Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Hunt v The Owners - Strata Plan No 1158/84199 [2024] NSWCATAP 65 Hearing dates: 14 December 2023 Date of orders: 22 April 2024 Decision date: 22 April 2024 Jurisdiction: Appeal Panel Before: M Harrowell, Deputy President A Boxall, Senior Member Decision: Leave to appeal is refused and the appeal is dismissed. Catchwords: LAND LAW – Strata Schemes Management Act 2015 – By-law regulating installation of air conditioning and permitting strata committee to approve – whether by-law protecting amenity of other lot owners is harsh oppressive or unconscionable ADMINISTRATIVE LAW – construction of by-law – principles applicable – circumstance in which extrinsic material may be relied on to determine meaning Legislation Cited: Civil and Administrative Tribunal Act 2013 (NSW) Strata Schemes Management Act 2015 (NSW) Cases Cited: Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown [2015] NSWCATAP 111 Collins v Urban [2014] NSWCATAP 17 Cominos v Di Rico [2016] NSWCATAP 5 Cooper v The Owners – Strata Plan No 58068 [2020] NSWCA 250 Coulton v Holcombe (1986) 162 CLR 1; [1986] HCA 33 Endre v The Owners - Strata Plan No. 17771 [2019] NSWCATAP 93 Kaye v The Owners – Strata Plan No 4350 [2022] NSWSC 1386; (2022) 20 BPR 42,767 The Owners Strata Plan No 2245 v Veney [2020] NSWSC 134 The Owners of Strata Plan No 3397 v Tate [2007] NSWCA 207 Walsh v The Owners – Strata Plan No. 10349 [2017] NSWCATAP 230 Texts Cited: Nil Category: Principal judgment Parties: Noela Hunt (First Appellant) Brian Hunt (Second Appellant) Cheryl Hunt (Third Appellant) The Owners - Strata Plan No 1158/84199 (Respondent) Representation: Counsel: L Sims (Respondent) Solicitors: Appellants (self-represented) Pikes & Verekers (Respondent) File Number(s): 2023/00283684 Publication restriction: Nil Decision under appeal Court or tribunal: Civil and Administrative Tribunal of New South Wales Jurisdiction: Consumer and Commercial Division Citation: Not applicable Date of Decision: 12 August 2023 Before: M Deane, Senior Member File Number(s): 2022/00419665 (formerly SC 22/28994) and 2022/00426498 (formerly SC 22/29381) reasons for decision Introduction 1. This appeal concerns two applications by the appellants (collectively the Hunts), for orders under ss 126 and/or 127 of the Strata Schemes Management Act 2015 (NSW) (SSMA). These applications were subsequently amended to seek orders under s 126 and orders under s 232(1)(a) and (b) of the SSMA. 2. In the first application, 2022/00426498 (formerly SC 22/29381), Noela Hunt was the applicant, being the owner of Lot 25 (Unit 13) in Strata Plan No. 1158/84199 (strata scheme). In the second application, 2022/00419665 (formerly SC 22/28994) Brian and Cheryl Hunt where the applicants, being the owners of Lot 26 (Unit 14) in the strata scheme. In both applications, the respondent was the owners corporation. 3. In each application, the applicants sought orders that they be permitted to install a reverse cycle air-conditioning unit to each of the balconies of their respective lots. Approval was, apparently, sought under Special By-law 5 (SBL 5). At an extraordinary general meeting on 19 July 2022, the motion for approval was lost, the minutes of that meeting recording: 3. AIR CONDITIONINING APPROVAL Motion LOST That the Owners Corporation 1158 consider the application for the installation of air-conditioner, submitted by the owners of lots (sic) 13 & 14. If approved this would be in accordance with the Special By-law 5 – Owners capital works and Section 110 of the Strata Schemes Management Act 2015 (minor renovation by owners). 1. The appellants said in the proceedings at first instance that the respondent had unreasonably refused its consent. 2. At the hearing of the applications, it was agreed that the proposed works did not meet the definition of minor works in s 110(7) of the SSMA. Accordingly the work was categorised as "alterations to common property directly affecting the owner's lot" as provided in s 126(1). 3. The applications were heard on 23 May 2023 and the decision reserved. On 10 August 2023 the Tribunal made orders dismissing each of the applications and provided reasons for its decision (reasons). Notice of Appeal and history of appeal proceedings 1. The appellants filed a Notice of Appeal on 5 September 2023. The appeal was filed in time. 2. The appellants subsequently filed a lever arch folder of documents headed "NCAT Amended Appeal 10.10.2023" (October AB). In that bundle was an amended Notice of Appeal, to which was attached a 45 page document (October AB 17-62) setting out the grounds of appeal, the orders sought on appeal why leave to appeal should be granted. At AB 28, the appellants indicated the orders sought were as follows: 1. Revoking the order made by Senior Member Deane on 10 August 2023 that Applications SC 22/29381 and SC 22/28994 are dismissed. The following other orders: 2. s 160 to invalidate By-law 5, under s 139(1) of the SSMA. 3. s 232(1) SSMA 4. s 126(1) SSMA 5. That under s 60(2) NCAT Act, costs as reserved by Senior Member Charles for the aborted Hearing on 12 December 2022 due to the NO SHOW of the Respondents, and as a result, adjourning the Hearing for over six months. This was not fair and equitable to the Appellants, who were significantly disadvantaged. 1. As to the grounds of appeal, the appellants contend the Tribunal misinterpreted SPL 5 because of the Tribunal's "failure to have regard to the context in which the by-law was made, having been made for the purpose to give effect to the in-principal consent that [the appellants] have been given at an earlier AGM of 2014 (Append 15), to install the condensers on the balcony returns provided they were concealed from view from other apartments by a housing". 2. In addition, the appellant raised the following matters: 1. The Tribunal "failed to notice" that the 2017 consolidated by-laws changed the wording of what had previously been approved. Reference is made to various historical matters and resolutions passed in connection with the making of SPL 5. 2. New evidence (described as Append 34 in the October AB) is said to show a further change to the by-law in terms of its numbering which has occurred since the proceedings at first instance were heard on 23 May 2023. We note in passing that this document is irrelevant to the issues for resolution by us which concerns the proper construction of the by-law applicable to the decision made by the respondent in general meeting on 19 July 2022. As such this new evidence is rejected. In this regard we are not conducting a new hearing, but rather determining whether the Tribunal at first instance made an appellable error. 3. The Tribunal failed to consider all relevant evidence. 4. Property rights of the appellants were impermissibly interfered with having regard to s 139 of the SSMA. The Tribunal was entitled to make a finding that SPL 5 contravened s 139 even if an order in the nature of a declaration was not sought. On this last point, reference was made to the decision in Walsh v The Owners – Strata Plan No. 10349 [2017] NSWCATAP 230 (Walsh) at [60]. However, this reference relates to the power of the Tribunal to make orders in the nature of declarations and/or when reasons for decision express a conclusion concerning a matter of fact or law. In this regard the Appeal Panel in Walsh noted, in our opinion correctly, that it had "no general power to give declaratory relief". 1. The Tribunal failed to consider earlier meetings and minutes of meeting in which the appellants' proposals to install air-conditioning had been discussed and failed to have regard to "the context in which the Application for the Air Conditioning was made and approved in principle by the Owners Corporation, at the AGM of 11 June 2014, subject to a suitable by-law". 2. The decision of the respondent effectively deprived the owners of all east-facing lots of a right to install air-conditioning condensers on the balcony. The appellants contend this affected 18 lots. This, the appellants contend, effectively banned air-conditioning in "Strata Plan 1158 as the balconies are the only place where a/c can be placed to comply with By-law 5". The appellants say this "decision we submit could therefore be corrected, by the Tribunal, invalidating the by-law under section 160 (sic)". 3. The Tribunal erred in failing to consider Noela Hunt's medical condition because she could not install air-conditioning. This contention appears to assume that the decision to refuse approval meant that no alternative proposal complying with SBL 5 could have been submitted for approval by the respondent in general meeting. 4. The Tribunal erred in concluding at [105] the appellants had not submitted the proposal to install air-conditioning condensers at 90 degrees, north/south. Reference was made to Appendix 22 October AB. 1. The appellants also sought leave to appeal. They said that the decision was not fair and equitable. The appellants provided a commentary against the various paragraphs of the reasons indicating what they said were erroneous findings. As to the decision being against the weight of evidence, the appellants reiterated points earlier made as well as identifying particular evidence which they say should have led the Tribunal to reach a different conclusion. As necessary, we will refer to the detail of these submissions below. 2. As to new evidence, the appellants referred to an email from Mr Brian Hunt to the Strata Committee dated 29 August 2023 (Appendix 5a October AB). Inter-alia, this document raises issues concerning air-conditioning installed in Unit 18, which was said to be in a non-compliant position having regard to SBL 5 and proposes 4 options for the positioning of air-conditioning condensers on Units 13 and 14. To the extent these documents are relied upon in respect of matters existing at or before the original hearing, this is not new evidence and should not be accepted in this appeal: Al-Daouk v Mr Pine Pty Ltd t/as Furnco Bankstown [2015] NSWCATAP 111. To the extent they relate to discussions of a possible resolution after the Tribunal published its decision, they appear irrelevant and should also be rejected. Otherwise, they will be taken as an amplification of submissions made in support of the appellants' position in this appeal. 3. The respondent filed a Reply to Appeal dated 1 November 2023. In short, the respondent says there was no error of law in the interpretation of SBL 5 (which regulated the installation of air conditioning units) or in the Tribunal's findings of fact concerning any "in principle approval" to carry out the proposed works. 4. In each case, the application to install a condenser unit identified a location that did not comply with SBL 5, in that the condenser unit would not be out of sight and covered. There was no error in the Tribunal concluding the refusals were not unreasonable. 5. As to any claim now made for an order under s 150 of the SSMA (which relates the Tribunal making an order to declare a by-law invalid) no such relief was sought at the original hearing. Consequently, it cannot now be pursued on appeal. 6. As to any allegation that there was an error in the wording of the consolidated by-laws, again the respondent says that this issue was not raised at the hearing at first instance. Further and in any event, the difference in wording "makes no difference to the issues in dispute" and any numbering of the by-law is merely a typographical error. 7. The parties filed written submissions and documents in support of their respective positions. In addition, at the hearing of this appeal on 14 December 2023, the parties made oral submissions. In the case of the appellants, Brian and Noela Hunt appeared. In the case of the respondent, they were represented by Ms Sims of Counsel. Tribunal decision 1. In the reasons at [16]-[17], the Tribunal set out the issues to be determined as follows: 16 The issues to be determined under s 126(1) are: (1) did the respondent unreasonably refuse its consent to the proposed works; (a) In relation to Unit 13 (Lot 25) and/or (b) In relation to Unit 14 (Lot 26)? (2) If so, should the Tribunal order the respondent to consent to the proposed works for (a) Unit 13 and/or (b) Unit 14? 17 If the application under s 126 is unsuccessful, the issues to be determined under s 232 are: (1) Is the dispute of a type for which orders can be made under s 232 SSMA? (2) Should the Tribunal order the respondent to consent to the proposed works for: (a) Unit 13 and/or (b) Unit 14? (3) Should the Tribunal made (sic) a different order under s 232? 1. The proposed works for which approval had been sought at the meeting on 19 July 2022 are contained in the Air Conditioning Application Forms found at October AB Appendix 2. This work Included the installation of an external condensing unit: 1. in the case of Unit 13, on the "return on the side front balcony Eastern side of balcony" (October AB 109); 2. in the case of Unit 14, on the "return on the side front balcony, western side of balcony" (October AB 111). 1. In each case the Tribunal determined the respondent had not unreasonably refused consent to the installation of an air conditioning unit in the proposed location. In reaching these conclusions the Tribunal found the works proposed for each lot were not "minor renovations", the works requiring development consent. 2. The Tribunal also found, on its proper construction, SBL 5 required that any air-conditioning unit placed on the balcony must be both out of sight from other apartments and housed in a cover in accordance with the specified diagram. That is, the Tribunal rejected the appellants' submission that SBL 5(23) could be satisfied by the air-conditioning unit being either "out of sight from other apartments" or "housed in a cover". 3. The Tribunal also rejected the submission that SBL 5 was harsh, unconscionable or oppressive within the meaning of s 139(1) of the SSMA. At [76]-[78] the Tribunal said: 76 I consider that the terms of SBL 5(23) are not unjust. SBL 5(23) is not a blanket prohibition on air-conditioning units. It merely regulates their appearance and impact on other units. Although the applicants claim that its effect is harsh and oppressive, SBL 5(23) does not arbitrarily prohibit air-conditioning units and the respondent's correspondence and submissions do not express any absolute objection to air-conditioning. Alternative locations or solutions for the condenser units have been proposed (eg against the common wall) which the applicants have rejected due to interference with the bi-fold doors. There is no perceptible arbitrariness in the by-law and it can be seen to enhance or be needed to preserve the other lot owners' enjoyment of their lots and the scheme common property in preserving the view corridors of the rear units and the external appearance of the building. 77 As a result, the applicants have not shown that the by-law is unjust or that the decision to refuse the application for the proposed works on the basis that it did not comply with SBL 5(23) was unreasonable. As a result, there is no basis on which the Tribunal would make a finding of harshness, to find SBL 5(23) to be unenforceable or to sever the words "out of sight from other apartments and" as suggested by the applicants. 78 It is unnecessary to consider the remaining reasons for refusing consent to the proposed works for Unit 13. I am satisfied that basing the refusal on non-compliance with the By-law was not immoderate, capricious or exorbitant and it formed a rational basis for the refusal. Accordingly the refusal was not unreasonable. 1. Having reached the above conclusion, and while unnecessary to do so, the Tribunal went on to express its views as to how it would have exercised its discretion if it had found that the refusals were unreasonable. 2. In relation to Unit 13, the Tribunal said it would not have exercised its discretion in favour of the applicant for the following reasons: 1. The rejection "was merely a rejection of the [applicant's] optimal solution (where the condenser unit was visible to many of the other lot owners, but not the applicant themselves). [The owners corporation] did not reject alternative solutions which did not impact on other lot owners": at [84]. 2. Although not relevant to whether the refusal was unreasonable, necessary planning approval from the relevant statutory authority had not been obtained: at [85]. 3. The fact Ms Noela Hunt had provided medical evidence concerning that she would benefit from the installation of reverse cycle air-conditioning, upholding the respondent's refusal "does not mean that the applicant cannot install air-conditioning". Rather, it was only the proposed works at the specified locations which were rejected: at [87]. 4. In saying so, the Tribunal had not considered child safety regulations concerning the placement of the condenser unit: at [86]. 1. In relation to Unit 14, the Tribunal said it would not have exercised its discretion in favour of the applicant for the following reasons: 1. The position of Unit 14 was more "nuanced" to that of Unit 13, the respondent conceding that "the impact was small": at [90]. In this regard the Tribunal said at [88]: According to the joint expert report, the proposed works for Unit 14 would be visible from the doorway of Unit 17 and from the common property. As a result, the proposed works for Unit 14 also do not comply with SBL 5(23) albeit to a lesser extent, in that they are visible from Unit 17. 1. Initially, the proposal included pipework which would be visible. However at [91] the Tribunal noted that the "experts had agreed that the proposal initially included visible pipework but then stated that they understood that the system could be installed so that there was no visible pipework. Despite this agreement, the Tribunal concluded that there was a "lack of clarity as to what the proposed solution was and the changes (if any) it would make to the pipework". Therefore, "it was not unreasonable for the respondent to maintain the conclusion that the proposed works were not consistent with SBL 5(23)": at [96]. 2. Consequently, the Tribunal was "satisfied that SBL 5 is not unjust and it was not unreasonable [for the respondent] to refuse consent to the proposed works for Unit 13": at [97]. 1. As to the application for an order under s 232 of the SSMA, the Tribunal accepted this section provided an alternative basis for making an order dealing with a dispute concerning refusal to consent to the proposed works. Again, a discretion was applicable when exercising powers under this section: at [100]. 2. The Tribunal found that it would have declined to exercise a discretion for the same reasons it would have declined to exercise a discretion under section 126: at [102]. 3. In addition, while there may be other proposals as to how air-conditioning could be installed, they have not been properly documented nor considered by the respondent. As such the Tribunal determined that in the absence of the respondent having an opportunity to consider such alternative proposals, it was premature to make any order under s 232 and the Tribunal declined to do so: at [183]. Similarly, proposals to modify the existing proposals in terms of the orientation of the condenser and its housing were not put to the respondent and may not, in any event, bring the proposal into compliance with SBL 5. As such the Tribunal said it would be "premature to usurp the democratic process of the [respondent] and impose works which have not even been considered": at [105]-[106]. Consideration 1. There is a right of appeal on a question of law. Otherwise leave appeal is required: s 80(2)(b) Civil and Administrative Tribunal Act 2013 (NSW) (NCAT Act). To the extent leave to appeal is required, it may only be granted if the Tribunal is satisfied an appellant may have suffered a substantial miscarriage of justice because the decision was not fair and equitable, against the weight of evidence or there was significant new evidence not reasonably available at the original hearing: Sch 4 cl 12(1) NCAT Act. 2. Whether the Tribunal properly construed SBL 5 raises a question of law. Likewise, whether SBL 5 is harsh, unconscionable or oppressive within the meaning of s 139(1) of the SSMA raises a question of law. The other matters raised by the appellants require leave to appeal. 3. It is convenient to deal with the grounds of appeal under the following headings: 1. Did the Tribunal err in its construction of SBL 5? 2. Was SBL 5 harsh, unconscionable or oppressive within the meaning of s 139(1)? 3. Should leave to appeal be granted on the questions of whether, in considering the application under s 126 of the SSMA, the Tribunal was wrong in concluding the respondent had not unreasonably refuse to approve the proposed air-conditioning works and/or, whether the Tribunal was wrong in determining there were no circumstances otherwise warranting an order being made that the respondent consent to the proposed works under s 232 of the SSMA? If so, should the appeal be allowed? Did the Tribunal err in its construction of SBL 5? 1. The principles concerning the construction of by-laws was dealt with by the Court of Appeal in The Owners of Strata Plan No 3397 v Tate [2007] NSWCA 207. At [71], McColl JA (Mason P agreeing) summarised the principles as follows: 71 The following propositions emerge from the foregoing discussion: 1. By-laws are the "series of enactments" by which the proprietors in a body corporate administer their affairs; they do not deal with commercial rights, but the governance of the strata scheme: Bailey ; 2. By-laws have a public purpose which goes beyond their function of facilitating the internal administration of a body corporate; cp, Parkin, Lion Nathan; 3. Exclusive use by-laws may be inspected by third persons interested in acquiring an interest in a strata scheme, whether, for example, by acquiring units, or by lending money to a lot proprietor; such persons would ordinarily have no access to the circumstances surrounding their making; their meaning should be understood from their statutory context and language: NRMA ; Lion Nathan . 4. By-laws may be characterised as either delegated legislation or statutory contacts: Dainford ; Re Taylor ; Bailey ; North Wind ; Sons of Gwalia; 5. Whichever be the appropriate characterisation, exclusive use by-laws should be interpreted objectively by what they would convey to a reasonable person: Lion Nathan ; 6. In interpreting exclusive use by-laws the Court should take into account their constitutional function in the strata scheme in regulating the rights and liabilities of lot proprietors inter se : Parkin ; Lion Nathan . 7. Unlike the articles of a company, there does not appear to be a strong argument for saying exclusive use by-laws should be interpreted as a business document, with the intention that they be given business efficacy: cf NRMA (at [75]). That does not mean that an exclusive use by-law may not have a commercial purpose, and be interpreted in accordance with the principles expounded in cases such as Antaios Cia. Naviera S.A . , but due regard must be paid to the statutory context in so doing; 8. An exclusive use by-law should be construed so that it is consistent with its statutory context; a court may depart from such a construction if departure from the statutory scheme is authorised by the governing statute and if the intention to do so appears plainly from the terms of the by-law: Re Taylor ; 9. Caution should be exercised in going beyond the language of the by-law and its statutory context to ascertain its meaning; a tight rein should be kept on having recourse to surrounding circumstances: Lion Nathan. 1. At [77] Her Honour continued: 77 Finally I observe that in taking surrounding circumstances into consideration, the primary judge drew inferences from the original development approval in 1966 and the layout of the strata scheme in relation to lifts. No evidence was led before the primary judge concerning the actual making of Special By-Law 21. The papers and minutes of the meeting at which it was made were not tendered: cf Lion Nathan per Finn J (at [92]). It cannot be assumed that the surrounding circumstances his Honour considered relevant were so regarded by those who made Special By-Law 21. Consistently with the "tight rein" approach, those matters should not have been taken into account. 1. In The Owners Strata Plan No 2245 v Veney [2020] NSWSC 134, Darke J had occasion to consider principle 9 in Tate the circumstances where resort to surrounding circumstances was appropriate. At [37] His Honour said: 37 I agree that in accordance with the cautionary approach laid down in The Owners of Strata Plan No 3397 v Tate (supra) recourse should not be had to either the historical evidence relied upon or the terms of the 27 November 1997 letter as surrounding circumstances on the question of construction of the by-law. Those materials are not available to third persons, such as Mr Veney himself, and are in any event open to various interpretations. Further, whilst the strata plan itself could in my view be considered for the purpose of identifying the essential subject matter of the by-law (being the location of the area of common property over which exclusive use rights are conferred), I do not think that the physical characteristics of the site at the time the by-law was made (whether as revealed by the strata plan or otherwise) should be considered as a useful aid to construction. In the absence of evidence of what material was placed before the meeting when the by-law was made, it cannot be assumed that any particular physical characteristics were considered to be relevant, let alone considered to be relevant in a particular way (cf The Owners of Strata Plan No 3397 v Tate (supra) at [77]). 1. It can be seen from these decisions that the extent of any enquiry into surrounding circumstances for the purpose of construing the by-law would, ordinarily, be limited to the particular resolution and material (including any explanatory memorandum in support of the resolution) by which the by-law in question was adopted. In this regard, principle 3 in Tate, which recognises by-laws may be inspected by those acquiring an interest in the property, would make it inappropriate in any interpretive exercise for a broader enquiry into matters which would not be evident from the records concerning the making of a by-law. 2. Of course, these principles of interpretation are not a means by which a by-law, which is clear in its meaning having regard to the words used and the objective meaning, can effectively be rewritten. Rather, they are an aid to interpretation where the meaning is unclear. 3. Having regard to the above, in our view there was no basis for the Tribunal to have regard to historical circumstances leading up to the making of SBL 5. Rather, as was the approach of the Tribunal, it is necessary to consider the words of the by-law and determine their objective meaning. 4. In saying so, while "papers and minutes of the meeting" by which SBL 5 was passed may have been relevant consistent with the principles in Tate, the material to which we were referred, said to provide context in the construction of SBL 5, is put forward as supporting the proposition that there was an in-principle agreement for the appellants being able to instal air-conditioning units on the returns of their balconies. The problem with this submission is that there is no relevant ambiguity and, in any event, recourse to this material does not assist in construing the words of a by-law in this case. The by-law, by its terms, was not passed to "approve" the particular work proposed by the appellants or ratify an earlier agreement. Its purpose was to provide general criteria to permit the strata committee to approve works prescribed in SBL 5(4), including proposed air-conditioning installations, complying with the requirements of the by-law. 5. The provisions of SBL 5 considered by the Tribunal as relevant to the present dispute were set out at [19] of the reasons as follows: Special By-law 5 19 SBL 5 to the consolidated by-laws for SP 1158/84199 relevantly reads (AB 40 – 41): 1. This by-law is made for the purposes of managing, regulating and controlling the carrying out of Works which affect the common property and/or impact on an owner or occupier on a lot. 2. The Works undertaken under this by-law must enhance, improve or add value to the lots and/or the common property. … 4. Each Owner has the right to undertake the following "Works" subject to the following conditions and Owners Corporations rights – … (e) Install air conditioning units including external condenser units (and any other ancillary items). … Conditions Before undertaking the Works 10. The Owner must notify the Owners Corporation at least 30 days before undertaking the Works and obtain the prior written approval for the works from – (a) the executive committee of the Owners Corporation; and (b) the relevant consent authority under the Environmental Planning and Assessment Act 1979 (if required); and (c) Any other relevant statutory authority whose requirements apply to undertaking the Works. … Specific conditions relating to the installation of Air Conditioning 15. An owner or occupier must not install or maintain on a lot or common property any air conditioning unit other than of the type or style approved by the owners corporation and with a power rating, noise rating and in a location directed by the owners corporation. … 23. In all instances the condenser unit must be located on the floor of the balcony of the respective apartment, out of sight from other apartments and housed in a cover in accordance with the diagram prepared by Fluid Building annexed to the agenda of the meeting at which this by-law is to be passed. no pipe work is to be run along the external facade of the building which is visible to the street and/or to the outside of the building. … 1. To this we would add clause 5 of SBL 5 which provides: 5. Where the Works undertaken under clause 4 of this by-law are visible from the outside of the scheme, the Works must be in a construction and colour scheme that matches the overall appearance of the building and prior consent must be sought from the Owners Corporation and granted at its discretion. 1. It is common ground in this appeal that the works proposed were not minor works. Rather s 111 of the SSMA applies. This section provides: 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. 1. It should be noted at this point that the Air Conditioning Application Forms sought approval of the strata committee. It was not an application by each of the appellants to the respondent in general meeting to pass a special by-law. Rather, the appellants sought approval under existing by-law SBL 5. 2. In this regard, SBL 5 authorised the respondent's strata committee to provide written approval for any proposed works in conformance with the by-law: SBL 5(10). However, the power of approval remained a matter which the owners corporation could also exercise in general meeting: s 36(4) SSMA. In the present case, it was the owners corporation in general meeting which refused approval. 3. It was therefore necessary for the Tribunal to consider whether the refusal for approval was unreasonable in the context of the application made. 4. The first issue raised by the appellants is that the Tribunal did not have regard to the actual by-law that had been passed. Rather, the appellants said that the wording of the by-law originally passed in 2015 was different to the wording considered by the Tribunal which referred to the consolidated by-law subsequently registered. 5. In our view, this matter should not be permitted to be raised on appeal. Any contention that the by-law relied upon was incorrectly worded involves a factual examination concerning the passing and registering the by-laws and what occurred at various meetings of the respondent. Consequently, such matters should not be permitted to be raised on appeal: Coulton v Holcombe (1986) 162 CLR 1 at [9]; [1986] HCA. 6. Further, and in any event, the points of difference between the different versions appear to relate to numbering or text which is irrelevant to the construction issue raised in this appeal. 7. The next question to consider is the proper construction of cl 23 of SBL 5. 8. In their written submissions dated 14 December 2023 (appellants' December Submissions, the appellants said on page 4: Mr Le Page eloquently argued against the disjunctive interpretation of this requirement, that such an interpretation is improbable. He went on to stress that the by-laws of the strata scheme do not proscribe the placement of barbecues, furniture, pot plants, or other personal items on balconies or balcony returns, even if these items are more visible than a small condenser, whether housed or under housed. The disjunctive interpretation, if accepted, would effectively bar the installation of any condensers, housed or under housed, on the balcony of any lot, as any such condenser would inevitably be visible from at least one other lot in the strata scheme. Mr Le Page contended that such an interpretation is unlikely to align with the by-law explicitly permitting the installation of "external condenser units". Moreover, he argued that this interpretation is inconsistent with the evident purpose of the by-law concerning air-conditioning, according to Mr Le Page, the Strata Committee's interpretation is harsh, oppressive, and not in the interests of the owners at large, potentially subject to intervention by the Tribunal under sections 148 and 150 of the Act. … Despite the clarity and strength of Mr LePage's arguments and evidence, it appears that SM Deane, in delivering her decision on 10 August 2023, leaned towards the disjunctive interpretation. This decision, we respectfully submit, is unreasonable, as it imposes a blanket prohibition on all owners with balconies on the Eastern side, encompassing not only our Units 13 and 14 but also affecting the entire community of owners in the old Strata Plan 1158, facing Evans Street. 1. In short, this submission would require the by-law to read "out of sight from other apartments or housed in a cover in accordance with the diagram prepared by fluid building". 2. It seems to us that the appellants' submission should be rejected. Rather, as the Tribunal found at [68]: 68 As a result of the principles outlined in Tate, the applicants' argument that the condenser unit would be out of sight from other units by being enclosed in a housing cannot be sustained. According to Tate, common property by-laws are to be interpreted objectively by what they would convey to a reasonable person. There is no need to analyse here whether SBL can be construed as a common property by-law – even if not, it is logical to extend the Tate principles to the interpretation of by-laws more generally. The use of the conjunctive "and" requires both that the condenser be contained in a housing and be out of sight from other units. The applicants' interpretation that being enclosed in a housing rendered the condenser out of sight, would make the requirement that it be "out of sight" obsolete. As a result, the application for the proposed works for Unit 13 did not comply with by law 5(23). 1. The correctness of this view is demonstrated by the following: 1. As stated in SBL 5(1), the purpose of SBL 5 is to regulate proposed works in the strata scheme both in terms of their effect on the appearance of the building to those external to the strata scheme and the amenity of Lot owners in the strata scheme who might be affected by any work. 2. SBL 5 is not limited to air conditioning work: see SBL 5(4). 3. SBL 5 considers any work from the perspective of both what is visible "from outside the strata scheme" (cl 5) and when viewed from "other apartments" (cl 23). 4. Clause 5 provides a general requirement, that when viewed from outside the strata scheme, any proposed works (which includes air-conditioning) "must be in a construction and colour scheme that matches the overall appearance of the building". 5. In addition, there are "Specific conditions relating to the installation of Air Conditioning" found in cls 15-23. These include that the air-conditioning be "housed in a cover". The requirements, which includes a specification for any housing, apply whether or not the air-conditioning is "out of sight from other apartments", if the air-conditioning unit were "visible from outside the strata scheme". This interpretation is consistent with the general requirement in cl 5 that the work be "in a construction and colour scheme that matches the overall appearance of the building", with the effect that the appearance of the building when viewed externally would be consistent. 6. While it might be thought that cl 23 only regulates the visibility and appearance in the context of what might be seen from other apartments, it is clear from the clause it is not so limited. In this regard, as set out above, the clause provides: No pipe work is to be run along the external facade of the building which is visible to the street and/or to the outside of the building. That is, cl 23 is also concerned with what is "visible to the street and/or to the outside of the building", not just visibility from "other apartments". Such a provision would not have been included if cl 23 was to have the limited operation and meaning proposed by the appellants. 1. If cl 23 was only relevant to regulate visibility from the perspective of other Lot owners, in the manner contended by the appellants, the word "or" rather than "and" would have been used between the words "out of sight from other apartments" and "housed in a cover". 1. SBL 5 enables the strata committee to approve this type of work on common property without a special resolution of the respondent which would otherwise be required by s 111 of the SSMA. It prescribes circumstances to be met in order for the exercise of power. It is not a general prohibition preventing a Lot owner otherwise seeking to have passed a special resolution for particular work. 2. Finally, consistent with Tate and ordinary principles of interpretation, there is no warrant to examine extrinsic material in the present case as the objective meaning can be ascertained from the text and context of SBL 5. 3. It follows no error has been demonstrated and this ground of challenge fails. Was SBL 5 harsh, unconscionable or oppressive within the meaning of s 139(1)? 1. At [69] and following the Tribunal referred to the decision of the Court of Appeal in Cooper v The Owners – Strata Plan No 58068 [2020] NSWCA 250 and the various reasons provided by each member of the Court. The Tribunal then concluded at [76]-[79] (set out above) that SBL 5(23) was not unjust because it was "not a blanket prohibition on air-conditioning units. It merely regulates their appearance and impact on other units". 2. It was not suggested that the Tribunal incorrectly identified the applicable principles. Rather, the substance of the appellants' contention was that the Tribunal erred in its interpretation of how the by-law might operate. The appellants submitted the nature of the discretion afforded to the respondent by clauses 5, 10(a) and 15, "granted an unlimited discretion to the strata committee or owners corporation, potentially infringing on the normal property rights of the [appellants]": appellants' December Submissions page 8. 3. There are a number of problems with this submission: 1. The fact there is a discretion, as opposed to an absolute prohibition, suggests particular work can be approved if it satisfies specified criteria: cf Cooper where the prohibition on keeping animals was absolute, even in circumstances where the keeping of particular animals could have had no effect on other lot owners. 2. SBL 5 has a purpose which is to protect the amenity of lot owners and the appearance of the building: see clauses 1, 5 and 23. It is of a type of by-law referred to by Basten JA in Cooper at [37] of which His Honour suggested was permissible. Regulating what can be constructed does not mean the "scope and effect" of SBL 5 exceeded what was permitted or was, consequently, harsh oppressive or unconscionable: see discussion of Fagan J in Cooper at [83] and following. 3. It is a permissive by-law, allowing a strata committee to exercise delegated power to approve works which conform with the requirements of the clause. It does not otherwise prevent this an individual applicant from seeking approval from the owners corporation to alter or carry out works to common property, a matter which the SSMA otherwise prohibits. 4. Lastly, the findings in the Tribunal in this case do not suggest that a proposal in conformance with the by-law could not have been formulated by each of the owners of Units 13 and 14: see eg reasons at [76]. Rather, the Tribunal rejected the proposition that the failure to approve installation of the air-conditioning unit in the appellants' proposed location meant that SBL 5 contravened s 139(1) of the SSMA. In the absence of SBL 5 operating as an absolute prohibition on installing air-conditioning on the Units in question, we see no error in the conclusion reached by the Tribunal. 1. Having regard to the above, it is unnecessary to consider that aspect of the appeal which now seeks relief under s 150 of the SSMA. Should leave to appeal be granted on the questions of whether, in considering the application under s 126 of the SSMA, the Tribunal was wrong in concluding the respondent had not unreasonably refused to approve the proposed air-conditioning works and/or, whether the Tribunal was wrong in determining there were no circumstances otherwise warranting an order being made that the respondent consent to the proposed works under s 232 of the SSMA? If so, should the appeal be allowed? 1. The issue in the present case was whether, within the meaning of s 126(1), the respondent unreasonably refused to approve the placement of the air-conditioning unit in the location and manner proposed under SBL 5. 2. Section 126(1) provides: 126 Orders relating to alterations and repairs to common property and other property (1) Order requiring owners corporation to carry out work on common property The Tribunal may, on application by a lessor of a leasehold strata scheme or an owner of a lot in a strata scheme, order the owners corporation to consent to work proposed to be carried out by an owner of a lot if the Tribunal considers that the owners corporation has unreasonably refused its consent and the work relates to any of the following— (a) minor renovations or other alterations to common property directly affecting the owner's lot, (b) carrying out repairs to common property or any other property of the owners corporation directly affecting the owner's lot. 1. In Endre v The Owners - Strata Plan No. 17771 [2019] NSWCATAP 93, when considering the operation of ss 126(1) and 149(1) of the SSMA, the Appeal Panel said at [44]-[46]: 44 It seems clear from the above that the purpose of the powers given to an owners corporation (and the Tribunal in a permitted review of any refusal) is to enable the grant of rights over common property to individual Lot owners and to permit such Lot owners to carry out minor renovation or alterations or repairs. The power to do so is despite other Lot owners having an interest in the common property as tenants in common. That is, individual rights to object might be overridden, even if there is a loss of amenity suffered by an objector. 45 It follows that the determination of whether a refusal is unreasonable must depend upon the conduct of the owners corporation and all the relevant circumstances. 46 The Tribunal said in its reasons, relying on the decision in Yardy v Owners Corporation Strata Plan 57237 [2018] NSWCATCD 19, that "the word 'unreasonable' means not based on or in accordance with reason or sound judgement": reasons at [39]. In saying so, the Tribunal, correctly in our opinion, noted that the test was an objective test. 1. At [52]-[53] the Appeal Panel continued: 52 It follows that what the Tribunal is required to do is determine whether, in all the circumstances, the refusal of the respondent to approve the work was unreasonable. 53 That is not to suggest that individual lot owner's views are not relevant to determining whether the refusal by an owners corporation was unreasonable. Rather, it is one of the factors to be taken into account when determining whether the refusal to approve works was unreasonable in all the circumstances. 1. As to evidence of individual owners and the evaluation of that evidence in the context of deciding whether a decision of an owners corporation was unreasonable for the purpose of s 149(1), in Kaye v The Owners – Strata Plan No 4350 [2022] NSWSC 1386; (2022) 20 BPR 42,767, Basten AJ said at [47]-[48]: [47] … Those voting at the extraordinary general meetings were not required to disregard all considerations which were not established by some objective material placed before the meeting. Nor were they required to give particular weight to particular matters. Lot owners were entitled to have regard to their own interests and, so long as they did not act unreasonably, have regard to their own experience and beliefs as to how a particular change might affect them. [48] Further, the interests of the proponents and the interests of other lot owners were likely to be in conflict. It was not for the Appeal Panel to seek to "balance" those interests by apportioning weight between them, so as to conclude that a refusal would be unreasonable if the balance favoured the proponents. The function of the Appeal Panel was to determine whether the refusal was "unreasonable". In making that assessment, it was entitled to treat as a valid reason for voting against the proposal a belief or opinion, whether or not it was supported by "evidence". The Management Act does not require that the owners corporation accept any proposal which was objectively reasonable. Nor should the Tribunal, in applying s 149(1)(a) of the Act, decide that a refusal was unreasonable merely because it considered the proposal to be reasonable. … 1. The principles applicable to the grant of leave are set out in the decision of Collins V Urban [2014] NSWCATAP 17 (Collins). 2. As to the requirements concerning the grant of leave under Sch 4 cl 12(1)(a)-(b) of the NCAT Act, namely that there was a substantial miscarriage of justice because the decision was not fair and equitable or was against the weight of evidence, the Appeal Panel in Collins said at [76]-[79]: 76 Accordingly, it should be accepted that a substantial miscarriage of justice may have been suffered because of any of the circumstances referred to in cl 12(1)(a), (b) or (c) 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. 77 As to the particular grounds in cl 12(1)(a) and (b), without seeking to be exhaustive in any way, the authorities establish that: (1) If there has been a denial of procedural fairness the decision under appeal can be said to have been "not fair and equitable" - Hutchings v CTTT [2008] NSWSC 717 at [35], Atkinson v Crowley [2011] NSWCA 194 at [12]. (2) The decision under appeal can be said to be "against the weight of evidence" (which is an expression also used to describe a ground upon which a jury verdict can be set aside) where the evidence in its totality preponderates so strongly against the conclusion found by the tribunal at first instance that it can be said that the conclusion was not one that a reasonable tribunal member could reach - Calin v The Greater Union Organisation Pty Ltd (1991) 173 CLR 33 at 41-42, Mainteck Services Pty Limited v Stein Heurtey SA [2013] NSWSC 266 at [153]. 78 If in either of those circumstances the appellant may have been deprived of a "significant possibility" or a "chance which was fairly open" that a different and more favourable result would have been achieved then the Appeal Panel may be satisfied that the appellant may have suffered a substantial miscarriage of justice because the decision was not fair and equitable or because the decision was against the weight of the evidence. 79 In order to show that a party has been deprived of a "significant possibility" or a "chance which was fairly open" of achieving a different and more favourable result because of one of the circumstances referred to in cl 12(1)(a), (b) or (c), it will generally be necessary for the party to explain what its case would have been and show that it was fairly arguable. If the party fails to do this, even if there has been a denial of procedural fairness, the Appeal Panel may conclude that it is not satisfied that any substantial miscarriage of justice may have occurred - see the general discussion in Kyriakou v Long [2013] NSWSC 1890 at [32] ff concerning the corresponding provisions of s 68 of the CTTT Act and especially at [46] and [55]. 1. In the present case, the Tribunal evaluated the evidence put forward by each party. This included: 1. The Air Conditioning Application Forms, SBL 5 and the submission that the by-law contravened s 139(1) of the SSMA (a proposition we rejected above); 2. Statements from Mr Hunt; 3. Medical evidence concerning Noela Hunt's need for air-conditioning; 4. Historical records concerning communications about the approval sought; 5. Statements from other lot owners concerning how they voted and their considerations; and 6. Expert evidence, including a joint report. 1. The appellants provide a detailed commentary against each of the paragraphs of the Tribunal's reasons. Many of the paragraphs to which reference is made are no more than the Tribunal recording the submissions of the parties, although the appellants appear to contend that these paragraphs represent findings. For example, at October AB 33, referring to paragraph 25 of the Tribunal's reasons, the appellant says: SM states that any condition was not severable from the others. 1. Accordingly, it is not necessary to deal with this commentary in detail. Rather, the issue is whether the Tribunal's analysis of the evidence and its determination of the application, found at [48] of the reasons and following and the submissions received in relation thereto establish circumstances warranting the grant of leave. 2. As noted above, at [78] the Tribunal found the proposal for Unit 13 did not comply with SBL 5. Consequently, the Tribunal determined that the refusal was not unreasonable. In doing so, the Tribunal said it was not necessary to consider other matters raised by the parties. 3. However, the Tribunal then continued to consider discretionary matters that might apply if s 126 was engaged. We have set out above the Tribunal's reasons in respect of these matters. 4. Where a party is self-represented, it may be necessary to examine whether the issues raised in a notice of appeal properly identify a question of law. In Cominos v Di Rico [2016] NSWCATAP 5, the Appeal Panel said at [13]: It may be difficult for self-represented appellants to clearly express their grounds of appeal. In such circumstances and having regard to the guiding principle, it is appropriate for the Appeal Panel to review an appellant's stated grounds of appeal, the material provided, and the decision of the Tribunal at first instance to examine whether it is possible to discern grounds that may either raise a question of law or a basis for leave to appeal. The Appeal Panel has taken such an approach in a number of cases, for instance, Khan v Kang [2014] NSWCATAP 48 and Prendergast v Western Murray Irrigation Ltd [2014] NSWCATAP 69. However, this must be balanced against the obligation to act fairly and impartially (Bauskis v Liew [2013] NSWCA 297 at [68] citing Hamod v State of New South Wales [2011] NSWCA 367 at [309]-[316]). Relevantly, s 38(2) provides that that Tribunal "may inquire into and inform itself on any matter in such manner as it thinks fit, subject to the rules of natural justice." 1. In the present circumstances, in our view the matters relied upon as constituting error concerning the finding that the refusal was not unreasonable do not raise a question of law. Rather, they raise a challenge to a factual conclusion. 2. The Tribunal was required to determine whether the applications made pursuant to SBL 5 for the installation of air conditioning were unreasonably refused. 3. The effect of the Tribunal's approach and factual findings made can be summarised as follows: 1. The applications were made for approval under SBL 5, the ultimate decision being referred to an extraordinary general meeting of the respondent for decision, rather than by the strata committee. 2. Each proposal did not comply with SBL 5 having regard to the position of each air-conditioning unit and its visibility and the requirement of cl 23 that they be "out of sight from other apartments". 3. The motion for approval was lost at the extraordinary general meeting on 19 July 2022. 4. The Tribunal reviewed all evidence, both from the appellants (as applicants) and the respondent (including the respondent's witness statement) and the expert evidence and joint experts report concerning the position and amenity of the proposed air-conditioning units. 5. The fact of non-compliance with SBL 5 (23) was a sufficient reason to conclude the refusal was not unreasonable. 6. Further, while dealt with in the context of the discretion afforded by the word "may" in s 126(2) of the SSMA, the Tribunal found: 1. The refusals were not an outright rejection of a request to install air-conditioning, but only a rejection of the proposal to install the air-conditioning in what the Tribunal described as the "applicants' optimal solution" (where the condenser unit was visible to many of the other lot owners, but not the applicants themselves). 2. Although not known at the time the motion for approval was lost, there was further non-compliance in that relevant statutory approval had not been sought and obtained. 3. It was unnecessary to consider issues of child safety and the regulations applicable to the placement of the condenser. 4. Because there was not an absolute prohibition on installing air conditioning, Noela Hunt's medical needs were not disregarded. 5. In connection with Unit 14, there was also an issue concerning visibility of pipework, such pipework placement itself infringing cl 23. In this regard, while there were proposals for placement of the pipework and/or for penetrations to common property to permit it's concealment, there was a lack of clarity as to the proposal. 1. The appellants raised a number of factual matters which they say the Tribunal had not considered or should have led to a different result. These matters included: 1. Discussions in earlier years, well prior to the meeting on 19 July 2022, concerning proposals by the appellants to install air-conditioning units, including events leading up to the passing of SBL 5 in 2015. 2. The medical condition of Noela Hunt. 3. The submission of alternative proposals differently configuring the orientation of the air-conditioning units. 4. Discussions subsequent to the Tribunal's decision of 10 August 2023 where the appellants say "we have endeavoured to reach out to the Strata Committee with alternative options (the North/South position on the return balcony (Append 22) and the common dividing wall between the balconies of Unit 13 and 14), for the 2A/C condensers, in an attempt to resolve this matter (Append 33)". 5. The fact of climate change and the need for air-conditioning. 6. That the installation of air-conditioning in Unit 18 "was illegal". 1. As to why leave should be granted, the appellants say: 1. "(T)here is a question of public importance here for the broader community of persons resident in the Strata Plan buildings that should be taken into account in considering our Appeal". The matters identified are the fact older people are encouraged to "downsize" and that 50% of the people in New South Wales live in strata premises. Accordingly, the appeal raises important questions concerning health and disability as well as child safety issues concerning "child balcony safety". 2. There was a "perceived miscarriage of justice" in the handling of the air-conditioning dispute by SM Deane. The appellant argues that SM Deane overlooked crucial evidence, including affidavits and reports, leading to an unjust decision. The appellants suggest four options for condenser placement and contend that SM Deane failed to understand the "logistical aspects of the proposal". 3. Ms Noela Hunt also challenges "the rejection of the medical evidence related to her health condition" again stating that SBL 5 "prohibiting air-conditioning is unjust, harsh and oppressive". 1. In relation to Tribunal rejecting the application for an order under s 232, the appellants say the documents disclose an "unwillingness to negotiate" on behalf of the respondent and that the case has broader public interest implications for the reasons noted above. 2. We do not accept that the appellants may have suffered a substantial miscarriage of justice for the following reasons: 1. The findings of the Tribunal were available to it on the evidence. 2. The applications, having been made under SBL 5, were required to be considered by the strata committee or the respondent in general meeting and determined according to that by-law. 3. We have rejected the challenge in this appeal concerning the by-law contravening s 139(1) of the SSMA. 4. No general application was made to the respondent for approval by special resolution to otherwise do work to alter the common property as might be permitted by s 111(c) of the SSMA. 5. Any alternative proposals were not what was put to the extraordinary general meeting. 6. As found by the Tribunal, the refusal does not prevent the appellants from installing air-conditioning in different location which did not affect the amenity of other lot owners and otherwise complies with SBL 5. The fact this may have required additional work- for example to reconfigure the bi-fold doors, or that it may have impacted the appellants' views, did not make the refusals unreasonable. 7. There is no matter of principle or public importance that would otherwise warrant the grant of leave. 1. Consequently leave to appeal should be refused. Orders 1. In light of our conclusions, we make the following orders: 1. Leave to appeal is refused and the appeal is 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 22 April 2024 - Amended date of publishing 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: 22 April 2024