Sahade v The Owners - Strata Plan 62022 - [2014] NSWCA 208

Court of Appeal

Supreme Court

New South Wales

Summary available

Medium Neutral Citation: Sahade v The Owners - Strata Plan 62022 [2014] NSWCA 208
Hearing dates: 3 June 2014
Decision date: 01 July 2014
Before: McColl JA at [1];
Basten JA at [2];
Sackville AJA at [55]
Decision:
(1) Set aside the order of the District Court remitting the matter to the Consumer, Trader and Tenancy Tribunal.
(2) In place of that order, order that:
(i) the decision of the Consumer, Trader and Tenancy Tribunal (Strata and Community Schemes Division) made on 4 September 2012, dismissing an application for variation of unit entitlements, be set aside;
(ii) order that the New South Wales Civil and Administrative Tribunal redetermine so much of the application as concerned -
(a) whether the original allocation of unit entitlements was unreasonable;
(b) if so, whether the unit entitlements should be reallocated, and
(c) if so, the appropriate allocation of unit entitlements,
on the basis of the values of the respective lots assessed by the Tribunal on 4 September 2012.
(3) Declare that in deciding the questions set out at 2(ii)(b) and (c), the Tribunal is entitled to take into account:
(a) if a variation in the allocations will affect the level of control of the owners' corporation currently enjoyed by each lot holder, that fact, and
(b) if a particular reallocation could lead to the potential for deadlock in voting at meetings of the owners' corporation, that fact.
(4) Order the applicant to pay the costs of the active respondents in this Court, being the owners' corporation up to 2 June 2014 and the second, third and fourth respondents thereafter.
(5) Grant the parties leave to -
(a) make submissions as to the source of the appeal to the District Court and the appropriateness of orders (2) and (3) set out above, and
(b) seek a variation of orders (2) and (3) above on the basis of any submissions made pursuant to (a),
within 14 days of the date of this judgment.
[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Catchwords:
ADMINISTRATIVE LAW - judicial review - error of law - tribunal declined to reallocate unit entitlements in strata scheme - appeal to District Court - remittal to tribunal ordered on the basis that there was a failure to give reasons - whether an error of law disclosed in requiring the issue of control of strata scheme management to be considered on remittal
REAL PROPERTY - strata titles - management and control - allocation of unit entitlements - power to reallocate units entitlements if original allocation considered unreasonable - relevant considerations - whether the only…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2014] NSWCA 208
Decision Date: 01 July 2014

CaseChat Overview and Summary

This case involved an appeal to the Court of Appeal of New South Wales concerning an application to reallocate unit entitlements in a strata scheme. The applicant, Mr. Sahade, sought to have the unit entitlements varied, arguing the original allocation was unreasonable. The Consumer, Trader and Tenancy Tribunal (CTTT) had dismissed this application. Mr. Sahade appealed to the District Court, which ordered a remittal to the CTTT on the basis that the Tribunal had failed to provide adequate reasons for its decision. The Court of Appeal was asked to determine whether the District Court erred in law by requiring the issue of control of strata scheme management to be considered on remittal.

The central legal issue before the Court of Appeal was the scope of the District Court's power on appeal from the CTTT, specifically in relation to the considerations that could be taken into account when redetermining an application for the variation of unit entitlements. The court had to consider whether the District Court's order, which effectively directed the CTTT to rehear the matter and potentially consider factors beyond the "respective values of lots," was legally sound. This involved examining the relevant provisions of the *Strata Schemes Management Act 1996* (NSW) and the procedural rules governing appeals from the CTTT to the District Court.

The Court of Appeal found that the District Court had erred in law by making an order that was based on a misunderstanding of its appellate jurisdiction. The District Court had incorrectly applied section 67 of the *Civil and Administrative Tribunal Act 2013* (NSW) to the appeal, which was instead governed by section 200 of the *Strata Schemes Management Act 1996* (NSW) and Part 5 of the *Crimes (Appeal and Review) Act 2001* (NSW). These provisions did not contain an equivalent to section 67(4) of the CTTT Act, which allowed for specific directions on rehearing. Consequently, the District Court's power was limited to determining the appeal or, if an error of law was found, remitting the matter for redetermination. The Court of Appeal determined that the original decision of the CTTT should be set aside and the matter remitted for redetermination by the New South Wales Civil and Administrative Tribunal (NCAT).

The Court of Appeal ordered that the District Court's order remitting the matter to the CTTT be set aside. In its place, the court ordered that the CTTT's decision dismissing the application for variation of unit entitlements be set aside. The matter was remitted to NCAT for redetermination of whether the original allocation of unit entitlements was unreasonable, and if so, whether they should be reallocated and to what extent. Crucially, the court declared that in making this redetermination, NCAT was entitled to take into account the potential impact of any variation on the level of control enjoyed by lot holders and the potential for deadlock in voting at owners' corporation meetings. The applicant was ordered to pay the costs of the respondents.

Orders

Orders of the court

(1) Set aside the order of the District Court remitting the matter to the Consumer, Trader and Tenancy Tribunal.

(2) In place of that order, order that:

(i) the decision of the Consumer, Trader and Tenancy Tribunal (Strata and Community Schemes Division) made on 4 September 2012, dismissing an application for variation of unit entitlements, be set aside;

(ii) order that the New South Wales Civil and Administrative Tribunal redetermine so much of the application as concerned -

(a) whether the original allocation of unit entitlements was unreasonable;

(b) if so, whether the unit entitlements should be reallocated, and

on the basis of the values of the respective lots assessed by the Tribunal on 4 September 2012.

(3) Declare that in deciding the questions set out at 2(ii)(b) and (c), the Tribunal is entitled to take into account:

(a) if a variation in the allocations will affect the level of control of the owners' corporation currently enjoyed by each lot holder, that fact, and

(b) if a particular reallocation could lead to the potential for deadlock in voting at meetings of the owners' corporation, that fact.

(4) Order the applicant to pay the costs of the active respondents in this Court, being the owners' corporation up to 2 June 2014 and the second, third and fourth respondents thereafter.

(5) Grant the parties leave to -

(a) make submissions as to the source of the appeal to the District Court and the appropriateness of orders (2) and (3) set out above, and

(b) seek a variation of orders (2) and (3) above on the basis of any submissions made pursuant to (a),

within 14 days of the date of this judgment.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

This understanding of the primary Judge's reasons receives some support from the second judgment given by her Honour, in which she considered the form of order that should be made: Sahade v Owners Corporation SP62022 (District Court (NSW), 10 October 2013, unrep) (Supplementary Judgment). Her Honour said that the error of law raised by the respondents' notice of contention was that: Perhaps not surprisingly, her Honour's reasons in the Principal Judgment gave rise to a debate in the District Court as to the orders that should be made to resolve the appeal to that Court. However, the debate generated some confusion when the parties made their submissions as to the form of orders. Both counsel and the primary Judge assumed in their submissions that the source of the District Court's appellate jurisdiction was s 67 of the CTTT Act. As Basten JA has pointed out, the District Court's appellate jurisdiction in relation to the decisions of the Tribunal was conferred by s 200 of the Management Act, which in effect incorporates Part 5 of what is now the Crimes (Appeal and Review) Act 2001 (NSW) (Appeal and Review Act). Section 67 of the CTTT Act had no relevance to the District Court appeal. In the course of delivering the Supplementary Judgment, her Honour stated that: This statement prompted senior counsel for the respondents to request an order making it clear that the Tribunal should not revisit the question of the respective values of the units. At that point, counsel then appearing for the applicant directed her Honour's attention to s 67(4) of the CTTT Act. This provides that if the District Court remits its decision on a question of law to the Tribunal and orders a rehearing of the proceedings: Faced with these submissions, the primary Judge did what she was asked to do. She made an order remitting the matter to the Tribunal and directing a rehearing of the proceedings by the Tribunal "consistent with my findings". I have set out at [61] above the terms of the formal order. In fact, as has been seen both senior counsel appearing in the District Court were mistaken and s 67(4) had no application to the appeal to that Court. Neither s 200 of the Management Act nor Part 5 of the Appeal and Review Act, which then governed appeals from the Tribunal to the District Court in matters arising under s 183 of the Management Act, has any equivalent to s 67(4) of the CTTT Act. The powers of the District Court on an appeal were those stated in s 59(2) of the Appeal and Review Act. Section 59(2) provided that the District Court, if it found that the Tribunal had erred in law, could determine the appeal: It is clear that her Honour intended the order she made to foreclose any attempt to reopen the valuation question at the Tribunal. Immediately after making the order, her Honour said that: In these circumstances, it seems to me that the primary Judge, in consequence of the submissions made to her by both parties, erred in law by making the order in the terms she did. Her Honour wrongly proceeded on the basis that the appeal from the Tribunal was governed by s 67 of the CTTT Act. It was for that reason that she acceded to the parties' joint submission that the order should follow the language of s 67(4).

Ratio Decidendi

Legal Principle Established

Full text does not contain this section.

Medium Neutral Citation:	Sahade v The Owners - Strata Plan 62022 [2014] NSWCA 208
Hearing dates:	3 June 2014
Decision date:	01 July 2014
Before:	McColl JA at [1]; Basten JA at [2]; Sackville AJA at [55]
Decision:	(1) Set aside the order of the District Court remitting the matter to the Consumer, Trader and Tenancy Tribunal. (2) In place of that order, order that: (i) the decision of the Consumer, Trader and Tenancy Tribunal (Strata and Community Schemes Division) made on 4 September 2012, dismissing an application for variation of unit entitlements, be set aside; (ii) order that the New South Wales Civil and Administrative Tribunal redetermine so much of the application as concerned - (a) whether the original allocation of unit entitlements was unreasonable; (b) if so, whether the unit entitlements should be reallocated, and (c) if so, the appropriate allocation of unit entitlements, on the basis of the values of the respective lots assessed by the Tribunal on 4 September 2012. (3) Declare that in deciding the questions set out at 2(ii)(b) and (c), the Tribunal is entitled to take into account: (a) if a variation in the allocations will affect the level of control of the owners' corporation currently enjoyed by each lot holder, that fact, and (b) if a particular reallocation could lead to the potential for deadlock in voting at meetings of the owners' corporation, that fact. (4) Order the applicant to pay the costs of the active respondents in this Court, being the owners' corporation up to 2 June 2014 and the second, third and fourth respondents thereafter. (5) Grant the parties leave to - (a) make submissions as to the source of the appeal to the District Court and the appropriateness of orders (2) and (3) set out above, and (b) seek a variation of orders (2) and (3) above on the basis of any submissions made pursuant to (a), within 14 days of the date of this judgment. [Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]
Catchwords:	ADMINISTRATIVE LAW - judicial review - error of law - tribunal declined to reallocate unit entitlements in strata scheme - appeal to District Court - remittal to tribunal ordered on the basis that there was a failure to give reasons - whether an error of law disclosed in requiring the issue of control of strata scheme management to be considered on remittal REAL PROPERTY - strata titles - management and control - allocation of unit entitlements - power to reallocate units entitlements if original allocation considered unreasonable - relevant considerations - whether the only…