versus when a special resolution under section 108 will be required.

21. The Tribunal notes that the Applicants bear the onus of establishing that the ordinary resolution that was passed in respect of the Remedial Works was insufficient because the Remedial Works fall outside section 106 and require a special resolution under section 108.

Interplay between sections 106 and 108

22. Section 106 ‘Duty of owners corporation to maintain and repair property’ subsections (1) and (2) of the SSMA provide that:

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

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

(3) This section does not apply to a particular item of property if the owners corporation determines by special resolution that—

(a) it is inappropriate to maintain, renew, replace or repair the property, and

(b) its decision will not affect the safety of any building, structure or common property in the strata scheme or detract from the appearance of any property in the strata scheme.”

23. Approval of works under section 106 does not require a special resolution.

24. Section 108 ‘Changes to common property’ subsection (1) of the SSMA provides that:

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

25. Subsection 108(2) provides that:

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

26. The Applicants argue that renewal or replacement of common property under subsection 106(2) of the SSMA is limited by a concept of reasonable necessity. As such, the Applicants submit that the primary question for the Tribunal is whether the Remedial Works are the ‘minimum necessary’ to bring the relevant part of the common property into a state of repair.

27. In support of this proposition the Applicants rely on the decisions in The Owners - Strata Plan No 33368 v Gittins [2022] NSWCATAP 130 (Gittins), and Glenquarry Park Investments Pty Ltd v Hegyesi [2019] NSWSC 425 (Glenquarry).

28. The Respondent on the other hand contends that there can be overlap between works that “improve or enhance the property” and those that “maintain the property”. The relevant enquiry is whether or not the work engages the duty in section 106 of the Act. If section 106 of the Act is engaged, it is irrelevant whether the works are also an improvement or enhancement to the common property.

29. The Respondent relies on the decisions in Stolfa at first instance, Stolfa v Hempton [2010] NSWCA 218 (Stolfa) and The Owners Strata Plan 50276 v Thoo [2013] NSWCA 270 (Thoo).

30. The scope of the duty of an owners corporation to maintain common property and keep it in a state of good repair has been the subject of extensive judicial consideration. The pertinent principles (excluding authority references) are summarised in Gittins as follows:

1. The owners corporation has a strict duty under s 106(1) of the SSMA to maintain and keep in a state of good and serviceable repair the common property. That duty is not merely to take reasonable steps or use best endeavours.

2. The duty under s 106(1) of the SSMA includes keeping common property in order by acts of maintenance before it falls out of condition. The duty includes taking preventative measures to ensure there is not a malfunction. The duty also includes remediation of defects in the original construction of the common property.

3. 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 106(1) duty.

4. Breach of the duty under s 106(1) of the SSMA gives each Lot owner a statutory cause of action.

5. Repairs to common property (including renewal or replacement of common property) that does not involve alteration or addition for the purpose of improving or enhancing the common property does not require a special resolution of the owners corporation under s 108 of the SSMA.

6. Renewal or replacement of common property under s 106(2) of the SSMA is only engaged when the item of common property is no longer operating effectively, or at all, or has fallen into a state of disrepair.

7. Renewal or replacement of common property under s 106(2) of the SSMA is limited by a concept of reasonable necessity.

31. It is apparent both from the terms of section 106 and the Gittins survey of the authorities that maintenance and repairs to common property that do not involve alteration or addition for the purpose of improving or enhancing the common property fall within subsection 106(1). A special resolution is not required.

32. Renewal or replacement of common property that does not involve alteration or addition for the purpose of improving or enhancing the common property falls within subsection 106(2). Again a special resolution is not required. However the obligation to renew or replace under subsection 106(2) is not an unlimited obligation. As Hodgson JA observed in RidisvStrata Plan 10308 (2005) 63 NSWLR 449; [2005] NSWCA 246 (Ridis) in respect of the equivalent provisions of the Strata Schemes Management Act 1996 (NSW) (1996 SSMA) (at 451 [3]-[4]):

“[3]. In my opinion, the circumstances that the words “where necessary” do not appear in subs (2) does not mean that the obligation under that subsection has no qualification, apart from that provided by subs (3). Suppose that there is a light-fitting in the common property. Subsection (2) cannot mean that this light-fitting must be continually replaced, unless there is a determination by special resolution that this is inappropriate. This view is confirmed by the consideration that the terms of subs (3) indicate that there cannot be a standing resolution not to replace a light-fitting. Paragraph (b) of subs (3) indicates that such resolutions are to be directed towards particular occasions when replacement is under consideration.

[4]. Accordingly, in my opinion, either words such as “where necessary” or “where appropriate” must be implied, or alternatively subs (2) must be read together with subs (1) to the effect that renewal or replacement must be undertaken whenever appropriate in the course of properly maintaining the common property and keeping it in a state of good and serviceable repair, as required by subs (1). It probably makes little difference in this case which of the two alternatives is chosen, but in my opinion the latter is the preferable view.”

33. The scope and limits of the obligation under subsection 106(2) were considered by each member of the Court of Appeal in Ridis. Parker J in Glenquarry at [64] concluded that the view of McColl JA in Ridis, namely that the relevant fixture or fitting needed to have deteriorated, to have been damaged or to be operating inadequately for the obligation in sub-section (2) to renew or replace an item of common property to arise, best reflected the ratio of the Court’s decision in Ridis, and that Tobias AJA accepted that in the later case of Thoo.

34. McColl addressed the meaning of the terms ‘renew’ and replace’. McColl JA stated (Ridis at [169], [171]):

“[169].   Turning to s 62(2), it is apparent that it conveys the sense of repairing fixtures or fittings which have deteriorated, are damaged or are operating inadequately. “Renew” as relevantly defined by the Macquarie Dictionary means “to make new, or as if new, ... restore to a former state”, while “replace” carries both the connotation of providing a substitute or equivalent or restoring or making good (Macquarie Dictionary).

[171]. It is apparent from this analysis that subs 62(1) and (2) do not impose an obligation on the respondent to insert new glass in a door which, as in the present case, was relevantly operating as intended (and, therefore, did not require maintenance or repair) – let alone an obligation to procure experts to assess the premises to determine whether any of the materials of which the common property was constructed could be made safer. The appellant contends and Tobias JA has accepted, however, that the addition of s 62(3) enlarges the prima facie scope of those duties.”

35. Tobias AJA in Thoo expressed the scope and limits thus:

“[128].   There is a clear relationship between subsections 62(1) and (2). The former applies to any part of the common property; the latter to any fixtures or fittings comprised in the common property. However, it does not follow that a fixture or fitting that is not in a state of good and serviceable repair must be renewed or replaced.

[129]. The first obligation on the owners corporation is to keep the fixtures and fittings in such a state. But if that cannot be achieved, then the defective fixture or fitting must be renewed or replaced subject, of course, to s 62(3). The point is that s 62(3) [sic: s 62(2)] is only engaged when the fixture or fitting can no longer be kept in a state of good and serviceable repair. This is consistent with McColl JA’s dicta in Ridis that both subsections are directed and, I would add, only directed, to the circumstances where a fixture or fitting is no longer operating effectively or at all, or has fallen into disrepair.

[130]. I would therefore accept the submission of the Owners Corporation that common property fixtures or fittings must be renewed or replaced under s 62(2) only when they are no longer operating effectively or have fallen into disrepair to the point where their renewal or replacement is called for as they can no longer be kept in a state of good and serviceable repair pursuant to s 62(1). Once it was found, as his Honour did, that the system had not fallen into disrepair but was operating according to its original design capacity, there could be no breach of s 62(2) by reason of the refusal of the Owners Corporation to replace the system.”

36. Parker J thus concluded at [74] (referring to Tobias AJA in Thoo) that the obligation in [subsection 106(2)] to renew or replace items of common property is limited by a concept of reasonable necessity. … the provision is only engaged where the item can no longer be kept in a state of good and serviceable repair. … the provision is only directed to circumstances where the item “is no longer operating effectively or at all, or has fallen into disrepair.”

37. Once the subsection 106(2) obligation to renew or replace has been engaged, the next question to arise is the scope of any works that involve renewal or replacement. The Respondent submits that there can be overlap between works that “improve or enhance the property” and those that “maintain the property.” The Respondent refers in support of that submission to the decisions at first instance and on appeal in Stolfa. It is apparent that from this submission that in addressing the scope of works that must be undertaken under subsection 106(2) an associated question to be address is the interplay between section 106 and section 108.

38. In Stolfa at first instance Brereton J (as His Honour then was) found that works done in a void space (part of the common property) beneath a building built on a steeply sloping site did not require the authority of a special resolution under section 65A (now SSMA section 108). His Honour said (at [68]):

“Prior to the disputed works, the Void had extensive damp, cracked walls and water entry. The retaining wall that formed its southern face was cracked, and water was entering under the building. Repairs were required to provide proper support for the porch and main entrance, to prevent water penetration into the void and under the building, and to provide support for the fill in the newly levelled front garden. Even though they may well have involved a superior construction to what pre-existed them – particularly insofar as a concrete slab was substituted for timber flooring I am satisfied that the Void works constituted the keeping of the building in a state of good and serviceable repair. Their purpose was to avoid damage to and defects in the building, not to introduce some new improvement. They came within the obligations and powers of the Owners Corporation under s 62. … The Void works were [not] enhancement or improvement within s 65A, … but appropriate repairs to common property that was in disrepair, within s 62. Accordingly, the Void works did not require the authority of a special resolution under s 65A …”

39. On appeal, Allsop P who gave the leading judgment in Stolfa on appeal said (at [10]):

“The primary judge concluded at [68] of his reasons that being work falling within s 62, the work was not covered by s 65A or by the relevant by-law. This was challenged. It was submitted that even though s 62 required repair and maintenance to be done, because the work in fact improved or enhanced the common property, a special resolution was required. The judge was correct to reject that submission. If, as a matter of fact, all the works satisfied the description in s 62 as repair and maintenance, they were not subject to any requirement of a special resolution in s 65A. The statute should not be construed so as to require the owners corporation to act, but then to place a voting barrier in its path in complying with the statute.”

40. It is apparent from this analysis that where the duty of an owners corporation under section 106 is engaged, a special resolution will not be required even though the work may improve or enhance the common property.

41. The question remains, however, whether there is a point beyond which renewal and replacement works will fall outside section 106 and engage the operation of section 108.

42. Section 108 is concerned with changes to common property, that is where the there is an addition to common property, alteration of common property or the erection of a new structure on common property. Simply because work results in an enhancement or improvement does not necessarily mean that section 108 will be engaged. By their very nature, renewal or replacement of fixtures or fittings will generally speaking result in or involve improvement because old will be superseded by new.

43. The Court of Appeal in Thoo considered the interplay of section 106 and section 108. Tobias AJA said (at [125]-[126]):

“[125].   …it is now well established that where the duty of an owners corporation under s 62(1) or (2) is engaged, s 65A does not require the passing of a special resolution notwithstanding that the relevant work to be performed in compliance with the owners corporation’s duties under s 62(1) and (2) involves an addition to the common property which improves or enhances it: Stolfa v Hempton [2010] NSWCA 218 at [9] and [10] per Allsop P, with whom Basten and Young JJA agreed. On the other hand, where the duties under s 62(1) and (2) are not engaged, then any additions to the common property for the purpose of improving or enhancing it must comply with the requirements of s 65A.

[126]. Reliance was thus placed on s 65A by the Owners Corporation to demonstrate that s 62 looks backwards, requiring that existing common property be returned to a previous state of proper performance, whereas s 65A looks forwards and is concerned with improving or enhancing the common property beyond its current level of performance. The real distinction between ss 62(1) and (2) on the one hand, and s 65 A on the other, is in my opinion dependent upon the purpose or objective of each provision. Subsections 62(1) and (2) are engaged if the proposed work is for the purpose of maintaining and keeping in a state of good and serviceable repair the common property or when any fixtures or fittings in the common property are required to be renewed or replaced. The purpose of s 65A, as its opening words reveal, is to provide for the improvement or enhancement of the common property where otherwise that objective could not be achieved.”

44. Barrett JA concurred with Tobias AJA but added some additional remarks “merely by way of confirmation and emphasis”. After referring to Stolfa at [10] (quoted above) his Honour said (at [3]-[7]):

“[3].   Section 65A is concerned with the forms of activity undertaken “for the purpose of improving or enhancing the common property”. Two of the relevant forms of activity are adding to the common property and altering the common property. Section 62(2), by contrast, creates a duty to “renew or replace any fixtures or fittings comprised in the common property”.

[4]. Replacement is a large concept. If a modest single-bulb light fitting is removed and a grand crystal chandelier is installed in its place, the former has obviously been replaced by the latter. There is also replacement if a substantial brick wall is erected on a site previously occupied by a flimsy brushwood fence. Replacement connotes no more than the installation of one thing in the place of another to achieve functional equivalence.

[5]. While s 65A does not curtail the duty imposed by s 62(2) or impede performance of that duty, the existence of s 65A does serve to shape the s 62(2) duty so that, in the ordinary course, anything amounting to alteration or addition for the purpose of improving or enhancing is beyond the concept of renewal or replacement with which s 62(2) is concerned.

[6]. In determining how s 62(2) and s 65A apply at any particular time, regard must be had to the attributes of the common property at some earlier reference point. The question of what amounts to renewal, replacement, alteration or addition must be answered by a process of comparison with the position that prevailed at the earlier reference point. The first such reference point is the time at which the strata plan is registered and the common property comes into being. The initial attributes are fixed at that time; and it is from that base that characterisation as renewal, replacement, alteration or addition is to be approached. Once any addition or alteration is made in accordance with the Act, the attributes of the common property are changed, a new reference point is identified, and future questions of renewal, replacement, alteration and addition fall to be assessed by reference to the changed state at that new reference point.

[7]. Generally speaking, renewal or replacement of fixtures or fittings will, of its nature, involve improvement because old will be superseded by new. It may also entail alteration or addition, in that the new or replacement item may be larger than or otherwise different from the old. To the extent that alteration or addition is, in that way, incidental to renewal or replacement, s 62(2) both requires and allows it. But s 62(2) does not, at a particular time, impose a positive requirement for superior functionality, compared with that inherent in the nature and quality of the relevant part of common property as most recently fixed in the way I have mentioned.”

45. The Respondent submits that there may often be multiple ways of addressing common property issues. An owners corporation is not precluded from adopting one suitable method merely because another suitable method exists. The discretion remains with the owners corporation.

46. Parker J in Glenquarry was required to consider a similar submission that, once part of the common property was in need of repairs and maintenance work, or replacement work, within s 62, there was an obligation on the Strata Corporation to undertake the necessary work and it was up to the Strata Corporation as to how to do so. The works in Glenquarry included a proposal to replace an existing pre-WWII lift, lift shaft and stairs that did not comply with currently applicable regulations and could not now be constructed in their present form, with a glass lift and a concrete staircase that would meet Building Code of Australia requirements, and to repair the brick façade of a building that had deteriorated in places because of salt attack and age.

47. Parker J stated (at [71] – [74]):

“[71].   There is force in the contention that practicality requires allowing a degree of judgment and latitude to an owners’ corporation in determining how far to go with repair and replacement work in a maintenance context. Often, the replacement of an old and obsolete item may be cheaper and more effective in the long run than continuing to try to patch it up. There is also a textual basis for allowing a degree of latitude to an owners’ corporation in deciding what and when should be replaced. Maintenance is not necessarily confined to responding to a breakdown; the term usually also includes preventative maintenance, that is, replacing something which has reached the end of its service life before it fails: Hamilton v National Coal Board [1960] AC 633 at 647; Greetings Oxford Koala Hotel Pty Ltd v Oxford Square Investments Pty Ltd (1989) 18 NSWLR 33 at 40 per Young J.

[72]. On the other hand, the purpose of s 65A was clearly to protect minority owners in a building from having the costs of enhancement imposed on them by the majority. The minority may prefer to continue to eke out the existing facilities even if in the longer run, that may prove more expensive or inefficient. They may have less money to spend, or their priorities may be different. The legislative purpose behind s 65A could arguably be subverted if unnecessary costs could be imposed on the minority at the discretion of the majority just because some, much less extensive, repair or maintenance is required.

[73]   The lift in the building the subject of these proceedings illustrates this tension very well. It is clear from the Pitfield report that it would be possible to continue to patch the lift up; but that may well not be the most economical or practical course. On the other hand, the replacement of the lift, which the majority owners now characterise as a form of repairs and maintenance under s 62, was originally conceived as part of an overall plan for the refurbishment of the building which was undoubtedly, taken as a whole, an enhancement.

[74]. In my view, it is implicit in what Tobias AJA said in Thoo that the obligation in s 62(2) to renew or replace items of common property is limited by a concept of reasonable necessity. His Honour stated at [129] that the provision is only engaged where the item can no longer be kept in a state of good and serviceable repair. He went on to say that the provision is only directed to circumstances where the item “is no longer operating effectively or at all, or has fallen into disrepair”.

48. In respect of the proposed lift works Parker J found as follows (at [77] – [78]):

“[77]    …the facts make it clear that the disputed works associated with the lift were not reasonably necessary in the sense implicit in Thoo. The Pitfield report shows that it would be possible to continue to maintain the existing lift and that it can be expected to operate for many years into the future. There is nothing in the evidence which establishes that a new lift car is required, much less a new lift shaft.

[78]. On the facts, the lift is operating in accordance with its design requirements and can be kept operating into the future. It has not reached the point where it “can no longer be kept in a state of good and serviceable repair” to use the language of Tobias AJA in Thoo. In the language of Barrett JA, the existing functionality of the lift can be maintained without renewing or replacing it. Installing a new glass lift would be an improvement, not the maintenance or reinstatement of the functionality of the existing lift.”

49. In respect of the proposed repairs to the brick facade Parker J found (at [96]):

“[96].   The existing functionality of the external walls can be restored by repairs to the damaged bricks and mortar. In my view, to render the walls, putting a new surface on the building and incorporating the external pipe work, would be an enhancement. This is not because of the cosmetic effect, but because, in my view, it involves going beyond the restoration of the walls to their previous functional state. A fully rendered wall with pipework chased into it is in my view something different from a brick wall with exposed pipework affixed to it.”

50. The test that emerges from the reasons of Tobias AJA, Barrett JA and Parker J extracted above as to when work that involves renewal or replacement will fall beyond the concept with which section 106(2) is concerned appears to be whether the item can be kept in, or restored to, a state of good and serviceable repair and its pre-existing functionality through repairs (rather than through renewal or replacement). To the extent that repairs are insufficient, renewal or replacement (in the sense referred to by McColl in Ridis, namely to “make new, or as if new, ... restore to a former state”, or to “provide a substitute or equivalent or restore or make good”), including such alterations or additions that are incidental to renewal or replacement, will be both allowed and required by section 106(2). However any works that ‘add to the common property, alter the common property or erect a new structure on common property for the purpose of improving or enhancing the common property’ and in so doing go beyond the restoration works reasonably necessary to return the common property to a state of good and serviceable repair and restore its pre-existing functionality will fall outside section 106 and engage the requirement for a special resolution under subsection 108(2).

51. The Appeal Panel in Lonergan v The Owners – Strata Plan No. 16519 [2020] NSWCATAP 177 (Lonergan) was required to consider the appropriate test as to when work that involves renewal or replacement will fall beyond the concept with which section 106(2) is concerned in the context of roof replacement works. Citing in support of his position the judgment of Parker J in Glenquarry, in particular paragraph [74], the Applicant in that case submitted that the question the Tribunal should have asked itself was “whether the roof is able to be repaired?” and that if the answer to that question was “yes”, then anything else said to give effect to the obligation imposed by section 106(1) of the SSMA to “properly maintain and keep in a state of good and serviceable repair the common property”, here the replacement of the roof, would be an enhancement within the meaning of section 108 of the SSMA.

52. The Appeal Panel in Lonergan did not agree that Glenquarry is authority for the proposition that where the obligation imposed by section 106(1) is engaged to “properly maintain and keep in a state of good and serviceable repair the common property” if the subject property is capable of being repaired, replacement must necessarily be considered to be an enhancement. The Appeal Panel stated (at [45]):

“Whether replacement will amount to an enhancement within the meaning of section 108(1) will depend on the facts of the particular case. As Parker J acknowledged at [71] “practicality requires allowing a degree of judgment and latitude to an owners corporation in determining how far to go with repair and replacement work”. In deciding whether to replace or repair, a range of matters will be relevant to inform a decision made by an owners corporation, such as the costs of repairs versus the cost of replacement and the estimated life of the repaired item versus the life of the replaced item.”

Nature and scope of the Remedial Works

53. Motion 3 relates to remediation works for the roof, sunrooms and windows. Motion 3 is in the following terms:

“The Owners - Strata Plan No. 9370 RESOLVE pursuant to Section 106(1) of the Strata Schemes Management Act, 2015 (NSW) to specifically authorise the remedial works to common property for the remedial works pertaining to the roof, sunrooms and window replacements per the Specifications as prepared by Baam Consulting dated 09/08/2023, as annexed to this agenda.”

54. According to the breakdown of the costs, the Remediation Works are to include:

Roof works

1. Remove and dispose of all existing roof tiles, ridge capping, flashings, valley irons, tile battens and sarking.

2. Supply and install Bradford Thermoseal roof sarking.

3. Supply and install Monier Marseille terracotta roof tiles with new tile battens.

4. Supply and install 20 roof anchors.

5. (Separable portion) Install 5 whirly birds on rear of roof to not be visible from street frontage.

1. Repair/replace damaged ridge board and rafters.

2. Install additional timber framing brackets, fasteners and bracing to comply with the Timber Framing Code.

3. Remove all redundant services and storage tanks from the roof cavity and dispose.

Sunroom windows

9. Remove 18 existing sunroom windows and single skin brickwork under the windows and dispose.

10. Supply and install internal 650-700mm tall AFS reinforced concrete structural balustrade doweled into concrete sunroom floor slab.

11. Supply and install external masonry skin to match facade brickwork and include cavity flashings.

12. Supply and install new awning and fixed windows powder coated with Dulux Duratec Zeus colour range.

13. Conduct internal make-good works to sunroom walls and floor.

14. Remove and replace window lintels as nominated by the Principal Representative.

Kitchen and bathroom windows

15. Remove and replace kitchen and bathroom windows with awning windows.

Infill wall remediation

16. Remove the 6 sunroom single skin infill walls from the northern sunrooms.

17. Supply and install 6 masonry cavity walls with brick tiles and cavity flashings to match existing brickwork.

18. Concrete spalling repairs to sunrooms.

19. Remove plaster ceilings on unit 2 and 15 sunrooms and dispose.

20. Scan 10 sunroom slab soffits and mark out reinforcement location.

21. Remove any drummy and spalling concrete to soffits of 10 sunrooms    (excluding top floor) and conduct conventional concrete repairs.

22. Replace corroded reinforcement as necessary.

23. Supply and install 12 x Sika Ferrogard 520 Patch anodes per sunroom soffit.

24. Supply and install new plaster ceiling to Unit 2 and Unit 15 sunroom.

25. Apply two coats of acrylic paint to newly repaired concrete slabs, 2 x plaster ceilings and all 12 sunroom walls.

Concrete spalling repairs

26. Conduct conventional concrete repairs to all sunroom soffits.

55. The relevant reports which address the need for and scope of the proposed works to which the Tribunal’s attention was drawn are as follows:

1. Owners Corporation (Respondents):

1. Roof Condition Report prepared by BAAM Consulting dated 17 February 2022 (BAAM February 2022 Roof Condition Report) (RB525)

2. Tender Reconciliation Report prepared by BAAM Consulting dated 13 October 2023 which sets out at page 5 (and elsewhere) the proposed scope of works (BAAM Tender Report) (RB544). It is noted that a review of the BAAM Tender Report reveals that a substantial proportion (approximately 30%) of the costs associated with the Remedial Works comes in the form of access requirements for roofing works, sunroom windows and brick infill panels, and as a separable portion for bathroom and kitchen windows. For the purpose of the roof works, access is proposed in the form of a single level scaffold deck for the full perimeter of the main building structure, with additional pricing for multi-level access to the nominated windows and infill panels at the rear of the building. (RB546)

3. Email from BAAM Consulting (Nathan Wells) dated 22 November 2024 addressing sunroom queries (BAAM Sunroom email) (RB637)

4. ‘Project Transmission Report’ from BAAM Consulting (Nathan Wells) dated 2 December 2024 addressing sunroom remedial work (BAAM Project Transmission Report) (RB 639)

5. Email from BAAM Consulting (Nathan Wells) dated 9 January 2025 regarding Sunroom Infill Panels (BAAM 9 January Sunroom Infill Panels email) (RB644)

6. Expert report of Nathan Wells of BAAM Consulting dated 13 May 2025 (Wells May 2025 Report) which also attaches:

(1)   25 November 2014 BAAM consulting condition report on eastern elevation windows (BAAM November 2014 Report)

(2)   17 December 2021 BAAM consulting condition report on sunroom windows (BAAM December 2021 Report)

(3)   4 May 2022 BAAM consulting condition report on sunroom concrete spalling (BAAM May 2022 Report)

(4)   23 January 2025 BAAM Condition Report Unit 17 and 25 Windows (BAAM January 2025 Report)

(5)   8 May 2025 BAAM consulting window inspection summary (BAAM May 2025 window inspection report).

2. Applicants:

1. Report of George Dahrie dated 11 March 2025 (Dahrie March 2025 Report). In the Dahrie March 2025 Report, Mr Dahrie provides his opinion as to whether the proposed scope of works go beyond what is the minimum necessary to remediate the sunrooms and windows.

2. Report of George Dahrie dated 13 June 2025 (Dahrie June 2025 Report). The Dahrie June 2025 Report provides Mr Dahrie’s opinion on the proposed roof works, as well as responding to aspects of the Wells May 2025 Report in respect of the sunroom works and windows.

56. Save for the Wells May 2025 Report, the reports and documents relied on by the Respondents have not been prepared by reference to NCAT Procedural Direction 3 ‘Expert Evidence’ (PD3). However, Mr Wells, who is engaged by BAAM Consulting and was made available for cross examination, was the author of each of the other reports and documents from BAAM Consulting save for the BAAM November 2014 Report, the BAAM December 2021 Report, the BAAM February 2022 Roof Condition Report and the BAAM May 2022 Report. Mr Wells gave evidence that he has been involved throughout the relevant period in the development of the scope of works recommended by BAAM Consulting, had reviewed each of the reports, and that he holds the opinions set out in each of the documents from BAAM Consulting including the reports attached to the Wells May 2025 Report and the BAAM February 2022 Roof Condition Report. Further, Mr Wells was onsite when the inspection that is referred to in the BAAM February 2022 Roof Condition Report was undertaken and has been back to reinspect the roof space more recently.

57. Mr Dahrie’s reports on the other hand were prepared by reference to PD 3. Mr Dahrie specifically agrees to be bound by the Expert Code of Conduct contained in PD 3 in the preparation of his report and giving evidence before the Tribunal. Mr Dahrie was also made available for cross examination.

58. PD 3 relevantly provides that:

“[1] The Tribunal may rely on evidence from expert witnesses to reach a conclusion about a technical matter or area of specialised knowledge that is relevant to an issue to be determined in proceedings. It is important that experts’ opinions are soundly based, complete and reliable.

…

[3] In proceedings where the Tribunal is not bound by the rules of evidence, the acceptability of expert evidence is a question of weight not admissibility. Nonetheless, if those proceedings involve complex or difficult expert issues, it is appropriate to require expert evidence to be prepared and presented in a manner, which seeks to ensure its usefulness.

…

[7] In non - Evidence Rules Proceedings [as defined in PD 3], a failure to comply with the code of conduct does not render any expert report or evidence inadmissible but it may, depending on the circumstances, adversely affect the weight to be attributed to that report or evidence.

59. In the present case evidence of expert witnesses as to the need for and scope of the Remedial Works will be of assistance to the Tribunal. Both Mr Dahrie and Mr Wells meet the PD 3 definition of an expert. Their respective CVs and experience demonstrate specialised knowledge based on their training, study and experience about technical matters relevant to an issue before the Tribunal. As such, whilst keeping in mind that except for the Wells May 2025 Report, the BAAM materials were not prepared for the purpose of the hearing of this matter or with reference to PD 3 and the Expert Code of Conduct, I propose to have regard to each of the reports and documents itemised above at paragraph 55.

60. Based on a review of those materials, the evidence given by Mr Wells and Mr Dahrie before the Tribunal, and the parties’ submissions, the main challenges to the scope of works as outlined above at paragraph 54 seem to be the following:

Roof works:

1. According to the BAAM February 2022 Roof Condition Report the roof works are proposed to include items to be repaired as well as items to be replaced.

2. The main items for replacement are the existing tiles, battens and sarking. This is a substantial undertaking, given that the roof is 6 levels above the ground, and it would appear from the BAAM Tender Report that for the purpose of the roof works, access is proposed in the form of a single level scaffold deck for the full perimeter of the main building structure. The costs of gaining access via the erection of scaffolding (as per the BAAM Tender Report) well and truly exceed the direct costs of the roof works.

3. The Applicants contend that a full roof replacement is not required. Mr Dahrie suggests in the Dahrie June 2025 Report (at paragraph 6.1.2.1) that more localised repairs and replacement can be undertaken.

4. In his evidence before the Tribunal Mr Dahrie confirmed his view that the more localised works that he is proposing could be undertaken from inside the roof space and by walking on the roof with an appropriate anchor point and harness. This view was based in part on his own personal experience on roofs and more broadly his experience working with the relevant trades and his familiarity with the use of safe work methods. While Mr Wells observed that there would be risks associated with such an approach, he accepted that there are experienced roofers who walk on roofs all the time and know how to do so. If the work could be safely undertaken in the way described by Mr Dahrie, which based on the evidence of the experts the Tribunal accepts is possible, there would be limited if any need for scaffolding to undertake the more limited roof works proposed in the Dahrie 13 June 2025 Report.

Sunroom windows and Infill walls:

5. The Respondent proposes removal of the existing sunroom windows and single skin brickwork under the windows, installation of a new internal structural reinforced concrete balustrade / window spandrel and a masonry external skin to preserve the original exterior aesthetic, cavity flashings, and installation of new sunroom windows in powder coated aluminium.

6. The Respondent also proposes demolishing and replacing the single leaf infill panels with a double leaf masonry (brick) cavity wall with cavity flashings.

7. The Applicants propose that the existing single skin brickwork and single leaf infill panels could be retained, with a steel stud framing system installed behind them, and repair of the windows.

Kitchen and bathroom windows:

8. The Respondent proposes to remove and replace kitchen and bathroom windows with awning windows.

9. The Applicants say the windows can be repaired and maintained.

Concrete spalling:

10. The Wells May 2025 Report identifies (at 8.1) that concrete spalling is occurring on most of the sunroom concrete floor slabs. The specification includes an allowance to conduct conventional concrete repairs to the concrete sunroom floors to restore the structural integrity of the concrete element.

11. Mr Dahrie’s March 2025 Report also refers to observable concrete spalling.

12. At the hearing the Tribunal was informed that both experts agree that concrete spalling is occurring on most of the sunroom concrete floor slabs and that these slabs should be retained and repaired.

Do the Remedial Works fall within section 106?

61. The Respondent submits that all of the Remedial Works satisfy the description of repair and maintenance under section 106 per the principles in Thoo and Stolfa. In support of this submission the Respondent refers to paragraphs 9.3 – 9.4 of the Expert report of Nathan Wells of BAAM Consulting dated 13 May 2025 (Wells May 2025 Report) at which Mr Wells states “I consider these works to be a combination of routine maintenance, necessary replacement and important safety work.” and goes further to express the view “I do not believe these works to be an upgrade of these elements, rather they are a necessary obligation of the Body Corporate to maintain and repair common property.” The Tribunal notes that Mr Wells’ Report, including the comments at paragraphs 9.3-9.4 of that report, concern those works which Mr Wells refers to in paragraph 9.1 of the same report as the ‘sunroom maintenance works’, rather than the entirety of the Remedial Works. The Tribunal further notes that it is a question for the Tribunal to determine whether the proposed works are a necessary obligation of the Body Corporate to maintain and repair common property within the meaning of section 106.

Roof works:

62. The Respondent’s position is that the existing tiles, battens and sarking all need replacing, and the proposal is for them to be replaced.

63. The BAAM February 2022 Roof Condition Report states (at page 3 of 16) that “Our first impression of the roof space was that it appears to have a sound and stable timber structure with a variety of under purlins and struts supporting system” and at (at page 12 of 16) that “The roof structure at [address] is generally in good condition for its age but requires some carpentry work and removal of redundant services and pipe work. There are some considerations to be made which are not in compliance with AES 1684, as follows”

64. Specific issues addressed in the BAAM February 2022 Roof Condition Report include:

1. Timber rafter and timber battens: (at page 9 of 16) “timber rafter with evidence of water infiltration.”

2. Roof tiles: (at page 7 of 16) “Terracotta roof tile made by Symonds Bros in the early 1900s and no longer available.”

3. Ridgeboard and rafters: (at page 10 of 16): “Ridgeboard timber to be repaired. Ridgeboard and rafter need to be repaired”, and (at page 11 of 16) “Capping sagging due to damaged ridgeboard damage” and (at page 12 of 16) “The Ridgeboard is in good condition however in one location it has been damaged and would need to be repaired with adjacent rafter beam. This damage has caused the ridge capping to sag in this location”.

4. Sarking: (at page 5 of 16) “Sarking is extensively damaged and would need replacing” and (at page 12 of 16) “Most of the sarking under this roof is damaged beyond repair and would need replacing urgently.”

65. The only other references in the BAAM February 2022 Roof Condition Report to roof tiles and timber battens appear (at page 13 of 16) under the heading ‘Quote Evaluation’ as follows “the owner corporation provided 3 separate quotations from roofing companies to remove and dispose of the existing Terracotta tiles, timber battens and sarking. The quotes allow for supply and install new sarking under new timber battens and the installation of new Terracotta roof tiles.”

66. However, Mr Wells’ oral evidence before the Tribunal was that about half the tiles were visible from within the roof space through the torn and damaged sarking and that more than 85% of the visible tiles showed at least some signs of fretting, a process of deterioration in terracotta roof tiles that occurs with age and exposure to the elements such as sea air. Many of the tiles are not locked on to the battens, in some cases because the locking tab on the tile is missing, and they are staying in place simply under their own weight. Mr Wells expressed the opinion that fretting is indicative of a tile coming to the end of its serviceable life and once fretting is observed it becomes necessary to replace the tile.

67. Mr Wells also referred in his oral evidence before the Tribunal to replacing the ridgeboard. However, the BAAM February 2022 Roof Condition Report refers to repair. There is no evidence that the condition of the ridgeboard has worsened since the 2022 Roof Condition Report.

68. It is noted that the method for access to undertake the roof works proposed in the BAAM February 2022 Roof Condition Report is (at page 13 of 16) “Access scaffolding mainly to the front of the building and a perimeter handrail as per work cover and occupational health and safety regulations.” The proposed scaffolding appears to be limited mainly to the front (west side) of the building and be more limited than the scaffolding proposed in the subsequent BAAM Tender Report (which is a single level scaffold deck for the full perimeter of the main building structure). The Respondent’s evidence did not explicitly address why there has been a change to the proposed extent of the scaffolding between the BAAM February 2022 Roof Condition Report and the BAAM Tender Report, and whether the pricing of the two approaches will be significantly different. However the BAAM May 2025 window inspection report refers (at page 3 of 24) to “The planned placement of the scaffolding for the sunroom remedial works”, which suggests that the more extensive scaffolding proposed in the BAAM Tender Report may be in response to other aspects of the Remedial Works (sunroom and infill walls), which it is noted primarily affect the eastern elevation of the building, rather than being a necessary requirement for the roof works.

69. The Applicants contend that a full roof replacement is not required. The Dahrie June 2025 Report proposes (at paragraph 6.1.2.1) that reinforcement be added to rigid boards and rafters where minor sagging or deflection has occurred and that localised tile replacement can be undertaken. Thereafter regular maintenance to ensure tiles are in place, and not cracked or dislodged, should be undertaken.

70. In his evidence before the Tribunal Mr Dahrie accepted that the ridgeboard and other structural timbers within the roof space required attention and reiterated his view that the work could be undertaken by way of repairs, which may include partial replacement or lamination of the ridgeboard in one section. In view of the recommendations in the BAAM February 2022 Roof Condition Report the Tribunal accepts Mr Dahrie’s opinion that repairs (include partial replacement or lamination) would be a sufficient response to addressing any damage and deterioration that has impacted the structural timbers in the roof space. It would not be necessary to undertake a complete replacement of the entirety of the timber framework that makes up the roof to comply with the section 106 obligation. The Tribunal does not understand the Respondent to be proposing a wholesale replacement of the entirety of the structural timber framework.

71. As to the roof tiles Mr Dahrie observed that fretting happens over time and it would be possible to replace tiles that have cracked or substantially deteriorated, on an individual tile by tile basis. Tiles do not require replacement immediately when they show signs of fretting. Mr Dahrie was not concerned that the original tile maker Symonds Bros was no longer making these tiles. Many of the tiles had already been replaced with tiles of other brands, indicating that they can still be sourced locally.

72. The Tribunal accepts Mr Dahrie’s proposition as a matter of logic. However, a program of tile replacement in the present case would require reasonably regular attention and associated expenditure from this point in time and into the future, given the age of the tiles and that, according to Mr Wells’ evidence and photos, which the Tribunal accepts, many of them are showing some degree through to a substantial degree of deterioration due to fretting and cracking. The process of degradation through fretting will only continue. This is a relevant consideration for the Owners Corporation to have in mind, given that the duty under s 106 (1) of the SSMA includes taking preventative measures to keep common property in order before it falls out of condition. (see Parker J in Glenquarry at [71] and Gittins at [58]).

73. Further, when viewed as a whole, it is apparent that the tiling making up the roof is no longer in a state of good and serviceable repair, and that repairs in the form of localised tile replacement will not resolve the issue of the continued and inevitable decline that the roof tiles are now experiencing, such that the Owners Corporation may comfortably conclude that the roof will have been restored to a state of good and serviceable repair through a localised repair program, which will inevitably need to be followed up by ongoing rolling repairs. As such the Tribunal finds that the Owners Corporation’s obligation under section 106(2) encompasses replacement of the roof tiles as a whole, as per the tender proposal.

148. The Respondent contends that the Applicants, and other owners, have not been adversely affected by the bin enclosures motion, and the Tribunal should not make orders to invalidate the motion. The Owners Corporation obtained a valuation report from Acumentis (RB105) to assess whether the movement of the garbage bins would impact the value of any properties. The valuation report concluded that the impact on value, if any, would be negligible to non-existent.

149. However the report by the Valuer is largely focused on the financial impact of the proposal and in particular how a potential buyer or tenant may react to the location of the bins. The Valuer’s assessment is informed by matters such as the observation that an incoming buyer or tenant would be oblivious to the fact of the bin relocation, that most valuers would enter any of the apartments via the footbridge and be oblivious to the garbage bin bay, and that a buyer or tenant is likely not to even notice the new bin bay location during an open for inspection. The Valuer Acknowledges that existing owners and occupants may understandably prefer the garbage bin facility to remain in its current location.

150. The Applicants argue that they will be adversely affected by the proposed relocation of the bins to the garden area. The impact is not merely financial.

151. It is apparent from the Applicants’ evidence that the bins will be visible and in closer proximity to a number of the apartments located in the lower south west section of the building and facing toward the garages. Additional stairs are involved if the bins are moved below the current bin room. The Applicants’ evidence also includes proposals for alternative solutions (for example affidavit of Colin Segal dated 13 June 2025).

152. The decision to proceed with the current bin installation plan has been imposed on the Applicants over their objection because the motion was treated as an ordinary resolution. Had the motion been treated as a special resolution it would not have passed.

153. While it is not for the Tribunal to determine which of the options is the best option, or to land on a solution that will not adversely impact any owner, the Tribunal is not satisfied that the failure to comply with the requirement for the Bin Enclosure Motion to be voted on as a special resolution did not adversely affect any person, or that compliance with the requirement for the Bin Enclosure Motion to be voted on as a special resolution would not have resulted in a failure to pass the resolution

154. For these reasons the Tribunal finds that it can and must make an order invalidating the resolution made in respect of motion 2.1.1 under section 24 of the SSMA. The consequence is that the resolutions in respect of motions 2.1.2, 9.2 and 9.2 [sic] (9.3) are also invalidated.

155. As such it is unnecessary to consider whether the Tribunal’s power under section 232 is enlivened.

Motion 8.1 –THE LEVIES MOTION

Challenge to validity of the Levies Motion

160. The Applicants challenge the validity of the Levies Motion on the basis that at the time it was passed, the Owners Corporation was not faced with ‘other expenses it could not at once meet’ (as per section 81(4) of the SSMA (Owners corporation to set contributions to administrative and capital works funds)).

Variation of the Levies Motion

161. In the alternative the Applicants submit that the Levies Motion should be varied under section 87 of the SSMA (Orders varying contributions or payment methods) having regard to the sizable sum involved and the fact that the funds will not be needed for a number of months at least.

Consideration of the Levies Motion

162. Section 81(4) of the SSMA provides that:

“If the owners corporation is subsequently faced with other expenses it cannot at once meet from either fund, it must levy on each owner of a lot in the strata scheme a contribution to the administrative fund or capital works fund, determined at a general meeting of the owners corporation, in order to meet the expenses.”

163. Motion 8.1’ Special levy for fire order works (option 1) and remediation works’ provides as follows:

“that the Owners - Strata Plan 9370 RESOLVE in accordance with section 81(4) of the Strata Schemes Management Act 2015 (NSW) to raise a special levy to the Capital Works Fund in the amount of $2,107,652 include GST for the specific purpose of raising funds for the fire order works (per option 1) and remedial works projects as resolved, to be paid in three instalments due on the 13th January 28 February and 28 March 2025.”

164. The expenses to which the special levy is to be directed are the expenses of the works covered by motion 2.1.1 (Fire Pump and Bin Enclosure) and motion 3.0 (Remedial Works).

165. The Applicants say that the expenses associated with relocating the fire pump are ones that the Owners Corporation could already meet out of available funds. No special levy was required in this regard.

166. Arithmetically this would appear to be correct. Ms Solomon states in her witness statement that levies were raised in 2021 to fund the fire order works and remedial works in the sum of $904,200, of which $436,000 has been expended to date. There would appear to be sufficient funds available to cover the works associated with compliance with the fire order. It appears from the explanation for the motion provided with the notice of general meeting (RB59) that funds of $660,000 held in the sinking fund were factored in to the calculation of the amount to be raised by way of special levy.

167. The Applicants say that the expenses associated with the Remedial Works are ones that the Owners Corporation was not yet faced with. At the time of the Meeting, the Owners Corporation could not rationally engage a contractor to carry out the Remedial Works because it had not yet obtained the necessary development consents. The Owners Corporation has still not applied for development consent. The works as authorised by the Council may differ from the works currently proposed. At that point the Owners Corporation will need to seek new quotes, which may be for different sums and then re-put the matter to a vote. The Owners Corporation will not be ‘faced with’ the expenses of the Remedial Works for an estimated 9 months or more.

168. In the circumstances the Applicants say that section 81(4) was not engaged so as to justify the Levies Motion.

169. There is limited authority on the operation of section 81(4), and what is meant by the phrase ‘faced with other expenses it cannot at once meet from either fund.’

170. Section 76(4) of the 1996 SSMA, the predecessor to section 81(4), was considered by Hall J of the NSW Supreme Court in Gannon v The Owners - Strata Plan No 14403 [2013] NSWSC 1916 on appeal from the Local Court. In that case an owner within the Strata Plan challenged the imposition of a special levy on the basis that at the time that the motion was passed the Owners Corporation had no more than a cost estimate to work with. The contention advanced for the applicant was that for the special levy to be imposed it was essential that there was available, before a resolution could be validly adopted, material that established the actual amount of the expense to be incurred.

171. Hill J stated (at [75]):

“The terms of s 76(4) are quite general. The provision does not speak of a liability for expenses incurred or to be incurred. Hence the phrase “subsequently faced with”: which carries the meaning of an owners corporation being confronted with the prospect of expenses which may not be capable of precise calculation in terms of a particular amount or actual cost. Maintenance or capital repairs may be subject to variables that prevent such precise quantification based on quotes from contractors. Consistent with the provisions of ss 75, 75A and 76, the legislature obligation must be construed in terms of an “estimate” rather than a particular total cost, the latter often being incapable of final or absolute calculation.”

172. Hill J held (at [87]):

“On the construction of s 76(4) to which I have referred, it is clear that the respondent was faced with an expense, being the estimated cost of the Scope of Works, and that it did not have the funds to meet such expense… a Resolution was passed properly raising the special levy.”

173. Applying the construction to which Hall J refers, it is apparent that a special levy can be struck by reference to estimates and by reference to the prospect of expenses which cannot otherwise be met out of the capital account.

174. On the question of the timing and certainty of the prospective or anticipated expenses, and what is meant by the ability to ‘at once meet’ those expenses, some assistance may be gained by considering the context of section 81(4) within the SSMA and the purpose of the section.

175. Section 81(4) sits within Part 5 ‘Financial management’ of the SSMA. Other sections in Part 5 which assist in an understanding of the operation of section 81(4) include sections 74, 79 and 80 and the balance of section 81.

176. Section 74 requires an owners corporation to establish a capital works fund.

177. Section 79 requires an owners corporation at each annual general meeting to estimate how much money it will need to credit to its capital works fund for actual and expected expenditure of a capital nature (including the costs which will arise in performing its section 106 obligations). In so doing the owners corporation must take into account the existing financial situation of the strata scheme and an estimate of receipts and payments. In estimating amounts to be credited to the capital works fund, an owners corporation is also to take into account anticipated major expenditure identified in the 10-year plan.

178. Section 80 requires an owners corporation to prepare a 10-year capital plan of anticipated major expenditure covering matters that include details of proposed work or maintenance, timing and anticipated cost, and source of funding. The purpose of a 10 year plan is to identify costs into the future, including the timing of anticipated costs, so that adequate financial resources can be built up over time.(per second reading speech of Ms Reba Meagher (Minister of Fair Trading and Minister Assisting the Minister of Commence) presented on 4 December 2003 which introduced the Strata Schemes Management Amendment Bill 2003 (NSW) to Parliament).

179. Section 81(1) requires the owners corporation to determine the amounts to be levied as contributions to the administrative fund and capital works fund to raise the amounts estimated as needing to be credited to those funds. Section 81(4) then comes into operation when the owners corporation is subsequently faced with other expenses that it cannot at once meet out of the funds already held, that is where the funds that have otherwise been accumulating will be insufficient to meet the additional expenses that have been subsequently identified.

180. By reference to the surrounding provisions, it is apparent that the phrase ‘it cannot at once meet from either fund’ is a reference to the owners corporation not already having sufficient funds in the relevant account to meet the prospective expense that has been subsequently identified. It is not confined to the question whether the funds will be in the relevant account when the payment falls due. This is consistent with the overall tenor of the surrounding provisions which are concerned with ensuring that the administrative and capital funds are built up over time and always contain sufficient amounts to cover expenses as they fall due.

181. There is force in the Applicants’ argument that given that section 81(4) concerns special levies which may be sizable and unplanned for, and which a lot owner may be required to pay against their own individual choice or will, and may not have planned or budgeted for, the Tribunal should give a narrow interpretation to the provision. For obvious reasons, a lot owner should not be compelled to pay further funds to an owners corporation outside of standard levies unless necessary.

182. The Tribunal further observes that the failure to pay a special levy can have serious consequences for an owner including in the first instance loss of voting rights and an obligation to pay interest unless the obligation to pay interest is waived.

183. In the surrounding context, including for these reasons, subsection 81(4) should not be understood to trigger an obligation to raise further funds the moment a further prospective expense not already covered by prior estimates is identified. The further expense must be sufficiently proximate that it cannot otherwise be absorbed into and be accommodated by the 10 year plan.

184. On the other hand, an owners corporation must have confidence that it will have the funds available to it to meet expenses that it faces in the shorter term. For example an owners corporation cannot commit to works Is confident that it will have sufficient funds to do so. Waiting until the commencement of works is imminent before the Owners Corporation resolves to strike a special levy would be impractical, and inconsistent with the operation of the provision within the context of the surrounding provisions which are concerned with the accumulation of funds sufficiently ahead of time to ensure that works can be undertaken as and when required.

185. It is further noted that the adverse impact of a sudden and sizeable special levy can be somewhat softened by the operation of section 81(5) which allows for an owners corporation to determine that a contribution may be paid by periodic instalments. The provision has a similar flavour to section 80, in the sense that an assessment as to whether contributions may be made over a period by reference to the likely timing of required expenditure would be an appropriate consideration for an Owners Corporation in determining a schedule for payments.

186. In the circumstances, it was within the Owners Corporations power to strike a special levy to cover the Remedial Works at the same time as the Remedial Works Motion was resolved.

187. The special levy of $2,107,652 was calculated to include funds for the fire order works ($313,840), and by reference to funds already held in the capital works fund ($660,000). The Tribunal has found that the resolution in respect of motions 2.1.1 and 2.1.2, 9.2 and 9.2/9.3 should be invalidated. Arguably, the consequence for the special levy is to reduce the immediate need for $313,840. However noting that (a) funds were raised for the purpose of compliance with the fire order in 2021, and have been applied in part for that purpose and otherwise held in the sinking fund since that time, (b) compliance with the fire order is an important priority for the Owners Corporation, and (c) the Applicants do not take issue with the works associated with the installation of the fire pump, which represents the majority of the figure of $313,840, it would be appropriate for funds of this amount to continue to be held in the capital works funds, despite motions 2.1.1 and 2.1.2, 9.2 and 9.2/9.3 being invalidated, pending application of same in compliance with the fire order. As such the Tribunal’s finding that the resolution in respect of motions 2.1.1 and 2.1.2, 9.2 and 9.2/9.3 should be invalidated does not detract (or deduct) from the sum which the Owners Corporation could reasonably raise by way of special levy for the purpose of meeting the costs of the Remedial Works.

188. The remaining question is whether the Tribunal should otherwise vary the special levies contributions.

189. In the present case the Owners Corporation determined that payment of the special levy would be by way of 3 instalments to be made in January, February and March 2025.

190. The Tribunal notes the evidence of the planning experts that development consents will be required for at least some of the works, and potentially for other works subject to confirmation from a structural engineer (supplementary report of aSquare Planning dated 3 July 2025). While it is not a matter for the Tribunal to determine that development consents are required, the Tribunal may take notice of the views of experts who practice in the planning area, and on whose advice the Owners Corporation is presumably acting, to form a view as to the likely timing of the works and when funds will be required to be held by the Owners Corporation.

191. The Tribunal further notes that once contracts for work are entered into, 100% payment will not be required up front. Standard building industry practice is for payments for works to be made by instalments or at certain points of a project. The works themselves once started will take time. Having resolved to impose a special levy and determined the payment timetable, the Owners Corporation can be comfortable that it will have sufficient funds as payments fall due.

192. Finally the Tribunal notes that $660,000 is already held in the capital fund.

193. In all of these circumstances the Tribunal finds that the manner of payment of the contributions required by the Levies Motion is unreasonable, in that it would be unreasonable to require owners to meet the current timetable for payment of the special levy when the works are still some way off, substantial available funds are already held, and payments to contractors will not be required immediately. In the absence of specific evidence as to the timetable for next steps, including what consents are to be sought and when, and when the Owners Corporation intends to or needs to engage relevant contractors, the Tribunal orders that the timetable be extended so that payments are due on 28 August, 28 September and 28 October (in effect a deferral of approximately 7 months from the original due dates).

Orders

194. For the reasons outlined above the Tribunal makes the following orders:

1. Order under section 24 of the SSMA invalidating the resolution made at the special general meeting held on 3 December 2024 (SGM) in respect of motion 2.1.1.

2. Order under section 24 of the SSMA invalidating the resolutions made at the SGM in respect of motion 2.1.2, 9.2 and 9.2 [sic] (9.3).

3. Order under section 87(1)(b) of the SSMA that the manner by which payment of the contributions required by the Levies Motion are to be made is varied such that payments will be due on 28 August, 28 September and 28 October.

195. The balance of the Applicants’ case is dismissed.

Costs

196. Each of the parties has had some degree of success. The Respondent in its written submissions indicated that if successful it would request an opportunity to be heard on costs.

197. If the parties are unable to agree on the issue of costs, they may apply to the Tribunal within 28 days of this decision and provide brief written submissions in support of any claim for costs. Any party opposing the application by the other party for costs must file and serve any submissions in reply within 14 days of receipt of the costs applicant’s submissions.

198. The parties’ submissions in reply should address the issue of whether any application for costs may be dealt with “on the papers” as permitted by s 50 of the Civil and Administrative Tribunal Act 2013 (NSW).

199. If either party considers that it would not be appropriate for the application for costs to be dealt with “on the papers”, they must advise the Registrar within 7 days of receiving any submissions in reply and request that the matter be listed for a further in person hearing on the question of costs. Any hearing on the question of costs will otherwise proceed on the papers.

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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: 23 October 2025