Reen v Owners Corporation SP 300

[2008] NSWSC 1105

CITATION:	Reen v Owners Corporation SP300 [2008] NSWSC 1105
HEARING DATE(S):	25 September 2008
JUDGMENT DATE :	23 October 2008
JURISDICTION:	Common Law
JUDGMENT OF:	Harrison AsJ
DECISION:	(1) The appeal is dismissed. (2) The orders of Senior Tribunal Member Balding dated 29 May 2008 are affirmed. (3) The amended summons filed 28 July 2008 is dismissed. (4) The plaintiffs are to pay the first defendant's costs as agreed or assessed.
PARTIES:	John Noel Reen (First Plaintiff) Barbara Patricia Reen (Second Plaintiff) Owners Corporation of Strata Plan 300 (First Defendant) Consumer Trader & Tenancy Tribunal (Second Defendant)
FILE NUMBER(S):	SC 13169/2008
COUNSEL:	D C Price (First Defendant)
SOLICITORS:	Thomas McDarra & Co (Plaintiffs) David Le Page (First Defendant) Submitting Appearance, Crown Solicitor (Second Defendant)
LOWER COURT JURISDICTION:	Consumer Trader and Tenancy Tribunal of NSW
LOWER COURT FILE NUMBER(S):	SCS07/60548
LOWER COURT JUDICIAL OFFICER :	Senior Tribunal Member Balding
LOWER COURT MEDIUM NEUTRAL CITATION:	[2008] NSWCTTT 1040

IN THE SUPREME COURT
OF NEW SOUTH WALES
COMMON LAW DIVISION

ASSOCIATE JUSTICE HARRISON

THURSDAY, 23 OCTOBER 2008

13169/2008 - JOHN NOEL REEN v
OWNERS CORPORATION SP300
JUDGMENT (Appeal – s 158 Strata Schemes
Management Act )

1 HER HONOUR: This dispute has a long history. At this property at Bellevue Hill there are eight units and only five existing car spaces. By amended summons filed 28 July 2008, the plaintiffs seek leave to appeal the decision of Senior Tribunal Member Balding dated 29 May 2008 and an order that the previous orders of Adjudicator Taylor be upheld.

2 By notice of contention filed 16 September 2008, the first defendant contends that the orders made by the Consumer Trader and Tenancy Tribunal should be affirmed on grounds additional to those relied on by the court below, but does not seek a discharge or variation of any part of the decision.

3 The first plaintiff is John Noel Reen. The second plaintiff is Barbara Patricia Reen (the Reens). The first defendant is the Owners Corporation of Strata Plan 300 (SP300). The second defendant is the Consumer Trader and Tenancy Tribunal (CTTT) who has filed a submitting appearance. The Reens relied on a bundle of documents marked Ex “A”. SP300 relied on a bundle of documents marked Ex “1”.

Appeal

4 The plaintiff can appeal under either s 200 of the Strata Schemes Management Act 1996 or s 67 of the Consumer, Trader & Tenancy Act 2001.

5 Section 200 of the Strata Schemes Management Act 1996 relevantly reads:

“Appeal to Supreme Court
(1) An appeal lies to the Supreme Court against an order made by the Tribunal under this Chapter.
(2) An appeal lies in the same cases and in the same way as it would lie under Part 5 of the Crimes (Local Courts Appeal and Review) Act 2001 if the order were a determination that a Local Court made, at the time the order took effect, in the exercise of summary jurisdiction on a court attendance notice.
…
(5) The persons who may appeal against an order of the Tribunal made on the determination of an appeal are:
(a) the appellant to the Tribunal, or
(b) the applicant for the original order made by an Adjudicator (if the applicant was not the appellant to the Tribunal); or
(c) any person who duly made written submissions to an Adjudicator in connection with the application for the original order, or
(d) a person required to do or refrain from doing any act by the order.”

6 This section has since been repealed.

7 As the Reens were the applicants for original orders made by Adjudicator Taylor, and made written submissions to the Adjudicator, they are entitled to appeal to the Supreme Court from Senior Tribunal Member Balding’s decision pursuant to s 200(5) of the Strata Schemes Management Act.

8 Sections 52 and 53 of the Crimes (Appeal and Review) Act 2001 read:

“52 Appeals as of right

(1) Any person who has been convicted or sentenced by a Local Court, otherwise than with respect to an environmental offence, may appeal to the Supreme Court against the conviction or sentence, but only on a ground that involves a question of law alone.

(2) An appeal must be made within such period after the date of the conviction or sentence as may be prescribed by rules of court.

53 Appeals requiring leave

(1) Any person who has been convicted or sentenced by a Local Court, otherwise than with respect to an environmental offence, may appeal to the Supreme Court against the conviction or sentence on a ground that involves:


(a) a question of fact, or

(b) a question of mixed law and fact,


but only by leave of the Supreme Court.

(2) Any person who has been convicted or sentenced by a Local Court with respect to an environmental offence, may appeal to the Supreme Court against the conviction or sentence, but only on a ground that involves a question of law alone, and only by leave of the Supreme Court.

(3) Any person against whom:


(a) an order has been made by a Magistrate in relation to the person in any committal proceedings, or

(b) an interlocutory order has been made by a Local Court in relation to the person in summary proceedings,

may appeal to the Supreme Court against the order, but only on a ground that involves a question of law alone, and only by leave of the Supreme Court.

(4) An application for leave to appeal must be made within such period after the date of the conviction, sentence or order as may be prescribed by rules of court.”

9 Sections 158 and 200 are both contained in Chapter 5 of Strata Schemes Management Act.

10 Section 67 of the Consumer, Trader & Tenancy Act relevantly reads:

“67 Appeal against decision of Tribunal with respect to matter of law

(1) If, in respect of any proceedings, the Tribunal decides a question with respect to a matter of law, a party in the proceedings who is dissatisfied with the decision may, subject to this section, appeal to the District Court against the decision.

(2) An appeal is to be made in accordance with the rules of the District Court. The rules of the District Court may provide that an appeal (or such classes of appeal as may be specified in the rules) may be made only with the leave of the Court.”

11 In Riana Pty Limited v The Owners – Strata Plan No 22336 [2007] NSWSC 1033, Rothman J considered these alternative sources of rights to appeal or seek leave to appeal. His Honour said:

“21 These provisions can and should be read consistently. Section 200 of the Strata Schemes Management Act , in importing s 52 and s 53 of the Crimes (Appeal and Review) Act , grants a right of appeal against an order of the Tribunal on a ground that raises a question of law alone: see Krishna v DPP (NSW) [2007] NSWCCA 318; Lewis v Spencer [2007] NSWSC 1383. It grants a right of appeal against an order of the CTTT on a mixed question of fact and law (or on a question of fact) but only by leave of the Court. Section 200 operates only on orders.

22 Section 67 of the Consumer, Trader and Tenancy Tribunal Act grants a right of appeal only where the Tribunal “decides a question with respect to a matter of law” and is a right of appeal against such decisions that may or may not result in orders.

23 In the view I take, s 201 of the Strata Schemes Management Act only restricts appeals against orders. And where an order has been made as a result of a decision with respect to a matter of law, an appeal lies under both s 200 of the Strata Schemes Management Act and s 67 of the Consumer, Trader and Tenancy Tribunal Act : one against the order; and the other against the decision.”

12 Hence, the Reens can appeal under s 200 of the Strata Schemes Management Act and s 67 of the Consumer Trader & Tenancy Tribunal Act.

Grounds of appeal and contention

13 The grounds of appeal are numerous and wide-ranging. The Reens, without the benefit of legal advice, drafted these grounds of appeal. Two days before this hearing, they instructed a solicitor. Their solicitor has drafted a document entitled “Appellants’ Supplementary Written Submissions” upon which they now rely.

14 The Reens submitted that in exercising her discretion pursuant to section 158 of the Strata Schemes Management Act, Senior Tribunal Member Balding erred in law.

15 The grounds are firstly, that Senior Tribunal Member Balding took into account an irrelevant consideration in exercising her discretion, namely that the Reens had paid no compensation to SP300 for the proposed by-law.

16 Secondly, the Reens submitted that Senior Tribunal Member Balding failed to take into account the following relevant considerations in exercising her discretion:

(a) The reasons why the former by-law 28 was repealed by order of Adjudicator Phillips in January 2006 and why that decision was upheld on appeal by CTTT Member Ross in January 2007;

(b) The reasonable expectation that the Reens had, that a new by-law would be passed giving them exclusive use of garage No 3, but on more equitable terms as to contributions for maintenance;

(c) The reasonable expectations of the Reens, bearing in mind their position prior to the repeal of the former by-law 28.

17 Thirdly, the Reens submitted that Senior Tribunal Member Balding seemed to have been under the impression that Adjudicator Taylor made a finding accepting the valuation of the exclusive use of garage No 3 given by Mr Reen. This, they submitted, constituted a further error law in that Adjudicator Taylor did not make any such finding.

Notice of contention

18 The grounds of contention are: firstly, that the CTTT ought to have found that the Adjudicator erred in failing to comply with s 158(1) of the Strata Schemes Management Act 1996 in that the Adjudicator failed to find that the SP300 had unreasonably refused to make the proposed by-law and/or failed to find that an owner of a lot had unreasonably refused to consent to the terms of the proposed by-law; secondly, the CTTT ought to have found that the Adjudicator erred in failing to comply with s 158(2) of the Strata Schemes Management Act in that the Adjudicator failed to have proper regard to the interest of all owners in the use and enjoyment of their lots and the company property and failed to identify any proper basis for any reasonable expectation of the plaintiff that the by-law be made; and thirdly, the CTTT ought to have found that the Adjudicator erred in failing to comply with ss 51 and 52 of the Strata Scheme Management Act in that the Adjudicator made the by-law in the absence of written consent from the owners of lots concerned.

The background facts

19 The background facts up to 2002 were set out by Hislop J in Owners Corporation Strata Plan 300 v John Noel Reen & Anor [2004] NSWSC 1006, and I respectfully acknowledge some of them. Since 2004, there have been further applications to the Adjudicator and the CTTT. I shall refer to them here.

20 On 11 July 1963, SP300 was registered pursuant to the Conveyancing (Strata Titles) Act 1961 in respect of an existing building at XX XXXXX XXXX, Bellevue Hill. The building comprises eight residential units and common property. SP300 includes five garages within the common property.

21 In October 1963, the Owners Corporation of SP300 granted to the original proprietors the sole right and privilege to the exclusive and enjoyment of the five garages for a term of 50 years (expiring on 9 October 2013) on certain terms and conditions. Separate licences in identical terms were issued for each garage.

22 Subsequently, the original owners sold each of the lots to third parties. They assigned to the purchasers of some lots the licence to use a particular garage. Relevantly, the licence in respect of garage 3 was assigned to Lot 2.

23 Minutes of a meeting on 17 March 1975 of the Owners Corporation recorded the following:

“RESOLVED pursuant to clause 15 sub-clause 2 of Schedule 4 of the Strata Title Act 1973 that the By-Laws under Schedule 1 to the said Act be added to by adding the following new By-Law: - That the exclusive rights of occupancy existing at 30th September, 1974 in pursuance of Licence Agreements in operation at that date be granted and confirmed in respect of Garage No. 3 being used by the Proprietor of Lot 2.”

24 On 21 March 1975 a notification of change of by-laws documenting a new by-law was signed by the then proprietors of Lot 2 (Messrs G & L Port) and executed under the common seal of the body corporate by the strata managing agent. The by-law stated:

“28 That the proprietor for the time being of Lot 2 be granted a right of exclusive use and enjoyment of that part of the common property described as garage No. 3 subject to the terms and conditions contained herein.”

25 Thereafter followed various terms and conditions. Those terms and conditions differed from those in the 1963 licences. The by-law contained no temporal limitation.

26 On 30 April 1975 a Deed between Messrs G and L Port and the intended purchasers of Lot 2, Mr and Mrs Oatley, was executed whereby the Ports assigned, “all their right, title and interest” in the licence dated 14 October 1963, to the Oatleys.

27 On 27 July 1981, the Land Titles Office registered the notification of change of by-laws on the common property title.

28 On 23 April 1993 the Reens exchanged contracts for the purchase of Lot 2 from Mrs Oatley. The sale was settled on 11 June 1993.

29 On 28 May 2001 an extraordinary general meeting of the Owners Corporation was held, during the course of which a resolution was purportedly passed (despite objection from the Reens) repealing by-law 28.

30 So far as garage No 3 is concerned, there have been three applications before an adjudicator, three appeals to the CTTT and this is the second appeal to this Court.

(1) The first application to the adjudicator and appeal to the CTTT

31 On 23 April 2002 the Reens lodged an application with the CTTT seeking inter alia an order that by-law 28 was valid.

32 On 19 September 2002 the Strata Schemes adjudicator dismissed the application.

33 On 16 October 2002 the Reens appealed the decision of the adjudicator to the CTTT pursuant to the Strata Schemes Management Act 1996 s 177.

34 On 2 April 2003, the CTTT upheld the appeal. The orders made by the CTTT in upholding the Reens appeal were: firstly, that by-law 28 was a valid and subsisting by-law of SP300; secondly, the resolution made by the Owners Corporation in the general meeting on 28 May 2001 repealing the by-law was of no effect; and thirdly, the resolution seeking to modify the conditions of by-law 28 was of no effect.

The first appeal to this Court

35 On 7 May 2003, the Owners Corporation of SP300 appealed to this Court citing error of law in the CTTT’s finding that by-law 28 was a valid and subsisting by-law. On 29 October 2004, Hislop J dismissed the appeal.

(2) The second application to the adjudicator

36 In November 2005 the Owners Corporation applied to the Strata Schemes Adjudicator for a variation of by-law 28, and orders relating to the repair of garage no. 3.

37 On 11 January 2006, Strata Scheme Adjudicator Phillips made an order repealing by-law 28 of SP 300. Adjudicator Phillips concluded:

“I have made the only order that I can perceive is open to me to resolve (or to commence the resolution of) this difficult set of issues. Clearly, the way forward in this dispute is to enter into a formalised arrangement – whether by way of by-laws, licences, or adjustments of the strata plan – to enable all those, including the respondents, to enjoy that which they have hitherto enjoyed and to contribute on a reasonable basis.”

The second appeal to the CTTT

38 In January 2007, the Reens appealed again to the CTTT for the repeal and registration of the repealed by-law 28.

39 Tribunal Member Ross in her decision stated:

“I accept that it is not a reasonable expectation of the Appellants that the Owners Corporation would allow them to enjoy privileges at common expense that the other members of the scheme did not enjoy. I am satisfied that the decision to repeal the by-law to allow for its replacement with a more equitable arrangement was based upon sound findings of fact and was an exercise of the Adjudicators discretion according to both law and equity.”

(3) The third application to an adjudicator

40 On 14 August 2007, the Reens lodged an application with the CTTT seeking an order that an exclusive by-law be made in their favour for the exclusive use and enjoyment of that part of the common property known as garage No 3, for an indefinite term, on the conditions set out in the proposed by-law.

41 On 31 October 2007, Adjudicator Taylor ordered that the by-law as submitted by the Reens be made pursuant to section 158 of the Act.

The third appeal to the CTTT

42 On 29 November 2007, the Owners Corporation lodged an appeal in the CTTT appealing the decision of Adjudicator Taylor. The grounds of appeal were: firstly, that the Adjudicator had failed to take into account relevant considerations namely, that the by-law made no provision for compensation of the owners corporation; that at the time the decision was made there was no by-law; and that no consent in writing had been provided by any of the affected owners. Secondly, that the Adjudicator took into account irrelevant considerations namely an assertion as to the market value of the by-law, the position of the Reens before the repeal of the by-law, the reasons given in a previous Adjudicator’s decision and that the Reens bought lot 2 with the “legal right” to use the garage. Thirdly, that the Adjudicator erred in the exercise of the discretion conferred under the Act.

43 In allowing the appeal and setting aside the orders, Senior Tribunal Member Balding stated:

“On 6 March 2007 the owners corporation included in the notice of its annual general meeting a form of resolution provided by the Reens for the making of a by-law conferring upon them the rights for exclusive use and enjoyment of garage 3 subject to certain conditions, including conditions for keeping the garage in good and serviceable repair at the expense of the Reens.

At the annual general meeting on 19 March 2007 the Owners Corporation refused to make the by-law. In the evidence provided by the owners corporation the reasons given for arriving at that decision include a disagreement with the terms of the by-law, a concern that one lot owner has rights for exclusive use when the other lot owners have a licence to use the garages until 2013. The by-law does not go far enough in addressing the payments, which should be made to the owners corporation. The making of the by-law will hinder the resolution by the owners corporation of the issues relating to the use of the garages…”

44 The Reens appealed to this Court from this third decision of the CTTT.

The relevant statutory provisions

45 Sections 51, 52 and 158 of the Strata Schemes Management Act read:

“51 Application of Division
(1) This Division applies to a by-law conferring on the owner of a lot specified in the by-law, or the owners of several lots so specified:


(a) a right of exclusive use and enjoyment of the whole or any specified part of the common property, or

(b) special privileges in respect of the whole or any specified part of the common property (including, for example, a licence to use the whole or any specified part of the common property in a particular manner or for particular purposes),


and to a by-law that amends or repeals such a by-law.

(2) This Division does not prevent an owners corporation making a by-law in accordance with section 54 of the Community Land Management Act 1989 .

52 How does an owners corporation make, amend or repeal by-laws conferring certain rights or privileges?

(1) An owners corporation may make, amend or repeal a by-law to which this Division applies, but only:


(a) with the written consent of the owner or owners of the lot or lots concerned and, in the case of a strata leasehold scheme, the lessor of the scheme, and

(b) in accordance with a special resolution.


(2) A by-law to which this Division applies may be made even though the person on whom the right of exclusive use and enjoyment or the special privileges are to be conferred had that exclusive use or enjoyment or enjoyed those special privileges before the making of the by-law.

(3) After 2 years from the making, or purported making, of a by-law to which this Division applies, it is conclusively presumed that all conditions and preliminary steps precedent to the making of the by-law were complied with and performed.

158 Order with respect to by-laws conferring exclusive rights or privileges over common property

(1) An Adjudicator may make an order prescribing the making, amendment or repeal, in terms of the order, of a by-law if the Adjudicator finds:


(a) on application made by an owner, that the owners corporation has unreasonably refused to make a by-law of the kind referred to in section 51, or

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

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

(2) In considering whether to make an order under this section, an Adjudicator must have regard to:


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

(b) the rights and reasonable expectations of any owner deriving or anticipating a benefit under a by-law of the kind referred to in section 51.


(3) An Adjudicator must not determine an application referred to in subsection (1) (a) by an order prescribing the making of a by-law in terms to which the applicant or, in the case of a leasehold strata scheme, the lessor of the scheme is not prepared to consent.

(4) For the purposes of subsection (1), an Adjudicator may determine that an owner has unreasonably refused consent even though the owner already has the exclusive use or privileges that are the subject of the proposed by-law.

(5) An order under this section, when recorded under section 209, has effect as if its terms were a by-law (but subject to any relevant order of a superior court).

46 The application by the Reens appears to be made pursuant to s 158(1)(a) on the basis that the owners corporation has unreasonably refused to make a by-law. In considering whether to make an order under s 158(2) the Adjudicator must have regard to the interest of all owners in the use and enjoyment of their lots and common property, and the rights and reasonable expectations of any owner deriving or anticipating a benefit under a by-law.

Compensation

47 The Reens submitted that Senior Tribunal Member Balding took into account an irrelevant consideration, namely, that the Reens had made no offer of compensation to SP300 for the proposed by-law. The proposed by-law imposed an obligation on the Reens only in so far as maintenance and repairs of garage No 3.

48 However, the Reens failure to provide compensation to SP300 for the benefit over the common property that would be obtained by them and lost by the other lot owners was arguably a matter relevant to the determination of the proposed by-law.

49 It is apparent from the Reens’s submissions that they consider garage No 3 to be “their” garage. As SP300 submitted, the by-law which the Reens sought to have approved by Adjudicator Taylor, made no provision for the payment of moneys to the owners corporation for the value of the exclusive use and enjoyment of common property that they would receive or other lot owners would lose.

50 However, garage No 3 is not the Reens garage. It is part of the common property of SP300. In my view, in determining whether the proposed by-law was being unreasonably refused by the owners corporation, it was open to Senior Tribunal Member Balding to consider the failure of the Reens to provide compensation to the owners corporation. This is of financial interest to the owners and was a relevant matter to consider as it was in the interests of the owners.

Replacement By-Law

51 The Reens submitted that Senior Tribunal Member Balding failed to take into account the reason why the former by-law 28 was repealed by order of Adjudicator Phillips in January 2006. In particular that Adjudicator Ross upheld that decision on appeal in January 2007, namely, that a replacement by-law with a more equitable arrangement would be made in the Reens favour.

52 In her decision to repeal by-law 28 in 2006, Adjudicator Phillips stated:

“I fully understand that the owners corporation is trying to rectify a situation of asymmetry in relation to the governance of this scheme and the maintenance of these decaying garages.

It is simply not my view that the proposed by-law is an appropriate mechanism to deal with these issues.

…

Clearly, the way forward in this dispute is to enter a formalised arrangement- whether by way of by-laws, licences or adjustments of the strata plan- to enable all those, including the respondents, to enjoy that which they have hitherto enjoyed and to contribute on a reasonable basis.

How that is done is up to the parties.”

53 In his decision upholding Adjudicator Phillips’ repeal of by-law 28 in 2007, Tribunal Member Ross stated:

“Nor is the effect of the Adjudicator’s decision to leave the Appellants stripped of the benefit of exclusive use of the garage… Repeal was to allow for equitable replacement to be drafted and determined by the appropriate processes…”

54 The role of Senior Tribunal Member Balding in the proceedings was not to review the reasons for the repeal of by-law 28. Adjudicator Phillips repealed by-law 28 on 11 January 2006. From that date the Reens did not enjoy exclusive use of garage No 3.

55 Senior Tribunal Member Balding determined that Adjudicator Taylor had erred in finding it more significant that the Reens had lost a benefit by virtue of the revocation of by-law 28, than the position of the other lot owners who had an equivalent interest in the common property.

56 In her reasons Senior Tribunal Member Balding took into account that the Reens had exclusive use over garage No 3 for a number of years. As long as they had the benefit of exclusive use over that part of the common property, a number of other lot owners missed out. Now however, the lot owners who have not previously had such access are interested in obtaining access. Those owners are exploring ways of developing the common property so that more parking is available on the scheme or implementing a more equitable allocation of the existing garages. It was open to the Tribunal Member to conclude that the Adjudicator was in error when she determined that the owners’ interest is equal to that of the Reens in the use and enjoyment of the common property.

Reasonable Expectation

57 The starting point here is that by-laws are made to facilitate the administration and harmony of the strata scheme.

58 Senior Tribunal Member Balding was asked to consider whether SP300’s refusal to approve a new by-law granting the Reens exclusive use of garage No 3 was unreasonable, as Adjudicator Taylor had concluded. That determination required a consideration of the interests of all owners in the use and enjoyment of their lots and common property. It also required a consideration of the rights and reasonable expectations of the Reens, who would derive a benefit under the by-law.

59 In finding SP300’s refusal of the proposed by-law reasonable, the Reens submitted that Senior Tribunal Member Balding failed to take into account their reasonable expectation that a new by-law would be passed giving them exclusive use of garage No 3.

60 The Reens had, for a number of years while by-law 28 was in place, the benefit of the exclusive use of garage No 3 for a nominal sum. Further, Mr Reen gave evidence before Senior Tribunal Member Balding, that in purchasing lot No 2 he was led to believe by the vendors, that he would gain exclusive access to garage No 3 “in perpetuity”.

61 However as SP300 submitted, the representations made to the Reens about the rights to the garage were made by the vendor of the lot, not SP300. Nor should the by-law have been taken to grant the Reens rights “in perpetuity”. Registration of a by-law merely serves to register the current state of the by-laws for a given strata scheme. They are always subject to change by the Owners Corporation, by an Adjudicator, the Tribunal or the Supreme Court.

62 Senior Member Balding stated:

“The circumstances in which the lot was purchased by the Reens does not give the Reens any greater right to exclusive use of the common property garage than any of the other lot owners. Nor does it create a reasonable expectation that they should obtain a benefit in having exclusive use of part of the common property over any of the other lot owners having an interest in making use of the common property.”

63 The Reens also submitted that in light of the comments of Adjudicators Phillips and Ross (discussed previously), they had a reasonable expectation that the proposed by-law would be approved.

64 SP300 submitted the proposed by-law, similar to repealed by-law 28, had no time limit. They continued that if the proposed by-law went ahead, the other lot owners would be hindered in their desire to look at creating enough parking spaces for all lot owners.

65 SP300 also submitted also that the proposed by-law, similar to repealed by-law 28, did not go far enough in addressing the payments, which should be made to the owners corporation.

66 It was drawn to my attention by the solicitor acting for the Reens that the by-law, Adjudicator Phillips found not to be an appropriate mechanism, is the same one that the Reens relied upon in these current proceedings. In any event, the obiter comments made by an earlier adjudicator do not, in my view, mean that the Reens are entitled to have a reasonable expectation that the comments will be converted into orders when the matter is next before the Tribunal.

By-Law 28

67 The Reens submitted that Senior Tribunal Member Balding seemed to have approached the exercise of her discretion almost as if the proposed by-law were a novel by-law being proposed for the first time and that the former by-law 28 had never existed.

68 I am satisfied however that Senior Tribunal Member Balding did not err here. In her judgment under the heading “Background”, Senior Tribunal Member Balding discussed the history of the dispute noting:

“If nothing else the history of the dispute shows that the parties consider the benefits conferred by the by-laws which have been in place or have been proposed have a value in the broad sense, they provide a benefit which is useful and important.”

69 Senior Tribunal Member Balding also discussed the benefit conferred on the Reens for the number of years by-law 28 was in place stating:

“The Reens have had the benefit of the use of the common property for a number of years... For the years when the by-law existed that may have been because no other lot owners had an interest in obtaining access to the common property garage. That position has not continued.”

Valuation

70 Finally, the Reens submitted that Senior Tribunal Member Balding seemed to have been under the impression that Adjudicator Taylor made a finding accepting the valuation of the exclusive use of garage No 3 given by Mr Reen. This they submitted constituted an error of law in that Adjudicator Taylor did not make any such finding.

71 However as SP300 contended, Senior Tribunal Member Balding made no finding as to the particular value of garage No 3. Rather, she found that there was no valuation evidence given by an independent expert in accordance with the Tribunal’s Expert Witness Code of Conduct, and that evidence of value from Mr Reen was flawed because he was a party to the proceedings and not an independent expert complying with the Code.

72 Senior Tribunal Member Balding stated that:

“Even if the by-law offered more than the market value of the benefit conferred by the by-law this does not determine the issue. The “interests” of the lot owners in the use and enjoyment of the common property is not just a commercial one, there are benefits which flow which are not just based on the market value of the part of the common property that is to be alienated, particularly where there is competition among the lot owners for a limited facility such as parking on the common property.”

73 In conclusion, Senior Tribunal Member Balding stated:

“In dealing with the errors made by the Adjudicator I have addressed many of the issues required to be determined as to whether the owners corporation has unreasonably refused to make the proposed by-law having regard to the interest of the lot owners in the use and enjoyment of the common property and having regard to the rights and reasonable expectations of the Reens.
In my view the matters set out by the lot owners in particular Ms Yule as their reasons as to why they voted against the by-law for the most part provide a sound basis for rejecting the by-law and outweigh the rights and reasonable expectations of the Reens.
For these reasons I am satisfied the orders of the Adjudicator should be set aside and the order made as above.”

74 In my view the Senior Tribunal Member applied the correct statutory test set out in s 158(2). It was open to the Senior Tribunal Member to come to the decision that she did. The Senior Tribunal Member did not address irrelevant considerations in exercising her discretion. There is no error of law. Hence, it is not necessary to consider the matters raised in the notice of contention. The appeal is dismissed. The orders of Senior Tribunal Member Balding dated 29 May 2008 are affirmed. The amended summons filed 28 July 2008 is dismissed.

75 In my view, the parties have taken up a vast amount of the Tribunal and Court’s time, incurred a large amount of legal costs and have not had any success resolving their problems with car parking. If the parties were minded to approach the resolution of this matter with a spirit of co-operation they may be able to mediate a compromise.

76 Costs are discretionary. Costs normally follow the event. The plaintiffs are to pay the first defendant’s costs as agreed or assessed.

The Court orders

(1) The appeal is dismissed.

(2) The orders of Senior Tribunal Member Balding dated 29 May 2008 are affirmed.

(3) The amended summons filed 28 July 2008 is dismissed.

(4) The plaintiffs are to pay the first defendant’s costs as agreed or assessed.
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