The Owners Strata Plan No 19341 v Dehlsen

Case •

[2022] NSWCATCD 208

•

19 December 2022

No judgment structure available for this case.

Civil and Administrative Tribunal


New South Wales

  • Amendment notes
Medium Neutral Citation: The Owners - Strata Plan No 19341 v Dehlsen [2022] NSWCATCD 208
Hearing dates: 9 September 2022
Date of orders: 19 December 2022
Decision date: 19 December 2022
Jurisdiction:Consumer and Commercial Division
Before: R Alkadamani, Senior Member
Decision:

1. Pursuant to s 149 of the Strata Schemes Management Act 2015 the Tribunal prescribes the making of a common property rights by-law in and to the effect of the by-law referred to at exhibit 1, pages 153 - 157 inclusive.

2. Order the owners corporation to do all acts necessary to register the common property rights by-law referred to in the preceding order pursuant to s 246 of the Strata Schemes Management Act 2015 (NSW).

3. Order pursuant to s 132 of the Strata Schemes Management Act 2015 (NSW) that the respondent undertake within 3 months of the date of these orders the waterproofing of the planter boxes on lot 3 in accordance with the Respondent’s Scope of Works as set out in paragraph 127 of this decision, apart from item 3.

4. If any party wishes to make any submissions as to costs then that party shall file and serve submissions not exceeding 5 pages within 21 days of the date of these orders, such submissions to also address whether a hearing on the papers is appropriate.

5. If any submissions are filed in accordance with the preceding order then the other party may file and serve any submissions in response, not exceeding 5 pages, within 35 days of the date of these orders, such submissions to also address whether a hearing on the papers is appropriate.

Catchwords:

STRATA SCHEMES – works by lot owner – whether work authorised – whether works caused water penetration

STRATA SCHEMES - unreasonable refusal to make a common property rights by-law - failure to provide a written consent to the making of a Special By-Law

Legislation Cited:

Civil and Administrative Tribunal Act 2013 (NSW)

Strata Schemes Management Act 1996 (NSW)

Strata Schemes Management Act 2015 (NSW)

Category:Principal judgment
Parties: The Owners – Strata Plan No 19341 (Applicant)
Brian Charles Dehlsen (Respondent)
Representation:

Mr Bannerman (Applicant)

Mr G Farland and Mr P Lin (Respondent)

Solicitors:
Bannerman Lawyers (Applicant)
Richard Harvey & Associates (Respondent)
File Number(s): SC 22/09428
Publication restriction: None

REASONS FOR DECISION

  1. This is an application under the Strata Schemes Management Act 2015 (NSW) (SSMA) by an owners corporation (the owners corporation) against Mr Dehlsen, the owner of lot 3 in the strata scheme.

  2. The owners corporation seeks an order under s 132(1)(a) that “the lot owner perform work or take other steps to repair damage, at its own cost”. The damage requiring repair is alleged to be damage to the common property caused as a result of work undertaken by Mr Dehlsen in 2005. This is made clear in a document entitled Annexure B - Reasons for Substantive Orders annexed to the application. Paragraph 1of that document alleges the following:

The Respondent … carried out unauthorised works to the balcony of their lot in or around 2005. The unauthorised works resulted in damage to the common property and water penetration into lot 2.

  1. Mr Dehlsen accepts that work was undertaken in or around 2005. However, he disputes that the work was unauthorised and denies that the work damaged the common property or is the cause of water penetration into lot 2. Mr Dehlsen is willing to undertake some remedial work at his cost, namely, the re-waterproofing of the planter boxes.

  2. The owners corporation also seeks an order under s 149(1)(b) of the SSMA. The proposed order is “that the Respondent must consent to the making of a by-law for unauthorised works that they have carried out to common property”. The proposed order does not properly reflect the manner in which the Tribunal prescribes the making of a by-law pursuant to s 149, but it was clear during the hearing and from the submissions that the owners corporation sought an order prescribing the making of a common property by-law on the basis that Mr Dehlsen had unreasonably refused to consent to a by-law to which all the other lot owners had consented.

  3. Another order sought by the owners corporation in their application related to access to lot 3. However, this order was not in issue at the time of the hearing.

The hearing

  1. The hearing was held on 9 September 2022.

  2. The owners corporation was represented by Mr Bannerman, of Bannerman’s Lawyers.

  3. The lot owner was represented by Mr Farland, with Mr Lin, of counsel, instructed by Richard Harvey & Associates, solicitors.

  4. The evidence comprised a paginated Joint Tender Bundle prepared by the parties and marked exhibit 1. In these reasons the Tribunal will refer to the documents by their page number in that exhibit.

  5. Exhibit 1 contained lay statements and expert reports filed by the parties.

  6. The owners corporation’s lay statements comprised two statements by Ms Rorison dated 28 April 2022 and 21 July 2022. Ms Rorison is a member of the strata committee.

  7. The owners corporation’s expert report is dated 27 April 2022 and was prepared by Mr Nguyen, who at that time was a senior project manager at Partridge Remedial Pty Ltd.

  8. Mr Dehlsen provided a statement dated 6 July 2022. This was the lay evidence on which he relied. Mr Dehlsen also relied on an expert report dated 5 July 2022 prepared by Mr Dahrie of Noviion Engineering Pty Ltd.

  9. Mr Nguyen and Mr Dahrie’s reports complied with the Tribunal’s Procedural Direction 3 which deals with expert reports in proceedings in the Tribunal.

  10. Exhibit 1 also included numerous other reports prepared over the years by consultants and builders who had been requested to investigate the source or reason for water penetration into lot 2. Those reports were not tendered on the basis that they were expert reports.

  11. Mr Nguyen and Mr Dahrie were the only witnesses that were cross examined.

The issues in dispute

  1. The first issue in dispute is whether the work undertaken by the lot owner was unauthorised. The lot owner’s closing submissions raised, as a subsidiary or related issue, whether the work altered or relevantly affected the common property such that the owners corporation’s consent was required under the predecessor to the SSMA.

  2. The second issue is whether the work undertaken by the lot owner is the cause of water penetration into lot 2.

  3. The third issue is whether an order should be made under s 149(1)(b) “prescribing a change to a by-law” on the basis that Mr Dehlsen has “unreasonably refused to consent to the terms of a proposed common property rights by-law”.

Findings

  1. The Tribunal makes the following findings of fact.

  2. On 14 October 1982 strata plan no. 19341 was registered. The strata scheme is located at ** Drummoyne Avenue, Drummoyne. The strata scheme comprises 7 lots.

  3. Lot 3 is located above lot 2. Lot 3 has a sizable outdoor area which is located above lot 2’s lounge room and one of its bedrooms. The outdoor area is divided by a hob. Between the hob and the commencement of the interior areas of the lot is a terrace or balcony. The outdoor area on the other side of the hob has planter boxes.

  4. In around January 2005 Mr Dehlsen and his wife visited all lot owners except the owners of lot 5 to explain to them their plans for renovations that they wished to undertake. They took with them architectural plans depicting the proposed renovations and explained the proposed renovations. The owners of lot 5 did not reside at the strata scheme.

  5. All the lot owners apart from the owner of lot 5 signed a copy of the architectural plans signifying their agreement to the proposed renovations, at least to the extent those renovations were depicted on, or explained by, the architectural plans (Ex 1, p. 374, para 10 and p. 384).

  6. In early February 2005 Mr Dehlsen wrote to the strata manager (Ex 1, p. 387). In that letter Mr Dehlsen referred to the plans for the renovations and requested the following:

Would you please provide me with a letter addressed to Canada Bay Council informing them that the body Corporate has viewed and has no objection to the renovations.

  1. By letter dated 15 February 2005 the strata manager replied to Mr Dehlsen advising that the owners corporation had agreed to the renovations subject to a number of conditions, which included that any damage to the common property must be made good by Mr Dehlsen (Ex 1, p. 388).

  2. In 2005 Mr Dehlsen undertook the renovations. One component of the renovations involved removing artificial turf on the deck. Mr Dehlsen says this turf was not glued or otherwise affixed to the deck. This evidence is not contested and the Tribunal accepts it.

  3. Mr Dehlsen applied a waterproofing membrane over the then-existing membrane on the balcony. Over the new membrane was applied a base preparation for tiling. Tiles were then installed on the balcony, including a row of skirting tiles on the north-western end (Ex 1, p. 377, para 33).

  4. In addition, drainage channels at the perimeter of the balcony adjacent to the parapet wall were installed (Ex 1, p. 377, para 33).

  5. Glass balustrade was installed onto the parapet walls (Ex 1, p. 377, para 33).

  6. Tiles were installed on the capping bricks of the parapet walls (Ex 1, p. 377, para 33).

  7. The owners of lot 2 did not give a witness statement. However, Ms Rorison’s statement records that in 2007 the owners of lot 2 started to complain of water penetration into their lot (Ex 1, p. 161, para 12).

  8. Mr Dehlsen’s evidence is that in 2010 the owner of lot 2 contacted him to complain about water penetration into lot 2 (Ex 1, p. 377, para 34).

  9. Since 2010 there has been extensive correspondence between Mr Dehlsen and the owners corporation, through its strata agent or strata committee.

  10. A number of investigations were undertaken and a number of reports obtained. These reports are dealt with in more detail below.

  11. As a consequence of the investigations and reports, the owners corporation undertook work to the common property commencing in October 2020 to remediate unsealed brick parapet walls on the outdoor areas of lot 3 (Ex 1, p. 324, para 10 and p. 498, para 4.1.2.3).

Water penetration into lot 2

  1. In respect of water penetration into lot 2, there is no dispute in these proceedings, as well as a large body of evidence, that lot 2 has experienced water penetration and the Tribunal so finds.

  2. However, there was some dispute between the parties as to whether there is evidence of continuing or recent water penetration as at the hearing of the application. Ms Rorison’s evidence in this respect is to the effect that the water penetration into lot 2 remains a problem (Ex 1, p. 528, para 16). Ms Rorison’s evidence is corroborated by Mr Dahrie’s observations of water penetration in lot 2 sighted during his investigations on 15 June 2022 (Ex 1, p. 501, para 4.2.2.12). The Tribunal finds that water penetration into lot 2 continued to be a problem as at the date of the hearing of the application.

  3. One of the primary disputes between the parties during the hearing was the cause of the water penetration into lot 2. The owners corporation’s case is that the water penetration into lot 2 is a result of the work undertaken by Mr Dehlsen to the balcony and adjacent outdoor areas in lot 3. More specifically, the owners corporation contends that the water penetration into lot 2 comes from the tiled balcony and/or the planter boxes and nearby areas on lot 3.

  4. Mr Dehlsen contends that the water penetration is not from the tiled balcony area.

  5. In relation to the planter boxes, the expert retained by Mr Dehlsen accepts that re-waterproofing of the planter boxes on lot 3 is appropriate. On a without admissions basis, Mr Dehlsen is willing to perform work to re-waterproof the planter boxes.

  6. Mr Dehlsen also contend that the source of the water penetration into lot 2 could be the masonry wall on the western side of the outdoor area of unit 3 or other sources attributable to the common property.

Reports relating to lot 2 water penetration

  1. Since 2010 there have been many reports or letters obtained by either Mr Dehlsen or the owners corporation regarding the water penetration issues.

  2. On 23 September 2010 Mr Harrison of Harrison Consultants Pty Ltd attended lot 3 and conducted an inspection of the balcony area. Mr Harrison is an engineer who drew the plans for the renovations undertaken by Mr Dehlsen in 2005. On 17 October 2010 Mr Harrison provided a letter regarding his inspection (Ex 1, p. 437). The letter noted that Mr Harrison observed “no sign of any cracking, subsidence or damage”. The letter recorded that there was evidence of water penetration into lot 2. The letter did not identify the source or cause of the water penetration. Finally, the letter recorded that from conversations between Mr Dehlsen and Mr Harrison “it appeared that there may have been an area over the concrete hob which may not have been treated” (Ex 1, p. 438). Further testing was recommended.

  3. On 13 July 2017 RHM Consultants Pty Ltd (RHM) conducted an inspection of lot 2 and lot 3. Their report dated 25 August 2017 confirmed that there was water penetration into lot 2’s master bedroom and living room (Ex 1, pp. 121-122). RHM did not perform tests to identify the source or cause of the water penetration. A number of possible causes for the water penetration were recorded, some but not all of which were attributable to water penetrating from the outdoor areas of lot 3, namely, the tiled balcony and/or raised timber deck (Ex 1, p. 125, para 3.1.3). RHM recommended flood testing of the outdoor areas of lot 3 and testing of the reticulation pipework plumbing to ascertain the cause(s) of the water penetration into lot 2 (Ex 1, p. 125, para 3.1.4 and p. 126, para 4.1.1).

  4. In July 2018 RHM oversaw flood testing of lot 3’s tiled balcony area, the area underneath the raised timber deck and the masonry parapets and balustrades extending along the western and eastern boundaries of lot 3’s balcony (Ex 1, p. 129) and provided a report dated 17 August 2018 in relation to those tests.

  5. The flood tests used dye infused water.

  6. In relation to area underneath the timber deck, RHM commenced a flood test of that area at 9am on 16 July. The flood test was released on 17 July 2018 after 28-30 hours (Ex 1, p. 130). RHM concluded that the flood test of that area did not result in a change in the water penetration into lot 2. RHM observed that, as a result of the flood test, “No change was observed, clear water only dripping at a consistent rate to that at commencement of the testing within the bedroom. No conclusive changes to the subject areas with the living room” (Ex 1, p. 130).

  7. In relation to the tiled balcony area, a large area was flood tested by sealing then filling the area at 9:00am on 23 July 2018. As at 11am on 23 July 2018 there was no change in water penetration to lot 2 (Ex 1, p. 131).

  8. On 23 July 2018 RHM also performed a flood test of the masonry parapet/balustrade wall. This appears to have commenced around 11am. At 12:40pm this testing was stopped because water “was observed cascading throughout the downlight fittings within the enclosed sunroom” of lot 2. It “was also evident that water was flowing from the base of the rendered masonry wall within the south western corner of the sunroom” (Ex 1, p. 131).

  9. RHM concluded that water penetration was “attributable to failed waterproofing provisions related to [lot 3], particularly the way in which the membrane is detailed/terminated against the masonry parapet wall” (Ex 1, p. 132). The water is able to “track through the brickwork by-passing the waterproofing provisions applied to the surface of the balcony, as it is assumed (as advised) the waterproof membrane(s) is turned-up the internal face of the parapets/balustrades” (Ex 1, p. 132).

  10. RHM recommended a number of remedial actions including removing the tiles from the balcony of lot 3 and re-waterproofing the area (Ex 1, p. 133).

  11. The next relevant report was prepared by Integrated Consultancy Group (Integrated Consultancy) dated 7 January 2019. Integrated Consultancy peer reviewed previous reports, undertook an inspection of lots 2 and 3 and held discussions with the owner of lot 3.

  12. Integrated Consultancy opined that the water penetration into lot 2 “is most likely entering via the western parapet masonry wall” (ex 1, p. 110, para 9.1).

  13. Integrated Consultancy observed that the RHM report dated 17 August 2018 had recommended that one of the remedial actions that should be undertaken was re-waterproofing the tiled balcony area although it had not been shown to be a cause of water penetration. Integrated Consultancy disagreed with that recommendation in circumstances where the parapet walls/balustrade had been identified as a confirmed source of water penetration into lot 2 but the tiled balcony area had not (see Ex 1, p. 111, paras 12.2 and 12.3).

  14. On 20 March 2020 Partridge Remedial Pty Ltd (Partridge) provided a report authored by Mr Nguyen (Ex 1, pp. 264 - 273) to the owners corporation in relation to the water penetration into lot 2 (the First Partridge report).

  15. For the purposes of the First Partridge report, Mr Nyugen inspected lots 2 and 3, carried out a number of water tests and reviewed previous reports.

  16. The inspection was carried out in February 2020. At that time the owner of lot 2 informed Mr Nguyen that there had not been water penetration for 6 months (Ex 1, p. 266).

  17. The First Partridge report recorded the following observations (Ex 1, p. 267):

  1. Efflorescence in the tiled grout at the centre of the balcony oof lot 3;

  2. The walls of the existing planter box had been demolished and timber decking area was then constructed with a steel support frame. This frame was side fixed into the original concrete hob;

  3. The liquid membrane was in poor condition with evidence of re-emulsification, cracking and peeling in a number of locations;

  4. Fixings penetrated the top of the hob, being fixings that secured the timber decking panels;

  5. Defective flashing detail was evident where the roof tiles (effectively above lot 2’s “sunroom”) meet the double brick walls on the east and west sides.

  1. The following tests were carried out by Partridge for the purposes of investigating the water penetration and preparing the First Partridge Report:

  1. Water test the west strip drain for 20 minutes. There was no water ingress into lot 2 or increase in moisture levels observed as a result of this test (Ex 1, p. 269, para 4.3);

  2. Water test the steel frame fixings into side of the concrete hob for 30 minutes. There was no water ingress into lot 2 or increase in moisture levels observed as a result of this test (Ex 1, p. 269, para 4.3);

  3. Water test the concrete hob at the timber decking for 30 minutes. There was no water ingress into lot 2 or increase in moisture levels observed as a result of this test (Ex 1, p. 269, para 4.3);

  4. Water test the brick façade above the main bedroom window for 20 minutes. There was no water ingress into lot 2 or increase in moisture levels observed as a result of this test (Ex 1, p. 269, para 4.3);

  5. Water test the cracked wall render at the south-west corner for 15 minutes. There was no water ingress into lot 2 or increase in moisture levels observed as a result of this test (Ex 1, p. 269, para 4.3).

  1. In relation to the water penetration into the main bedroom the First Partridge report records that the results of the water testing were inconclusive (Ex 1, p. 269, para 4.4).

  2. The First Partridge Report recorded that the water penetration into the main bedroom “may be from” the following location(s) (Ex 1, p. 270):

  1. Top of the concrete hob on lot 3. Partridge observed this was not waterproofed after demolition of a planter box wall;

  2. Mechanical fixings installed into the top of the concrete hob securing the timber panels, and into the side of the concrete hob, belonging the steel frame;

  1. The solid 230mm calcium silicate brick work and the east and west parapets (and entering internally from there);

  2. Leak through the lot 3 balcony areas (although these were unable to be flood tested by RHM)

  1. The First Partridge Report also opined (Ex 1, p. 271):

It has yet to be confirmed if the condition of the existing waterproofing membrane beneath the tiled area of [lot] 3 is watertight.

Defects in the waterproofing and observed fixings into the concrete hob are likely areas for water penetration. These areas will need to be rectified by re-waterproofing to eliminate this area as a contributor to [lot] 2 leaks”

  1. In relation to the sunroom, the First Partridge report recorded that the flashing detail where the western solid brick wall meets the lot 2 sunroom “is inadequate” and metal capping should be installed over this location (Ex 1, p. 271). The report also recorded the following (Ex 1, p. 271):

We also believe that water is tracking laterally from the timber decking area. This is evidenced by the dirt and debris observed in Unit 2’s bedroom.

  1. The First Partridge Report also recommended a leak detection report (Ex 1, p. 272).

  2. The next relevant report relates to electronic leak detection tests undertaken by Mr Previte of Waterproofing Integrity (the Waterproofing Integrity report). The tests were carried on 21 October 2021. The test methodology uses a limited current at relatively high voltage over a horizontal or vertical surface (Ex 1, p. 350). An earth lead from a portable generator is grounded to one surface and another lead is attached to an electrode brush with conducive bristles. The brush is swept across the “surface of the roof membrane”, being the surface for which the water leak detection testing is being undertaken. An electric arc will “jump from the electrode through any breach in the membrane thereby completing a circuit between the brush and the roof substrate”. However, if there are no breaches then the membrane acts as an insulator and prevents any flow of current to the deck. In relation to these proceedings, the Tribunal infers that “roof” refers to the surface of the balcony and the other areas tested by Waterproofing Integrity on lot 3’s outdoor areas.

  3. The Waterproofing Integrity report recorded that leaks were identified in two locations on the tiled balcony area of lot 3 and multiple locations in the timber deck area (Ex 1, p. 355).

  4. Mr Dehlsen’s counsel criticised the Waterproofing Integrity report on a number of grounds.

  5. First, the report records that the test “can only be carried out on non-conducive membranes which have a conducive substrate” (Ex 1, p. 352). Mr Dehlsen’s counsel observed that the test was undertaken over tiles rather than over membrane. It is clear from the photographs in the report and the contents of the report that the test was undertaken over tiles. The Waterproofing Integrity report records that the test was calibrated for a test over “Tiles and Screed over waterproofing system” (Ex 1, p. 353).

  6. Although the report does not in terms state that the testing can be undertaken over tiles it is clear that Mr Previte was well aware that is what he was doing because the test was calibrated for that circumstance. There is no evidence that the calibration exercise was defective. Having regard to the fact that Mr Previte’s occupation was to conduct leak detection tests it would be unlikely that the test would be conducted over tiles if that rendered the test invalid.

  7. Mr Dahrie, the expert retained by Mr Dehlsen, was provided with a copy of the Waterproofing Integrity report (Ex 1, p. 496, para 3.7.1.1). Mr Dahrie did not make any comment to the effect that the test being conducted over tiles would render the results invalid.

  8. The expert retained by the owners corporation, Mr Nguyen, also did not make any comment to the effect that the test being conducted over tiles would render the results invalid and indeed relied on the conclusions recorded in the Waterproofing Integrity report (Ex 1, p. 324, para 10.2.3). Moreover, the Waterproofing Integrity tests were conducted under Mr Nguyen’s supervision ((Ex 1, p. 324, para 9.2).

  9. Having regard to the whole of the Waterproofing Integrity report, it is apparent that testing of the membrane is contemplated to occur by sweeping the brush with electrode bristles over the surface being tested. The calibration exercise undertaken by Mr Previte recorded that he calibrated the equipment for the fact that the surface over which the sweeping occurred was tiled. Based on the fact that Mr Previte calibrated the equipment and conducted the testing of the membrane over the tiles, the supervision of that task by Mr Nguyen and the fact that both Mr Nguyen and Mr Dahrie did not contend that the test could not be conducted over the tiles, I would infer that, assuming the testing equipment was appropriately calibrated, the test carried out by Mr Previte was not rendered invalid or ineffectual because it was conducted over tiles. Finally, as discussed above, there is no evidence that the calibration of the equipment was not appropriate.

  10. The next criticism is that the leaks detected in the timber deck area were recorded as arising from low voltage electronic leak detection whereas the test methodology required use of high voltage (Ex 1, pp. 352 and 355). The Waterproofing Integrity report records that the methodology involves “using a limited current at a relatively high voltage” (Ex 1, p. 352). In relation to the leaks detected in the timber deck area the report records “Multiple breaches identified using low voltage electronic leak detection” (Ex 1, p. 355). Mr Nguyen describes the tests undertaken by Waterproofing Integrity as “low voltage leak detection” testing (Ex 1, p. 324, para 9.2). These apparent inconsistencies were not explained by the evidence. In particular, the owners corporation did not provide a cogent explanation that addressed this criticism and consequently it appears well founded. This affects the leaks found in the timber deck area.

  11. The next report of significance is the expert report of Mr Nguyen dated 27 April 2022 (the Second Partridge report). This report subscribed to the Tribunal’s Procedural Direction 3 dealing with expert evidence (Ex 1, p. 317, para 4.3.1).

  12. The Second Partridge report reviewed earlier reports, drew on previous inspections undertaken by Partridge as well as further inspections, and also relied on the results recorded in the Waterproofing Integrity report.

  13. The Second Partridge report (Ex 1, p. 324, paras 9.1 and 9.2):

  1. referred to the observations in the First Partridge Report;

  2. recorded that additional non-destructive tests were undertaken under Mr Nguyen’s direction, described as “low voltage leak detection tests”.

  1. Mr Nguyen made the following recommendations, or noted that such recommendations were previously made (Ex 1, p. 324, para 10):

  1. Carry out capping repairs to the top of the brick parapet walls, where the west and east walls meet the Lot 2 sunroom roof tiles. The Second Partridge report noted that these works were carried by Structural Building Maintenance Pty Ltd (SBM) as part of the building remedial works contracted by the owners corporation which commenced on 19 October 2020;

  2. Undertake a [low voltage leak detection] test. The Waterproofing Integrity test and report addressed this recommendation.

  1. The Second Partridge report concluded as follows (Ex 1, p. 324, para 10.2.3):

The results of the LVLD [low voltage leak detection] testing confirmed that there were failures in the existing waterproofing membrane of Lot 3 northen balcony in multiple locations. Subsequently, a supplementary scope of works was prepared by Partridge to carry out complete waterproofing works to Lot 3 balcony in order to remediate the failures.

  1. During cross examination Mr Nguyen agreed that a plausible source for the water ingress into lot 2 could be water coming through the porous (exterior masonry) wall and tracking under the membrane of lot 3’s tiled balcony and entering lot 2 through a crack in the slab. A sectional diagram depicting this scenario is at Ex 1, p. 134. In relation to this explanation, the water coming through the masonry wall could be rain water falling at an angle against the masonry wall. However, one problem with this explanation is that it does not address why the water penetration into the main bedroom of lot 2 was not observed prior to the renovations to lot 3.

  2. The next report is a leak detection report from International Leak Detection (the ILD report) dated 21 June 2022 (Ex 1, p. 474). This report was prepared by Mr Stanbury at the request of Mr Dehlsen. The testing occurred on 20 June 2022. The testing technique is described as follows (Ex 1, p. 476):

An electrical potential difference is set up between a non-conducive membrane surface, which is wet or thoroughly dampened, and a conducive structural deck or substrate which is earthed or grounded. If there are any leaks, then a small electric current will flow across the membrane surface and down through the puncture to the earthed structural deck. The electric current will flow directly to the puncture or breach.

  1. Twelve areas of concern were identified in the ILD report. These were located between the hob and the outer boundary of lot 3 in the planter box area and adjacent to the common property roof over the sunroom of lot 2. No areas of concern were recorded for the tiled balcony area, being the area between the hob and the inside of lot 3.

  2. The next report is from Mr Dahrie of Noviion Engineering (the Noviion report). Mr Dahrie was the expert retained by Mr Dehlsen. The Noviion report is dated 5 July 2022. The Noviion report was an expert report and subscribed to the Tribunal’s Procedural Direction 3.

  3. For the purposes of compiling his report, Mr Dahrie water tested the sliding door area on the balcony of lot 3 by hosing that area for 10 minutes. This did not result in water ingress into lot 2 (Ex 1, p. 498, para 4.1.2.4).

  4. On 14 June 2022 Mr Dahrie flood tested the tiled balcony area.

  5. The flood test for the tiled balcony was for a period of 4 hours. The water was infused with blue dye. Mr Dahrie concluded as follows (Ex 1, p. 498, para 4.1.2.6:

the flood testing revealed that no moisture ingress was present as a result of failed waterproofing membrane to the tiled balcony area

  1. Similarly, Mr Dahrie recorded that the flood test conducted by Noviion for the tiled section of the balcony of lot 3 “showed no signs of waterproofing membrane failures with no elevated signs of moisture recorded in the bedrooms of unit 2 directly under the suggested failure points of the tiled area” (Ex 1, pp. 498-499, para 4.1.2.9).

  2. Mr Dahrie also commented that the results of the flood testing of the tiled balcony area were consistent with the findings of the ILD report (Ex 1, p. 499, para 4.1.2.10).

  3. Mr Dahrie concluded (Ex 1, p. 500, para 4.1.4.1):

Based on the flood testing undertaken to the tiled balcony area of unit 3, no rectification works are required as there is no presence of water ingress to the unit 2 bedroom below.

  1. The planter boxes on lot 3’s outdoor area were also flood tested for 3 hours on 15 June 2022 (Ex 1, p. 501, para 4.2.2.4 and 4.2.2.5). The water was infused with yellow dye. The depth of the water was up to the mechanical fixings into the steel frame in the planter box to “confirm whether the alleged source of the water ingress was present through the fixing penetrations” (Ex 1, p. 501, para 4.2.2.6). There was no water penetration into lot 2 as a result of this flood test (Ex 1, p. 501, para 4.2.2.7).

  2. Mr Dahrie then undertook a further flood test at the western end of the planter boxes. This area of the planter boxes had taped patch repairs.

  3. Mr Dahrie had been instructed by Mr Dehlsen that the taped patch repairs were undertaken by Mr Dehlsen after SBM had removed multiple sections of membrane within the planter boxes. However, the evidence did not establish that this had in fact occurred.

  4. For the purposes of the flood test of the western end of the planter boxes, the taped patch repairs were removed and that area of the planter boxes was separately flood tested for another hour. Mr Dahrie recorded that “low moisture readings” and “no active water ingress was observed into Unit 2” (Ex 1, p. 501, para 4.2.2.11).

  5. Following the above tests, Mr Dahrie attended lot 2. Mr Dahrie removed stalactite covering a pre-existing drill hole in the ceiling of the bedroom in lot 2. Mr Dahrie observed 4 drops of clear water egress from the drilled hole. Because the water was clear Mr Dahrie concluded the source was unknown because the flood test in the planter boxes used yellow dyed water (Ex 1, pp. 501-502, para 4.2.2.12).

  6. In relation to the planter boxes Mr Dahrie recorded that “it is evident that there are two sources of failure” (Ex 1, p. 504, para 4.2.4.2). One failure was attributed to SBM, but as noted in the preceding paragraph, there is no evidence for this. The second failure was attributed to the areas identified in the ILD report. The Noviion report recorded the following (Ex 1, p. 504, para 4.2.4.2):

I note that the flood test undertaken in the planterbox of Unit 3 is inconclusive to the water ingress into Unit 2, however in my opinion the membrane in the planter box should be re-waterproofed.

  1. During cross examination, Mr Dahrie’s evidence was to the effect that the best method for determining the cause of water penetration into lot 2 was to conduct flood testing.

  2. Mr Dahrie also rejected a proposition put to him that the dye in dye infused water may separate from the water so that the water as it appears at the point of penetration into lot 2 would be clear.

  3. Mr Dahrie also water tested the masonry parapet wall behind the glass balustrade (Ex 1, p. 502, para 4.2.2.15). After approximately 15 minutes “active clear water (non-coloured) was observed to the unit 2 bedroom ceiling” (Ex 1, p. 502, para 4.2.2.15). Mr Dahrie attributed this water penetration to a “failure in the cavity flashing” (Ex 1, p. 502, para 4.2.2.16). Mr Dahrie also opined that it is “likely” that the common property steel roof stiffeners which penetrate through the brickwork to support the roof are also allowing water to penetrate into lot 2 (Ex 1, p. 502, para 4.2.2.16).

Original membrane on balcony area prior to renovation

  1. One factual issue that requires resolution is the material used in the membrane that was in place on the balcony/outdoor area of lot 3 prior to the 2005 renovations.

  2. The First Partridge Report recorded the author’s understanding that the original membrane was retained and a polyurethane membrane applied over it (Ex 1, p. 267). Mr Dehlsen’s evidence is that the original membrane was retained and a new membrane was applied over it but Mr Dehlsen did not say that the original membrane was bitumen (Ex 1, p. 377, para 33).

  3. However, in early 2016 Built by Meric Pty Ltd (Built Meric) had attended lot 3 and carried out a flood test on the deck area of lot 3. In a subsequent undated letter and quote addressed to the owners corporation Built Meric recorded the following (Ex 1, p. 473):

The owner of unit 3 mentioned the new membrane was applied on top of the existing bitumen membrane, bitumen and polyurethane are not compatible and will result in a failure of the membrane as seen in the planter box, the cracks (planter box) in the membrane have appeared as the bitumen has expanded under normal circumstances and the polyurethane has not.

  1. Mr Dehlsen annexed the Built Meric letter to his witness statement and took no issue with the assertion that he supplied to Built Meric the information about the pre-existing membrane being made of bitumen or that a polyurethane membrane was subsequently applied over it.

  2. In addition, a water leak detection report by Waterproofing Integrity recorded under the heading Membrane Type (Ex 1, p. 352):

The area of exposed waterproofing appeared to be a liquid membrane overlaid onto bitumen sheet membrane.

  1. Based on the matters in the preceding four paragraphs the Tribunal finds that the original or pre-existing membrane was a bitumen membrane and Mr Dehlsen caused to be applied a polyurethane membrane over it when the renovation works were undertaken to lot 3.

Consideration

  1. The first issue is whether the renovation work undertaken by Mr Dehlsen in 2005 was authorised by the owners corporation.

  2. As at 7 February 2005 section 65A of the Strata Schemes Management Act 1996 (NSW) provided as follows:

65A Owners corporation may make or authorise changes to common property

(1) For the purpose of improving or enhancing the common property, an owners corporation or an owner of a lot may take any of the following action, but only if a special resolution has first been passed at a general meeting of the owners corporation that specifically authorises the taking of the particular action proposed:

(a) add to the common property,

(b) alter the common property,

(c) erect a new structure on the common property.

(2) A special resolution that authorises action to be taken under subsection (1) in relation to the common property by an owner of a lot may specify whether the ongoing maintenance of the common property once the action has been taken is the responsibility of the owners corporation or the owner.

(3) If a special resolution under this section does not specify who has the ongoing maintenance of the common property concerned, the owners corporation has the responsibility for the ongoing maintenance.

(4) A special resolution under this section that allows an owner of a lot to take action in relation to certain common property and provides that the ongoing maintenance of that common property after the action is taken is the responsibility of the owner has no effect unless:

(a) the owners corporation obtains the written consent of the owner to the making of a by-law to provide for the maintenance of the common property by the owner, and

(b) the owners corporation makes such a by-law.

(5) A by-law made for the purposes of this section:

(a) may require, for the maintenance of the common property, the payment of money by the owner concerned at specified times or as determined by the owners corporation, and

(b) must not be amended or repealed unless a special resolution has first been passed at a general meeting of the owners corporation and the owners corporation has obtained the written consent of the owner concerned.

(6) The provisions of sections 52 (3), 54 (2) and (3) and 55 apply to a by-law made for the purposes of this section in the same way as those provisions apply to a by-law to which Division 4 of Part 5 of Chapter 2 applies.

  1. There was no special resolution authorising the renovation work undertaken by Mr Dehlsen. The February 2005 correspondence between the owners corporation’s strata manager and Mr Dehlsen was regrettable. It is understandable that Mr Dehlsen proceeded with the renovations after obtaining the letter dated 15 February 2005 from the strata manager (Ex 1, p. 388). However, that letter did not constitute a special resolution of the owners corporation and it follows there was no special resolution of the works undertaken by Mr Dehlsen in 2005 in accordance with s 65A of the Strata Schemes Management Act 1996.

  2. Mr Dehlsen contended in written submissions that s 65A did not apply to the work undertaken to the balcony area because the work did not add to or alter the common property. However, the glass balustrade and polyurethane membrane were affixed to the common property and indeed the polyurethane membrane is sealed onto the bitumen membrane. That element of the work undertaken in 2005 falls with one or other of sub-paragraphs (a) to (c).

  3. The next point raised by Mr Dehlsen in relation to the applicability of s 65A is that the purpose of the work was not for the purpose of improving or enhancing the common property. However, if improving or enhancing the common property was not at least one purpose of the work undertaken by Mr Dehlsen in 2005, in circumstances where that work added to, altered or erected a new structure on the common property, then authorisation for that work could not be obtained under s 65A.

  1. Mr Dehlsen contended that s 65A of the Strata Schemes Management Act 1996 did not apply to the work undertaken in 2005 and that then the work was undertaken pursuant to by-law 5. I do not accept that authorisation for the work performed by Mr Dehlsen in 2005 can be obtained pursuant to by-law 5.

  2. By-law 5 is, relevantly, as follows:

By-Law 5 - Damage to Common Property

(1) An owner or occupier of a lot must not mark, paint, drive nails or screws or the like into, or otherwise damage or deface, any structure that forms part of the common property without the approval of the owners corporation.

(2) An approval given by the owners corporation under clause (1) cannot authorise any additions to common property.

  1. By-law 5 proscribes certain conduct if undertaken without the approval of the owners corporation. It also places limits on the approval which the owners corporation can give. However, by-law 5 does not prescribe or deal with the means for obtaining the approval of the owners corporation. It follows that by-law 5 cannot be relied on by Mr Dehlsen as a source for the authorisation of the work that he performed in 2005.

  2. Since by-law 5 does not provide a source of power for the approval of the work undertaken by Mr Dehlsen, then s 65A of the Strata Schemes Management Act 1996 is the only (identified) source of power. Consequently, it also follows that if the work undertaken by Mr Dehlsen fell within s 65A(a) – (c) but was not for a purpose which included enhancing or improving the common property, as Mr Dehlsen contended, then s 65A would not be capable of being satisfied.

  3. Mr Dehlsen’s counsel also contended that the lot owners had acted in a manner analogous to lot owners providing unanimous consent in general meeting. Relying on Re Duomatic Ltd [1969] 2 Ch 365, Mr Dehlsen contended that since all but one lot owner had consented in writing it is open to the Tribunal to disregard any deviation from the formalities associated with calling a meeting. I do not accept that the Tribunal should disregard the necessity for a special resolution passed at a general meeting. The Strata Schemes Management Act 1996 prescribed how common property may be altered or added to. A special resolution passed at a general meeting was required. Once that had been complied with, lot owners, the owners corporation and successor’s in title would be affected by the special resolution. It was necessary that the parties adhered to the processes prescribed by the legislation at the time.

  4. Finally, in these proceedings it cannot be said there was unanimous approval by the other lot owners.

  5. It therefore follows that the renovation work undertaken in 2005, at least to the extent it involved work falling within s 65A(a) – (c) was not authorised by the owners corporation.

The source(s) of the water penetration into lot 2

  1. I am not satisfied on the balance of probabilities that the tiled balcony area of lot 3 is a source of water penetration into lot 2.

  2. Mr Dahrie’s conclusions were to the effect that the tiled balcony area was not a source of water penetration. His evidence was that flood testing was the best way to identify the source of water leaks. Mr Dahrie’s flood test of the tiled balcony area did not identify any water penetration into lot 2.

  3. The flood testing carried out by RHM Consultants in July 2018 and referred to in their 18 August 2018 report did not find the tiled balcony area to be the source of the water penetration into lot 2. Similarly, the water tests carried out by Partridge of the tiled balcony area for the purposes of the First Partridge report did not lead to observed water penetration into lot 2.

  4. Having regard to the absence of water penetration into lot 2 from the flood tests and water test of the tiled balcony area conducted by Noviion, RHM and Partridge (in their first report), I am not satisfied on the balance of probabilities, that the tiled balcony area is a source of water penetration.

  5. The Waterproofing Integrity report found two locations on the tiled balcony area which may be the cause of water penetration into lot 2. However, this result must be weighed against the physical water tests, including the two flood tests of the tiled balcony area, which did not result in observed water penetration into lot 2 from the tiled balcony area. In addition, the findings Waterproofing Integrity report are not supported by the ILD report in relation to the tiled balcony area.

  6. Finally, I was persuaded by the evidence of Mr Dahrie that the most appropriate method for identifying the source of water penetration into lot 2 was flood testing. Mr Dahrie was cross examined extensively and I was persuaded by his clarity and his views on this issue.

  7. I have has also taken into account the fact that a polyurethane membrane was applied to a bitumen membrane. The balance of the evidence is that those two membranes are not compatible. However, neither Mr Nguyen nor Mr Dahrie contended or identified that the water penetration into lot 2 from the tiled balcony area of lot 3 was attributable to the use of the polyurethane membrane over the bitumen membrane.

  8. In relation to the planter boxes, the evidence does show that water may be penetrating.

  9. Mr Dehlsen agreed, including in his Points of Defence, to re-waterproof the planter boxes.

  10. The owners corporation seeks that the re-waterproofing of the planter boxes be undertaken in accordance with items (i) to (vii) of a scope of works provided by Partridge (Ex 1, p. 54). One question which arises from that scope of works is the requirement to remove the concrete hob (item (iii)). There was no evidence that the concrete hob was installed by Mr Dehlsen and it the evidence did not make clear why it would be appropriate that Mr Dehlsen be required to undertake that work.

  11. In the alternative to the scope of works prepared by Partridge, the owners corporation submitted that the Tribunal should order, subject to one qualification, that Mr Dehlsen re-waterproof the planter boxes in accordance with the scope of works served by Mr Dehlsen’s solicitors on 19 September 2022, being annexure A to Mr Dehlsen’s submissions filed in the Tribunal on 29 September 2022 (the Respondent’s Scope of Works). That qualification is that item 3 should not be ordered. The Respondent’s Scope of Works is as follows:

  1. Engage accredited design practitioner and accredited building practitioner.

  2. Remove existing balustrade systems and framework and all existing membrane in planter box.

  3. Remove and replace parapet flashing to brickwork adjacent to planter box. Undertake water testing to confirm integrity of flashing. A note in the scope of works by Mr Dehlsen’s representatives observed that the flashing works adjacent to the planter box appears to be common property but that Mr Dehlsen is prepared to repair it.

  4. Apply waterproofing membrane to planter box in accordance with AS4654.2. Undertake flood testing to confirm integrity of waterproofing membrane.

  5. Install screed to create 1 in 100 falls to existing drains.

  6. Install secondary membrane to screed in accordance with AS4654.2. Undertake flood testing to confirm integrity of waterproofing membrane.

  7. Apply desired finish to planter box area.

  8. Install balustrades to conform [with] AS1170.

  9. Undertake make good work as required.

  1. An order will be made pursuant to s 132(1)(a) of the SSMA that Mr Dehlsen carry out work in accordance with the Respondent’s Scope of Works other than item 3. Item 3 appears to be on common property and the owners corporation submits that the work order should not include item 3.

  2. The parties did not address the time frame by which the work should be completed. It seems to me 3 months is appropriate.

Common property by-law

  1. The final issue for determination is the common property by-law sought by the owners corporation. All the lot owners apart from Mr Dehlsen consented to the proposed by-law and the minutes of an extraordinary general meeting held on 27 January 2022 record that the proposed by-law was “specially resolved” (Ex 1, p. 152). However, Mr Dehlsen did not consent to the proposed by-law and, by reason of s 143, Mr Dehlsen’s consent was required.

  2. Section 149 of the SSMA provides as follows:

149 Order with respect to common property rights by-laws

(1) The Tribunal may make an order prescribing a change to a by-law if the Tribunal finds—

(a) on application made by an owner of a lot in a strata scheme, that the owners corporation has unreasonably refused to make a common property rights by-law, 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 common property rights by-law, or to the proposed amendment or repeal of a common property rights by-law, or

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

(2) In considering whether to make an order, the Tribunal 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 common property rights by-law.

(3) The Tribunal must not determine an application by an owner on the ground that the owners corporation has unreasonably refused to make a common property rights by-law 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) The Tribunal 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 246, has effect as if its terms were a by-law (but subject to any relevant order made by a superior court).

(6) An order under this section operates on and from the date on which it is so recorded or from an earlier date specified in the order.

  1. The text of the proposed by-law is at Ex 1, pp. 153-157. The proposed by-law can be summarised as follows:

  1. The owner of lot 3 is authorised to keep the Work. The term Work is defined to reflect the work undertaken in 2005 although it also includes wording that incorporates damage to common property arising from that work;

  2. The owner of lot 3 is to provide the owners corporation with a copy of any certificate, local government or other approvals and pay the owners corporation’s costs of drafting, negotiating, making and registering the by-law;

  3. The owner of lots 3 is responsible for maintaining the Works, must renew or replace the Work “when necessary or when reasonably required by the Owners Corporation”, is liable for any damage to lot or common property from the Work, must make good any damage and must indemnify the owners corporation against any costs or losses arising out of the Works to the extent permitted by law.

  1. Mr Dehlsen’s counsel pointed to two matters in opposing the proposed common property rights by law.

  2. First, it was submitted that the by-law permits the owners corporation to require the work to be replaced. However, the owners corporation can only do so when that is “necessary” or “reasonably required”. That is reasonable.

  3. Second, it was submitted that the indemnity was objectionable. However, the indemnity generally reflects the ‘conditions’ contained in the letter dated 15 February 2005 (Ex 1, p. 388), particularly ‘conditions’ 2 and 3. These were in the following terms:

2. Any costs in connection with the renovations must be borne by you and the costs of repair, maintenance and ultimate replacement of the renovations will be the responsibility of the owner of lot 3 of this strata plan.

3. Any damage caused to common property must be made good by owner of Lot 3.

  1. The ‘conditions’ recorded in the 15 February 2005 letter did not extend to damage to other lots arising from the renovations but the proposed common property by-law is not unreasonable for containing such a provision. It is evident from these proceedings that other lot owners may be impacted by work affecting the common property and s 149(2) directs the Tribunal to consider the interests of all owners in the use and enjoyment of their lots and common property.

  2. Of course, the ‘conditions’ in the 15 February 2005 letter from the strata agent to Mr Dehlsen were not binding in that the Tribunal has found that the letter did not constitute approval of the owners corporation in accordance with s 65A of the Strata Schemes Management Act 1996. However, the terms of that letter, and Mr Dehlsen’s willingness to proceed on the basis of those terms, is indicative of the reasonableness of those terms. That, in turn, is relevant to the s 149 issue in these proceedings.

  3. The proposed common property by-law also provides some benefits to Mr Dehlsen. It regularises the status of the renovations undertaken in 2005. Those renovations are currently unapproved and unauthorised.

  4. Having regard to the above matters, the Tribunal is satisfied that Mr Dehlsen has unreasonably refused to consent to the terms of the proposed common property rights by-law at Ex 1, pp. 153-157. It is appropriate to make an order under s 149 prescribing a common property rights by-law in terms of Ex 1, pp. 153-157.

Costs

  1. The parties each seek costs. Each party has had a measure of success in the outcome.

  2. From what I observed in the preparation and conduct of the matter there is nothing at this stage that suggests an order under s 60(2) of the Civil and Administrative Tribunal Act 2013 would be justified.

  3. However, the orders will provide for submissions as to costs should the parties wish to pursue such an order.

Orders

  1. The Tribunal makes the following orders:

  1. Pursuant to s 149 of the Strata Schemes Management Act 2015 the Tribunal prescribes the making of a common property rights by-law in and to the effect of the by-law referred to at exhibit 1, pages 153 - 157 inclusive.

  2. Order the owners corporation to do all acts necessary to register the common property rights by-law referred to in the preceding order pursuant to s 246 of the Strata Schemes Management Act 2015 (NSW).

  3. Order pursuant to s 132 of the Strata Schemes Management Act 2015 (NSW) that the respondent undertake within 3 months of the date of these orders the waterproofing of the planter boxes on lot 3 in accordance with the Respondent’s Scope of Works as set out in paragraph 127 of this decision, apart from item 3.

  4. If any party wishes to make any submissions as to costs then that party shall file and serve submissions not exceeding 5 pages within 21 days of the date of these orders, such submissions to also address whether a hearing on the papers is appropriate.

  5. If any submissions are filed in accordance with the preceding order then the other party may file and serve any submissions in response, not exceeding 5 pages, within 35 days of the date of these orders, such submissions to also address whether a hearing on the papers is appropriate.

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


Registrar

Amendments

03 October 2023 - Formatting amendments.

Decision last updated: 03 October 2023

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