Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Silberstein v Strata Choice Pty Ltd & Hecker Australia Pty Ltd [2022] NSWCATAP 375 Hearing dates: 2 November 2022 Date of orders: 5 December 2022 Decision date: 05 December 2022 Jurisdiction: Appeal Panel Before: P Durack SC, Senior Member R Dubler SC, Senior Member Decision: 1. Leave to appeal is granted. 2. The appeal is allowed. 3. The orders made by the Tribunal on 20 May 2022 and 23 September 2022 are set aside. 4. The appellant's costs of the summary dismissal application determined by the Tribunal on 20 May 2022 are to be paid by the first and second respondents. 5. The appellant's costs of the appeal are to be paid by the first and second respondents. Catchwords: LAND LAW-strata title scheme dispute-claims by lot owner in negligence against strata managing agent and the building manager-whether the Tribunal has jurisdiction and power to order damages in such a dispute-interpretation of s 232 of the Strata Schemes Management Act 2015 (NSW). APPEALS – leave to appeal-important question concerning jurisdiction and power of the Tribunal-error of law. Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Civil and Administrative Tribunal Rules 2014 (NSW) Strata Schemes Management Act 2015 (NSW). Strata Schemes Management Act 1996 (NSW) Cases Cited: Champion Homes Pty Ltd v Guirgis [2018] NSWCATAP 54 Collins v Urban [2014] NSWCATAP 17 Coscuez International Pty Ltd v The Owners-Strata Plan No 46433 [2022] NSWCATAP 147 Ritson v Commissioner of Police [2022] NSWCATAP 223 The Owners-Strata Plan No at 80412 v Pullicin; The Owners Strata Plan No 80412 v Vickery [2020] NSWCATAP 5 Vickery v The Owners Strata Plan No 80412 [2020] NSWCA 284 Category: Principal judgment Parties: Jessica Silberstein (Appellant) Strata Choice Pty Ltd (First Respondent) Hecker Australia Pty Ltd (Second Respondent) The Owners Strata Plan 55468 (Third Respondent) Michael Adamo (Fourth Respondent) Peter Michal Hans Engelbert (Fifth Respondent) William Paul O'Brien (Sixth Respondent) Matthew Terence Gagen (Seventh Respondent) Representation: Counsel: P Afshar & R Clark (Appellant) Solicitors: Silberstein & Associates (Appellant) Bannermans Lawyers (First Respondent) HBA Legal (Second Respondent) Gilchrist Connell (Third, Fourth, Fifth, Sixth & Seventh Respondents) File Number(s): 2022/00175895 Publication restriction: None Decision under appeal Court or tribunal: Civil and Administrative Tribunal Jurisdiction: Consumer and Commercial Division Date of Decision: 20 May 2022 Before: S Corley, General Member File Number(s): SC 22/05083 REASONS FOR DECISION 1. This is an appeal in a strata title management dispute from a decision by the Tribunal, made pursuant to s 55 (1) (b) of the Civil and Administrative Tribunal Act 2013 (NCAT Act), to summarily dismiss the appellant's claims against each of the first and second respondents in this appeal on the basis that the claims were misconceived. The Tribunal came to this conclusion because it was of the opinion that the Tribunal did not have jurisdiction and power to grant the damages relief sought against each of the respondents. 2. In this appeal, the appellant is the owner of three lots in the strata title property, the first respondent is the strata managing agent in respect of the property and the second respondent is the building manager. 3. For the reasons set out below, we have decided that the appellant should be granted leave to appeal and the appeal should be allowed. Background 1. The appellant brought proceedings in the Tribunal concerning water ingress alleged to be caused by defects in common property. Her claim was brought against seven parties, including the owners corporation and each of the two respondents in this appeal. 2. These five other parties were joined as respondents in this appeal, along with the first and second respondent, and they have filed a submitting appearance on the appeal. 3. In separate sections of Points of Claim served by the appellant pursuant to orders made by the Tribunal on 7 March 2022, the appellant alleged that the strata managing agent and the building manager were each liable to her for damages for breach of a common law duty of care to carry out its functions with due care, skill and diligence. It was alleged that her claim for damages against these parties fell within one or more of sections 232 (1) (a), (c), (e) and (f) of the Strata Schemes Management Act 2015 (NSW) (SSMA). 4. Against the owners corporation, the appellant sought orders for rectification works to be undertaken by it, as well as damages for breach of the statutory duty of the owners corporation set out in s 106 of the SSMA. The Tribunal's decision 1. The Tribunal concluded (at [52]): In summary, whilst I am of the view that the dispute resolution power of the Tribunal under s 232 could be brought to bear on issues of the conduct of R6 and R7 [the respondents in this appeal] in the performance of their functions in relation to the repair and maintenance of the common property I do not believe that a money order for damages could be awarded against them under s 232 SSMA. 1. Having noted that the remedies sought against these respondents was limited to damages, Tribunal considered that adherence to the guiding principle in s 36 of the NCAT Act required that the proceedings against them be dismissed: at [54]- [55]. 2. The Tribunal's reasons for arriving at these conclusions can be fairly summarised as follows: 1. The Tribunal's jurisdiction with respect to the claims depended upon whether the claims fell within s 232 of the SSMA and, hence, fell within the "general jurisdiction" of the Tribunal as provided for in ss 28 and 29 of the NCAT Act: at [16] and [24]. 2. There was no overriding prohibition on the Tribunal making money orders or making findings that a tort had been established and that damages should be paid. However, unlike under the Residential Tenancies Act 2010 (NSW), the Fair Trading Act 1987(NSW) and the Home Building Act 1989 (NSW), the SSMA did not grant the Tribunal a specific power to make money orders: at [19]-[25]. 3. The scope of s 232 is broad, there was no prescribed restriction on the nature of the party who may be a respondent and in the absence of any prescribed exclusion it was reasonable to conclude that a person who had standing to initiate a claim (which included a strata managing agent and a building manager) could also be a respondent to a claim provided it fell within one of the categories set out in s 232 (1) (a)-(f): at [27]-[30]. 4. Under s 232 of the SSMA, performance orders, potentially, could be made against the respondents for breach of duty to provide their services with due care and skill and diligence: at [34]-[35]. 5. However, the Tribunal did not accept that an order for damages could be made against the respondents under s 232 because: 1. There was no specified money order making power in that section, unlike the position under other provisions in the SSMA, for example, in ss 60 (3), 89 (1) and 132 (1) (b): at [37]. 2. Whilst the specific prohibition on the making of money orders contained in s138 of the Strata Schemes Management Act 1996 (NSW) was removed by s 232, it was not replaced with a positive power to make money orders: at [39]-[41]. 3. The decision of the majority of the NSW Court of Appeal in Vickery v The Owners Strata Plan No 80412 [2020] NSWCA 284 is authority for the position that the Tribunal may make a money order under s 232 that an owners corporation pay damages under s106 (5) of the SSMA. However, the Tribunal did not accept the appellant's submission that the logic of the decision in Vickery indicated that the Tribunal had power to make a money order for other disputes which fell within s 232. In this regard, in the absence of a specific legislated power and in the overall context of the decisions of the Appeal Panel and the higher Courts in relation to the ability of the Tribunal to make a money order under s 232, the Tribunal considered that a very clear statement was required from higher authority before such an order could be made under s 232 and no such statement currently existed: at [44]-[52]. 1. As will appear below, we disagree with the Tribunal's understanding of the scope of the reasoning of the majority in Vickery. In this regard, we agree with the Appeal Panel's analysis of that reasoning in the recent decision of Coscuez International Pty Ltd v The Owners-Strata Plan No 46433 [2022] NSWCATAP 147, a decision that was given on 9 May 2022, shortly, before the Tribunal's decision in this case, and to which the Tribunal was not referred. Nature of the appeal-leave to appeal required 1. With respect to internal appeals, as this is, section 80 (2) of the NCAT Act provides: 80 Making of internal appeals ….. (2) Any internal appeal may be made— (a) in the case of an interlocutory decision of the Tribunal at first instance—with the leave of the Appeal Panel, and (b) in the case of any other kind of decision (including an ancillary decision) of the Tribunal at first instance—as of right on any question of law, or with the leave of the Appeal Panel, on any other grounds. 1. The appellant submitted that the decision the subject of appeal was a "ancillary" decision in respect of which leave to appeal was not required (see s 80 (2) (b)). However, in our view, the decision is an "interlocutory decision" in respect of which leave to appeal is required under s 80 (2) (a). As to this, s 4 (h) of the NCAT Act, specifically, states that the summary dismissal of proceedings falls within the definition of an interlocutory decision. This accords with the categorisation of such a decision applied in many decisions of the NSW Supreme Court. 2. Following the approach to be taken concerning the grant of leave to appeal from interlocutory decisions, as set out in such decisions of the Appeal Panel as Champion Homes Pty Ltd v Guirgis [2018] NSWCATAP 54 and Ritson v Commissioner of Police [2022] NSWCATAP 223, as well as the discretionary considerations concerning the grant of leave to appeal set out in Collins v Urban [2014] NSWCATAP 17 at [84], we consider that such leave should be granted because: 1. The appeal raises a question of law on a matter of public importance concerning the jurisdiction and power of the Tribunal with respect to strata title disputes. 2. It will be apparent from our reasons below that the Tribunal's decision, is attended by sufficient doubt such as to warrant the grant of leave to appeal. 3. If the decision is wrong the appellant is likely to have suffered a substantial injustice because she will have, incorrectly, lost the opportunity to pursue in one Tribunal proceeding all of her claims arising out of the events the subject of those proceedings. She will be left with unattractive and, potentially, costly choices, including that she pursue separate proceedings in a court against the respondents, whilst continuing her remaining claims in the Tribunal, or she abandon her existing Tribunal proceedings so that all of her claims can be brought in a court. 4. In relation to what we have said in (3), Mr Bannerman, who appeared at the hearing of the appeal for the first respondent, submitted that leave should not be granted because the appellant could obtain the same relief she sought against the respondents from the owners corporation. This may be correct, but if, contrary to the Tribunal's decision, the Tribunal does have jurisdiction and power to grant the relief she seeks against the respondents then she should not be summarily prevented from pursuing these other claims which seek to attribute responsibility for her alleged losses to others, separately, or in conjunction with the owners corporation, with the potential consequence that the burden of these losses is borne by or shared with these other parties. 5. On the appeal, both Mr Bannerman and Mr Stanicic, who appeared for the second respondent, put forward arguments in an attempt to demonstrate that the Tribunal's conclusion about jurisdiction and power was correct for reasons other than that relied upon by the Tribunal. As will appear, we do not agree with these arguments. The appellant's submissions 1. The appellant's submissions (both written and oral), included that: 1. The Tribunal found that the remedy of damages against these respondents was not available under s 232 of the SSMA but Vickery made it clear that this was wrong, as did the Appeal Panel in Coscuez. This was the kernel of the problem with the Tribunal's decision. 2. The Tribunal's reasoning appeared to be similar to that of the Appeal Panel in The Owners-Strata Plan No at 80412 v Pullicin; The Owners Strata Plan No 80412 v Vickery [2020] NSWCATAP 5, which reasoning was rejected by the Court of Appeal in Vickery, including by Leeming JA in the minority. In the decision of the Court of Appeal in Vickery, no judge considered that s 232 of the SSMA was so limited as to only allow orders of the kind otherwise provided for in some other part of the SSMA. 3. It was implicit in the reasoning of the majority in Vickery that, provided a dispute answers the description of one or more of s 232 (1) (a) – (f), the jurisdiction and power of the Tribunal under that section would extend beyond relief available to the parties under particular provisions of the SSMA, to relief available based on an independent cause of action. Furthermore, Leeming JA, in the minority in that decision, expressed the view that, if Mr Vickery's construction of s 232 was correct, it followed that s232 authorized NCAT to hear and determine tortious claims apart from breach of statutory duty so long as such claims arose out of a function conferred or imposed under the strata titles legislation. 4. The Tribunal's unwillingness to accept that an order for damages could be made against the first and second respondents to the appeal under s 232 did not flow from any language in the SSMA or from the purport of any of the authorities following the decision of the Court of Appeal in Vickery. 5. The Tribunal's reasoning creates an odd lacuna; the reasoning, that the Tribunal is invested with jurisdiction to hear a claim for breach of duty but is not invested with the power to grant the most common form of relief in respect of such a claim, being the payment of damages arising from loss and damage caused by such a breach of duty. That is an unprincipled outcome. The respondents' submissions 1. The first and second respondents submitted that the Tribunal's decision was correct for the reasons it gave. 2. They submitted that the Court of Appeal's decision in Vickery, and the other cases relied upon by the appellant, concerned different facts and different damages claims and were claims against an owners corporation only. 3. They submitted that there was no binding authority for a lot owner to obtain an award of damages against either of them in the Tribunal and that there was nothing in the decision in Vickery that stated that this was the case. 4. Furthermore, they made other submissions, which, in effect, sought to uphold the Tribunal's decision on a different ground to that relied upon by the Tribunal (although Mr Bannerman disavowed such a step at the hearing of the appeal) as follows: 1. The Tribunal's jurisdiction and power under s 232 (1) was confined to claims and orders against an owners corporation and the reference to "functions" in s 232 (1) was concerned only with the functions of such an entity. 2. For the building manager, Mr Stanicic submitted that the references to "functions" in s 232 (1) did not extend to the limited, specific function that a building manager had under the SSMA, which was only one of assistance to the owners corporation. In this regard, it was submitted, amongst other things, that the contrary interpretation would stifle the ability of building managers to do their job and expose every building manager in NSW to an indeterminate liability for negligence in relation to their past, present and future actions. He also submitted that it would be a very long bow to draw to find a building manager liable in respect of its supply of assistance and he invited us to draw the line now against the existence of such a liability. 3. The Tribunal had no jurisdiction or power to make orders in relation to a claim in negligence or the general law. Limited issue on this appeal 1. It is worth noting here that we are not concerned on this appeal with whether or not a duty of care under the law of negligence was owed to the appellant by either or both of the first and second respondent, as alleged by the appellant. This will be a matter to be determined by the Tribunal, having regard to, amongst other matters, the facts and circumstances as found after a hearing on the merits. 2. We also note that it seemed to us that some of the arguments of the active respondents about what was said to be the extreme width of the Tribunal's jurisdiction should the appeal be upheld did not recognise the jurisdictional requirement for a matter to fall within s 232 (1) (a)-(f). 3. Whether the appellant's claims do fall within any of these provisions in s 232 (1) will be a matter to be determined by the Tribunal at a hearing on the merits. Whilst the Tribunal's reasons on the summary dismissal application contain general statements about this subject which are favourable to the appellant, the Tribunal did not analyse the matter in any detail and did not make necessary findings about how the claims fall within any of these provisions in s232 (1). In this connection, at the hearing of the appeal, we noted that the appellant's pleading did not address this issue in any specific way. The Tribunal's conclusion was arrived at on a different basis. Relevant provisions of the SSMA 1. The central provision of the SSMA in issue is s 232, which provides: 232 Orders to settle disputes or rectify complaints (1) Orders relating to complaints and disputes The Tribunal may, on application by an interested person, original owner or building manager, make an order to settle a complaint or dispute about any of the following— (a) the operation, administration or management of a strata scheme under this Act, (b) an agreement authorised or required to be entered into under this Act, (c) an agreement appointing a strata managing agent or a building manager, (d) an agreement between the owners corporation and an owner, mortgagee or covenant chargee of a lot in a strata scheme that relates to the scheme or a matter arising under the scheme, (e) an exercise of, or failure to exercise, a function conferred or imposed by or under this Act or the by-laws of a strata scheme, (f) an exercise of, or failure to exercise, a function conferred or imposed on an owners corporation under any other Act. (2) Failure to exercise a function For the purposes of this section, an owners corporation, strata committee or building management committee is taken not to have exercised a function if— (a) it decides not to exercise the function, or (b) application is made to it to exercise the function and it fails for 2 months after the making of the application to exercise the function in accordance with the application or to inform the applicant that it has decided not to exercise the function in accordance with the application. (3) Other proceedings and remedies A person is not entitled— (a) to commence other proceedings in connection with the settlement of a dispute or complaint the subject of a current application by the person for an order under this section, or (b) to make an application for an order under this section if the person has commenced, and not discontinued, proceedings in connection with the settlement of a dispute or complaint the subject of the application. ……. (7) Excluded complaints and disputes This section does not apply to a complaint or dispute relating to an agreement that is not an agreement entered into under this Act, or the exercise of, or failure to exercise, a function conferred or imposed by or under any other Act, if another Act confers jurisdiction on another court or tribunal with respect to the subject-matter of the complaint or dispute and the Tribunal has no jurisdiction under a law (other than this Act) with respect to that subject-matter. 1. Other provisions of relevance, include: 3 Objects of Act The objects of this Act are as follows— (a) to provide for the management of strata schemes, (b) to provide for the resolution of disputes arising from strata schemes. 9 Owners corporation responsible for management of strata scheme The owners corporation for a strata scheme has the principal responsibility for the management of the scheme. …. 52 Owners corporation may delegate functions to strata managing agent (1) An owners corporation may, by the instrument appointing a strata managing agent or some other instrument, delegate to the strata managing agent— (a) all of its functions, or (b) any one or more of its functions specified in the instrument, or (c) all of its functions except those specified in the instrument. ….. 66 Building managers (1) A building manager is a person who assists in exercising any one or more of the following functions of the owners corporation— (a) managing common property, (b) controlling the use of common property by persons other than the owners and occupiers of lots, (c) maintaining and repairing common property. ….. 70 Functions of building manager (1) A building manager may, in accordance with the building manager agreement appointing the building manager, assist in exercising one or more of the functions of the owners corporation of managing and controlling the use of common property (otherwise than by the owners or occupiers of lots) and of maintaining and repairing common property. (2) However, the owners corporation may continue to exercise all or any of those functions, subject to the building manager agreement. (3) A person is not a strata managing agent for the purposes of this or any other Act only because the person is a building manager acting in accordance with a building manager agreement. 106 Duty of owners corporation to maintain and repair property (1) An owners corporation for a strata scheme must properly maintain and keep in a state of good and serviceable repair the common property and any personal property vested in the owners corporation. ….. (5) An owner of a lot in a strata scheme may recover from the owners corporation, as damages for breach of statutory duty, any reasonably foreseeable loss suffered by the owner as a result of a contravention of this section by the owners corporation. …. Consideration-the Tribunal's reason for deciding it had no jurisdiction and power to make an order for damages was incorrect 1. We agree with the appellant's submissions. 2. The following remarks by the Appeal Panel in Coscuez about the decision in Vickery are, in our opinion, respectfully, correct and demonstrate the Tribunal's error: 119 The dispute in this matter does not involve s106 (5) of the SSM Act. However, in the context of whether the Tribunal had the power to award damages for breach of the duty of an owners corporation to keep and maintain the common property in a reasonable state of repair under s106 (1) of the SSM Act, the Court of Appeal [in Vickery] discussed the ambit of the remedial powers under s 232 of the SSM Act. 120 In Vickery, both Basten JA and White JA referred to the ambit of the Tribunal's powers to settle complaints or disputes about the matters in s 232 (1) (a)-(f) of the SSM Act. 121 Basten JA stated at para [26] that the powers conferred in s 232 of the SSM Act were "broad". At paras [50]-[51] Basten JA stated: It does not matter for present purposes why it was thought inappropriate for adjudicators under the 1996 Act to award damages; however, it is unsurprising that when the functions of the adjudicators were transferred to the Tribunal, the prohibition on ordering payment of damages was discontinued. In short, the legislative history demonstrates that the language found in the chapeau to s 232 (1) has at all stages been understood as sufficiently broad to encompass an order for the payment of damages. In the absence of an express prohibition in s 232 in relation to the powers of the Tribunal, it would be wrong in principle to construe the unchanged language as subject to an implied limitation which is not existed in its past emanations. 122 At paras [53]-[58], Basten JA set out "other features of the current legislative scheme which support the conclusion that the Tribunal has power to order payments by way of damages". At para [58], Basten JA concluded that the Tribunal had power to award damages for a contravention of s106 (1) of the SSM Act. 123 However, there is nothing in the reasoning of Basten JA to suggest that the Tribunal's power to award damages involving a cause of action that arises due to a "complaint" or "dispute" about the matters in s232 (1) (a)-(f) of the SSM Act is limited to the failure to keep and maintain common property in a state of good repair under s106 (1) of the SSM Act. 124 White JA stated that he agreed with Basten JA's analysis that the legislative history of the SSM Act supported the conclusion that the Tribunal had the power to award damages if there was a "complaint" or "dispute" about the matters in s232 (1) (a)-(f) of the SSM Act; and that the fact that some provisions of the SSM Act gave the Tribunal a specific power to award the payment of monies did not limit conferral of the general remedial power under s232 (1) of the SSM Act (paras [167] and [170])…. 125 As with the decision of Basten JA, although White JA refers to the remedial powers of the Tribunal under s 232 (1) of the SSM Act in the context of a power to award damages the owners corporation's duty under s106 (1)of the SSM Act, there is no reason to confine the principles expressed in the judgement to a breach of duty under s106 (1) of the SSM Act. …. Consideration-the respondents' attempt to uphold the Tribunal's decision on grounds not relied upon by the Tribunal 1. We do not accept the respondents' submission that they fall outside s 232 of the SSMA because that section is only concerned with complaints or disputes about the exercise, or failure to exercise, the functions of an owners corporation and otherwise does not capture complaints or disputes concerning the exercise, or failure to exercise, the functions of a strata managing agent or a building manager. 2. The submission is contrary to the reference in s 232 (1) (e) of the SSMA to a "function conferred or imposed by or under this Act…" [our emphasis], the reference to the functions of a strata managing agent and building manager in ss 66 and 70 of the SSMA (referred to above), and with the separate reference to the function of an owners corporation set out in s 232 (f). 3. There is nothing within these terms that would warrant the building manager's function to assist with the exercise of a function of the owners corporation (as specified in s 70 (1)) being excluded from the operation of s 232 (1).The building manager's submissions in this connection about indeterminate liability and policy issues (which we have referred to above) appear to be more applicable to any question as to whether a common law duty of care is to be found to have arisen in the circumstances, which, as we have said, is not a question the subject of this appeal. 4. The respondents' submission that the Tribunal had no authority under s 232 to determine a claim in negligence or otherwise under the general law derives no support from the broad terms of the section. 5. Furthermore, it is contrary to what was stated by Leeming JA (at [149]) and White JA (at [165]) in Vickery and by the Appeal Panel in Coscuez (at 133 (4)). 6. The correct question to ask is not directed to the nature of the cause of action, but rather whether a complaint or dispute before the Tribunal falls within any of the matters referred to in s 232 (1) (a) – (f). Consequences of our decision on the appeal 1. As a consequence of our decision on the appeal, the claims against the first and second respondents on the appeal fall to be determined by the Tribunal as part of the determination of all of the claims in proceedings SC 22/05083 currently, listed to be heard on 22, 23 and 24 February 2023. 2. As we have already mentioned, and which was accepted (or not disputed) at the hearing of the appeal by the appellant and the first and second respondents, one of the issues in the claims against each of the respondents in this appeal, which remains to be determined by the Tribunal, is whether the Tribunal has jurisdiction to determine those claims on the basis that the claims fall within one or more of s 232 (1) (a)-(f) of the SSMA. Costs 1. There was no serious dispute that it would follow from a decision by us to allow the appeal that orders should be made that the respondents pay the appellant's costs of the proceedings at first instance and that they should pay the appellant's costs of the appeal. The amount in dispute between the parties exceeds $30,000. As a consequence, special circumstances are not required to warrant the making of an order for costs and costs should follow the event, as they did in the reverse way in the Tribunal at first instance. As to the latter, the order made by the Tribunal at first instance on 23 September 2022 must be set aside. Orders 1. For the above reasons, we make the following orders: 1. leave to appeal is granted. 2. The appeal is allowed. 3. The orders made by the Tribunal on 20 May 2022 and 23 September 2022 are set aside. 4. The appellant's costs of the summary dismissal application determined by the Tribunal on 20 May 2022 are to be paid by the first and second respondents. 5. The appellant's costs of the appeal are to be paid by the first and second respondents. 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 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: 05 December 2022