New South Wales Supreme Court CITATION : Stanley Melbourne Gillett & Anor v Brian John Walsh [2009] NSWSC 1436 HEARING DATE(S) : 14/12/09 JUDGMENT DATE : 18 December 2009 JURISDICTION : Equity Division Technology and Construction List JUDGMENT OF : Einstein J DECISION : Interlocutory injunction ordered. CATCHWORDS : Practice and procedure - Strata Schemes Management Act 1996 - Consumer Trade and Tenancy Tribunal - Jurisdiction - Ex parte application to adjudicator for urgent orders restraining defendant from carrying out building works in breach of by-laws - Evidence that adjudicators orders being flouted by defendant - Whether Supreme Court has jurisdiction by interlocutory or other injunction to restrain continuance by defendant of its refusal to abide by the adjudicators orders - Interplay between Consumer Trade and Tenancy Tribunal and Strata Schemes Management Act 1996 - Interlocutory injunctions - Principles LEGISLATION CITED : Strata Schemes Management Act 1996 Supreme Court Act 1970 CATEGORY : Procedural and other rulings Appleton Papers Inc v Tomasetti Paper Pty Ltd [1983] 3 NSWLR 208 Buzrio Pty Limited v Consumer, Trader & Tenancy Tribunal [2009] NSWSC 836 CASES CITED : Buzrio Pty Limited v Consumer, Trader & Tenancy Tribunal (No 2) [2009] NSWSC 937 Crawley v Cochrane (1998) NSW Title Cases 80-051 Stollznow v Calvert [1980] 2 NSWLR 749 Stanley Melbourne Gillett (First Plaintiff) PARTIES : Juliana Yvonne Schaeffer (Second Plaintiff) Brian John Walsh (Defendant) FILE NUMBER(S) : SC 55117/09 COUNSEL : Mr J Young (Plaintiffs) Mr N Eastman (Defendant) SOLICITORS : Bannermans Lawyers (Plaintiffs) Gadens Lawyers (Defendant) IN THE SUPREME COURT OF NEW SOUTH WALES EQUITY DIVISION TECHNOLOGY AND CONSTRUCTION LIST Einstein J Friday 18 December 2009 55117/09 Stanley Melbourne Gillett and Anor v Brian John Walsh JUDGMENT The proceedings 1 The proceedings before this Court had their genesis in an application made on 26 November 2009, the subject application constituting a request for an interim order to be made under the Strata Schemes Management Act 1996 (the Act or the SSMA]. 2 The application was brought by the plaintiffs, Stanley Gillett and Julie Schaeffer. The plaintiffs are tenants in common of lot number 54, Strata Plan 70726. The subject premises are situated at Greenknowe Avenue, Elizabeth Bay. 3 Pursuant to section 217 of the SSMA the Minister appointed a Strata Schemes Adjudicator in relation to interim orders sought by the plaintiffs [under section 170 of the Act]. 4 Subsection (1) of section 170 deals with interim orders and provides as follows: If an applicant for an order under another provision of this Chapter requests the making of an interim order and an Adjudicator is satisfied on reasonable grounds that urgent consideration is justified in the making of the orders, the Adjudicator may : (a) make any order that could otherwise be made by the Adjudicator or the Tribunal, and (b) renew the order by serving notice in accordance `with section 174 that the order is renewed if a request for its renewal is made not later than three months after the order was made 5 A number of other provisions are made in sections 170, 171 and 172 whereunder: i. an adjudicator is given power to revoke an interim order, or a renewal of an order; ii. provision is made for the duration of interim orders; iii. powers are granted for the variation or revocation of an order by an adjudicator and similar. 6 As Rothman J observed in Buzrio Pty Limited v Consumer, Trader & Tenancy Tribunal [2009] NSWSC 836, the construction of any statute requires a reading of the statute as a whole. Both in those proceedings and in these current proceedings an understanding of the relationship between the SSMA and the CTTT is of the first order. His Honour's reasons assist in that understanding. As his Honour observed the SSMA in section 124 deals with applications for an order to be made to the Registrar. 7 It is necessary to keep in mind the fact that no application was made to the CTTT. The material application was made to an adjudicator. As the adjudicator made clear in the reasons for decision, the interim orders were sought pursuant to section 170 of the Act. Further the Minister had appointed the adjudicator under section 217 of the SSMA and the adjudicator therefore had the powers set out in chapter 5 of the SSMA. 8 An adjudicator is a creature of the SSMA [Chapter 6 Part 2] and has clearly delineated functions under that Act [Chapter 4 Part 4], as distinct from the Tribunal. The Tribunal is constituted by the Chairperson, Deputy chairperson and Members, but not by adjudicator's [CTTT Act Section 6]. The dispute 9 In essence the dispute with the defendant [Mr Brian John Walsh] concerns the entitlement of the defendant to carry on particular works on a unit owned by him [lot number 49 in the Strata Plan]. Mr Walsh's unit on level 6 comprises 322 square metres with a terrace - a total area of 404 square metres. 10 The plaintiffs' unit is situate immediately above Mr Walsh's unit and also includes a terrace: so that if one stands on the terrace of the plaintiffs' unit on level 7 and looks down, one looks down on the terrace of the defendant's unit on level 6. 11 The plaintiffs have made clear that their application arises because of their complaint that certain work commenced by the defendant will obstruct the plaintiffs' level 7 views. 12 The plaintiff's contention is that work of the type commenced by the defendant cannot be performed without a 'special resolution' of the Owners Corporation, which it is contended has never been passed. This requirement is said to arise from the by-laws of the Strata Scheme which are said to require that the development, if affecting the common property, requires such a special resolution. 13 The subject by-laws are in evidence. Relevantly: i. By law 2.3 includes the following: a) Who must comply with the by-laws? b) Owners and occupiers of apartments must comply with the by-laws which relate specifically to apartments; c) All owners and occupiers must comply with the by-laws which do not relate specifically to apartments, storage lots and the retail lot; d) The owners Corporation must comply with the by-laws. ii. By law 6.2 includes the following: Subject to your rights under the by-laws, you must have consent from the Owners Corporation to: carry out building works (see by law in 19 for more information) 14 The definition of building works is in the following terms: Buildings works Works, alterations, additions, damage, removal, repairs or replacement of: (a) common property structures, including the common property walls, floor and ceiling enclosing your lot. Common property walls include windows and doors in those walls; (b) the structure of your lot; (c) internal walls inside your lot (eg a wall dividing two rooms in your lot); (d) common property services; or (e) services in Manhattan, whether or not they are for the exclusive use of a lot; Building works include altering or removing an inter-tenancy wall according to by-law 20. Building works exclude: (a) minor fit out works inside a lot; and (b) works or alterations to the interior or common property walls enclosing a lot (eg hanging pictures or attaching items to those walls). 15 By law 19 is headed: Carrying out building works. By law 19.1 reads i. When do you need consent? ii. Subject to the by-laws, you must have consent from the Owners Corporation to carry out building works. 16 By law 19.3 is headed: Procedures before you carry out building works 17 By law 22.2 is headed: When would you need consent from the Owners Corporation? It reads: Subject to the by-laws, you must have consent from the Owners Corporation to: (a) interfere with or damage common property; (b) remove anything from common property that belongs to the Owners Corporation; (c) interfere with the operation of common property equipment. 18 By law 34 deals with how consents given and provides [34.1]: Unless a bylaw states otherwise, consents under the by-laws may be given by : (a) the owners corporation and a general meeting; or (b) the executive committee at a meeting of the executive committee. 19 Other provisions of by law 34 provide for the Owners Corporation or the executive committee being able to make conditions if they give consent to do things under the by-laws which conditions have to be complied with. They also provide that consent can be revoked for failure to comply with conditions made by the Owners Corporation or the executive committee when they gave consent or for failure to comply with the by law under which consent was given. 20 Section 65 of the SSMA provides in subsection 1 as follows: For the purpose of improving or enhancing the common property, an owners corporation or an owner of a lot may take any of the following action, but only if a special resolution has first been passed at a general meeting of the owners corporation that specifically authorises the taking of the particular action proposed : (a) add to the common property (b) alter the common property (c) erect a new structure on the common property 21 The plaintiffs' proposition is that what is now being done is caught by section 65 A (i) (c) because the surface of the terrace is common property. In essence the plaintiffs seek to protect against the lack of the approval required pursuant to section 65A of the SSMA. 22 As I have understood the position, the parties are at issue as to whether or not the requisite special resolution has ever been passed. There is before the Court evidence adduced by the plaintiff [and admitted without objection] to the effect that on 11 December 2009 the plaintiffs' solicitor had a conversation with the strata managing agent for Strata Scheme 70726 during which that managing agent was asked to confirm whether there had been any resolution passed in a general meeting of the Owners Corporation authorising building works to the balcony of lot 49. The answer was that there had been no resolution passed. 23 The further question put to the strata managing agent sought his confirmation as to whether there had been any discussion of works to the balcony of lot 49 in a general meeting of the Owners Corporation. The answer was that there had not been any such discussion in a general meeting. The Adjudicator's reasons and consequential order 24 The Adjudicator acting ex parte gave the following reasons: Application The Applicant is the owner of lot 54 in Strata Scheme SP 70726; the Respondent is the owner of lot 49 in the same scheme. The applicant is seeking interim orders under section 170 of the Act. There is a substantive application seeking orders in relation to works being carried out on the Respondent's balcony. Discussion The Minister has appointed me an Adjudicator under s 217 of the Strata Schemes Management Act 1996 (the Act). As an Adjudicator I have the powers set out in Chapter 5 of the Act. The powers include the power to make an interim order under s 170 where an applicant for an order another provision of Chapter 5 requests the making of such an order. On 26 November the applicant made an application for an order of Adjudicator under Chapter 5. Also on that date the applicant requested the Adjudicator make an interim order. Under section 170 of the Act an interim order can only be made if the "Adjudicator is satisfied on reasonable grounds that urgent considerations justify the making of the order". If the Adjudicator is so satisfied, the Adjudicator may make any order that could otherwise be made by the Adjudicator or Tribunal. Interim orders are not granted lightly. Generally the word "urgent" connotes immediacy, that is, a situation in which it would be inappropriate for action to be delayed, or for time to intervene before a certain course is undertaken. This request was filed in the Registry yesterday. The respondent has not been given notice of the request at this state. I am aware of the judgments of the Supreme Court in Buzrio Pty Limited v Consumer, Trader & Tenancy Tribunal [2009] NSWSC 836 and Buzrio Pty Limited v Consumer, Trader & Tenancy Tribunal [2009] NSWSC 937. These judgments require the Tribunal to observe the rules of procedural fairness in making interim orders under s 170. In the normal course that would involve giving the affected party notice of the request prior to making any determination. I am also aware of the earlier judgment of the court in Crawley v Cochrane (1998) NSW Title Cases ¶80-051. In that case the Court held that notice does not have to be given by the Adjudicator before making an order under s 170. The Court in that case was persuaded to this view by the fact that the person affected by the order could make an immediate application for revocation or stay of any such order. I also note that under s 168 of the Act an Adjudicator may dispense with the requirements for written submissions prior to making an interim order. It may be that, in light of conflicting authority, the legislation needs to be amended to clarify the procedures to be followed by an Adjudicator in making orders under s 170. In this case, for the reasons set out below, I consider that the request for an interim order should be granted on an ex parte basis. I note that Rothman j in Buzrio Pty Limited v Consumer, Trader & Tenancy Tribunal [2009] NSWSC 836 at paragraph 48 envisaged that, given the urgency of a particular situation, such orders could be made under s 170. In this case, the Respondent is in the process of carrying out building works on his balcony. The Applicant states that the works will interfere with his view. Further, that the works are in breach of by-laws, and there has been no valid consent given to the works by the Owners Corporation. He states that if the works are allowed to continue there may be significant costs incurred in restoring common property should the Adjudicator on the substantive application order work to cease, or even as he is seeking, be removed. In the circumstances, taking into account the substantial costs and damage that may accrue should the works continue, I am satisfied that urgent considerations justify the making of the orders. In making this order I am mindful that those affected have not had an opportunity to put their point of view. It is, however, open to the respondent to make an application to revoke the order and that application will be considered by an Adjudicator expeditiously. 25 The orders made by the Adjudicator were as follows: 1. The Respondent is to cease all building works on the balcony of lot 49. 2. This order has effect for a period of three months from the date of this order unless revoked, renewed or the application is earlier determined in accordance with Chapter 5 of the Strata Schemes Management Act 1996. 3. This order may be renewed by an Adjudicator if a request for its renewal is made no later than three months after the date this order is made. 4. This order may be revoked by an Adjudicator on application of a person affected by the order. 5. Within 72 hours of receiving this order the Owners Corporation must display a copy of the order on the scheme notice board for a period of 14 days. 6. If there is no notice board the Owners Corporation must give a copy of the order to each person shown on the strata roll. Dealing with the matter 26 It is unnecessary to do otherwise than briefly restate the principles which inform the grant or refusal of an application for an interlocutory injunction. 27 In Appleton Papers inc v Tomasetti Paper Pty Ltd [1983] 3 NSWLR 208 at 215, McLelland J pointed out the importance of recalling that the Court here deals with a discretionary power conferred on the Court in very general terms. As McLelland J made plain at page 216 citing from the judgment of Moffitt P in Stollznow v Calvert [1980] 2 NSWLR 749: "While useful guidance is provided by the manner of exercise of the discretion in other cases, and by the factors considered in those cases to favour the exercise of the discretion in a particular way, each case must depend upon its own facts. It would be contrary to what I understand to be the accepted law in this country, to confine the exercise of a judicial discretion by judge made rigid formulae." "The Court addresses itself to two main enquiries. The first is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is, there is a probability that at the trial of the action the plaintiff will be held entitled to relief...the second enquiry...is whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused, outweighs or is outweighed by, the injury which the defendant would suffer if an injunction were granted." 28 Plainly enough the Court is not able in relation to the instant application to determine contested questions of fact. That process will be before a trial judge when the matter is finally heard. The jurisdictional issue 29 The defendant's counsel contended that this Court lacks jurisdiction to deal with the plaintiffs' dispute, relying on this regard upon section 22 (3) of the CTTT Act which was said to prevent any Court from dealing with any matter which is already before the Tribunal. 30 Section 66 (1) of the Supreme Court Act 1970 provides that the Court may, at any stage of proceedings, by interlocutory or other injunction, restrain any threatened or apprehended breach of contract or other injury. Subsection (4) of the same act provides that the Court may at any stage of proceedings, on terms, grant an interlocutory injunction in any case in which it appears to the Court to be just or convenient to do so. One needs to go no further to ground the jurisdiction of this Court in these proceedings. 31 Somewhat curiously it is to be observed that the defendant's very case so carefully put to the Court, contended that the subject orders were invalid for want of jurisdiction. 32 Subsection 5 of section 22 provides that subsection (3) does not prevent a Court from hearing and determining any proceedings in which it is claimed that any order, determination or ruling of the Tribunal is invalid for want of jurisdiction or from making any order as a consequence of that finding. Whilst it is unnecessary to go this distance, it could be argued that the defendants' very case, in itself, would suffice to permit this Court to determine these proceedings. The defendant's contention that nothing can be said against the proposition that the plaintiffs could never restrain works on the private lot 33 Amongst the many contentions put forward by the defendant was the contention that the plaintiffs' complaint could only relate to works on common property. 34 The problem with this argument concerns the plaintiff's contention that one of the specific items of work being carried out is to drill holes into the tiles on the surface of the deck of the terrace in order to build above that surface, a pergola with a retractable roof. This would contravene the provisions in section 65 (1) (c) earlier set out in these reasons. That section also refers to the requirement for a special resolution to have been passed at a general meeting of the Owners Corporation specifically authorising the taking of the particular action proposed where an addition to the common property or an alteration to the common property for the erection of a new structure on the common property is sought. 35 Whilst it is true that the defendant's contentions have strongly put that the plaintiffs could never restrain works on the defendant's private lot, this eschews the problems in any subsequent dispute as to what is and what is not common property: as for example whether particular bolts went into common property tiles or into some other tiles. These are the sorts of issues which require determination on a final hearing of the proceedings and not otherwise. The evidence before the Court as to the defendant's activities 36 There is evidence before the Court that the second plaintiff on or about 10 December 2009: i. having observed the erection of a crane immediately adjacent to the subject building; ii. having also observed road closures to Greenknowe Avenue; iii. having also viewed various building materials positioned on the footpath immediately adjacent to the building and a number of contractors and or labourers undertaking work in the avenue within the lot 49 in relation to the building materials and operation of the crane. 37 Her further evidence is that she approached one of the landscape gardening contractors with the order from the CTTT asking that the work be stopped and pointing out that the worker was in breach of the Tribunal's orders, to be told to contact her lawyer. 38 Her further evidence was that on or about 10 December 2009 she had a telephone conversation with the defendant in which she informed him that he was in breach of the Tribunal's orders and he responded by stating that those orders had been obtained without discussion with him. 39 Her further evidence was that later on that same day she had a conversation with the contractor supervising the works on the balcony of lot 49 in the course of which he said that he was putting the roof on the awning that day. Her further evidence is that on or about 11 December she observed labourers undertaking a number of works on the balcony of lot 49, including preparation of the site and preparation and assembly of building materials including part of an awning. The need for urgency in approaching this Court 40 It is apparent that it was necessary for the plaintiffs to approach this Court for the interlocutory injunction. I reject the proposition that in a situation of an urgent need to restrain a person from breaching an order made by or under the aegis of the CTTT, this Court has no jurisdiction to intervene by granting urgent interlocutory relief. 41 Standing back from the dispute, the application before the Supreme Court does not give rise to the same issues as arose in the hearing before the Adjudicator. The issue in this Court is whether it should exercise its coercive powers to restrain the defendants from taking certain steps. Clearly enough there is no such power available to the plaintiffs in the CTTT. Conclusion 42 The plaintiffs have established a serious case for determination. The balance of convenience is very clearly in favour of the Court extending the interlocutory regime first put into place by undertakings given to the List Judge on Friday last. To permit the work to continue upon the basis that should the defendant ultimately lose, those works would and could be dismantled, only has to be stated to be dismissed. 43 Nor is there any or any satisfactory evidence that the defendant will suffer prejudice as a result of the building works being unable to proceed, including that the building contract is likely to become frustrated. 44 For those reasons the orders made on 14 December granted the interlocutory relief sought by the plaintiffs and stood the proceedings over until early February in the new term. At that time it will be appropriate for the parties to approach the list judge for further directions. 45 The principled approach is to reserve costs of and occasioned in relation to the interlocutory application. ********* 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.