Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Lu v Community Association DP 270682 [2022] NSWCATAP 241 Hearing dates: 26 May 2022 Date of orders: 21 July 2022 Decision date: 21 July 2022 Jurisdiction: Appeal Panel Before: S Thode, Senior Member A Boxall, Senior Member Decision: 1. Appeal dismissed. Catchwords: APPEALS - COMMUNITY ASSOCIATION – appointment of compulsory manager – no issue of principle – appeal dismissed Legislation Cited: Civil and Administrative Tribunal Act 2013 Civil and Administrative Tribunal Regulation 2013 Community Land Management Act 1989 Community Land Management Regulation 2021 Cases Cited: Nil Texts Cited: Nil Category: Principal judgment Parties: Guitang Lu (Appellant) Community Association DP 27062 (Respondent) Representation: Solicitors: Appellant (Self-represented) JS Mueller & Co (Respondent) File Number(s): 2022/00081736 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Citation: 2022 NSWCATCD [*] Date of Decision: 01 March 2022 Before: G Ellis SC, Senior Member File Number(s): SC 21/32569 REASONS FOR DECISION Background 1. In an application filed 27 July 2021 the appellant sought an order for the appointment of a compulsory manager pursuant to section 85 of the Community Land Management Act 1989 (the Act). It was the appellant's submission that the management structure of the respondent's scheme is not functioning, or not functioning satisfactorily, in that the respondent has demonstrated continuing and systemic breaches of the Act, the Regulations and the Community Management Statement. 2. The applicant is a lot owner in Community Association DP 270682 which is located at Norwest and has a total of 26 lots. After the first annual general meeting was held on 29 October 2012 a new managing agent was appointed. To that managing agent was delegated the powers of the Owners Association but not the powers of the Executive Committee or its officers. 3. On 16 December 2020 the applicant was elected to the executive committee. Just under 3 months later, on 11 March 2021, a resolution was passed to remove him from the executive committee. 4. At a meeting held on 3 February 2022 it was resolved to terminate the agreement with the former managing agent and a new managing agent was appointed. The former managing agent terminated the managing agency agreement with the respondent in the hope it would appease the appellant, resolve any friction between the appellant and other lot owners, and finalise any proceedings before Tribunal. 5. Regardless, the applicant commenced proceedings seeking an order that Universe Strata Services Pty Ltd be appointed to act as compulsory managing agent for the community association for a period of 12 months commencing from the date of orders. 6. The appellant alleged: 1. that the management structure of the respondent's scheme is not functioning or is functioning unsatisfactorily; and 2. that the respondent's scheme has demonstrated "continuing and systematic breaches" of the Act, the Regulations and the community management statement. 1. In his lengthy attachment to the original application the appellant alleged various breaches of the Act, in particular: 1. the failure by the [former] agent to give meeting minutes and resolutions to all owners; 2. the failure of the executive committee at its first meeting after being appointed to appoint proper officers; 3. the respondent recklessly committing continuing and systemic breaches of section 34 of the Act by not appointing officers in a timely fashion or at all; and 4. the unlawful appointment of officers of the executive committee; 5. the respondent's failure to follow certain by-laws; and 6. other voting irregularities. 1. The applicant summarised his case as follows: "with the above circumstances supported by evidence it is a reasonable conclusion that the management structure of the respondent's community scheme is not functioning satisfactorily, and it may be an appropriate solution for the Tribunal to order the appointment of a managing agent for the community scheme which is seeing conflicts in such nature as in the case of Falvey v Community Association DP 270469 (Strata and Community Schemes) NSWCTTT 410 (15 August 2013). (See p38 of the appellant's bundle dated 2 May 2022)." 1. Critically all the breaches complained of by the appellant pre-date the appointment of the new managing agent (see applicant's attachment to the Community Schemes Application Form dated 30 July 2021 outlining 11 breaches dating from 2018 to 2021). 2. The matter was listed for hearing on 21 February 2022. The appellant was self-represented and the respondent was legally represented by Mr W van Ede of JS Mueller & Co. 3. The critical findings are contained at page 22 of the decision from paragraph 73 and following. Among other things the member concluded that: [73] It is not necessary to consider the breaches alleged by the applicant since, even assuming they are each established, the appropriate action would be to appoint a new managing agent which has already occurred. Put another way since functions were delegated by the respondent to its managing agent, the alleged breaches reflected against the managing agent rather than the respondent. As the managing agent has recently been replaced by the respondent it would be a curious exercise of discretion to replace that recently appointed managing agent as that agent was not involved in any of the alleged breaches. … [75] Having considered both parties' written and oral evidence as well is the written and oral submissions, the tribunal finds that there was no racist conduct towards the applicant noting that a majority of the lot owners (i.e., members of the Association) are of Asian descent as is the wife of Mr Smith. While it is clear the applicant perceives there is racist conduct towards him by others the Tribunal is comfortably satisfied that is because the applicant does not perceive the impact of his conduct on others … [76] As a solicitor the applicant must be aware of the need to put his case to the witnesses for the other party. In many respects that was not done. Further, to the extent that the evidence of Mr Smith and Ms Riley conflict with that of the applicant, their evidence is preferred to his. In contrast to the direct, responsive answers of those two witnesses, the applicant was a pugnacious witness who gave non-responsive answers which were consistent with the suggestion that he is a person who is fixated on getting his own way. … [82] The Tribunal is not satisfied that the conduct of the applicant provides an adequate basis for an appointment that would deprive all other lot owners of their democratic rights. The Notice of Appeal 1. The Notice of Appeal was filed on 21 March 2022. The appellant appeals on four grounds. 1. The Tribunal identified a wrong issue and asked the question in a way that affects the exercise of power by determining that it is not necessary to consider the respondent's breaches [73]. 2. The primary decision-maker failed to consider, or generally and realistically consider, the respondent's breaches [44], [73]. 3. The decision is not fair and equitable in adopting the victim blaming view that the appellant engaged in aggressive conduct and prefers confrontation to co-operation and (sic) refusing to consider remedy the respondent's breaches which adversely affect the appellant. 4. The Tribunal misconstrued section 85 of the Act concerning the functions of the compulsory managing agent, thereby refusing to grant appropriate remedies to settle the complaints. 1. The appellant seeks an order that the order made by the Tribunal on 1 March 2022 be set aside and a compulsory managing agent be appointed. Submissions and evidence 1. In deciding the appeal, we have had regard to the following: 1. The Notice of Appeal referred to above and the 79 pages of attachments, the appellant's submission and 169 pages of attachments dated 2 May 2022, the appellant's submissions in reply dated 23 May 2022, the amended notice of appeal filed on 8 April 2022; and the original community schemes application for Tribunal orders dated 30 July 2021. 2. The Reply to Appeal dated 4 April 2022; and the respondent's bundle of materials filed on 12 May 2022. 3. The oral submissions made by and on behalf of the parties at the appeal hearing. The scope and nature of internal appeals 1. By virtue of s 80(2) of the Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act), internal appeals from decisions of the Tribunal may be made as of right on a question of law, and otherwise with leave of the Appeal Panel. 2. In Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69 the Appeal Panel set out at [13] a non-exclusive list of questions of law: 1. Whether there has been a failure to provide proper reasons; 2. Whether the Tribunal identified the wrong issue or asked the wrong question. 3. Whether a wrong principle of law had been applied; 4. Whether there was a failure to afford procedural fairness; 5. Whether the Tribunal failed to take into account relevant (i.e., mandatory) considerations; 6. Whether the Tribunal took into account an irrelevant consideration; 7. Whether there was no evidence to support a finding of fact; and 8. Whether the decision is so unreasonable that no reasonable decision-maker would make it. 1. The circumstances in which the Appeal Panel may grant leave to appeal from decisions made in the Consumer and Commercial Division are limited to those set out in cl 12(1) of Schedule 4 of the NCAT Act. In such cases, the Appeal Panel must be satisfied that the appellant may have suffered a substantial miscarriage of justice because: 1. The decision of the Tribunal under appeal was not fair and equitable; or 2. The decision of the Tribunal under appeal was against the weight of evidence; or 3. Significant new evidence has arisen (being evidence that was not reasonably available at the time the proceedings under appeal were being dealt with). 1. In Collins v Urban [2014] NSWCATAP 17, the Appeal Panel stated at [76] that a substantial miscarriage of justice for the purposes of cl 12(1) of Schedule 4 may have been suffered where: … there was a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved for the appellant had the relevant circumstance in para (a) or (b) not occurred or if the fresh evidence under para (c) had been before the Tribunal at first instance. 1. Even if an appellant from a decision of the Consumer and Commercial Division has satisfied the requirements of cl 12(1) of Schedule 4, the Appeal Panel must still consider whether it should exercise its discretion to grant leave to appeal under s 80(2)(b). 2. In Collins v Urban, the Appeal Panel stated at [84(2)] that ordinarily it is appropriate to grant leave to appeal only in matters that involve: (a) issues of principle; (b) questions of public importance or matters of administration or policy which might have general application; or (c) an injustice which is reasonably clear, in the sense of going beyond merely what is arguable, or an error that is plain and readily apparent which is central to the Tribunal's decision and not merely peripheral, so that it would be unjust to allow the finding to stand; (d) a factual error that was unreasonably arrived at and clearly mistaken; or (e) the Tribunal having gone about the fact finding process in such an unorthodox manner or in such a way that it was likely to produce an unfair result so that it would be in the interests of justice for it to be reviewed. 1. Mr Lu seeks to appeal on a question of law and seeks leave to appeal on the grounds that the decision was not fair and equitable and was against the weight of evidence. Consideration 1. In respect of the first ground of appeal, we consider that the failure by the Tribunal to identify a wrong issue and ask itself the wrong question is a question of law. 2. We consider that the Tribunal, in the disposition of the application and by exercising its discretion decided that it was not necessary deal with each of the breaches alleged. 3. Each of the breaches alleged constituted potentially a breach of the Act or its regulations. 4. However, it is clear from the lengthy decision that the Tribunal considered the breaches are largely of an administrative nature and brought about by the failure of the former strata manager to implement properly the meeting requirements of the Act. 5. It was open to the Tribunal to conclude that the replacement of the strata manager cured the non-compliance issues. In deciding the application in that manner, the Tribunal exercised its discretion. There was, broadly speaking, no utility in determining each of the breaches. Even if the Tribunal had found each of the breaches established, it was open to the Tribunal to conclude on the evidence that the issue was one of mismanagement and that the replacement of the manager was an appropriate remedy. The Tribunal was entitled to conclude that any breaches of the Act were caused by the strata manager's failure to comply with the meeting requirements of the Act and not by reason of any dysfunctionality on the part of the owners corporation. 6. In deciding the application in that manner, the Tribunal exercised its discretion. 7. On an appeal the appellant is required to demonstrate some relevant error in the Tribunal's decision or decision-making process and that the commission of that error did or may have affected the result. 8. To establish error in the exercise of a discretionary decision the appellant needed to persuade us that the Tribunal, per House v R (1936) 55 CLR 499; [1936] HCA 40: 1. made an error of legal principle; 2. made a material error of fact; 3. took into account some irrelevant matter; 4. failed to take into account or gave insufficient weight to, some relevant matter; 5. or arrived at a result so unreasonable or unjust as to suggest that one of the foregoing categories of error had occurred, even though the error in question did not explicitly appear on the face of the reasoning. 1. We were not persuaded the Tribunal committed any of those errors. Nor are we persuaded that the appellant may have suffered a substantial miscarriage of justice (the only other possible ground of appeal that we consider might apply in this case) because the decision of the Tribunal was not fair and equitable within the terms of cl 12(1)(a) of the Civil and Administrative Tribunal Act 2013 (NSW) and according to the principles set out in Collins v Urban [2014] NSWCATAP 17. Accordingly, this ground of appeal must be dismissed. 2. Ground two is couched in essentially the same terms as ground one of the appeal. We are not of the view that the Tribunal erred in its decision not to consider each of the breaches. Any breach of the Act was found to be cured by the appointment of a new strata manager. The appellant has failed to establish an error in the exercise of the Tribunal's discretion to dispose of the application in the manner it did. This ground of appeal must be dismissed also. 3. We understand ground three concerns the Tribunal's comments that the appellant prefers "confrontation to compromise" [79] and that the appellant is "confrontational rather than co-operative" [86] which we shall refer to as "the comments". We do not consider that the comments are relevant to the decision or were central to the disposition of the application. The Tribunal addressed the appellant's various complaints concerning the conduct of other lot owners towards him, that was variously described by the appellant as racially motivated or discriminatory. The Tribunal concluded that such conduct was, at least in part, instigated by the appellant. 4. The appellant has not persuaded us that the comments are against the weight of evidence. Even if they were, the appellant has failed to explain how the comments impugned the Tribunal's ultimate finding, that despite the conduct complained of by the appellant "the Tribunal is not satisfied that he has proved that the respondent [is] either not functioning or is not functioning satisfactorily". Again, the Tribunal was not satisfied that the discretion should be exercised in the appellant's favour by reason of the respondent's recent appointment of a new manager. The Tribunal, having considered all of the evidence, was not persuaded that the appointment of a compulsory manager, being the most draconian of measures, was warranted. The Tribunal, correctly with respect, identified the principles enunciated in Hoare v The Owners – Strata Plan No 73905 [2018] NSWCATCD 45 where the Tribunal found that the fact that some lot owners do not agree does not make a strata scheme dysfunctional. The Tribunal found that there was no reason why the same principles should not apply to matters arising under the Community Land Management Act 1989. 5. We are not persuaded that the Tribunal made an error of legal principle or arrived at a result so unreasonable or unjust as to suggest that one of the foregoing categories of error had occurred. This ground of appeal must be dismissed. 6. In respect of the final ground of appeal, the appellant contends that the Tribunal misunderstood section 85 of the Act and "refused to grant appropriate remedies or settle the complaints". We understand his ground to appeal to concern an allegation that the Tribunal, having misconstrued section 85, failed to exercise its jurisdiction. A failure to exercise jurisdiction is an error of law, and if established, the leave of the Appeal Panel is not required. However, the Tribunal did exercise its jurisdiction, the Tribunal considered the appellant's named breaches of the Act and considered the conduct of other lot owners towards the appellant. Having considered the appellant's case, the Tribunal found, in the exercise of its discretion that neither the breaches nor the conduct were such as to warrant the appointment of a compulsory manager. The Tribunal clearly did settle the complaint in dismissing the application. This ground of appeal is dismissed. 7. In respect of the grounds of appeal that require the leave of the Appeal Panel, the appellant in his notice of appeal states that the Tribunal made findings against the weight of the evidence and that as a victim of vilification he brought his concerns to the attention of the Australian Human Rights Commission as well as the Police. He states he is a victim of the respondent's unconscionable conduct. These submissions are not further developed, and we are not persuaded that the appellant may have suffered a substantial miscarriage of justice because the decision of the Tribunal was not fair and equitable within the terms of cl 12(1)(a) of the Civil and Administrative Tribunal Act 2013 (NSW) and according to the principles set out in Collins v Urban [2014] NSWCATAP 17. Accordingly, the appeal must be dismissed. Orders 1. The Appeal Panel makes the following orders and directions. 1. Appeal dismissed. ********** 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 02 November 2022 - Paragraph [8] amended Paragraph [14] amended DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 02 November 2022