Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Gazebo Penthouse Pty Limited v The Owners - Strata Plan No 73943 [2014] NSWCATCD 55 Hearing dates: 11 November 2013 Decision date: 24 April 2014 Before: N Vrabac, Senior Member Decision: The Tribunal allows the appeal in matter no SCS 12/20802 and revokes the order made by the Adjudicator on 22 March 2012. The Owners Corporation is to restore forthwith exclusive use of Lift No 3 in the Tower Building to the owner of Lot 61, and thereafter not interfere with the exclusive use of the lift by the applicant, subject to the lawful repeal or variation of by-law 43. The application that an exclusive use by-law be made in the applicant's favour to have exclusive use and enjoyment of Lift No 3 in matter no SCS 13/21405 is dismissed. Catchwords: Exclusive use by-law Legislation Cited: Strata Schemes Management Act 1996 ("the Act") Interpretation Act 1987 The Owners Corporation of Strata Plan No 397 v Tate (2007) NSWLR 344 Cases Cited: Strata Schemes Management Act 1996 ("the Act") Interpretation Act 1987 The Owners Corporation of Strata Plan No 397 v Tate (2007) NSWLR 344 Category: Principal judgment Parties: Gazebo Penthouse Pty Limited (applicant) The Owners - Strata Plan No 73943 (respondent) File Number(s): SCS 12/20802 SCS 13/21405 Publication restriction: Unrestricted reasons for decision BACKGROUND 1.The former Gazebo Hotel was redeveloped into residential units and two commercial units between 2002 and 2005. 2.The developer was 2 Elizabeth Bay Pty Ltd. The guiding mind in the development of the Hotel, several decades ago, and the redevelopment in to the Strata Plan was Mr Sydney Fischer. He was the sole director of the companies involved. Mr Fischer is the sole director of the applicant company. 3.The strata plan comprises two buildings: the Tower Building and the Court Building. The Tower Building has 61 residential apartments and three lifts. The Court Building has 100 apartments and two lifts. 4.Level 18 of the Tower Building was formerly a roof top area. It was developed by one of Mr Fischer's companies into a habitable floor. It became lot 61. 5.Lift No 3 became the only lift servicing lot 61. 6.The strata plan 73943 was registered by the Developer 11 August 2005 7.The applicant is the proprietor of lot 61 in the Tower Building, Level 18. 8.The applicant acquired lot 61 in August 2006. 9.By-law 43 was registered in 2005 with the Strata Plan. 10.By-law 43 is in the following terms: 43.1 The owner of each lot has the right to the exclusive use and enjoyment of any service that exclusively services its individual lot that is located and forms part of the common property ("Exclusive Services"). 43.2 The owner is responsible for the ongoing repair and maintenance of the Exclusive Services. 43.3 In the event that the Owners or Occupier or person authorised by an owner fails to maintain the Exclusive Services in accordance with this by-law, the original owner during the initial period or the Owners Corporation following the expiration of the initial period, or any person authorised by it, may undertake any works necessary to maintain the Exclusive Service to be in keeping with this by-law. The costs of the original owner or Owners Corporation, as the case may be, undertaking such works shall be a debt payable by the owner to the original owner Owners Corporation as the case may be, on demand. 11.Lift No 3 was exclusively used by lot 61 between the period 2005 and 2011. In 2009 Mr Fischer gave a key to Lift No 3 to the occupiers of level 17 to use mainly when their children were staying with them. 12.On 11 January 2011 the Executive Committee met and noted in the Minutes that all lifts are common property and there is no restriction in place to prevent all residents from using them. 13.On 6 July 2011 the Owners Corporation's lift contractor re-programmed Lift No 3 to respond to calls from all residential floors in the Tower Building. APPLICATION 14.On 3 November 2011 the applicant applied for an interim and a substantive order by an Adjudicator. 15.The application for an interim order sought to have the respondent restore forthwith exclusive use of Lift No 3 in the Tower Building to the owner of lot 61, and thereafter not to interfere with the exclusive use of the lift by the applicant pending determination of the substantive application or earlier expiry of the interim order. 16.The substantive application sought an order for the Owners Corporation to restore forthwith exclusive use of Lift No 3 in the Tower Building to the owner of lot 61, and thereafter not interfere with the exclusive use of the lift by the applicant, subject to the lawful appeal or variation of by-law 43. 17.An interim order was made in the applicant's favour by an Adjudicator on 4 November 2012. The respondent was ordered not to interfere with the use by the applicant, its officers, servants, agents or invitees of the lift providing access to level 18, Tower Building SP 73943. 18.The respondent appealed against the decision to grant an interim order on 1 December 2012. 19.On 2 February 2013 the Tribunal revoked the interim order. 20.The applicant's substantive application was decided by an Adjudicator on 22 March 2012. 21.The application was dismissed. 22.The Adjudicator formed a view that by-law 43 makes no specific reference to Lift No 3 or indeed any other lift. Therefore, there could not be a grant of exclusive use of Lift No 3 to the applicant. 23.The Adjudicator decided the practice of all parties for a number of years was to conduct themselves in a manner consistent with there being no exclusivity granted by by-law 43. 24.The Adjudicator was satisfied that Lift No 3 has always been common property and remains so. 25.The Adjudicator was satisfied that, except for the times when Lift No 3 was being used for moving large furniture, the applicant effectively had sole access to Lift No 3. 26.The Adjudicator was not satisfied that re-programming of Lift No 3 amounted to alteration of common property for which approval in general meeting has not been given. 27.The present appeal is by the proprietor of lot 61 against the Adjudicator's decision. 28.The appeal was filed in the Tribunal on 12 April 2012. 29.The following are the grounds of appeal: 1.The Adjudicator erred in finding that by-law 43 could not confer exclusive rights in respect of the lift without a specific nomination of the lift in the by-law. 2.The Adjudicator erred in construing by-law 43 according to the subsequent conduct of the parties. 3.The Adjudicator erred in construing by-law 43 by placing weight upon the contention that the Owners Corporation has not requested payment of the maintenance and cleaning of the lift. 4.The Adjudicator erred in finding (or inferring) that the applicant not objecting to "the continued use over the years of the lift to bring furniture, etc into and out of the building" was inconsistent with the right of exclusive use and enjoyment of the lift. 5.The Adjudicator erred in finding that the respondent has not interfered with the applicant's exclusive use of Lift No 3, and that any interference was limited to the events of 11 October 2011. 6.The Adjudicator erred in failing to find that Lift No 3 has been designed to be used exclusively by the Penthouse levels (except for transporting persons by stretcher). 7.The Adjudicator erred in finding that the alterations and additions to the lift were "no more than utilizing the mechanical and/or electronic capabilities of common property to achieve the management obligations imposed on the Owners Corporation pursuant to s 61(1) of the Act." 8.The Adjudicator erred in failing to find that alterations and additions to the lift had not been authorised by the Owners Corporation. 9.The Adjudicator erred in his findings of fact and in weight given to his findings. 30.On 16 April 2012 the applicant filed a fresh application for adjudication, SCS 13/21045. An order was sought pursuant to s158 of the Act that a by-law be made to allow exclusive use and enjoyment of Lift No 3 to lots 60, 61 and 166. This application was transferred for determination to the Tribunal in June 2013 pursuant to s164 of the Act. 31.Lots 60 and 166 did not make submissions or take part in the proceedings. 32.The parties agreed that the evidence in one matter is the evidence in the other. 33.The Tribunal was, as outlined by the respondent, to deal with two questions in this appeal: (a)Does Lift No 3 exclusively service the applicant's lot, such that it has a right to the exclusive use and enjoyment of Lift No 3 under the scheme's by-laws? (b)If not, should the Tribunal make an exclusive use by-law giving the applicant that right? APPLICANT'S EVIDENCE 34.The applicant relied on the following in the appeal; a.All of the documents, submissions and statements in the Adjudication Files SCS 11/53748 and SCS 13/21405. b.Two folders of documents (Ex A), dated 17 August 2012 and documents, dated 16 September 2013. c.Applicant's submissions, dated 25 November 2013. d.Applicant's submissions in reply, dated 16 December 2013. 35.The applicant submitted that the language of by-law 43 confers a right of exclusive use of Lift No 3 on lot 61, level 18 and lot 166 and 60, levels 16 and 17. 36.The applicant stated that the Adjudicator erred in finding that by-law 43 could not confer exclusive rights in the lift without specific nomination of the lift in the by-law. 37.The applicant contends that the word exclusive in by-law 43 is to be construed by reference to its own language and its statutory context. There is no evidence, or suggestion of any other service which could possibly come within that description in by-law 43. 38.The applicant refutes the argument by the respondent, made to the Adjudicator, that Lift No 3 never provided an exclusive service to Gazebo, level 18. The applicant asserts that until July 2011, Lift No 3 was never available to levels 1-15.The Adjudicator made a finding to this effect in his Reasons for Decision. This finding, the applicant submitted, has not been challenged by the respondent. 39.The applicant stated that the respondent seeks to challenge the right given to lot 61 in by-law 43 because the language used in the by-law is to give exclusive right to an individual lot. The respondent argued that prior to 2011 exclusive services were given by Lift No 3 to 3 levels; 16, 17 and 18, which is more than one individual lot, specified in by-law 43. 40.The applicant's answer to the argument that by-law 43 may not permit exclusive right to more than an individual lot is in three parts: 41.Firstly, the applicant points to the Specification for Modernisation of Passenger lifts prepared in 2001 by EMF Griffiths Pty Ltd, Consulting Engineers. At 3.6 Lift 3 Priority "Penthouse Service", among other, the following is specified: "Lift 3 shall operate in a simplex directional collector system for penthouse residents on levels 16, 17, 18. Emergency services shall override all security as appropriate". The applicant says the specification is unambiguously clear, Lift No 3 was to be exclusively used by the 3 levels only, 16, 17 and 18. The applicant submitted that by-law 43 was directed at confirming, and reiterating, and securing what was stated in the specification. 42.Secondly, the applicant submitted that s52 of the Act clearly envisages that a right of exclusive use of common property may be conferred upon the owners of a number of lots, not just one. Section 52 states; How does an owners corporation make, amend or repeal by-laws conferring certain rights or privileges? (1)An owners corporation may make, amend or repeal a by-law to which this Division applies, but only: with the written consent of the owners of the lot or lots concerned and, in the case of a strata leasehold scheme, and (a) in accordance with a special resolution. 43.Thirdly, the applicant says that it is the applicant's interpretation of by-law 43, rather than the Owners Corporation's which serves the evident purpose of the by-law. The applicant contended that the language of by-law 43 easily and readily accommodates the conferring of "exclusive" use of Lift No 3 on all three levels, 16, 17 and18 because s8(b) of the Interpretation Act 1987 states that a word or expression in any Act or instrument in the singular form includes a reference to the word or expression in the plural form. 44.There are several other matters submitted by the applicant to illustrate the historical circumstances surrounding by-law 43. The applicant states that Mr Fischer acquired the Gazebo on level 18 in 2006. Mr Fischer's statements are referred to, to note that the purchase was made on the understanding that Lift No 3 would be available only to the 3 Penthouse levels. 45.There were exceptions made in the exclusive use of Lift No 3 when the lift was required to move large furniture or if the lift was required to carry a stretcher in emergency cases. 46.The applicant concedes that it did not pay separately for any maintenance and repairs of Lift No 3. The applicant says that he was never asked to pay for any maintenance or repair costs. He is willing to meet his obligations in this regard. 47.The applicant contends that reprogramming of Lift No 3 in 2011 by the Owners Corporation, to make it available to all 18 levels, had obvious and considerable impact on the Gazebo. 48.The applicant refers to the report prepared by Mr Alan Hyam, Consultant Valuer, dated 16 August 2012. The report states (pps.16-17) that purchasers of prestigious apartments, particularly if they are located on upper levels of apartment buildings expect reliable lift access. It would be a disincentive to potential purchasers and they would pay significantly lower prices for apartments which do not have reliable lift access. 49.The prospective purchaser would face a prospect of having to walk down18 levels of fire stairs in the event if Lift No 3 was held up on any other floor. There is no exit to any other level from the stairwell, between level 18 and the ground floor 50.It is stated in the Valuer's Report that if exclusive use of Lift No 3 is not available to lot 61 there would be a diminution in value of $1.95 million. 51.The applicant points out that level 18 occupant does not have a key and cannot gain access to lift lobbies on any of the floors between level 18 and ground level. 52.Mr Fischer states the Gazebo would not be able to let the premises. It would not be viable for him to live on level 18. The use of level 18 for business purposes is made uncertain without exclusive access to Lift No 3. 53.The applicant submitted that the respondent conceded that no resolution has been passed at the meetings of the Executive Committee in November 2010 and January 2011 to alter the programming of Lift No 3 in the way it occurred in 2011. 54.The applicant states that the absence of a special resolution by the Owners Corporation to alter the programming of Lift No 3 is fatal to the Owners Corporation's case on the appeal. That is, the Owners Corporation did not comply with the requirements of s65A (1) of the Act. 55.Section 65A is in the following terms: 65A Owners Corporation may make or authorise changes to common property (1)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. The applicant claims that altering the reprogramming of Lift No 3 was done without the special resolution of the Owners Corporation and was therefore unauthorised and impermissible. 56.The applicant asserts that the Adjudicator made an error when he concluded that reprograming of Lift No 3 was no more than utilising the mechanical and/or electronic capabilities of common property to achieve the management obligations imposed on the Owners Corporation pursuant to s 61(1). The applicant maintains that the re-programming the operation of a lift system which is a part of common property, to operate in a completely different way, amount to altering that system, and thus the common property. 57.The applicant notes that the dictionary meaning of "alter" is to make different in some respect; modify. The applicant contends that the person who re-programmed Lift No 3 described in his report the tool that he used to make the change as "a key pad, by which one could alter the operation of the software"...The applicant contends that the action taken by the respondent in July 2011 to alter the programming of Lift No 3 system was unauthorised and has to be reversed. It is submitted the Tribunal should order the restoration of the pre-existing status quo in relation to Lift No 3. SCS 13/21405 APPLICATION THAT A BY-LAW BE MADE, SECTION 158 AND 169 58.The applicant applied for an order to be made by an Adjudicator, in the alternative to the restoration of the rights to the exclusive use of Lift No 3. Section: 158, 169 1. That a by-law be made in the following terms: SPECIAL BY-LAW Notwithstanding anything to the contrary in by-law 43 registered with Strata Plan 74943 and on the conditions set out in this by-law, the owners for time being of lots 60, 61 and 166 shall have a right of exclusive use and enjoyment of Lift No 3 in the Tower Building ("the Lift"). For this purposes of this by-law, the Lift shall include the lift housing and all operating equipment serving only Lift No 3. Conditions 1.The owner for the time being of lot 61 shall be solely responsible for the proper maintenance and keeping in state of good and serviceable repair of the Lift. 2.Notwithstanding anything to the contrary in this by-law, the lift may be used: (a)to transport a person by stretcher to or from an apartment in the Tower Building; (b)to transport furniture, which by virtue of its size cannot be transported in another lift in the Tower Building, in and out of an apartment, provided that the occupiers of lots 60, 61 and 166 are given not less than 72 hours' written notice. 3.In this by-law, "occupier" of a lot includes an owner who occupies the lot. 2. The Owners Corporation do everything required to secure registration of the order under s 209 of the Strata Schemes Management Act 1996. The applicant submitted that the Owners Corporation refused to make the above by-law at an Annual General Meeting on 7 March 2013. The applicant contends that the Owners Corporation's refusal to make the by-law was unreasonable. 59.The Tribunal has the power to make an order in the applicant's favour under s158 of the Act for a special by-law to give the owners of lots 60, 61 and 166 a right of exclusive use and enjoyment of lift No 3 in the Tower Building, 60.Section 158 is as follows: 158 Order with respect to by-laws conferring exclusive rights or privileges over common property (1)An Adjudicator may make an order prescribing the making, amendment or repeal, in terms of the order, of a by-law if the Adjudicator finds: (a) on application made by an owner, that the owners corporation has unreasonably refused to make a by-law of the kind referred to in section 51, or (b) on application made by an owner or owners corporation, that an owner of a lot, or the lessor of a leasehold strata scheme, has unreasonably refused to consent to the terms of a proposed by-law of that kind, or to the proposed amendment or repeal of such a by-law, or (c)on application made by any interested person, that the conditions of such a by-law relating to the maintenance or upkeep of any common property are unjust. (2) In considering whether to make an order under this section, an Adjudicator must have regard to: (a) the interests of all owners in the use and enjoyment of their lots and common property, and (b) the rights and reasonable expectations of any owner deriving or anticipating a benefit under a by-law of the kind referred to in section 51. (3) An Adjudicator must not determine an application referred to in subsection (1) (a) by an order prescribing the making of a by-law in terms to which the applicant or, in the case of a leasehold strata scheme, the lessor of the scheme is not prepared to consent. (4) For the purposes of subsection (1), an Adjudicator may determine that an owner has unreasonably refused consent even though the owner already has the exclusive use or privileges that are the subject of the proposed by-law. (5) An order under this section, when recorded under section 209, has effect as if its terms were a by-law (but subject to any relevant order of a superior court). 61.The application under s158 was made to the Adjudicator. It was referred to the Tribunal pursuant to s164 of the Act because the issue for determination, the exclusive use of Lift No 3, is the same as the issue on appeal. 62.In view of the decision I propose to make I will only briefly deal with the facts of this application to illustrate that both proceedings, the appeal and the adjudication, were concerned with one issue only; the exclusive use and enjoyment of Lift No 3 by the applicant. 63.The applicant submitted that the proposed by-law was put before an EGM in October 2012. The item was adjourned following a debate to consider possible amendments. 64.The application to the Owners Corporation to make a by-law regarding Lift No 3 in the applicant's favour was next considered at an AGM in March 2013. There was an amendment put forward by the Executive Committee. 65.The applicant says that under this amendment, which was lengthy and complicated, the Owners Corporation was to continue to be responsible for the repair and maintenance of Lift No 3.The Executive Committee amendment was defeated. 66.At the March AGM, the applicant put forward his own amendment to the proposed by-law. The applicant's amendment was that he and not the Owners Corporation would be responsible for the maintenance and repair of Lift No 3. 67.The applicant's amendment was also defeated. The applicant notes that margin of his defeat was less than the margin of the defeat of the Executive Committee's amendment. 68.The applicant submitted that the refusal by the Owners Corporation to make the amended by-law sought by the Gazebo was unreasonable. 69.The applicant says that under the proposed by-law the interests of all owners are appropriately dealt with in accordance with s158(2)(a) and rights and reasonable expectations of the applicant, anticipating a benefit under the proposed by-law, are also met in accordance with s158(2)(b) of the Act. 70.The applicant states that no reason has been given by the respondent for the refusal. The applicant points out that Mr Donnison, a resident, Executive Committee Member since March 2010 and the Chairperson of the Executive Committee since July 2010, gave evidence for the respondent concerning this and other matters. 71.He stated in cross-examination that the concern of the respondent under the proposed by-law was the cost of maintenance and repair of Lift No 3. 72.The applicant notes that this issue was directly addressed by his amendment to the proposed by-law. That is, the applicant offered to meet the cost of maintenance and repair of Lift No 3. 73.The applicant submitted that the respondent has given no reason to suggest that the alteration made to Lift No 3 was actually needed. The respondent has not shown nor did his expert Mr Smith suggest that three lifts are necessary for the reasonable amenity of occupants on levels 1-15. 74.In contrast, the applicant argued that the evidence given by his expert, Mr Brinnand, a lift expert of some 46 year experience, established that two lifts were standard in Sydney buildings of up to at least 20 floors. 75.Further to the expert evidence, the applicant submitted that Mr Fischer gave evidence that the respondent has not ever suggested to him that Lift No 3 had to be used because the facilities provided by lifts 1and 2 were inadequate. 76.The applicant states that Mr Donnison, who is not a lot owner, took it upon himself to alter the "pre-existing status quo" on the exclusive use of Lift No 3 by lot 61. 77.It is submitted that Mr Donnison is motivated by hostility towards Gazebo and Mr Fischer. His hostility has come to overpower the application of rational thought in this matter. RESPONDENT'S EVIDENCE 78.The respondent relied on the following in the appeal: a.All of the documents, submissions and statements in the Adjudication Files SCS 11/53748 and SCS 13/21405 b.Two folders of documents (Ex B), dated 5 October 2012 and 15 July 2013. c.Respondent's submissions, dated 9 December 2013. 79.The respondent noted that the Adjudicator erred regarding the proper construction of by-law 43.The Adjudicator held that the exclusive use of common property, such as Lift No 3, may not be granted without specifically nominating the common property in the by-law. 80.The respondent agreed with the applicant's contention that the Adjudicator made an error in holding that by-law 43 could not confer a right of exclusive use of Lift No 3 on the applicant, without specifically referring to the lift in the by-law. 81.However, the respondent submitted that the Adjudicator's conclusion, despite the abovementioned error, that Lift No 3 was always a part of common property and remains so, is not wrong. 82.The respondent submitted that the question whether by-law 43 confers a right of exclusive use of Lift No 3 on the applicant depends upon whether, on its proper construction and on the facts, by-law 43 operates to confer such a right. 83.The respondent stated the issue of construction may be resolved by asking what do the words in by-law 43, "exclusively services its individual lot" mean in the context of the service provided by Lift Lo 3 ? 84.The respondent than provided in his submission analysis of the words cited in by-law 43. 85.The word "its" in by-law 43 refers to owner of the lot in question, being the owner of lot 61. 86.The word "individual" in by-law 43 indicates that the by-law is concerned only with the single lot owned by the owner in question. In this case the relevant "individual lot" is the lot owned by the applicant, namely lot 61, which is the only lot on level 18. 87.The word "exclusive" which is an adjective derived from an adverb "exclusively" means in short, to the exclusion of all others. 88.The next question that the respondent poses is, does Lift No 3 service (provide access to and from) lot 61 (level 18) to the exclusion of all other lots? The following examination of the facts is given in the respondent's submission. 89.Prior to the refurbishment of the Tower in 2005, Lift No 3 provided service to all levels in the Tower other than (level 18), lot 61. 90.One of the effects of the refurbishment was that Lift No 3 was extended to provide access to level 18. 91.Following the refurbishment and the registration of Strata Plan 73943, Lift No 3 has been designed to, and is mechanically capable of providing access to all levels, and thus all lots in the Tower. 92.Lift No 3 has been used since the registration of Strata Plan 73943 to move belongings of residents in and out of the Tower. Lifts no 1 and 2 are not large enough to take large furniture. Also, lifts 1 and 2 do not have padded curtains and floor mats. 93.Since 6 July 2011, Lift No 3 has been used by residents and guests of Lots on all levels to gain access to and from their respective properties. This is so, because the priority key system available to lots 166, 60 and 61 was taken out of group operation. Priority services to lots 166, 60 and 61 are available only when the priority key is used. 94.The respondent concluded that Lift No 3 does not provide access to lot 61 (level 18) to the exclusion of all other lots (or levels). Lift No 3 is not a service to which by-law 43 confers exclusive use and enjoyment on any individual lot owner. 95.The respondent makes a number of other submissions to deduce that the applicant has no right to the exclusive use of Lift No 3. I will briefly summarize these. 96.The respondent submitted that a right to exclusive use may only be conferred by a by-law which is subject to Division 4 Part 5 of the Act. The respondent's argument is that by-law 43 would give exclusive use of Lift No 3 to lot 61 if it was the only lot serviced by Lift No 3. The respondent states, "that is not the case". 97.The respondent rejects the applicant's contention that exclusive use of Lift No 3 is given to lot 61 because Lift No 3 is the only lift that services Lot 61. The respondent states that the applicant's contention is inverting the inquiry required by by-law 43. 98.The respondent submitted that the applicant's argument to have recourse to surrounding circumstances to give meaning to by-law 43 should be rejected. 99.The respondent cites in support of his contention the Supreme Court case about an exclusive use by-law concerning a lift; The Owners Corporation of Strata Plan No 397 v Tate (2007) NSWLR 344. 100.In Tate, McColl JA held that a meaning of a by-law should be understood from its statutory context and language. Caution should be exercised in going beyond the language of the by-law. 101.The respondent's contention is that proper construction of by-law 43 must be understood from the statutory context and language. No reference should be made to some historical documents to ascertain the nature of the exclusive use granted in the by-law. 102.The respondent referred to the applicant's evidence regarding the lift specifications from EMF Griffiths, dated November 2001. The specification provided that Lift No 3 was to exclusively service levels 16, 17 and18. The respondent submitted that a specification in a document dated November 2001 has no relevance to the proper construction of by-law 43. 103.The specification is not referred to in by-law 43 and it does not identify any particular common property service. The respondent pointed out that the applicant has not explained how, as matter of language, the specification is called up by by-law 43. 104.The language of the specification is not to be construed as a contract or some other legal document. The word "exclusive" in one sentence of the specification does not suggest conclusive evidence that the document is to have legal effect in relation to by-law 43. 105.The specification is an engineering document and has to be construed in its entirety. The respondent referred to the evidence of Mr Smith, an Escalator and Lift Consultant, given on behalf of the Owners Corporation. 106.Mr Smith's evidence was that the Specification provided for Lift No 3 to be included in the Group control function, but within the Group, Levels 16-18 should have priority service. The priority access key was used for Lift No 3 to make it available "exclusively for penthouse service landing calls on levels B1, G, 16, 17, 18 only" 107.The respondent referred to the applicant's submission which pointed out that the re-programing of software in July 2011 was outside the scope of the Specification. The respondent's answer to this submission is that the applicant cannot say that the system is required to continue to run with the programming which was put in place at the time the strata plan was registered, 108.The re-programming carried out by Greg Marsh on 6 July 2011 did not interfere with the applicant's right of exclusive use of Lift No 3 because the applicant has no such right. It follows from this argument that reprogramming did not require approval under s65A of the Act as contended by the applicant. Hence, the Adjudicator's decision on this issue ought to stand. 109.Section 65A prevents the Owners Corporation from adding to, altering or erecting a new structure on common property, unless a special resolution is passed authorising the addition, alteration or erection. The respondent does not dispute that the Owners Corporation is required to have prior authorisation under s 65A to alter or add to common property. 110.The respondent's contention is that there was no altering of the common property when the Lift No 3 was re-programmed. It was merely, as found by the Adjudicator, no more than utilizing the mechanical and/or electronic capabilities of the common property. 111.The re-programming was done, as explained by Mr Donnison, to optimise the service available from the scheme's lifts for the benefit of all owners and residents. The Adjudicator found that re-programming was done under s61 of the Act to achieve management obligation imposed on the Owners Corporation. 112.The respondent disputes the applicant's argument that the Adjudicator erred when he determined that re-programming was not an alteration within the meaning of s 65A. An analogy was made by the respondent to the effect that reprograming of Lift No 3 was analogous to changing the manner in which electronic equipment is operated such as air conditioners, exhaust systems, escalators and or security systems. DECISION 113.I am satisfied that the applicant has made out grounds one to six of the appeal. 114. I do not have to consider grounds seven, eight and nine because of the decision I have reached in relation to grounds one to six. 115.The following are brief reasons for the decision I have made. 116.The Adjudicator found that by-law 43 does not make specific reference to Lift No 3. The Adjudicator concluded that if no reference is made in the by-law to Lift No 3, there could not be a grant of exclusive use to the applicant. 117.The respondent conceded in his submission that the Adjudicator's construction of by-law 43 is incorrect. The by-law does not have to specifically nominate Lift No 3 to confer a right of exclusive use on the applicant. Hence, the ground number one of the appeal is made out. 118.In relation to ground number two, the Adjudicator decided that the parties conduct themselves in a manner consistent with there being no exclusivity granted by-law 43. That is, the Adjudicator inferred from the conduct of the parties that exclusivity to Lift No 3 was not granted to the applicant. 119.I disagree with the Adjudicator's conclusion and accept the submissions of the applicant in this regard. 120.The applicant submitted and he is supported by the evidence by Mr Fischer that Lift No 3 was never available, until it was re-programmed in July 2011, to levels 1-15. 121.The Adjudicator was satisfied, as well, that the applicant was the only occupant who appeared to have access to Lift No 3, other than when the lift was used for moving large furniture in and out by any lot in the Tower. 122.My view is that the conduct of the parties between 2005 and 2011 in respect of Lift No 3 clearly suggests that the lift was exclusively available to the applicant rather than the respondent. 123.The Adjudicator stated that the Owners Corporation did not request payment from the applicant for maintenance and cleaning of Lift No 3. 124.The Adjudicator stated that the applicant did not object to the continued use of Lift No 3 over the years, to bring furniture into and out of the Tower. 125.The applicant submitted that he was not ever been billed for whatever maintenance and repairs have been separately needed for Lift No 3. The applicant pointed out that he paid his share of levies for lifts 1 and 2 without being able to use either of those lifts. 126.The applicant submitted that he is prepared to meet the costs of maintenance and repair of Lift No 3. 127.The applicant contended that the failure to pay for maintenance and repair of Lift No 3 does not impact on the Gazebo Resident Information Manual Rules & Procedures require that protective pads have to be put in place and the lift be taken out of passenger service during transportation of furniture. However, the applicant submitted that Lift No 3 is not the only lift that is to be used for moving in and out and the transportation of furniture. 128.My view is that the availability of Lift No 3 for moving of large furniture or stretcher transport during the period 2005 to 2011 or thereafter by the Building Manager is not the conduct from which it may be inferred that there is no exclusivity given to the applicant to the lift. 129.The respondent submitted that Lift No 3 does not provide access to lot 61 to the exclusion of all other lots. Lift No 3 is therefore not a service which is in by-law 43 conferred to the exclusive use and enjoyment on any individual lot owner, 130.The respondent stated that lot 61 is not the only lot serviced by Lift No 3. It follows from this that by-law 43 is not capable for this reason to confer exclusive use only on lot 61. 131.I should look to the evidence of Mr Fischer to find the background as to why Lift No 3 is able to access all levels. The evidence is that the Developer of the strata scheme of which Mr Fischer was a sole director, decided to develop level 18, which was a roof top, into residential premises. 132.Level 18 was not served by a lift prior to the development. EMF Griffith's Pty Ltd was requested to prepare a specification for modernisation of passenger lifts. The specification was completed in November 2001. It provided in clause 3.6 that Lift No 3 shall operate in a simplex directional collector system for penthouse residents on levels 16, 17, 18. 133.The applicant pointed out in his submission in reply that it is recorded in EMF Griffiths' specification that Lift No 3 was to be "exclusively for penthouse service calls on levels B1, G, 16, 17, 18 only". 134.Lift No 3 specification included a specific function to allow the lift to be called in an emergency requiring the stretcher lift to any level 1-15. It appears that the lift was not ever called for the moving of a stretcher. The only exception to the exclusive use of Lift No 3 by lot 61 was when Lift No 3 was used moving of large furniture. 135.Otis Elevator tendered for the work. The upgrade of the lift was completed in accordance with the Specifications in December 2004. The strata plan was registered in August 2005. By-law 43 was registered, by the Developer, with the Strata Plan. 136.I am in agreement with the applicant's submission that the language of by-law 43 which states that the owner of each lot has the right to the exclusive use and enjoyment of any service that exclusively services its individual lot, has to be referring to the exclusive arrangements so specifically provided for levels 16-18. 137.The Adjudicator found that the applicant effectively had sole access to Lift No 3 until July 2011. However, he also found that the conduct in respect of Lift No 3 is not consistent with there being exclusivity granted to the applicant. I disagree with the Adjudicator's second finding. I prefer the submission of the applicant in relation to this issue. 138. My view is that the conduct prior to 2005 and during the period 2005 to 2011 clearly points to the grant of exclusivity in Lift No 3 to the applicant. The evidence of Mr Fischer as the Developer responsible for the preparation of the Specifications and the sole occupancy for about six years is sufficient enough to reach this conclusion. 139.The non-payment of levies by the applicant for the maintenance and repair of Lift No 3 is not sufficient evidence to point to no exclusivity to the applicant in Lift No 3. The applicant has not been billed the levies which he has agreed to pay. 140.The moving of large furniture in Lift No 3 by the lot owners and residents on levels 1-15 is not sufficient conduct to be able to conclude from it no exclusivity to applicant of lift no 3. The applicant agrees to the moving of large furniture by Lift No 3, subject to 72 hour notice being given to him. 141.The applicant submitted in relation to Ground 6 that the language of by-law 43 refers to the careful and deliberate arrangements made, in design and specifications for levels 16-18 to have exclusive access to Lift No 3. 142.The respondent submitted that the specifications have no relevance in construing by-law 43 because the specifications refer to levels 16, 17 and 18. They do not confer exclusivity on any individual lot as required by by-law 43. 143.The respondent submitted that s52(1) of the Act envisages that an exclusive use by-law might confer exclusive use of common property on more than one lot does not mean that a particular by-law has done so, as contended by the applicant. 144.The applicant pointed out in his submission in reply that by virtue of by-law 43, a right of exclusive use and enjoyment emanates from the exclusive use. 145.The respondent argued that the applicant's submission is absurd because lifts 1 and 2 would fall within the purview of by-law 43 because they each "exclusively service the individual lots 1-60". 146.I disagree with the proposition advanced by the respondent because it is abundantly clear from the EMF Griffiths' specification that Lift No 3 has to have Group Supervisory System programed for penthouse users in accordance with section 3.6 of the specification. 147.Section 3.6 has a heading, lift 3 Priority "Penthouse Service". It is stated in section 3,6 that Lift No 3 will be exclusively for penthouse service landing calls on levels B1, G, 16, 17, 18 only. Lift No 3 is to be made available in an emergency requiring the stretcher lift. 148.There is no mention in the specification about lifts 1 and 2 being dedicated to the exclusive use of levels 1-15. It is readily apparent from the Specification that lifts 1 and 2 cannot come within the purview of by-law 43, as contended by the respondent. In addition, the conduct of the parties since the registration of the Strata Plan in 2005 is such that no inference could be drawn that lifts 1 and 2 may be subject to exclusive use. 149.The respondent argued that a specification in a document dated November 2001 has no relevance to the proper construction of by-law 43. 150.The respondent cited the decision by McColl JA in Tate's case in support of his argument. That is, an exclusive use by-law may be inspected by third persons interested in acquiring an interest in the strata scheme. The third person would ordinarily have no access to the circumstances surrounding the making of the by-law. 151.McColl JA said that "caution should be exercised in going beyond the language of the by-law and its statutory context: a tight rein should be kept having recourse to surrounding circumstances". The respondent submitted that the applicant makes no serious attempt to explain how, as a matter of language, the specification is called up by by-law 43. 152.The applicant submitted that by-law 43 is to be construed by reference to its own language and its statutory context. The applicant noted that the respondent is misconceived to as to the applicant's position is that the proper meaning of by-law 43 is being derived by reference to the words of EMC Griffiths specification. The applicant also submitted in relation to this argument, that the observations of McColl JA in Tate do not assist the respondent. 153.I agree with the applicant, that by virtue of by-law 43, a right of exclusive use and enjoyment emanates from the fact of exclusive use. If a third person was to enquire, as suggested by the respondent, what were the by-laws in Strata Plan 73943, by-law 43 would be found. 154.Lift No 3 is not nominated in the by-law for exclusive use to the applicant. The respondent submitted that the third person ought not to be asked to derive the proper meaning of a by-law other than from the language of the by-law. The third person should not be asked to consult some other documents, not publicly available, to understand the meaning of the by-law. 155.I disagree with the respondent's submission. If a third person was to enquire, as suggested by the respondent, what were the by-laws in SP 73943, by-law 43 would be found. This ought to convey to a reasonable third person to enquire from the Body Corporate what does by-law 43 refers to. The answer would be the exclusive use by the applicant of Lift No 3. 156.If the third person was to delve further in to the applicant's exclusive use, then the recourse would be had to surrounding circumstances of by-law 43, namely EMC Griffiths specifications. My view is that these two enquiries, to ascertain the meaning of by-law 43, do not make public search in to by-law 43 nugatory as contended by the respondent. 157.The third person enquiry to identify any particular exclusive use granted under by-law 43 would not in my view go beyond what is said by McColl JA namely, keeping a tight rein on having recourse to surrounding circumstances in ascertaining the meaning of the by-law. 158.I am of the view that the applicant has made out Ground 6 of the appeal. 159.I disagree with the Adjudicator that re-programming of a lift does not amount to alteration of the common property. However, I am not required to entertain this issue because the appeal has been allowed in the applicant's favour in relation to by-law 43. 160.I note, as found by the Adjudicator, that the applicant had sole access to Lift No 3 in the period 2005 to 2011. It cannot be said that in these circumstances the change of use of Lift No 3 does not amount to more than utilising the mechanical and/or electronic capabilities of common property. 161.To change the use of common property, wherein the applicant had sole access to Lift No 3, for around six years, required the formalities set out in s65A of the Act to be observed. MATTER NO SCS 13/21405 GRANT OF EXCLUSIVE USE OF LIFT SCS 13/21405 162.I will make only a short observation about this application to illustrate that the appeal and the adjudication in SCS 13/21405 were both concerned with the grant of exclusive use of Lift No 3 to the applicant. 163.The application was made to an Adjudicator pursuant to s158 of the Act. 164.An order was sought to prescribe the making of a by-law if it was found that the Owners Corporation has unreasonably refused to make a by-law of a grant of exclusive use and enjoyment of Lift No 3. 165.The application was transferred to the Tribunal for hearing, prior to the Adjudicator making a decision on the papers. 166.The applicant submitted that the Owners Corporation considered the application for a by-law conferring exclusive rights over Lift No 3 on two occasions, in October 2012 and March 2013. The proposed by-law was defeated at both meetings despite lengthy negotiations and offers of compromise in particular regarding the responsibility for the maintenance of Lift No 3. 167.The applicant contended that the Owners Corporation conduct was unreasonable in refusing the proposed by-law. In addition to the unreasonable conduct, the Owners Corporation did not give reasons why they voted against the motion. 168.The respondent's contention is that the applicant appears to object to having to share the use of Lift No 3 with the owners and the occupiers of the Tower Building. 169.The respondent submitted that all owners have an interest as beneficial tenants in common in the common property, including the lifts. The applicant's proposal to pay the cost of maintenance of Lift No 3 was rejected because it does not address loss of an asset and it did not address the significant loss of amenity involved in reducing lift capacity by 33% for 92 lot owners. 170.There is no need to have matter no SCS 13/21405 determined on its merits because the applicant has been successful in the appeal against the Adjudicator's decision in SCS 12/20802. 171.Matter No SCS 13/21405 is therefore dismissed. N Vrabac Senior Member Civil and Administrative Tribunal of New South Wales 24 April 2014 I hereby certify that this is a true and accurate record of the reasons for decision of the New South Wales Civil and Administrative Tribunal. Registrar ********** 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: 24 July 2014