The Owners - Strata Plan No. 31293 v Lewinsohn; Lewinsohn v The Owners - Strata Plan No. 31293

[2021] NSWCATCD 121

Civil and Administrative Tribunal

New South Wales

Medium Neutral Citation:

The Owners - Strata Plan No. 31293 v Lewinsohn; Lewinsohn v The Owners - Strata Plan No. 31293 [2021] NSWCATCD 121

Hearing dates:

25 August 2021

Date of orders:

1 December 2021

Decision date:

01 December 2021

Jurisdiction:

Consumer and Commercial Division

Before:

G Sarginson, Senior Member

Decision:

Matter SC 21/15994

1. By 11 February 2022, the respondent Mark Lewinsohn is to restore the common property altered by him in respect of the following works:

(a) Remove skate ramp;

(b) Remove rear deck and any fixtures attached to rear deck;

(c) Remove garden beds;

(d) Remove all debris as a result of the work removing the skate ramp; rear deck; garden beds; and any fixtures attached to the works;

(e) Restore the area to a reasonably clean and tidy condition.

2. By 11 February 2022, the respondent Mark Lewinsohn is to remove all rubbish, debris, and materials that have been stored, placed, or located on common property by the respondent in breach of By-laws 3 and 9 of the strata scheme to the extent necessary to achieve compliance with By-laws 3 and 9 of the strata scheme.

3. The respondent Mark Lewinsohn is to pay the applicant, The Owners-Strata Plan No 31293 a penalty under s 147 of the Strata Schemes Management Act 2015 in the sum of $550 by 28 days from the date of this order.

4. The costs applicant is to file with the Tribunal and serve on the costs respondent any further evidence and submissions on the issue of costs from 7 days from the date of these orders.

5. The costs respondent is to file and serve on the costs applicant any evidence and submissions on the issue of costs by 14 days from the date of these orders.

6. The costs applicant is to file and serve on the costs respondent any evidence and submissions on the issue of costs by 21 days from the date of these orders.

7. Both parties have liberty to apply to the Tribunal in writing to vary the timetable for cost submissions.

8. The costs submissions of the parties are to include submissions on whether the parties consent to the issue of costs being determined without a further oral hearing in accordance with s 50 (2) of the Civil and Administrative Tribunal Act 2013.

9. The costs submissions are to be filed and served in person or by post, and in addition by email.

10. Subject to the submissions of the parties the Tribunal may determine the application for costs on the papers.

Matter SC 21/22748:

11. In Matter SC 21/22748 the application is dismissed.

Catchwords:

LAND LAW — Strata schemes —Unauthorised alteration of common property —Breach of by-laws —Breach of notice to comply with by-laws —Penalty

Legislation Cited:

Civil and Administrative Tribunal Act 2013 (NSW)

Crimes (Sentencing Procedure) Act 1999 (NSW)

Strata Schemes Development Act 2015 (NSW)

Strata Schemes Management Act 2015 (NSW)

Cases Cited:

ACCC v Albert [2005] FCA 1311; (2005) 223 ALR 467

ACCC v Dataline.Net.Au Pty Ltd (in liq) [2007] FCAFC 146; (2007) 161 FCR 513

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

McCue v The Owners-Strata Plan No 3844 [2021] NSWCATCD 35

Pearce v R [1998] HCA 57; (1998) 194 CLR 610

Stolfa v Hempton [2010] NSWCA 218

The Owners - Strata Plan 21702 v Fallshaw Investments Pty Ltd [2008] NSWCTTT 1493

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

The Owners - Strata Plan No 63731 v B & G Trading Pty Ltd [2020] NSWCATAP 202

The Owners - Strata Plan No 68255 v Downs; Downs v The Owners - Strata Plan No 68255 [2021] NSWCATCD 34

The Owners - Strata Plan No 87812 v Thomson [2019] NSWCATCD 38

Texts Cited:

Nil

Category:

Principal judgment

Parties:

Matter SC 21/22748:
The Owners-Strata Plan No 31293 (Applicant)
Mark Lewinsohn (Respondent)

Matter SC 21/22748:
Mark Lewinsohn (Applicant)
The Owners-Strata Plan No 31293 (Respondent)

Representation:

M Lewinsohn (Self-represented)

Solicitors:
Le Page Lawyers (The Owners-Strata Plan No 31293)

File Number(s):

SC 21/15994; SC 21/22748

Publication restriction:

Nil

REASONS FOR DECISION

1. This is a strata schemes dispute involving materials/belongings being or stored on areas of common property; and alterations to common property including the Lot owner constructing a wooden skate ramp in the rear courtyard of the strata scheme building. The Lot owner has also constructed a wooden deck structure and placed an outdoor table and benches in the courtyard.

2. The strata scheme building is located in the eastern suburbs of Sydney, NSW. Mr Lewinsohn is the owner of Lot 1 (formerly known as Lot 6). Lot 1 is located on the ground floor of the strata building adjacent to the courtyard and garden area. The strata scheme comprises of 4 Lots and is a two story building.

3. In this decision, The Owners-Strata Plan No 31293 is referred to as ‘the owners corporation’ and Mr Lewinsohn is referred to as ‘the Lot owner’.

4. The Lot owner purchased the Lot in about 2018. The Lot owner has two children aged 9 and 12 who reside with him in the Lot. The Lot owner identified his background in evidence as “landscaper and professional renovator”. The Lot owner also, at one stage, operated a furniture business.

5. The wooden deck structure is comprised of what appears to be in the wooden sheeting. A barbeque and outdoor furniture has been installed by the Lot owner. There was also gym equipment in the courtyard area.

6. The strata scheme building also includes on common property a former communal laundry area and alcove, which has been used by occupants of the strata scheme building to store goods and belongings. The Lot owner accepts that he has stored items in this area, but disputes that he has left rubbish/debris in the area and claims to have removed the items that he left in the area.

7. There is no dispute that the Lot owner has made significant alterations to the common property courtyard area, without any consent of the owners corporation or the passing of a common property rights by-law under s 108 and 142 of the Strata Schemes Management Act 2015 (NSW) (‘the SSMA’).

8. The Lot owner asserts that he has taken such measures to enhance the amenity of the outdoor area, and that a number of persons residing in the strata scheme building (including tenants of Lot owners) are very pleased with the measures he has taken. The wooden skate ramp was installed by the Lot owner in 2020 because, according to the Lot owner, his teenage son was becoming bored and frustrated during COVID-19 lockdown. The Lot owner asserts that his teenage son now rarely uses the skate ramp, but the Lot owner has not removed it.

9. The owners corporation asserts that it has sent “4 notices” to the Lot owner that it has failed to comply with by-laws. However, the affidavit of Ms Sardelic, strata manager, dated May 2021 (the affidavit not identifying the precise date it was sworn or affirmed) identifies the following relevant documents being served on the Lot owner:

1. A letter from the strata manager dated 21 August 2020 stating that the Lot owner had breached by-laws 4, 9, and 11 of the strata scheme by reason of the Lot owner constructing the deck on common property; not removing items deposited on common property; depositing rubbish on common property; and storing items on common property (including bicycles and surfboards) that created a fire safety risk. The letter states that if the Lot owner did not remove the items, the owners corporation may take proceedings in NCAT. The letter did not serve any breach of by-law Notice under s 146 of the SSMA.

2. A letter from the strata manager dated 2 December 2020 that again refers to the Lot owner continuing to breach by-laws of the strata scheme as set out in the previous correspondence of 2 December 2020. The letter refers to the previous issue of “4 Notices to Comply with By-laws” but does not identify the dates of such Notices. The letter again states that the owners corporation may take action in NCAT if the breach of by-laws is not rectified. The letter does not serve any Notice of Breach of By-laws under s 146 of the SSMA.

3. A letter of the strata manager dated 4 December 2020 that refers to photographs supplied to the strata manager on 4 December 2020, and that the applicant is continuing to breach by-laws by reason of items/belongings being deposited and stored on common property; and the alteration of common property. The letter again states that if the Lot owner does not rectify the breach of by-laws, the owners corporation may take action in NCAT. The letter does not serve a Notice of Breach of By-laws under s 146 of the SSMA, and refers to “Notices to Comply issued 02/09/2019” (sic). However, the evidence of the owners corporation did not contain a copy of any Notice of Breach of By-laws dated 2 September 2019.

4. The Notice of Breach of By Laws under s 146 of the SSMA that were served on the Lot owner and contained in the affidavit of Ms Sardelic dated May 2021 were all dated 16 December 2020. Those Notices are as follows:

1. Breach of By-law 11-Fire Safety.

2. Breach of By-law 9-Deposting rubbish or other material on common property without consent of the owners corporation.

3. Breach of By-law 3- Obstruction of common property.

4. Breach of By-law 19-Change of use of the Lot in a way that may affect the insurance premiums of the owners corporation.

10. In respect of the above, the documentary evidence of the owners corporation that it issued Notices of Breach of By-laws on the Lot owner is limited to the 4 Notices it served dated 16 December 2020. The Notices are compliant with the provisions of s 146 of the SSMA, and contain affidavits of service.

11. The affidavit of Ms Sardelic contains the minutes of a strata committee meeting dated 15 December 2020 where it was resolved, among other items, to issue Notice of Breach of By-laws against the Lot owner, and “submit an urgent application to NCAT”.

12. On 12 April 2021, the owners corporation commenced proceedings in NCAT in Matter SC 21/15994. The application was prepared by the Solicitors for the owners corporation who act for the owners corporation in the proceedings.

13. The application sought 11 orders, the substance of which will be detailed later in this decision.

14. Matter SC 21/15994 was listed for an interlocutory directions hearing in the Tribunal on 14 May 2021. The Tribunal set the matter down for hearing with directions regarding the filing and serving of evidence. The Tribunal also relevantly granted leave for both parties to be legally represented; and granted the Lot owner leave to file a cross-application.

15. On 24 May 2021, the Lot owner filed a cross-application in Matter SC 21/22748. That application sought a plethora of orders, the substance of which will be detailed later in this decision.

16. The matter was listed for hearing in the Tribunal on 25 August 2021. The hearing was conducted by audio-visual link. Ms Price, owner of Lot 4 and strata committee member, was cross examined. Ms Douvier-Bouchaud, the owner of Lot 2, was cross-examined. Ms Sardelic, the strata manager, was cross examined. The Lot owner gave evidence and was also cross-examined.

17. At the conclusion of the hearing, both parties made oral submissions. There were also oral submissions on the issue of costs in the event that either party was successful. The parties had also made written submissions prior to the hearing above the various issues in dispute in addition to the documentary and oral evidence put before the Tribunal.

DOCUMENTARY EVIDENCE AND SUBMISSIONS OF THE PARTIES

18. The evidence and submissions of the owners corporation (in both sets of proceedings) was as follows:

1. Affidavits of Ms Sardelic dated May 2021 and 6 August 2021.

2. Affidavits of Ms Price dated 12 May 2021 and 11 August 2021.

3. Affidavit of Ms Dovier-Bouchard dated 13 May 2021.

4. Undated written outline of submissions filed under covering letter dated 18 May 2021.

5. Written outline of submissions in reply dated 10 August 2021.

19. The evidence and submissions of the Lot owner were filed and served electronically on 2 August 2021.

20. Such documents relevantly included photographs; written submissions setting out the Lot owners response to the issues raised by the owners corporation in their proceedings (containing photographs); affidavit of Ms Louise Barry (friend of the Lot owner) dated 25 May 2021; affidavit of Ms Margot Davies (friend of the Lot owner) dated 1 July 2021; affidavit of the Lot owner dated 5 July 2021; extracts of financial records of the owners corporation; a levy analysis of the 2019/2020 contained in the financial records of the owners corporation; and emails of the Lot owner to the strata committee and strata manager regarding failure to install a clothes line and clean up leaves.

CONSIDERATION

The Claim By the Owners Corporation in Matter SC 21/15994

21. The orders of sought by the owners corporation were, in substance:

1. The Lot owner removes alterations to common property and restores the common property.

2. The Lot owner remove items (including rubbish and debris) it had stored or located on common property;

3. If the Lot owner did not take measures to comply with orders restoring common property and removing rubbish/items; the owners corporation be able to access the Lot owner’s Lot and common property and remove such items and restore common property, with the Lot owner bearing the costs incurred by the owners corporation in doing so.

4. The Tribunal make an order that the Lot owner “refrain from contravening the strata scheme’s by-laws”.

5. The Tribunal impose penalties for failure to comply with the 4 Notice of Breach of By-laws issued dated 16 December 2020 under s 147 of the SSMA. The owners corporation sought the maximum amount under s 147 of the SSMA; and sought that the penalties be imposed consecutively (i.e. the Tribunal award the maximum penalty four times, rather than the imposition of one penalty).

6. The Lot owner pays the owners corporations legal costs of the proceedings.

The Issue of Alterations to Common Property

22. The Lot owner accepted in his evidence that he had made significant alterations to common property for the purpose of improving or enhancing the common property.

23. It is also clear that such works were performed without the consent of the owners corporation and the passing of a common property rights by-law by special resolution.

24. Whether or not some Lot owners or occupants of the strata scheme knew of the works being performed by the Lot owner is irrelevant to the obligations of the Lot owner under the SSMA.

25. The evidence of the Lot owner and his questioning of the strata manager and the two other Lot owners who gave evidence was based upon the Lot owner’s view that the rear courtyard was in poor condition; and he was taking measures that improve the amenity for all persons who occupied the strata scheme building.

26. The motives the Lot owner expressed for performing the works, whether genuinely held or not, do not excuse failure to comply the applicable provisions of the SSMA.

27. The alterations to the common property rear courtyard of the strata scheme were clearly significant alterations beyond cosmetic work to common property in connection with the Lot (s 109 of the SSMA); or minor renovations to common property in connection with the Lot (s 110 of the SSMA). The alterations are clearly for the purpose of improving or enhancing common property rather than repairing existing common property (which is the obligation of the owners corporation in any event): (Stolfa v Hempton [2010] NSWCA 218 at [9]-[10]; The Owners-Strata Plan 50276 v Thoo [2013] NSWCA 270 at [3]-[6]; and [125]-[126]).

28. Section 108 of the SSMA states as follows:

108   Changes to common property

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

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

Note—

If the special resolution is a sustainability infrastructure resolution fewer votes may be needed to pass it. See section 5(1) (b).

(3) Ongoing maintenance A special resolution under this section that authorises action to be taken 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.

(4)  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.

(5)  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 the by-law.

(6)  The by-law—

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

(b)  must not be amended or repealed unless the owners corporation has obtained the written consent of the owner concerned.

(7) Sections 143 (2), 144 (2) and (3) and 145 apply to a by-law made for the purposes of this section in the same way as they apply to a common property rights by-law.

Note—

A new by-law or other changes to the by-laws for a strata scheme must be approved by a special resolution of the owners corporation (see section 141).

29. Section 111 of the SSMA states as follows:

111   Work by owners of lots affecting common property

An owner of a lot in a strata scheme must not carry out work on the common property unless the owner is authorised to do so—

(a)  under this Part, or

(b)  under a by-law made under this Part or a common property rights by-law, or

(c)  by an approval of the owners corporation given by special resolution or in any other manner authorised by the by-laws.

30. By reason of s 108 and 111 of the SSMA, the Lot owner needed to have a common property rights by-law passed and registered (ss 142 and 143 of the SSMA) to alter the common property. The applicant failed to do this.

31. Section 132 of the SSMA states as follows:

132   Rectification where work done by owner

(1)  The Tribunal may, on application by an owners corporation for a strata scheme, make either of the following orders if the Tribunal is satisfied that work carried out by or for an owner or occupier on any part of the parcel of the scheme has caused damage to common property or another lot—

(a)  an order that the owner or occupier performs the work or takes other steps as specified in the order to repair the damage,

(b)  an order that the owner or occupier pay to the owners corporation or the owner of the lot a specified amount for the cost of repairs of the damage and any associated costs, including insurance and legal costs.

(2)  An amount payable by an owner or occupier to an owners corporation under this section is payable, and may be recovered, under this Act as if it were an amount of unpaid contributions.

Note—

Section 86 provides for the recovery of unpaid contributions.

32. An owners corporation can consent to alterations of common property that have previously occurred by way of the passing by special resolution at a general meeting of the owners corporation a common property rights by-law (The Owners-Strata Plan No 63731 v B & G Trading Pty Ltd [2020] NSWCATAP 202; The Owners-Strata Plan No 68255 v Downs; Downs v The Owners-Strata Plan No 68255 [2021] NSWCATCD 34) but there was no evidence by the Lot owner that he has any intention of drafting a common property rights by-law or requesting the owners corporation call an extraordinary general meeting (or putting such a proposal on the agenda for the next annual general meeting) to approve the works performed.

32. In any event, the photographs of the “deck” and “skate ramp” do not indicate they have been constructed in a thorough manner, and the work has been done by the Lot owner rather than by a suitably licensed builder.

33. The Tribunal is satisfied that the Lot owner be directed to perform the following under s 132 (1) (a) of the SSMA:

1. Remove skate ramp.

2. Remove rear deck and any fixtures attached to rear deck.

3. Remove garden beds.

4. Remove all debris as a result of the work removing the skate ramp; rear deck and any fixtures attached to the rear deck; and garden beds.

5. Restore the area to a reasonably clean and tidy condition.

35. Considering the works the Lot owner performed may not be covered by the owners corporation’s insurance; and have not been performed by a licensed builder, there is a possibility the works may be hazardous and carry a risk of injury. However, the Tribunal acknowledges that the owners corporation did not provide any expert evidence that the works constituted a safety risk.

36. The Tribunal is satisfied that the restoration works should be completed by 11 February 2022.

37. The Tribunal is not satisfied that it should make the orders sought by the owners corporation that it make any order under s 122 (1) (c) of the SSMA that the owners corporation perform the restoration works; or that it should make the order sought (by reason of ss 122 (1) (c); 124; and 132 (b) of the SSMA) that the owners corporation conduct the works if the Lot owner does not perform the works and that the Lot owner pay the owners corporation’s costs of performing the restoration works.

38. If the Lot owner does not comply with the orders of the Tribunal, the owners corporation can bring renewal proceedings under Sch 8 Cl 8 of the Civil and Administrative Tribunal Act 2013 (NSW) (‘the NCAT Act’) seeking orders under ss 122; 124; and 132 of the SSMA and any other appropriate application by reason of failure to comply with orders of the Tribunal if it seeks to do so.

39. Accordingly, it is in the Lot owner’s interests to ensure compliance with the orders to remove the unauthorised alterations and restore common property as set out in the orders of the Tribunal.

Breach of By-Laws And The Application for a Penalty Under s 147 of the SSMA

40. Considering that an appeal from the penalty provisions of the SSMA lies to the District Court and any appeal from a decision involving other orders lies to the Appeal Panel of the Tribunal, it is arguable that proceedings seeking a penalty should most appropriately be brought separately to proceedings seeking other orders (such as under ss 232 and 241 of the SSMA).

41. However, that issue was not raised at the hearing or in submissions; nor was it raised at the directions hearing on 14 May 2021. The Tribunal will, in accordance its duty under s 36 of the NCAT Act, hear and determine the proceedings seeking a penalty under s 147 of the SSMA and the proceedings seeking orders under other provisions of the SSMA together. However, if there is any appeal from the decision of the Tribunal, the findings and reasons of the Tribunal dealing with ss 146 and 147 of the SSMA must be considered separately from the findings and reasons of the Tribunal dealing with other orders sought by the owners corporation and the Lot owner.

42. This aspect of the owner’s corporation’s claim involves the Lot owner placing and storing belongings on the common property in breach of by-laws.

43. There are two aspects to the application. One is for orders that the Lot owner remove items from common property; and additionally an injunctive order under s 241 of the SSMA that the Lot owner “comply with the by-laws” of the strata scheme. The second is for a penalty to be imposed under s 147 of the SSMA for failure to comply with breach of By-law Notices issued under s 146 of the SSMA.

44. It is clear from the photographic evidence contained in the affidavits relied upon by the owners corporation (and in the evidence of the witnesses of the owners corporation) that there is a large amount of materials on common property of the strata scheme (in the common property laundry area that occupants have used as a storage area; the side passage of the strata building; and the rear courtyard). Such materials relevantly include:

1. A barbeque.

2. Outdoor table and benches.

3. Chairs

4. Pot plans.

5. Surfboards.

6. Bicycles.

7. A gym set (bench and weights).

8. Building materials.

9. Ladder.

10. Tarpaulin.

11. Paint pots.

12. Tools/tool box.

45. The Lot owner denied that a number of items that had been stored in the laundry and in the common property courtyard were owned by him. For example, the Lot owner denied that the gym set and bicycle show in photographs were owned by him. The applicant stated that “2/3rds of the stuff” shown in the photographs from May 2021 that the owners corporation relied upon were not his.

46. The Lot owner stated that he owned the BBQ; the outdoor furniture; and had installed the wooden plantar box garden beds.

47. The Lot owner asserted that the courtyard was in poor condition when he purchased the Lot; and that he cleaned up and improved the Lot. The Lot owner further asserted that he had removed a number of items from common property.

48. The Lot owner stated that in respect of the laundry area, occupants of the strata scheme had used that area for storage; and that neither the owners corporation nor the strata manager had raised any issues about this before the issue of the letters the Lot owner received. The Lot owner asserted, in essence, he was being “singled out”.

49. Ms Dovier-Bouchard stated in her evidence that when the Lot owner moved in, he installed a surfboard rack in the “storage area” of the former laundry and alcove. He also informed her that he was “emptying his warehouse” (the Lot owner operated a furniture business). Ms Dovier-Bouchard stated that the courtyard area soon became littered with material from the Lot owner.

50. A contemporaneous text message exchange between Ms Dovier-Bouchard and the Lot owner occurred in July 2019. Ms Dovier-Bouchard texted the Lot owner stating the “back yard and our entry area looks like a junk yard”. The Lot owner responded that he had to “move/empty my warehouse this afternoon” and “it will be fixed up this afternoon”.

51. Ms Dovier-Bouchard’s evidence was that the “mess” in the common property areas remained as of May 2021.

52. In cross examination, Ms Dovier-Bouchard accepted that she had stored items in the common property laundry area, but stated that she had removed almost all of her items because the owners corporation had raised this issue with her.

53. The evidence of Ms Price was that although she is not an occupant in the building, she has been owned her Lot for 26 years and has been a member of the strata committee for “several years”.

54. According to Ms Price, it has been since the Lot owner purchased his Lot and moved into the building that many items have been stored or “dumped” on common property; and the common property has been modified by the installation of the wooden “deck” and skate ramp. Ms Price stated she attends the property regularly, and as of May 2021 there remained items scattered around the common property area.

55. As discussed previously, the evidence of the Lot owner was that (1) he denied that many of the items depicted in the photographs were his or that he had deposited them on common property; (2) he asserted that he had cleaned up the common property and improved it.

56. According to the Lot owner, it was he who cleaned out the storage area. In his affidavit of 5 July 2021, the Lot owner stated that in January 2019 there was an “informal meeting” between Lot owners where renovation of the building was discussed, but the issue progressed no further because of cost.

57. The Lot also asserted that the parties attended a mediation at NSW Fair Trading on 18 March 2021, and the actions of the owners corporation against the Lot owner have escalated because the Lot owner has raised issues of repair to common property and other issues.

58. However, when cross examined and also when asked to clarify what property was or was not his that was depicted in the photographs, the applicant’s evidence was vague; often not clearly responsive; and he took every opportunity to emphasise how he had “improved” the common property and it was only Ms Price who was unhappy with what he had done.

59. In his written submissions filed on 2 August 2021, the Lot owner provided a number of photographs. The photographs were mainly of the courtyard; with one photograph of a side passage; and two photographs of part of the former laundry (although not showing the area that had been used for storage). Such photographs do not provide clear detail that the courtyard/backyard area has been cleaned up since the photographs taken in May 2021, although the area around the “:wooden deck” where the BBQ and outdoor table and benches appears to be slightly more tidy.

60. The By-laws of the strata scheme relevantly state as follows:

3 Obstruction of common property

An owner or occupier of a lot must not obstruct lawful use of common property by any person except on a temporary and non-recurring basis.

9 Depositing rubbish and other materials on common property

An owner or occupier of a lot must not deposit or throw on common property any rubbish, dirt, dust or other materials or discarded item except with the prior written approval of the owners corporation.

11 Preservation of Fire Safety

The owner or occupier of a lot must not do any thing or permit any invitees of the owner or occupier to do any thing on the lot or common property that is likely to affect the operation of fire safety devices in the parcel or to reduce the level of fire safety in the lots or common property.

19 Change in the use of the lot to be notified

An occupier of a lot must notify the owners corporation if the occupier changes the existing use of the lot in a way that may affect the insurance premiums for the strata scheme (for example, if the change of the use results in a hazardous activity being carried out on the lot, or results in the lot being used for commercial or industrial purposes rather than residential purposes.

61. The Tribunal is satisfied that the Lot owner had deposited items which obstruct the lawful use of common property (By-law 3); and has deposited items of rubbish and materials on common property without the prior written approval of the owners corporation. Such actions constitute breaches of By-laws 3 and 9.

62. The Tribunal is not satisfied that the owners corporation has proved breach of By-law 19. By-law 19 applies to “use of a Lot”, not use of the common property.

63. In respect of By-law 11, the owners corporation has not provided any clear evidence that the depositing of materials by the Lot owner on common property “is likely” to reduce fire safety in the Lots or common property. Although the Tribunal may speculate that a number of the items the Lot owner has deposited (and the construction of a wooden deck; skate ramp; and garden beds which have not been constructed by a licensed builder) may affect the fire safety of common property, the owners corporation did not provide any expert evidence (such as a report by a fire safety expert) that, in addition to the lay evidence, would be sufficient to establish breach of By-law 11.

64. In respect of the materials that have been deposited by the Lot owner, it is difficult to make precise factual findings as to what exactly has been deposited (including the Lot owner storing surfboards in the laundry/alcove area). The reason for this is the disputation about what precise items have been deposited by the Lot owner and remain on common property.

65. However, it is ultimately unnecessary to make precise factual findings about each and every item. The appropriate approach is for the Tribunal to make an order under ss 232 and 241 of the SSMA that the Lot owner remove all materials that have been deposited by him on common property to ensure compliance with By-laws 3 and 9. An appropriate date of compliance for such an order is 11 February 2021, so that it is consistent with the order in respect of removal of unauthorised alterations.

66. The Tribunal is not satisfied a permanent injunctive order be made that the Lot owner “comply with By-laws” as sought by the owners corporation. The Lot owner has an obligation to comply with the By-laws of the strata scheme, and if he fails to do so the SSMA sets out action that can be taken by the owners corporation. An injunctive order that the Lot owner “comply with By-laws” would be the equivalent of an order to comply with legal obligations (or not breach them). Such an order is excessively broad and has no utility (ACCC v Albert [2005] FCA 1311; (2005) 223 ALR 467; ACCC v Dataline.Net.Au Pty Ltd (in liq) [2007] FCAFC 146; (2007) 161 FCR 513).

67. In respect of the penalty provisions under ss 146 and 147 of the SSMA, rules of evidence apply (s 38 (3) (a) (i) of the NCAT Act) ; and the owners corporation must prove breach of s 147 of the SSMA to the criminal standard for a penalty to be imposed.

68. Sections 146 and 147 of the SSMA state as follows:

146   Notice by owners corporation to owner or occupier

(1)  An owners corporation for a strata scheme may give a notice, in a form approved by the Secretary, to the owner or occupier of a lot in the scheme requiring the owner or occupier to comply with a specified by-law if the owners corporation is satisfied that the owner or occupier has contravened that by-law.

(2)  The notice must contain a copy of the specified by-law.

(3)  A notice must not be given unless a resolution approving the issue of the notice, or the issue of notices for the type of contravention concerned, has first been passed by the owners corporation at a general meeting or by the strata committee of the owners corporation.

(4)  Subsection (3) does not apply to the giving of a notice by a strata managing agent if that function has been delegated to the strata managing agent in accordance with this Act.

147   Civil penalty for breach of by-laws

(1)  The Tribunal may, on application by an owners corporation, order a person to pay a monetary penalty of up to 10 penalty units if the Tribunal is satisfied that—

(a)  the owners corporation gave a notice under this Division to the person requiring the person to comply with a by-law, and

(b)  the person has since contravened the by-law.

(2)  The Tribunal may, on application by an owners corporation, order a person to pay a monetary penalty of up to 20 penalty units if the Tribunal is satisfied that the person has contravened a by-law within 12 months after the Tribunal had imposed a monetary penalty on the person for a previous breach of the by-law.

(3)  Despite subsections (1) and (2), the Tribunal may, in dealing with a contravention of a by-law made under section 137, impose a monetary penalty of up to 50 penalty units under subsection (1) and a monetary penalty of up to 100 penalty units under subsection (2).

(4)  An application for an order under subsection (1) must be made not later than 12 months after the notice was given.

(5)  An owners corporation is not required to give notice under this Division before applying for an order under subsection (2).

(6)  A monetary penalty is payable to the owners corporation, unless the Tribunal otherwise orders.

Note—

The penalty may be registered as a judgment debt and will be enforceable accordingly (see section 78 of the Civil and Administrative Tribunal Act 2013).

69. The Tribunal is satisfied that the strata committee of the owners corporation passed a Motion for the issue of breach of by-law notices on 15 December 2020; and also passed a Motion to take action in NCAT if the notices were not complied with.

70. The Tribunal is satisfied, beyond a reasonable doubt, that the Lot owner has breached By-laws 3 and 9 since the issue of the Notices of Breach of By-laws. In particular, the evidence of Ms Price and the photographs of the premises in May 2021 satisfy the Tribunal to the applicable standard of proof that there has been breach of By-laws 3 and 9 since the service of the Notices of Breach of By-law dated 16 December 2020.

71. A “penalty unit” is $110 (s 17 Crimes (Sentencing Procedure) Act 1999 (NSW)).

72. As this is a first offence, and there have been some measures taken by the Lot owner in the past to remove materials deposited by him, the Tribunal is satisfied that the appropriate penalty is 5 penalty units ($550).

73. The owners corporation submits that the Tribunal should impose the “maximum penalty” for the conduct breaching each of the Breach of By-law notices.

74. There are fundamental flaws to this submission. Firstly, the only Breach of By-law Notices the Tribunal is satisfied have been proved are in respect of By-laws 3 and 9.

75. Secondly, the conduct to which the Tribunal is imposing a penalty is failure to comply with Breach of By-law Notices. Breach of each notice is not a separate offence. The Tribunal must look to the totality of the conduct which breaches one or more of the Notices. It is the conduct which must be focussed upon, not the number of Notices issued under s 146 of the SSMA. To penalise the Lot owner otherwise would be to impose separate penalties for the same conduct, and contravene the principle set out in Pearce v R [1998] HCA 57; (1998) 194 CLR 610, where McHugh, Hayne and Callinan JJ stated at [40]:

To the extent to which two offences of which an offender stands convicted contain common elements, it would be wrong to punish that offender twice for the commission of the elements that are common. No doubt that general principle must yield to any contrary legislative intention, but the punishment to be exacted should reflect what an offender has done; it should not be affected by the way in which the boundaries of particular offences are drawn. Often these boundaries will be drawn in a way that means that offences overlap. To punish an offender twice if conduct falls in that area of overlap would be to punish offenders according to the accidents of legislative history, rather than according to their just desserts.” 

76. Thirdly, the authority cited by the owners corporation (The Owners-Strata Plan No 87812 v Thomson [2019] NSWCATCD 38 on this issue (which the owners corporation sought to distinguish) is consistent with the approach that s 147 allows the Tribunal to impose only one penalty for failure to comply with multiple breach of By-law Notices, not treat breach of each Notice as a separate offence with separate penalties. The owners corporation also cited The Owners-Strata Plan 21702 v Fallshaw Investments Pty Ltd [2008] NSWCTTT 1493 where obiter dicta comments were made that the Tribunal could impose separate penalties, but the Tribunal is not persuaded that obiter dicta is legally correct.

77. Fourthly, the Tribunal is only empowered to impose a penalty under s 147 of the SSMA for failure to comply with the Notices of Breach of By-law. It is not imposing a penalty for conduct that does not fall within the scope of the By-laws, such as failure to comply with ss 108, 111, 142 and 143 of the SSMA in respect of the alterations to common property.

The Lot Owners Application in Matter SC 21/22748

78. The application filed by the Lot owner contained reference to multiple provisions of the SSMA. Many of the provisions had no engagement with the evidence before the Tribunal, or on what basis the orders were sought.

79. The orders sought can be summarised as follows:

1. Restriction on the use of utility of a Lot (s 235 of the SSMA). This clearly does not apply, as s 235 applies to restraints on committing a breach of a restriction imposed under s 63 of the Strata Schemes Development Act 2015 (NSW) on the use of the utility of the Lot. There was no evidence of any such restriction.

2. To nullify a resolution of the owners corporation on grounds that a person was denied a vote (s 25 of the SSMA). There was no evidence of any general meeting of the owners corporation (such as an annual general meeting or extraordinary general meeting) where the Lot owner was improperly denied a vote. Informal discussions between Lot owners do not fall under the auspices of s 25 of the SSMA.

1. To impose a monetary penalty for contravention of a By-law. (s 147 of the SSMA). The Lot owner has no standing to make such an application.

2. To obtain consent for existing or proposed alterations or repairs to common property (s 126 of the SSMA). As discussed previously, the alterations to common property performed by the Lot owner require the passing of a common property rights by-law. Section 126 of the SSMA does not alleviate the Lot owner’s responsibility in that regard.

3. To require the owners corporation enter information on the strata roll (s 187 of the SSMA). The Lot owner’s evidence did not identify and establish what strata roll information was deficient in respect of s 178 of the SSMA.

4. To require the owners corporation to supply records or documents for inspection (s 188 of the SSMA). There was no evidence by the Lot owner that he had made any request for inspection of records of the owners corporation under s 182 of the SSMA, and there is no basis established for making an order under s 188 of the SSMA.

80. There were two other aspects of the Lot owners claim that were dealt with in more detail in the Lot owner’s evidence and submissions.

81. The first is that the owners corporation had budgeted an inadequate amount in the Administrative Fund and Capital Works Fund, particularly in respect of cleaning; repairs; and landscaping the rear courtyard/backyard. However the Lot owner’s evidence and submissions did not establish what provisions of the SSMA had been breached, or how the Tribunal had the powers to make the remedial orders sought.

82. The second is that the Lot owner asserted the owners corporation had failed to comply with its duty under s 106 of the SSMA to keep and maintain common property in a state of good repair.

83. The duty of the owners corporation under s 106 of the SSMA is well established, and the applicable principles were summarised in McCue v The Owners-Strata Plan No 3844 [2021] NSWCATCD 35 at [63]-[64].

84. It was unclear from the evidence as to what items of common property the Lot owner asserted had not been kept in a state of good repair by the owners corporation, or what repair orders were sought. The Lot owner provided no detailed evidence containing a scope of works identifying what repairs he asserted needed to be made. Even if he had established any breach by the owners corporation, he had not provided sufficient evidence for the Tribunal to make any orders in his favour (Glenquarry Park Investments Pty Ltd v Hegyesi [2019] NSWSC 425).

85. The Lot owner also raised an issue that the owners corporation was consuming electricity to his Lot to light the common property of the strata scheme. The evidence of the Lot owner was unclear as to what he asserted had occurred, or how the owners corporation was responsible. No breach of the SSMA by the owners corporation was established.

86. Accordingly, the application by the Lot owner is dismissed.

THE ISSUE OF COSTS

87. The owners corporation seeks a costs order, and made submissions (both oral and in writing) on the issue of costs at the hearing in the event it was successful.

88. In accordance with its obligations under s 38 (5) (c) of the NCAT Act, the Tribunal regards it as appropriate to give both parties a further opportunity to be heard on the issue of costs.

89. The Tribunal has made orders and directions to deal with disposition of the issue of costs.

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

Registrar

Decision last updated: 10 February 2022