Rosenthal v The Owners - Strata Plan No. 20211

[2021] NSWCATCD 64

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

Rosenthal v The Owners - Strata Plan No. 20211 [2021] NSWCATCD 64

Hearing dates:

7 September, 8 December 2020

Date of orders:

15 February 2021

Decision date:

15 February 2021

Jurisdiction:

Consumer and Commercial Division

Before:

C Paull, Senior Member

Decision:

1.The Respondent at its own expense is to rectify the following items listed in T2 identified and described in the Document T1 in respect of which the Tribunal has found in the Applicants’ favour-1,3,10,18,22,31,34.

2. The Respondent at its own expense is to rectify the following items identified in the Document T1 where the Tribunal has accepted the agreement reached by the expert witnesses-26,30,55,56,70,73,87,88,90,93,95,111.

3. The Respondent at its own expense is to complete the following items identified in the Document T1 where the Tribunal has accepted the agreement reached by the expert witnesses-3,4,17,23,24,25,27,28,29,33,35,36,37,38,39,41,42,43,44,45,47,48,49,50, 52,53,57,59,60,61,64,71,89,91.

4. In carrying out orders 1,2 and 3 above the Respondent is to commence the work no later than 16 March 2021; is to complete all work within 6 weeks of commencement; is to ensure that all work is carried out by appropriately licensed and qualified persons and in accordance with all relevant laws, rules and regulations; and as provided for in the Pickering Reports marked in evidence as Exhibits A1 and A2 .

4. The Respondent at its own costs is to commence investigation no later than 16 March 2021 of the following items identified in the Document T1 being the items where the Tribunal has accepted the agreement of the expert witnesses that further investigation is necessary and is to complete all such investigation within 4 weeks of commencement.

5. Within 2 weeks of completion of the investigations as required in Order 4 above, the Respondent is to submit a report to the Applicants outlining the scope of works required as a result of the investigation carried out for any items identified in Order 4 above and within 2 weeks of providing the Applicants with the scope of works , the Respondent is to commence that scope of works.

6. In complying with Order 5 above the Respondent at its own costs is to ensure that the scope of works is completed within 6 weeks of commencement ,carried out by appropriately qualified and licensed persons and in accordance with all relevant laws, rules and regulations .

7. The Applicants are to allow the Respondent access to facilitate compliance with the above orders upon being given 48 hours written notice of when access is required.

8. The parties are given leave until 16 March 2021 if they wish to make a costs application

Catchwords:

LAND LAW  —Strata title — Renewal of Appeal Panel Work Orders — Compulsory Appointment of Strata Manager to implement Work Orders — Appointment of persons under General Order making powers to implement Work Orders

Legislation Cited:

Strata Schemes Management Act 2015 (NSW)

Cases Cited:

Rosenthal v OC SP 20211(2020) NSWCATP 251

Category:

Principal judgment

Parties:

Thomas Rosenthal (First Applicant)
Joanne Rosenthal (Second Applicant)
The Owners - Strata Plan No. 20211(Respondent)

Representation:

Counsel:
A Fernon (Applicants)
T Maltz (Respondent)

Solicitor:
Speirs Ryan (Applicants)
Grace Lawyers (Respondent)

File Number(s):

SC19/42421

Publication restriction:

Nil

Reasons for Decision

BACKGROUND

1. The dispute the Tribunal is being asked to determine follows a somewhat complex history of litigation in this Tribunal. For the sake of completeness, I have attached, at the conclusion of this decision, an extract from the Appeal Panel decision of Rosenthal v OC SP 20211(2020) NSWCATP 251, which helpfully summarises the litigation history that pre-dates and post dates the commencement of application SC19/42421, being the current renewal proceedings that are now before me for consideration (the current renewal proceedings)

2. Put shortly and so far as is strictly relevant to the current renewal proceedings, the applicant lot owners (the lot owners) reside in a 3 level penthouse that is part of the strata scheme SP 20211. For quite some time the lot owners have experienced water penetration issues emanating from common property and affecting their lot.

3. This led the lot owners to launch proceedings against the respondent Owners Corporation (the OC) under the Strata Schemes Management Act 2015 (NSW) (SSMA) which were determined and then taken on appeal to the Appeal Panel

4. On 15 October 2018, the Appeal Panel handed down orders in the lot owners’ favour, requiring the OC to carry out certain investigative and rectification work (the substantive orders).

5. On 15/1/19 the lot owners brought a renewal application in relation to the substantive orders being SC19/02562 (the initial renewal proceedings).

6. On 27/2/19 the initial renewal proceedings were withdrawn and dismissed and the Presiding Member, Principal Member Rosser, noted that the parties would jointly seek from the Appeal Panel an extension of time for compliance with the substantive orders; that the lot owners were to provide the OC with a list of additional work they sought in conjunction with the substantive orders; and that the lot owners “ may make a renewal application within the relevant time and/or lodge a fresh application “(the orders and notation in the initial renewal proceedings).

7. Time for compliance with the substantive orders was extended to May 2019 and then again to August 2019, by the Appeal Panel.

8. On 17 September 2019 the lot owners brought the current renewal proceedings.

9. The Appeal Panel’s substantive orders were in effect work orders for the OC to rectify waterproofing issues affecting the lot owners’ penthouse, within a stipulated time that has now expired. As already noted, the Appeal Panel extended the time period on 2 occasions. The Appeal Panel declined to do so on the third occasion without the lot owners’ consent.

10. As acknowledged by the parties, what has transpired in attempting to implement the substantive orders has resulted in a complete communication breakdown between them with the result that direct communications have ceased and all communications take place through their solicitors.

11. The lot owners concede that some of the substantive work orders have been carried out but they say that some of this work is unsatisfactory and some work remains to be done.

12. When the current renewal proceedings commenced there were also other, pending Tribunal proceedings, between the parties. By the time the evidence in the current renewal proceedings was completed, Senior Member Meadows had handed down a decision in those proceedings, which for convenience; I will refer to as the Meadows Decision. The Meadows Decision has been the subject of an Appeal Panel decision, Rosenthal v OC SP 20211 (2020) NSWCATP 251 (the Appeal of the Meadows decision ).

13. As noted, the lot owners’ penthouse is on 3 levels, the water issues affect the top level (level 20) and the second top level (Level 19).

14. The lot owners agree that in determining these proceedings the Tribunal must look at the state of the work as at the date the evidence was heard in the current renewal proceedings. They rely on the expert evidence of Mr Pickering.

15. The lot owners seek the Amended Orders that appear at Tab 5 of the Tribunal Books. In summary, the lot owners seek work orders to implement the work required to be done under the substantive orders.

16. Further, the lot owners seek that these work orders be carried out by a compulsory managing agent appointed by the Tribunal under s 237 SSMA , to oversee the implementation of the substantive orders and other associated orders as to the powers to be given to that agent. In the alternative, an order under s 232 SSMA that Mr Pickering (their expert witness) supervise the work and associated orders as to the powers to be given to Mr Pickering for this purpose and for which, the OC is to bear all costs.

17. The OC relies on the evidence of Mr Ilievski. Mr Illievski was the project manager for the work the OC has carried out to date. The OC is relying on the authority of Sydney South West Area Health Service v Stamoulis, to say that nonetheless, this must be viewed as expert evidence before the Tribunal.

18. The OC agrees in most part with the version of facts presented by the lot owners but says that for legal reasons the Tribunal cannot make all the Orders sought; that in light of the OC’s efforts it would be inappropriate to appoint Mr Pickering and draconian to appoint a managing agent; and that it is ready, willing and able to resume and complete the work that it considers needs to be addressed.

19. In support of the lot owners, Mrs Rosenthal gave evidence before the Tribunal and her statements are in evidence.

20. Mr Cavangh, a fellow lot owner and the treasurer of the strata scheme, gave evidence for the OC. Mr Cavanagh has played a large role in implementing the substantive orders, along with other committee members.

THE ISSUES FOR DETERMINATION

21. What work was the OC required to carry out under the Substantive Orders?

22. What work is now required to implement the Substantive Orders?

23. Are there any impediments to the Tribunal making the Orders requested by the lot owners?

WHAT WORK WAS THE OC REQUIRED TO CARRY OUT UNDER THE SUBSTANTIVE ORDERS?

24. The substantive orders made by the Appeal Panel are as follows:-

...(1) The respondent (being the OC) shall immediately take all steps to further investigate as necessary and to correct all sources of water ingress to lot 64( being the lot owners’ lot) and in particular shall carry out the following work in addition to any other that is found necessary to achieve compliance with these orders:

(i) Replace waterproof membrane around lot 64 on level 20;

……

4 …..

.   (ii)  Investigate and correct as necessary water ingress from downpipe within column to south end of main bedroom; 


.   (iii)  Waterproof the window hob to second bedroom, install or correct as necessary the flashing and weep holes to the wall between the second bedroom and study and perform all other steps necessary to correct the ingress of water to the second bedroom and study; 


(2) The respondent shall immediately take all steps to replace the fire rated front door to lot 64.

WHAT WORK IS NOW REQUIRED TO IMPLEMENT THE SUBSTANTIVE ORDERS?

25. This issue is largely to be determined by an examination of the expert evidence.

26. As already noted, Mr Pickering gave evidence on which the lot owners rely and Mr Ilievski, who was the OC’s project manager, gave evidence for the OC.

27. At the hearing Mr Ilievski advised that he is part of the company that entered into a 3 stage contract with the OC to prepare and advise on the work required to be done under the substantive orders; to tender for builders to do the work; and to act as a project administrator while the work is being done. Mr Ilievsaki stated that he was involved in all these 3 stages.

28. It is the lot owners’ case that Mr Ilievski’s evidence is affected by the fact that he was retained by the OC; is “intimately involved” in the carrying out of the rectification work; and that his opinions “have been largely based on his instruction from the OC ”.

29. In considering Mr Ilievski’s qualifications and experience, I accept that he is properly qualified to give evidence on the building matters in issue. Further, from his oral and documentary evidence, I am satisfied that he is aware of his obligations in giving such evidence As such I accept that Mr Ilievski is a properly qualified person to give opinion evidence.

30. As will be seen below, however, the instructions he was given often meant that he did not turn his mind to matters in issue and instead proceeded strictly along the lines of his instructions, which often dictated how he responded in attempting to rectify the waterproofing and other building issues. This, coupled with his involvement in the rectification work carried out to date, affects the weight to be given to his evidence and has ultimately resulted in my preferring the evidence of Mr Pickering where there is disagreement between the witnesses as to whether a matter has to be attended to and how it is to be attended to.

31. In addition to the building matters in issue, Mr Ilievski also gave evidence of the difficulty with access he experienced, which he says, prevented him from completing the work.

32. Mr Pickering agreed that he was instructed not to consult with Mr Ilievski . In fact it appears that Mr Pickering was instructed to do a visual inspection and opine on the standard and state of what he observed and was not informed of ongoing work by the OC following his Report in October. Mr Pickering remained unaware of these matters until he was provided with Mr Ilievski’s report, which then required Mr Pickering to do a subsequent report.

33. Regrettably, Mr Pickering and Mr Ilievski did not confer until the first hearing date .Even more regrettably, Mr Ilievski did not do a final inspection. Once, however, the witnesses were able to confer at the hearing, a vast number of items in T1 (a Schedule that summarises the work items in issue) were agreed upon. When put to him at the hearing, Mr Ilievski agreed that many of the matters in T1 with which he has now reached agreement with Mr Pickering, are matters he could have picked up in a final inspection as matters to be rectified in the defects liability period, if he had been afforded a final inspection.

34. I now turn to the relevant matters as cystalized in T1, the working document used at the hearing as the witnesses gave their concurrent evidence.

35. T1 is a voluminous document containing a large number of items. What is more, a great many of these items overlap. In addition, as the evidence unfolded and it appeared that there was considerable common ground between the witnesses on the matters recorded in T1, the process was streamlined by the document marked T2 which the expert witnesses executed and presented to the Tribunal. T2 lists only those items in T1 where complete disagreement persists between the witnesses.

36. The lot owners raised concern as to the Scope of Work identified by the OC in carrying out the rectification work thus far; whether it adequately addresses the substantive orders; whether it has been complied with; and to additional work that has to be included.

37. To some extent, these arguments have been superseded by what transpired at the hearing, when the witnesses reached agreement for many matters in T1.

38. While the parties’ submissions are in some instances at variance as to what exactly the experts agreed upon in T1, I have proceeded to deal with this by considering their varying interpretations in the light of what the experts have actually written and signed off on in T1 and T2, the oral evidence they gave, my own notes and independent recollection of what transpired at the hearing.

39. In so doing I have given considerable weight to the agreement reached by the expert witnesses, as recorded in T1 and T2, representing as they do, the views of the experts after they were given the opportunity to confer and ventilate the matters concerned , consider their own and the opposing view and through this process reach in many instances agreement and in others, a streamlining of the issues that were not agreed upon

40. It is to the Items listed in T1 and T2 that I now turn .

Matters In T1 That Are Identified In T2 As Still Remaining In Dispute

Items 1 The A/C ducting area argument re levels 19 and 20; the mechanical plant area. Patch and repairs only

41. 44. It is the lot owners’ case that the membrane around the subject equipment is damaged and so causing leakage. Despite some attempts the rectification has been unsuccessful; the membrane is deteriorating and needs to be replaced.

42. The OC concedes that the matter is still to be addressed and the issue in dispute is whether this should be done by further repair or whether the membrane should be replaced.

43. It appears that Mr Ilievski did not have access to the substantive orders when he developed his scope of works and made the decision to repair the subject membrane.

44. I accept the lot owners’ submission that the substantive orders refer to the replacement of “waterproof membrane around lot 64 on level 20”, which I find to be unambiguous and based on the findings of the Appeal Panel in making the substantive orders.

45. Clearly Mr Pickering is of the view that such compliance is required. For reasons already given I give greater weight to that of Mr Pickering than that of Mr Ilievski.

46. Therefore, I find in the lot owners’ favour, and order the OC is required to replace the subject membrane.

Item 3. Only part of membrane on southern level 19 balcony (adjacent to 1^st and 2^nd bedrooms and study) even though apparent water ingress from entire balcony.

47. Mr Pickering gave evidence that the relevant Balcony was partially repaired by the OC but says that this work needs to be extended to bedroom 1 which is still being adversely affected.

48. Mr Ilievski agreed that he saw signs of water penetration but stated that he was instructed by the OC that bedroom1 was not to be rectified as it was not part of the substantive orders.

49. Both experts agree that water issues persist.

50. The Appeal Panel in making the substantive orders found that the area in question is not common property, however, this in my view, does not overcome the fact that the water issues involve the membrane, a matter which the substantive orders clearly address and in respect of which they imposed an unambiguous obligation on the OC to rectify. What is also of concern is that the evidence suggests there may be a complete absence of any membrane.

51. I therefore find that in keeping with the substantive orders the OC is liable to rectify the situation

Item 9 Internal camera investigation of stormwater drainage pipes, to investigate leaks to bedroom wall on level 19

52. Although initially listed as an item in dispute in T2, at the hearing the Tribunal was advised it was no longer pressed.

Item 10 Bedroom 1, Bedroom 3 and Foyer on level 19, alleged water penetration through ceilings, being below mechanical plant area

53. Mr Pickering gave evidence as to the signs of water penetration he saw in all the areas in issue. Mr Pickering agreed that when he saw the area on 15/7/2020 he observed that some paint and preparation work had been carried out

54. Mr Ilievski gave evidence that he had addressed the leakage issues and then started the paint and rectification work which he was prevented from completing. It appears from his evidence that Mr Ilievski concedes signs of water penetration.

55. In light of the above, as the substantive orders require the OC “ to correct all sources of water ingress to lot 64 ”and my reasons for preferring the evidence of Mr Pickering, I find that the OC is to carry out all necessary work to cure the water ingress.

Item 18 On level 20 tiled terrace area: Criticism re membrane turning up at subsill doors, but not overlapped by sill flashing

56. Mr Ilievski agreed that the water proof membrane required by the relevant standard is absent.

57. Both witnesses agreed that there is currently no evidence of any leaking.

58. Notwithstanding this, however, given the history of water penetration over a considerable period of time; the possible absence of any membrane having been installed as required under the relevant Standard; and the overriding objective of the substantive orders to bring the water penetration issues to an end, I find that the matter should be addressed as identified by Mr Pickering.

IItem 22 On Level 20 terrace area :MOISTURE DAMAGE TO KITCHEN CABINETRY ARISING FROM WATER PENETRATION FROM TILED TERRACE FLOWING ACROSS KITCHEN FLOOR

59. Although this matter is listed in T2 it was subsequently withdrawn at the hearing

Item 26 On level; 20 tiled Terrace area:render and paint coating not completed with due care

60. There is, as it emerged at the hearing, no issue that the render and painting needs to be made good and as such, at the least, an order to this effect needs to be made.

61. What the lot owners also seek is the replacement of the fence which was removed when during the course of the works undertaken by the OC when implementing the substantive orders.

62. The evidence seems to support a finding that the fence was removed by the OC in the course of carrying out work.

63. It must follow from this and it must be taken to be implicit in the substantive orders, that the OC is obliged to reinstate the area as it was before carrying out the work and accordingly I order the OC to do so.

Item 31 On Level 20 tiled terrace area:damage from water penetration in bedroom 4 had not been repaired

64. Once again it appears that Mr Ilievski’s view that this is not a matter that needs to be addressed is confined to and based on his instructions from the OC that the matter does not fall within the OC’s responsibility under the substantive orders.

65. As the substantive orders state that the OC is “ to correct all sources of water ingress to lot 64 ”and in light of the Pickering evidence which I prefer, I find that the OC is to carry out all necessary work to cure the water ingress.

Item 34 The mechanical fixings of the pressure seal are spaced at centres greater then 150mm

66. Mt Pickering stressed non-compliance with the relevant standard. Mr Ilievski did not appear to refute this but referred to compliance with the manufacturers standards and the fact that fitness for purpose has been shown.

67. Mr Ilievski’s substantiating evidence as to compliance with manufacturing requirement is not strong. This, when coupled with the fact that there is agreed non-compliance with the relevant standard and the overriding objective of the substantive orders to bring the water penetration issues to an end, lead me to find in the lot owners favour and order rectification as opined by Mr Pickering.

Item 92-The sliding door for Bedroom 3 is out of alignment by approximately 20 mm over its width resulting in an unsightly fill in the tiles

68. The subject sliding door has been reinstalled by the OC and the lot owners take issue with the manner in which this has been done .

69. Mr Ilievski denies any need for further work pointing to the existing hob structure alignment to show that the matter should not be taken further. The lot owners seek that the sliding door be replaced.

70. The evidence seems to support the fact that there is no water penetration issue here. Nor do I understand there to be any breach of a relevant regulation or guideline. As such it is difficult to come to a finding that what the lot owners seek is a reasonable method of rectification and one that is required to enforce the substantive orders.

71. I therefore dismiss this part of the application.

Item 101 Other Items Not listed individually

72. The dispute centres around the suitability of the membrane.

73. Mr Ilievski is of the view that the membrane that has been applied is suitable to the relevant area because it is a light traffic area.

74. The lot owners take issue with the “light traffic area”categorisation .

75. In his evidence before the Tribunal, however, Mr Pickering appeared to concede that the area concerned is not one of great use. Further, I do not understand Mr Pickering to have put forward a more viable, alternative membrane.

76. I therefore disallow this item.

ITEMS IN T1 - AGREEMENT REACHED TO BE RECTIFIED AND FOR THE RECTIFICATION METHOD

77. Items - 26,30,55,56,70,73,87,88,90,93,95,111. For reasons already stated, I am persuaded by the weight to be given to the agreement reached by the witnesses as documented in T1 and propose to make orders to give effect to that agreement.

90. ITEMS IN T1 - AGREEMENT REACHED TO BE COMPLETED

78. For reasons already stated, I am persuaded by the weight to be given to the agreement reached by the witnesses as documented in T1 and propose to make orders to give effect to that agreement being items -3,4,17,23,24,25,27,28,29,33,35,36,37,38,39,41,42,43,44,45,46,47,48,49,50,52,53,57,59,60,61,64,71,89,91 For

ITEMS IN T1 - AGREEMENT REACHED HAVE BEEN COMPLETED

79. In light of the agreement by the witnesses there is no need to make any orders in relation to these items, being, 19,20,21

ITEMS IN T1 - AGREEMENT REACHED NEED FURTHER INVESTIGATION AND IF NECESSARY DEVELOP A SCOPE OF WORKS

80. For reasons already stated, I am persuaded by the weight to be given to the agreement reached by the witnesses as documented in T1 and propose to make orders to give effect to that agreement being for items - 6,7,8, 63,72,75,76,79,80

ITEMS IN T1 - AGREEMENT REACHED THAT NOT REQUIRED TO BE DETERMINED INDEPENDENTLY AS SUBSUMED IN OTHER ITEMS IN T1

81. For reasons already stated, I am persuaded by the weight to be given to the agreement reached by the witnesses as documented in T1 in relation to the following items-5,11,12,13,14,15,16,40,51,58,62,65,66,67,68,69,74,76,78,81,82,83,84,85,86,94,96,97,98,99,100,102-109.

82. Therefore no specific orders need to be made for the above items.

83. Any of the above items that are subsumed in an item in respect of which the OC is ordered to take some action, will fall within that order.

84. Where the above items are subsumed in items in respect of which the OC is not required to take any action, then clearly there is no order to be made.

100. ITEMS IN T1 NO LONGER PRESSED

85. Accordingly, no orders are to be made for Items 9 and 22.

86. To conclude, therefore, I find that the OC is liable for those items dealt with above, where the Tribunal has determined the dispute in the lot owners’ favour or has accepted the agreed evidence of the expert witnesses, as to liability or any further action that is required. I propose to make orders to reflect these findings.

87. As stated, what the lot owners seek, however, is to have those orders implemented by an appointed managing agent, or in the alternative, Mr Pickering.

88. I turn to consider whether such orders are appropriate and within the legal scope provided under the SSMA.

ARE THERE ANY IMPEDIMENTS TO THE TRIBUNAL MAKING THE ORDERS REQUESTED BY THE LOT OWNERS?

89. Prior to considering whether there are any legal impediments to appointing a managing agent or in the alternative, Mr Pickering , to implement the orders I propose to make, it is necessary to consider whether there is a need for such orders.

90. As the lot owners submit, prior to the two extensions of time granted by the Appeal Panel, the OC had not commenced the work pursuant to the substantive orders.

91. Nonetheless, such works did commence and continued until mid September 2019.

92. What the lot owners say is that this and the OC’s failure to immediately take all steps to further investigate as necessary and correct as necessary, all sources of water ingress, as required by the substantive orders, are relevant considerations in deciding whether the substantive orders were complied with and hence in deciding how the substantive orders should now be implemented in the current, renewal proceedings.

93. The lot owners submit that these matters as well as the OC’s failure to complete the work properly and in a timely manner and the “staggering “ amount of defects identified by Mr Pickering show how the OC has seriously failed to comply with the substantive orders.

94. The lot owners point to the animosity between them and the OC and the ongoing litigation saying that it impacts on the OC’s ability to discharge its statutory obligations under the SSMA to implement the substantive orders and indeed, that the considerable lapse of time since the making of the substantive orders and the still unresolved matters, points to the OC’s either incapacity or unwillingness to finalise the implementation of the substantive orders.

95. The lot owners contend that these issues have acted detrimentally on their health, their well being and their ability to use and enjoy their lot.

96. The lot owners also stress that to allow the OC to implement the substantive orders will only result in ongoing disputes and failures in the common property and ongoing water penetration, causing the lot owners to endure an ongoing inability to enjoy their lot.

97. It is for the above reasons that the Lot owners seek the appointment of a manging agent or in the alternative, Mr Pickering, to bring the outstanding rectification work to completion.

98. On the one hand, the long history of the water penetration issues; the history of the litigation between the parties; their complete lack of personal communication; and the OC’s failure to finalise matters pursuant to the substantive orders that date back to October 2018 causes me concern.

99. On the other hand, it must be acknowledged that the OC did not ignore the substantive orders and made genuine efforts (such as the appointment of a building consultant and the calling for tenders from builders) in an attempt to implement those orders.

100. It must also be acknowledged that the procedures required for an owners corporation, as opposed to an individual, in taking such measures are by necessity more formal and hence more lengthy and complex.

101. It must also be acknowledged that building issues such as finding the source and cause of water penetrating, of necessity require time and regrettably additional work and variations to deal with issues as the work progresses and the problems unravel.

102. What is more the OC has invested considerable funds and time in attempting to implement the substantive orders.

103. Further, there is no persuasive evidence that outside this dispute, the OC has been derelict in any of its other obligations under the SSMA to administer and manage the strata scheme.

104. While, as I have noted, the OC was in default of the time stipulations imposed under the substantive orders and the time limits extended for compliance of such orders, the fact remains that once Mr Ilievski was engaged, matters did start to move and progress was made.

105. Regrettably a road block was hit when the parties ceased to communicate directly as to what the substantive orders required and how they needed to be implemented. While there are differing versions from the parties as to the reasons for this, in considering the evidence one is inexorably led to conclude that some blame must lay with each side and that the litigation embarked upon after the substantive orders were made and both before and after the initiation of the current renewal proceedings, has only made matters worse.

106. Unfortunately, the end result has been to hinder and ultimately stop the work required to implement the substantive orders.

107. That said, it must also be said that once the matters in issue were placed concurrently in the hands of Mr Ilievski and Mr Pickering, through the hearing process, we saw an expansive and speedy resolution of many of the sticking points, agreement in many matters and hence, a substantial narrowing of what now needs to be done to finalise the substantive orders.

108. The end result of Mr Pickering and Mr Ilievski finally conferring, albeit at the 11^th hour, is that there are a majority of matters to be attended to where Mr Pickering and Mr Ilievski agree on the need for rectification, completion or further investigation and the handful of matters where disagreement remained, the Tribunal has now resolved.

109. It is to be hoped that the Tribunal’s orders to implement the experts’ agreements and the Tribunal’s findings in the limited instances where agreement was not reached, can overcome the history and actions that have blighted the final resolution of the water penetration issues and prevented the full implementation of the substantive orders.

110. What is more, the OC’s evidence that these matters can be completed within a few weeks of engaging a contractor to attend to them, is not directly refuted.

111. Thus, I am not inclined to make any orders that a compulsorily appointed strata managing agent, or alternatively, a project manager, step into the shoes of the OC .

112. The extent to which such orders would disenfranchise the OC from its statutory rights and obligations to conduct and fund repairs and maintain common property would, in my view, be disproportionate to what remains to be done to finalise the substantive orders .

113. I now turn to whether there are any legal impediments to the Tribunal determining the proceedings.

114. Initially there was a jurisdictional issue raised as to whether the Tribunal is deprived of jurisdiction to hear the current renewal proceedings because it is a renewal application from the substantive orders of the Appeal Panel and cl 8 (5)(b) of Schedule 4 of the Civil and Administrative Tribunal Act 2013 provides that no renewal application can be made for renewal of an order if the relevant order ”is or has been the subject of an internal appeal”.

115. I agree with the lot owners’ submissions that the above provision is not applicable in this instance. In this instance the substantive orders which the lot owners are seeking to ventilate by way of a renewal application, were made by the Appeal Panel at first instance. The substantive orders which the lot owners are seeking to ventilate by way of a renewal application have never been the subject of an internal appeal .

116. In any event, as I understand it, the OC is no longer pressing this jurisdictional point.

117. I therefore find that the Tribunal is not precluded from determining the proceedings by virtue of cl 8(5)(b) Schedule of the Civil and Administrative Tribunal Act 2013.

118. There is then the issue of whether the Tribunal has the power, in determining a renewal application, to appoint Mr Pickering to be the supervising contractor under s 232 SSMA; or to appoint a strata managing agent for that purpose under s237 SSMA ; and indeed the relationship between sections 232 and 237 SSMA.

119. As the lot owners in my view quite rightly submit, s 232 SSMA is a broad and general power and the recent Court of Appeal decision in the Vickery litigation has confirmed the breadth of the power given to the Tribunal to make orders to ensure that an owners corporation fulfils its obligations .

120. Section 237 SSMA is a specific, confined provision , having a high threshold to ensure that the drastic results which flow from compulsorily appointing a managing agent only occur when that high threshold is met .

121. It would therefore be unlikely that the general s 232 power can be used to in effect achieve a very similar outcome to the one provided for under the specific s 237 SSMA . In other words, a request for a general order under s 232, cannot be a disguised s237 order.

122. Whether an order is made under the general s 232 provision to appoint Mr Pickering or under the s237 specific power to appoint a managing agent , the end result is very similar . In each case the OC is being stripped of its rights to decide the manner in which it can implement the substantive orders and oversee the necessary works to common property for which it bears responsibility.

123. In any event, as a result of the findings I have made above, namely, that there is not sufficient justification to appoint a third party to have the responsibility of implementing the substantive orders, I do not need to take these legal considerations any further.

124. There is, finally, the issue of the Meadows decision. As I understand it, the order made by the Senior Member was to allow the OC access to carry out the substantive orders and there was no ventilation of those substantive orders or any other determination, by Senior Member Meadows that touched upon what the Tribunal is being asked to consider in this current renewal application.

125. In any event the Meadows decision was appealed with the result that on 26/11/2020 the Meadow decision was set aside.

126. I therefore find that nothing turns on the Meadows decision.

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

EXTRACT FROM APPEAL PANEL DECISION ON THE MEADOWS DECISION

Introduction

127. These proceedings relate to a dispute concerning the failure of the respondent (Owners Corporation) to repair and maintain common property which has led to water leaks and other issues affecting Lot 64 in the strata scheme which is owned by the appellants (Rosenthals). The original proceedings were commenced in 2016, the Rosenthals seeking orders including for the repair of common property.

128. Work orders were originally made by the Tribunal on 29 August 2017. Those orders were varied by the Appeal Panel in application AP 17/41893 on 15 October 2018 (Work Order).

129. Subsequent to the Work Order being made, applications were made by the Owners Corporation seeking an extension of time to comply with those orders,a matter not presently relevant to the disposition of this appeal.

130. The Owners Corporation also filed two applications in the Tribunal seeking interim and substantive relief in connection with the carrying out of those works. These were application SC19/20664 (interim application) and application SC 19/20671 (substantive application). They were filed on 2 May 2019. In part, these applications related to a dispute concerning the liability of the Rosenthals to remove what were referred to as the “Disputed Items” to enable the work under the Work Order to be completed. 

131. In the substantive application, the Owners Corporation sought an order under s 149(1) of the Strata Schemes Management Act 2015 (NSW) (SSMA) for the making of a common property by-law. This by-law would have imposed liability on the Rosenthals to pay for the maintenance of past works carried out to their lot which were said to have been unauthorised and which in turn were said to have affected, or which could affect, the good and serviceable repair of the common property. These works were said to include the Disputed Items.

132. In addition, both the interim application and the substantive application sought an order that the Rosenthals provide to the Owners Corporation access to Lot 64 to enable the Owners Corporation to “carry out remedial building works in compliance with the orders of the Appeal Panel in NCAT File No AP 17/41893”. 

133. The interim application and substantive application were listed before the Tribunal for directions on 8 May 2019. Relevant to the present dispute, the Tribunal made the following orders by consent:

134. The parties shall jointly approach the Appeal Panel with a view to extending the date for compliance with orders of the Appeal Panel in proceedings No AP 17/41893 dated 15 October 2018 and varied on 4 March 2019 until 23 August 2019;

135. Pursuant to section 124 of the Strata Schemes Management Act 2015, the respondents shall provide the applicant with access to Lot 64 to enable the applicant's contractors to carry out the works the subject of the scope of works at Annexure pages 112 to 166 of the Chua Affidavit, and including the removal of the items designated "Lot owner Responsibility" at item 8.1 on page 163 of the annexure to the Chua Affidavit (the Disputed Items);

136. The question of liability for the costs of and incidental to the removal of the Disputed Items shall be determined at the final hearing of these proceedings if not otherwise agreed;

137. Directions were also made for the filing and service of evidence by the parties to facilitate a final hearing both applications. The hearing occurred on 21 August and 27 November 2019.

138. On 28 August 2020, the Tribunal made orders including the following:

1 SC 19/20664 

1. (1)   The application is dismissed. 

2 SC 19/20671 

1. (1) Pursuant to section 124 of the Strata Schemes Management Act 2015 (the Act), upon the provision of seven days notice in writing by the applicant, the respondents are to provide the applicant with access to lot 64 to enable the applicant’s contractors to carry out remedial works in compliance with the orders of the Appeal Panel in NCAT file number AP 17/41893 (the works).

1. (2)   The respondents are to comply with Order (1) above notwithstanding that they may disagree that the works will be effective or do not comply with the orders. 

2. (3)   The application is otherwise dismissed.

139. In short, the Tribunal dismissed the application under s 149 of the SSMA and made a further order for access (Order 2(1) above). The Tribunal published reasons for its decision (Reasons). In relation to the access order, the Tribunal said at [145]:

145. Given the passage of time, it is not clear to me whether access to lot 64 is still an issue. However, I make the orders below in order to obviate the necessity for further appearances before this Tribunal in relation to the current application. 

140. The Tribunal did so despite the Owners Corporation saying in its submissions (both in writing and orally) that no issue of access remained for determinationby the Tribunal in circumstances where the parties had not otherwise provided submissions about the making of such an order.

141. In the meantime, that is between 2 May 2019 and 28 August 2020, a further application had been made by the Rosenthals. In that application, the Rosenthals sought to renew the proceedings under Sch 4 cl 6 of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act) because they contended that the Owners Corporation had failed to complete the work required by the Work Order by the due date of 23 August 2019 (renewal proceedings). At the date of hearing this appeal, the renewal proceedings were part heard before a differently constituted Tribunal to that which made orders on 28 August 2020 in the interim application and substantive application.

Notice of Appeal

142. By Notice of Appeal dated 7 September 2020 the Rosenthals appealed the access order. Subsequently, an amended Annexure A to the Notice of Appeal was filed on 15 September 2020.

143. It does not appear that leave was granted by the Appeal Panel to amend the Notice of Appeal. However, it is appropriate we now make a formal order to permit that amendment, the parties proceeding on the basis of this amended notice.

144. The orders sought were as follows:

1. An order for the stay of orders (1) and (2) in NCAT proceedings SC19/20671 pending the appeal; and

2. An order striking out orders (1) and (2) made in the NCAT proceedings SC 19/20671 referred to above.

145. It is unnecessary to set out the grounds of appeal in detail. Rather, the issues necessary for us to determine can be identified from the submissions which the parties have filed and by reference to submissions made at the hearing of the appeal. In short, the Rosenthals’ position can be summarised as follows:

1. There has been non-compliance by the Owners Corporation with the Work Order made by the Appeal Panel in the earlier proceedings.

2. On its proper construction, the access order made by the Tribunal on 5 May 2019 is an interim order, not a final order. By reason of s 231(6)(a) of the SSMA, that interim order has now expired, because a period of 3 months has elapsed since that order was made.

3. In respect of relief sought in the substantive application, the Owners Corporation did not finally seek an access order, having informed the Tribunal that no relief was sought. Reference was made to the Owners Corporation’s written submissions at first instance (Appellants Submissions and Evidence Bundle Tab 7 p 258 para 4) and oral submissions made by its Counsel at the hearing on 21 August 2019: see appellants’ transcript bundle (ATB) at tab 1 p 2 timestamp [00:04:38].

4. In making the access order on 28 August 2020, the Rosenthals were denied an opportunity to be heard.

5. Consequently, orders 1 and 2 made in the NCAT proceedings SC 19/20671 should be set aside and no further order should be made.

146. In response, the Owners Corporation initially asserted there was no denial of procedural fairness. However, a concession was properly made at the hearing of the appeal.

147. Nonetheless, the Owners Corporation said that no order should be made by the Appeal Panel, there being no practical injustice. Alternatively, the appeal should be adjourned to determine what orders should be made once the renewal proceedings had been determined by the Tribunal at first instance.

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: 03 September 2021