Civil and Administrative Tribunal New South Wales Medium Neutral Citation: Frampton v The Owners – Strata Plan No 35012; The Owners – Strata Plan No 35012 v Frampton [2019] NSWCATCD 15 Hearing dates: 8 December 2017; 20 April 2018; 2 November 2018; Written submissions 12 December 2018; 2 January 2019; 17 January 2019. Date of orders: 19 February 2019 Decision date: 19 February 2019 Jurisdiction: Consumer and Commercial Division Before: L Wilson, Senior Member Decision: In SC17/35958: 1. The Framptons application is dismissed. In SC17/50958: 2. Mrs Frampton must pay a monetary penalty of $1,100 to the Owners Corporation immediately. In both applications: 3. If the Owners Corporation wishes to make a cost order it must do so, with submissions, by 15 March 2019. A copy of the application and submissions may be emailed to both the Tribunal and the Framptons; 4. The Framptons may make any submissions opposing a cost order against them, by 8 April 2019. 5. If no cost application is made, and no submissions are received, the Tribunal will order that the Framptons pay the OC's costs of both proceedings, from 14 February 2017 to date, as agreed or assessed, on the ordinary basis. Catchwords: Strata – Damage to Common Property – Work Order – Sale of Lot after hearing Strata – Notice to Comply - Penalty Legislation Cited: Civil and Administrative Tribunal Act 2013 Strata Schemes Management Act 1996 (repealed) Strata Schemes Management Act 2015 Category: Principal judgment Parties: In SC17/35958: Alexandra Frampton (Applicant) Peter Frampton (Applicant) The Owners – Strata Plan No 35012 (Respondent) In SC17/50958: The Owners – Strata Plan No 35012 (Applicant) Alexandra Frampton (Respondent) Peter Frampton (Respondent) Representation: Solicitors: Jane Crittenden (Framptons) Piper Alderman (The Owners – Strata Plan No 35012) File Number(s): SC 17/35958 and SC 17/50958 Publication restriction: Nil REASONS FOR DECISION The two applications 1. Mrs Frampton was, until 12 December 2018, the owner of lot 24 in strata scheme 35012 in Balmain. Mrs Frampton, and her husband Mr Frampton, lodged an application against the Owners Corporation (OC) of their scheme on 16 August 2017. The Owners Corporation (OC) lodged an application against the Framptons on 28 November 2017. 2. The background to the dispute is that, in July 2014 the Framptons installed an air conditioner above their lot which included cutting two hatches into the roof above their lot. Water ingress issues existed in Mrs Frampton's lot. This lead the Ms Frampton to lodge an application with the Tribunal on 14 September 2014 for an adjudication of a strata dispute, which was the process prior to 1 November 2015. On 29 December 2016 Adjudicator Sarginson determined that the Owners Corporation replace the common property roof above lot 24. 3. Shortly thereafter the OC appealed the adjudicator's determination. On 30 January 2017 the Appeal Panel stayed the orders of the adjudicator. On 14 February 2017 the Appeal Panel entered consent orders which resolved the appeal to finality. 4. However there ensued a disagreement between the parties as to the interpretation or meaning of the consent orders made by the Appeal Panel. A few months later the Framptons lodged their application. On 22 January 2018 they amended the orders sought in their application and ultimately it was for the following orders: 1. (s.232) The OC complete the scope of works set out in the AFT Report to rectify the defective common property roof above Lot 24 within 4 weeks from the date of the order, in accordance with: 1. the orders made by Adjudicator Sarginson on 29 December 2016 in SCS16/41412; and 2. the orders made by the Appeal Panel with the consent of both parties on 14 February 2017 in AP 17/04341. 1. (s.232) In the alternative to order (1) the applicants be entitled to carry out the work necessary to comply with the scope of works set out in the APT Report including reinstating the air conditioner, hatches, and back trays which the OC removed in breach of orders made in SCS16/41412 and AP17/04341, and that the OC reimburse the applicants for the costs of completing this work within 2 weeks of being served with a copy of the invoice for this work; 2. (s.232(1)(f)) the OC sign and seal the application to Inner West Council seeking approval for the Framptons to maintain an air conditioner on the roof above lot 24. 1. The Framptons 'requested' the Tribunal, 'for the purpose of orders 1 and 2' sought by the Framptons, to make an order noting that the outstanding items of work required to be carried out in order to comply with the scope of works contained in the APT Report, are set out in both the quotations from Asset Air-Conditioning dated 22 June 2017 and from Inner City Roofing dated 11 October 2017 (annexures 20 and 21 to the Framptons' written submission filed on 17 October 2017): Amended Order 3 filed in the Tribunal on 22 January 2018 pages 232 – 233 NCAT Book. 2. A few months after the Framptons filed their application, and days before the first final hearing of the Framptons' application, the OC sought the following orders in their proceedings: 1. (s.147(1)) The Framptons pay the maximum penalty for breach of by-law 5. 2. (s.147(1)) The Framptons pay the maximum penalty for breach of special by-law 2 3. An order that the Framptons repair the damage caused to the common property roof of Lot 24. 1. On 20 April 2018 the OC clarified that the 'repair order' (number 3 above and the fifth order sought in the OC's application) was for Mrs Frampton to do work to repair the damage the OC claims she caused to the common property, not to reimburse the OC for work they did or could do to rectify any damage to the common property caused by the Framptons: 20 April 2018 T62 - T64. 2. Both parties were seeking that the application against them be dismissed and costs ordered against the other. Procedural history 1. Until 28 November 2017, only the Framptons' application was on foot. There was a directions hearing on 9 September 2017 which was adjourned to a return of summons hearing on 25 September 2017. The final hearing of the Framptons' application was listed for 3 hours on 8 December 2017. 2. A few days before that hearing the OC lodged their application and applied to have it heard together with the Framptons' application. There was insufficient time to conclude the Framptons' application on 8 December, with the result the two applications were listed together on the next occasion which was 20 April 2018. The hearings were not concluded on 20 April and therefore needed to be listed again. 3. Partly due to an oversight in the Registry, and partly because the Framptons were overseas and therefore unavailable for several months, the applications were not relisted until 2 November 2018, some 15 months after the Framptons lodged their application. 4. At the conclusion of the last hearing on 2 November 2018, the OC's lawyer raised with the Tribunal the fact that Mrs Frampton had listed her unit for sale by auction in the days before 2 November 2018. The Member asked the OC if they were seeking to amend their application to seek money in lieu of a work order, and the OC did not make that application. The Member enquired about timing, noting that the Member had no time allocated for decision writing until 30 November 2018 at which time other, more urgent and older matters would be written. The Framptons, through their lawyer, explained the auction campaign had only just begun and was due for auction in a certain number of weeks, and the settlement period would likely be six weeks. With that noted the Tribunal adjourned with the intention to resolve the matters in a quick, cheap and just manner. 5. On 12 December 2018 the Framptons' solicitor Ms Crittenden sent an email to the Tribunal at 3:10pm which read "Dear Registrar, Please find attached my letter dated 12 December 2018 for the attention of Senior Member L Wilson." The attached letter said: I act for Mr and Mrs Frampton Peter and Alexandra Frampton in these proceedings. On 2 November 2018, a decision in these matters was reserved by Senior Member L Wilson. As foreshadowed at the hearing on 2 November, Mrs Frampton has sold Lot 24 in Strata Plan No. 35012. The settlement of the sale took place on 12 December 2018. Mr and Mrs Frampton do not own property in New South Wales and are now permanent residents of Queensland, where they have purchased a home. As the proceedings now concern parties of different states, the principles expressed by the High Court of Australia in Burns v Corbett [2018] HCA 15 apply, so that the Tribunal no longer has power to determine the disputes. I respectfully submit that it would be appropriate to dismiss both proceedings on the grounds that the Tribunal lacks jurisdiction to determine a dispute involving my clients, who are now permanent residents of Queensland." 1. On 21 December 2018 the Tribunal sent the following letter to the lawyers who acted for the parties in both proceedings: To Ms Crittenden and Mr Bacina, On 12 December 2018 the Tribunal received a letter via email from Ms Crittenden, on behalf of her clients Mr and Mrs Frampton. This letter was carbon copied to Mr Bacina who appears for the owners corporation. Several matters arise from that letter. Firstly, Ms Crittenden misunderstands the Burns v Corbett decision to which she referred, and for that matter Attorney General for New South Wales v Gatsby [2018] NSWCA 254. Those decisions concern the power, or lack thereof, of the Tribunal to exercise judicial power to determine matters between residents of two states because of s.39(2) of the Judiciary Act 1903 (Cth) and s.109 of the Constitution (Cth). Only natural persons may be residents, that is, a corporation or polity is not a resident, and therefore no issue of federal diversity jurisdiction arises where a party is not a resident. SC17/35958 and SC17/50958 are two such cases. Even if the owners corporation was a resident, which it is not, the time at which diversity is required to be established is the time jurisdiction is invoked by commencing the proceedings, as opposed to the time of the conduct in question, or the ultimate resolution of the dispute. For the Framptons' application that was on 16 August 2017 and for the Owners Corporation 28 November 2017. On both of these dates, the Framptons resided in NSW. Ms Crittenden's assertion that "the Tribunal no longer has power to determine the disputes" is incorrect. Secondly, Ms Crittenden asked the Tribunal "to dismiss both proceedings on the grounds that the Tribunal lacks the jurisdiction to determine a dispute involving [the Framptons]". For the reasons set out above, Ms Crittenden's request is misplaced. However if the Framptons wish the Tribunal to dismiss SC17/35958 as they wish to withdraw it, they must write to the Tribunal, carbon copying the owners corporation, no later than close of business Friday 4 January 2019 and ask the Tribunal to make such an order pursuant to s.55(1)(a) of the Civil and Administrative Tribunal Act 2013. Thirdly the fact that Ms Frampton is no longer a lot owner in the strata scheme may give rise to issues which the parties may need to address at a further hearing. The Tribunal was preparing to hand down its decision on 12 December 2018 when it received the aforementioned letter. That may be prevented now by the sale of Ms Frampton's lot. The Tribunal will obtain a copy of the recording of the hearing on 2 November 2018 as the sale of the Frampton's lot was discussed towards the end of the hearing and the Tribunal may need to remind itself of what the parties stated in the event the Ms Frampton sold her lot. The Tribunal requires the parties to write to it no later than close of business Friday 4 January 2019 setting out what dates in January, February and March they are unavailable to appear at a further hearing to address the issue of the sale of lot 24, if that needs to happen. In the same letter, the parties should indicate whether they would prefer any questions arising from the sale of Lot 24 to be put in writing, with a date for submissions to be provided in writing. That is, what their attitude to dispensing with a hearing and determining any issues arising on the papers: see s.50 of the Civil and Administrative Tribunal Act 2013. The Tribunal may conclude that it can determine SC17/35958 and SC17/50958 without the need for a further hearing. However it will not do so until after 4 January 2019, to give the Framptons an opportunity to inform the Tribunal if they wish to withdraw their application, and the Tribunal to consider more fully if the sale of lot 24 does give rise to the need for a further hearing. If Ms Crittenden or Mr Bacina no longer appear for the parties they are to immediately inform the Tribunal and forward this letter to their clients. 1. On 2 January 2019 the OC replied to the Tribunals' letter in the following terms: 1. We refer to the above proceedings, and the correspondence dated 21 December 2019 from NCAT (NCAT Letter). The Owners Corporation had instructed our office to prepare submissions which were on paint with the matters set out in the NCAT Letter and are no longer necessary. 2. Attached is an email dated 13 December 2018 sent at 10:11am from Ms Crittenden to our office confirming Ms Crittenden is not acting for Mr and Mrs Framptons [sic] in the proceedings. 3. We have provided a copy of the NCAT Letter to Mr and Mrs Frampton. 4. The Owners Corporation are content for any further remaining questions NCAT wishes to have answered in relation to the proceedings to be set out in written submissions writing [sic] and dealt with on the papers pursuant to s.50 of the NCAT Act. 5. [Available dates for a further hearing given] 1. The Framptons did not reply by 4 January 2019. 2. On 9 January 2019, the Tribunal sent a second letter to the lawyers for the parties and the parties themselves, by email. That letter was in the following terms: At 3:10pm on Wednesday 12 December 2018, solicitor for the Framptons sent a letter to the Tribunal which was carbon copied to the owners corporation. At 10:11am on Thursday 13 December 2018, the same solicitor for the Framptons emailed the owners corporation stating "I do not know where they are residing in Queensland and I do not have instructions to continue acting for them in relation to the Tribunal proceedings." On 21 December 2018 the Tribunal wrote to both parties. Included in that letter was: "If Ms Crittenden or Mr Bacina no longer appear for the parties they are to immediately inform the Tribunal and forward this letter to their clients." At no time has the solicitor for the Framptons (Ms Crittenden) ever informed the Tribunal that she no longer appears for the Framptons. Not by email, letter or filing a Notice of Ceasing to Act. The only way the Tribunal came to read the 10:11am email sent to the owners corporation on 13 December 2018 was by the owners corporation sending it to the Tribunal. In the aforementioned 13 December 2018 email Ms Crittenden stated "Please communicate directly with Mr and Mrs Frampton about the matter". The same request was not made to the Tribunal, when the Tribunal sent a letter to both parties on 21 December 2018, asking both parties to address the matters raised in the letter of 12 December 2018 sent from the Framptons solicitor to the Tribunal, and specifically asking the lawyers to inform the Tribunal if they no longer appeared. It is unknown whether the solicitor for the Framptons forwarded the letter to the Framptons, as requested by the Tribunal. Given she claims not to know where they live in Queensland, but apparently does know they permanently reside in Queensland, the Tribunal assumes she could have emailed the Framptons if she could not post the letter to them. Email has been the Framptons preferred method of contact throughout these proceedings. However given Ms Crittenden ignored the 21 December 2018 letter, ignored the direction of the Tribunal to inform it if she no longer appeared for the Framptons, and with no information about whether she has forwarded the Tribunal's letter dated 21 December 2018 to the Framptons, I direct the Tribunal to send it to their email address forthwith, along with this letter, with the following extensions of time: 1. If the Framptons wish the Tribunal to dismiss SC17/35958 as they wish to withdraw it, they must write to the Tribunal, carbon copying the owners corporation, no later than Friday 18 January 2019. 2. The Tribunal requires the Framptons to write to it no later than close of business Friday 18 January 2019 setting out what dates in January, February and March they are unavailable to appear at a further hearing to address the issue of the sale of lot 24, if that needs to happen. 3. In the same letter, the parties should indicate whether they would prefer any questions arising from the sale of Lot 24 to be put in writing, with a date for submissions to be provided in writing. That is, what their attitude to dispensing with a hearing and determining any issues arising on the papers: see s.50 of the Civil and Administrative Tribunal Act 2013 4. The Tribunal may conclude that it can determine SC17/35958 and SC17/50958 without the need for a further hearing. However it will not do so until after 18 January 2019, to give the Framptons an opportunity to inform the Tribunal if they wish to withdraw their application, and the Tribunal to consider more fully if the sale of lot 24 does give rise to the need for a further hearing. The Tribunal notes the owners corporation complied with the directions made in the 21 December 2018 letter. The Tribunal notes that the response to that letter, and the owners corporations time in addressing the matters raised in Ms Crittenden's letter emailed on 12 December 2018 are all costs in the proceedings. The proceedings have not been finally determined and are ongoing. Finally Ms Crittenden is reminded of her obligation arising from s.36(3)(b) of the Civil and Administrative Tribunal Act 2013, that an Australian legal practitioner who is representing a party in proceedings in the Tribunal is under a duty to co-operate with the Tribunal to give effect to the guiding principle and, for that purpose, to participate in the processes of the Tribunal and to comply with directions and orders of the Tribunal. She is also bound by professional obligations as a solicitor. She is advised to remind herself of these duties and responsibilities. 1. On 11 January 2019 at 7:10pm the Framptons' solicitor sent the following email to the Deputy Divisional Registrar: I refer to the Tribunal's letter that was emailed to me on Friday 21 December 2018 at 2:14pm. I have provided a copy of that letter to Mr and Mrs Frampton, whom I have copied in on this email. I have ceased to act for Mr and Mrs Frampton in these proceedings… Mr and Mrs Frampton are no longer the owners of a Lot in Strata Plan No. 35012. I do not know their postal or residential address in Queensland but they continue to use the email address panda1907@bigpond.com and can be contacted at that address. Please address further correspondence to Mr and Mrs Frampton at that address, or such other postal address as they may provide to the Tribunal. 1. On 17 January 2019 the Framptons emailed a letter to the Tribunal, which they carbon copied "for information only" to their lawyer. Their letter is long and it is unnecessary to set it out in full. Included in it were some misunderstandings. For example the Framptons complained that in April 2018 "SM Wilson had had the matter 4 months without any sign of resolution". As above, in April 2018 the matter was adjourned part heard. The Tribunal does not issue decisions whilst matters are part heard. The hearing needs to be concluded before a decision can be made. The Framptons also noted that the third hearing was in November 2018 which was almost a year after the first hearing before Senior Member Wilson. That is correct. That was largely due to the Framptons being overseas between April and November 2018 and thus being unavailable. At the April hearing they advised they were away in May and from 20 July to 6 August 2018. In an email they sent to the Registry on 27 June 2018 they told the Registry "We will be away in September and the early part of October but are available any day from Monday 15th October through to Wednesday 31st October inclusive". On 10 July 2018 the Tribunal allowed an adjournment request from the OC in regards to the listing on 17 October 2018. On 11 July 2018 the Framptons wrote to the Tribunal with their unavailable dates including "We are unavailable in August and December but could be available from the 1st to the 16th November 2018". The OC had limited availability in November but both parties were available on 2 November so it was listed on that day, to suit both parties. 2. The Framptons also complain that on two occasions "at about 4pm SM Wilson wanted to close the case". The Tribunal sits 9:15am to 4:15pm. All hearings are concluded shortly after 4pm, and if not finished by that time, they are adjourned part heard. The Framptons stated that, at the conclusion of the last hearing "SM Wilson was aware that we were in the process of selling the house and indicated that she would have a decision by November 30th 2018". This is inaccurate. The correct position is set out above. The parties may obtain a recording of the hearing on 2 November 2018 if they wish, to remind themselves of the exchange, including that Senior Member Wilson's next decision writing day was 30 November 2018 and there could be no guarantee that day would be used for their matters. 3. As to the sale of the lot, the Framptons stated in their letter that "On the final day of the hearing, on 2 November 2018, we informed the Tribunal that our Lot in the strata scheme was going to auction on 24 November 2018". In fact the OC raised the pending sale and the Framptons only answered questions from the bench about it. The Framptons had never raised the sale with the Tribunal, either in writing or orally. When the Member asked about timing the Framptons said the auction date was three weeks hence and that the settlement period would likely be six weeks, which would have been early January 2019. The Framptons in fact sold the property prior to auction on 21 November 2018 with a short three week settlement period. 4. Finally, presumably in answer to the question 1 which was "If the Framptons wish the Tribunal to dismiss SC17/35958 as they wish to withdraw it, they must write to the Tribunal, carbon copying the owners corporation, no later than Friday 18 January 2019" the Framptons wrote: We presume that as we are not an "owner" of a Lot or an "interested person" within the meaning of section 226 of the Strata Schemes Management Act 2015, the Tribunal does not have the power to make the orders we sought under section 232 of the Act, or the orders the Owners Corporation sought under section 132 of the Act. We would have thought that it is necessary to dismiss the applications for those orders in circumstances where we neither own a Lot in the strata scheme, or any property in New South Wales, and are not residents of New South Wales. 1. Questions 2 – 4 inclusive asked by the Tribunal on 9 January 2019 were not answered by the Framptons. Instead they wrote the following: In relation to the Owners Corporation's application for penalties under Section 147 of the Act, for breaching by-laws, we rely on the submissions made by our solicitor at the third day of hearing; namely, that we cannot have acted in breached [sic] of a by-law after the notice to comply was served, as their air-conditioner was removed from the roof by the Owners Corporation in March 2017 and has not been re-installed by us since. It was left in the courtyard of the Lot for the current owner of Lot 24 when we vacated the premises prior to 12 December 2018. Finally we would ask SM Wilson to hand down her Decision and we will then decide on any further action, if any, we will take. Jurisdiction 1. The earlier proceedings before the adjudicator were made under the now repealed Act. The current proceedings are made under the Strata Scheme Management Act 2015 (SSMA). Unless otherwise specified, all sections are a reference to the SSMA. 2. An application can be made by an interested person, original owner or building manager for an order pursuant to s.232. 3. Interested persons are defined in s.226 to include the OC, an owner of a lot in the scheme, a person having an estate or interest in a lot or an occupier of a lot. Mrs Frampton was an owner and Mr Frampton was an occupier and therefore both had standing to make their application for orders pursuant to s.232. 4. In a letter to the Tribunal dated 12 December 2018, the Framptons informed the Tribunal they had sold their lot and stated that they had permanently moved to Queensland. Their solicitor then asked the Tribunal, on their behalf, to "to dismiss both proceedings on the grounds that the Tribunal lacks the jurisdiction to determine a dispute involving [the Framptons]". The grounds were said to be on the basis that the Tribunal is exercising federal diversity jurisdiction and made reference to Burns v Corbett [2018] HCA 15. On 21 December 2018 the Tribunal wrote to the parties explaining why their request was misplaced and declining to dismiss the proceedings on the basis that the Framptons had moved to Queensland. The Tribunal relies on the contents of the letter sent to the parties on 21 December 2018 as an accurate statement of the law on this point. 5. An application for an order under subsection s.147(1) of the SSMA must be made within 12 months after the notice/s are given. In this case, both notices to comply were served on 21 September 2017 and the application for penalties were lodged on 28 November 2017 so the penalty applications are within time: s.147(4) SSMA. 6. Other than the misplaced Burns v Corbett submission, the parties did not raise any other jurisdictional issues and the Tribunal finds it has jurisdiction to hear and determine both applications. Evidence 1. The Framptons relied on: 1. Folder of evidence filed on 17 October 2017; 2. Folder of evidence filed on 19 February 2018. 1. The OC relied on the two volume NCAT Book which they provided to the Framptons but which the Framptons refused to rely upon in the hearings. The NCAT Book contains all of the Framptons' evidence. It is convenient for the Tribunal to cite the NCAT Book reference to evidence, even if it is also contained in the Frampton's' folders. See 20 April 2018 transcript T-21.39 and T24. The OC did not read the statutory declaration of Ms Smith at Tab 13 of the NCAT Book: 20 April 2018 T61.20. 2. The OC also relied on an affidavit of Michael Bacina sworn 2 November 2018. 3. The correspondence between the parties and Tribunal, between 12 December 2018 and 17 January 2019 set out above under "Procedural Background" was taken into account by the Tribunal in determining the issues in dispute. 4. Several witnesses were cross examined. Their oral evidence was taken into account by the Tribunal in addition to the documentary evidence. Those witnesses were Mr Kim Chew, Mr Clarke, Mrs Frampton and Ms Jackie Smith. Most of this oral evidence was given in the 8 December 2017 and 20 April 2018 hearings for which transcripts were provided to the Tribunal. These transcripts were tendered as evidence and were taken into account by the Tribunal. Submissions were made at the 2 November 2018 hearing with reference to the transcript which was very helpful to the Tribunal, as the matter had been on foot for some time. 5. The Tribunal has a recording of the 2 November 2018 hearing which it has listened to in part, particularly certain aspects of the closing submissions of parties. There was some short oral evidence given on that day which is also in the recording. 6. The parties were aware that the Tribunal is bound by the rules of evidence in "proceedings for the imposition by the Tribunal of a civil penalty in exercise of its general jurisdiction": s.38(3)(a)(ii) Civil and Administrative Tribunal Act 2013. The Tribunal is not bound by the rules of evidence for the remainder of the proceedings: s.38(2) Civil and Administrative Tribunal Act 2013. This was explained to the parties, who were both legally represented, a number of times, and set out in detail in the 20 April 2018 directions with reasons. 7. On 8 December 2017 the Tribunal ordered that both proceedings run together, and that evidence in one is evidence in the other. That is, evidence tendered in either SC17/35958 or SC17/50958 is taken to be evidence in the other proceedings. This was the first order sought by the OC in their application lodged on 28 November 2017 and as such has been determined. 8. The next order sought by the OC in its application was for leave to be legally represented which was granted on 8 December 2017 to both parties. Preliminary agreed facts 1. During the course of these proceedings, which have been on foot for more than a year and had three days of final hearings throughout 2018, the parties ultimately conceded several important points. 2. Firstly, it was agreed that the OC had approval to bring these proceedings (namely the application for a civil penalty and approval to be legally represented). Secondly the parties agreed Mr Frampton had standing to be an applicant and respondent in the proceedings. Thirdly that damages can only be for loss suffered after 30 November 2016 and not before, resulting in the Framptons withdrawing their application for damages from the OC. Fourthly that the dispute in s.232 that the Framptons want the Tribunal to resolve was about the 14 February 2017 consent orders in the Appeal Panel and not about a breach of s.106 the Act. In this regard, the Tribunal was asked to make an order to settle a dispute about an agreement between the owners corporation and an owner of a lot in a strata scheme that relates to the scheme or a matter arising under the scheme: s.232(1)(d) SSMA. 3. The consent orders entered in the Appeal Panel on 14 February 2017 were as follows: 1. Appeal dismissed with no order as to costs. 2. Order 1 is made on the following conditions: 1. That the OC forthwith replace the common property roof above Lot 24 in accordance with the APT Roofing report dated 4 June 2016, using a suitably licenced tradesperson with works to commence by 1 May 2017, and pay for those works in the first instance. 2. Ms Frampton agrees to pay to the OC the cost of any damage and any associated costs which any Court, Tribunal or Appeal Panel finds that she caused to the common property by work carried out by or for her on any part of the common property (including reimbursing the OC for some or all of the costs referred to in condition (a) to the extent that such works caused or contributed to the water ingress the subject of these proceedings). 3. Ms Frampton will allow the OC access to Lot 24 to perform the works referred to in condition (a) above upon reasonable notice being given, and for investigations as to the cause of leaks into Lot 24. 1. The Appeal Panel noted the agreement between the parties that, 'notwithstanding the works in Order 2, Ms Frampton undertakes and agrees that she will remain liable for any repairs or maintenance required to the air-conditioning installation, including penetrations to the common property roof following completion of works in Orders 1, in accordance with added by-law 2 made on 11 October 2010': page 94 NCAT Book 2. The APT Report dated 4 June 2016 is in evidence: page 128ff NCAT Book. The scope of works referred to in Consent Order 2(a) made by the appeal panel appears on pages 135 and 136 of the NCAT Book (Agreed Scope). It is as follows: Scope of works: Colorbond Ultra re roof * To supply safely and access equipment * To remove existing roof and associated materials * To supply air con engineer for disconnection and reconnection of air con unit. * To supply and install new 50mm insulation blanket. * To supply and install new colorbond ultra speed dek [sic] roof sheets. * To supply and install new colrobond [sic] ultra box gutter. * To supply and install new infill strips to fit underneath apron flashings. * To supply and install new colorbond ultra apron flashings. * To supply and install new colrobond [sic] ultra barge cappings. * To supply and install new decktite flashing to waste pipe. * To supply and install new colorbond back tray to waste pipes, chimney and ventilation system. * To supply and install new 90mm pvc downpipe with spreader. * To remove all trade waste from site and to leave site clean and tidy. Issues 1. The questions for the Tribunal to determine in these two related proceedings are: 1. Whether the Agreed Scope to be performed required the OC to reinstate the Hatches to the common property roof area (that is whether the Hatches formed part of the Agreed Scope): 2. Whether the Framptons are required to obtain Council approval for the (re) installation of the air conditioning condenser to the common property roof area prior to the OC being required to perform the reconnection of the condenser; 3. Whether Mrs Frampton caused to the common property any damage or associated costs by work carried out by or for her on any part of the common property (including reimbursing the OC for some or all of the costs referred to in condition a) to the extent that such works caused or contributed to the water ingress the subject of these proceedings): Order 2(b) of consent orders and Order 5 sought by the OC in its application. 4. Whether the Framptons should pay a monetary penalty for breach of By Law 2: s.147(1) $1,100 5. Whether the Framptons should pay a monetary penalty for breach of By Law 5: s.147(1) $1,100 1. Questions 1 and 2 above were accurately set out by the OC, in paragraph 41 of its submissions in reply, at page 224 of the NCAT Book. 2. Both parties claim their legal costs from the other. Directions are made about making any cost application given the outcome of these proceedings. Findings of fact 1. It is not in dispute that the initial application by the Framptons to install air-conditioning was made on 25 July 2014. This was made by Mr Frampton sending an email to the Strata Committee members a copy of a proposal to install air-conditioning, including a plan in respect of the proposed works, to the then Strata Manager, Jamesons, and the then Strata Committee members (A/C Application): pages 140 to 150 inclusive, NCAT Book. 2. The request was in the following terms We intend to install air conditioning as permitted under Special By Law of the Owners' Strata Plan No 35012. This is the written request to the Executive Committee providing all the information including Brand Name, Model number and Specification of the Air Conditioning Unit. A plan of the Lot is included showing the location of the outside unit. All other conditions C, D, E, F, G, H, I, J and K are understood and will be met by the installation. We request that the Executive Committee accept this request by email as the installation is intended to be carried out on the 1st August, 2014. 1. In fact the Framptons installed said air conditioner on the same day as the request for approval, namely on 25 July 2014. 2. The air conditioning by-law in place in July 2014 is on pages 141-142. By-law 5 in place in July 2014 included the following 1. An owner or occupiers of a lot must not mark, paint, drive nails or screws or the like into, or otherwise damage… any structure that forms part of the common property without the approval in writing of the owners corporation. 2. An approval given by the owners corporation under subclause (1) cannot authorise any additions to the common property. 1. Page 143 is a hand drawn diagram which has a box labelled A/C with an arrow and words "on [indecipherable] roof not visible from street" and two empty boxes with arrows pointing to them with the words "indoor units". 2. On 25 July 2014, the Framptons arranged for the following work to be done (A/C Works) despite the fact they had no approval to do so: 1. Cutting holes in the roof sheeting to allow the installation of two air conditioning units; 2. Cutting of holes in the ceilings of two rooms within the lot to allow the installation of two air conditioning units; 3. The installation of two air conditioning units in the roof space; 4. The installation of an air conditioning compressor unit on the rooftop; 5. The installation of metal covers over the holes in the roof sheeting cut to allow the two air conditioning units to be installed (the Hatches); 6. The installation of back trays to the Hatches; and 7. Cutting of the roof sheeting for connections from the air conditioning units to the condenser: Report from Clark Engineering, page 533 NCAT Book. 1. The A/C Application, made on the day the installation occurred, failed to disclose: 1. That the Hatches would be installed to the roof as part of the A/C Works; and 2. That during the A/C Works, roof timbers would be or had already been cut to accommodate the air conditioning units; and 3. That Council approval was required for the A/C Works to be performed as proposed, specifically that the condenser being located on the roof required council approval. 1. It is an accepted fact that the Framptons did need council approval to put the air conditioner on their roof: T25 – 28. For example at T28.00 the Member asked Mrs Frampton "Now you agree that you do in fact need a DA for…" and Mrs Frampton interrupted the Member by answering "Yes, of course". Their amended orders seeking the OC sign and seal the DA application enforce this. 2. I find that, despite on 20 April 2018, capitulating finally that they did indeed need a development approval from their local council for the air conditioning unit to go on their roof, they refused to do so for many months after being advised of the need for the DA. For example: 1. On 3 March 2017 Aaron Edmonds, strata manager, emailed the Framptons including "Without a DA, or confirmation from Council they are exempt from the relevant SEEP, then the owners corporation cannot reconnect the air conditioner for fear of being in breach of the Council controls": page 177 NCAT Book 2. On 17 March 2017 by letter to the Framptons' lawyer Ms Crittenden in which the OC asked the Framptons, through their lawyer, to confirm "That they will provide either a development approval or a written opinion from a suitably qualified consultant setting out why development approval is not required for the air conditioning installation": page 227B of the NCAT Book. 3. On 30 March 2017 an email to the Framptons' lawyer Ms Crittenden which included at paragraph 7 "As your clients have failed to show in any way (beyond bare denials), that the air-conditioning condenser does not require a development consent from Council, the condenser was removed and placed within your clients' lot for their convenience." 1. At this stage it is important to note that the letters of 17 and 30 March 2017 from the OC to the Framptons are important letters which accurately set out the correct version of events, that the Framptons refused to accept and preferred to fight. Had the Framptons, in March 2017, realised the errors of their ways, this expensive and hard fought litigation could have been avoided. Instead, the Framptons continued to pay legal fees for their lawyer to fight the air conditioning issue, and ultimately lodge another application in the Tribunal on 16 August 2017, which has been entirely unsuccessful. 2. On 20 September 2017, pursuant to s.146 SSMA, the then strata managers for the OC issued two Notices to Comply upon Mrs Frampton. They appear at pages 462 and 465 of the NCAT Book. They were served on 21 September 2017: pages 466 to 469. The fact that the Notices complied with ss.146 and 147 SSMA was not contested by Mrs Frampton, the recipient of the Notices. 3. The first Notice is for the contravention of the Special By-Law 2: air conditioning. The by-laws were attached to the Notice to Comply: affidavit of Bacina sworn 2 November 2018: page 12 of the affidavit. The contravention was particularised as installing the air conditioning without proper approval, not getting written approval from the local council and causing damage to the common property (former roof) when the back trays and hatches were installed without permission including cutting the timber roof timbers. 4. The compliance required by the properly issued Notice was "either agreeing to pay the costs to enact a Common Property Rights By-Law in a form acceptable to the owners [corporation] and provide your consent to be bound by same, and bearing any cost of the installation of hatches and back-trays to the roof or not seeking to install hatches to the roof. You must also repair the roof timbers cut during your installation of the air-conditioning at your cost to the satisfaction of Mr Clark, the expert of the owners corporation". 5. The Framptons did not agree to enact the proposed common property by-law. The Framptons did not agree to bear the cost of installing the hatches and back trays, or agree not to install them. The Framptons did not repair the roof timbers. 6. The Framptons continued to contravene Special By-Law 2 after 21 September 2017 and up to the date they vacated their lot when they moved out some time before 12 December 2018. 7. The second Notice to Comply alleged a breach of By-Law 5 which is in the following terms: "The owners corporation believes that you have contravened this by-law as during the installation of your air-conditioning system you have damaged structures that form part of the common property without the approval in writing of the owners corporation. This includes damage to the former roof structural elements of the roof timbers and installation of hatches to the common property areas of the roof without permission". The manner in which the OC expected compliance with this breach was the same as that required for the first Notice. 8. As the way to comply was the same for the second Notice, the Framptons continued to contravene Special By-Law 2 after 21 September 2017 and up to the date they vacated their lot when they moved out some time before 12 December 2018. 9. The Agreed Scope referred to in the Appeal Panel Consent Orders was set out in the AFT Roofing report and the scope of works of the Agreed Scope was included in the Quotation obtained by the Owners Corporation for the works. There are no references to hatches in the Agreed Scope. APT did not mention hatches, only ventilation system. 10. On page 373 of the NCAT Book the OC (by its strata manager) clearly pointed out its view that reinstallation of the hatches was not part of the Agreed Scope of works, but offered to reinstall the hatches and back trays if the Framptons paid for this additional work as well. This email was forwarded to the Framptons on 23 February 2017, shortly after the Appeal Panel Consent Orders. 11. The 23 February 2017 email was not replied to. Instead the Framptons' lawyer sent a letter on 15 March 2017 to the OC to say that the air conditioning unit needs to be reconnected. 12. Page 588 of the NCAT Book is an uncontested expert report by OC's expert that hatches are "not necessary and not recommended." 13. The OC's expert Mr Kim Chew was cross examined during the hearing. He was asked 14. You were asked a number of questions Qu1 reply hatches not necessary? Yes What type of roof above these buildings? Tin metal roof On what basis hatches not necessary? Ceiling cassette designed so air con contractors don't have to cut big hole on the roof 1. The Tribunal finds that the Hatches were not part of the approved A/C Works originally installed and were not part of the AFT Agreed Scope and are not necessary or recommended for the installation of the air conditioning unit pursuant to the Appeal Panel Consent Orders. 2. For the purpose of the penalty proceedings, it is necessary to make a finding of fact that the Framptons did cause damage to the common property, by cutting timber members in the roof. The evidence of this is clearly set out in Mr Clarke's expert report. However for the reasons that follow the Tribunal will not order the Framptons to make good the damage they caused, as they are no longer owners of the lot. Resolution of the issues 1. The first issue is whether the Agreed Scope to be performed required the OC to reinstate the Hatches to the common property roof area. 2. The answer is no, as above. 3. The second issue is whether the Framptons are required to obtain Council approval for the (re) installation of the air conditioning condenser to the common property roof area prior to the OC being required to perform the reconnection of the condenser. 4. The answer is yes, as above. 5. The third issue is whether Mrs Frampton caused to the common property any damage or associated costs by work carried out by or for her on any part of the common property. 6. The answer is yes, as above, but the remedy for this damage is complicated by the sale of Mrs Frampton's lot. 7. The next two issues are whether Mrs Framptons should pay a monetary penalty for breach of Special By Law 2 and/or for breach of By Law 5. 8. The Tribunal finds Mrs Frampton did breach both Special By Law 2 and By law 5, before and after the service of the Notice to Comply. There was no issue with the service of the Notices; they complied with ss.146 and 147 and no issue was taken by Mrs Frampton accordingly. 9. The breaches are similar. The Tribunal, in the exercise of its discretion, declines to issue a fine against Mrs Frampton for both Notices. The breach of special by-law 2 incorporated the breach of by law 5. Therefore the Tribunal, in the exercise of its discretion, finds a breach of both by-laws, and a refusal to comply with both of them after 21 September 2017, but only determines to issue a penalty against the first Notice (of the Special By law). To do otherwise would be duplicitous. 10. The Tribunal inquired about the reason the OC did not issue Notices to Comply closer to July 2014 than September 2017. However the Tribunal accepts that the OC went to great lengths, clear from the correspondence tendered in evidence in these proceedings, to get the Framptons to accept the factually and legally correct position, but they refused. It was only after consenting at the Appeal Panel (February 2017) and then trying to comply with the Consent Orders, that the OC finally issued the two Notices upon Mrs Frampton in an attempt to have her accept the reality of the situation; namely that she wrongly installed the air conditioning in the first place, and she was responsible for obtaining a DA, and the OC was not responsible for installing hatches again. 11. Mrs Frampton has been resolute that she does not need to comply with these Notices, to the end, including in her letter dated 17 January 2019, received by the Tribunal on 23 January 2019. Her conduct in denying, for a long time, her responsibilities as a lot owner and as a party who entered consent orders in the Appeal Panel, weigh against her in considering the discretion to impose a penalty or not. In all the circumstances the Tribunal determines Mrs Framptons conduct warrants the imposition of the highest penalty which is $1,100 and needs to be paid to the OC immediately: s.147(6) SSMA. 12. This penalty is payable, despite the fact Mrs Frampton is no longer a lot owner. The Framptons made no submission about the inability of the Tribunal to impose a monetary penalty on a former lot owner, once the offending lot owner sold her lot. Also, s.147 speaks of 'a person' not a lot owner. There is nothing in ss.146 or 147 which prevents the Tribunal from ordering a person, namely a former lot owner, from paying a monetary penalty for a contravention of a Notice to Comply properly issued under the SSMA while they were a lot owner. Outcome of proceedings 1. The resolution of these issues has the effect that the Framptons' application is dismissed. The Framptons were given an opportunity to withdraw their application on the basis they were no longer lot owners. They did not do so, rather ending their submissions dated 17 January 2019 with the words "we would ask SM Wilson to hand down her Decision". They 'presumed' the Tribunal did not have the power to make an order under s.232 or 132 because they were no longer owners. 2. Subsection 232(1)(d) which is relied on in these proceedings requires a dispute about "an agreement between the owners corporation and an owner … of a lot in a strata scheme that relates to the scheme or a matter arising under the scheme" for the Tribunal to have the power to make an order to settle a complaint or dispute about that. There is no longer a dispute about an agreement between the OC and an owner; Mrs Frampton is no longer an owner. Therefore, on one view, the Tribunal has no power to make an order pursuant to s.232 and in that respect agrees with the Framptons' 'presumption'. 3. The reason a work order pursuant to s.132 cannot be made is because the Tribunal cannot order the Framptons to do any work on a property they no longer own. Section 132 enables the Tribunal to "order that the owner … perform work or takes other steps as specified in the order to repair the damage". Mrs Frampton is no longer an owner, Mr Frampton is no longer an occupier, so the Tribunal cannot make an order against them under s.132. Whether they could have been ordered to pay the costs of the OC repairing the damage and associated costs does not need to be answered, as the OC did not seek to amend their claim in that way. At the time the application was lodged, both the OC and the Framptons were interested persons and Mrs and Mr Frampton were owners and occupiers respectively. This was the position at the final hearing also. Whether the sale would affect an order being made pursuant to s.132(b) does not need to be answered for present purposes. Costs 1. Both parties sought the costs of the other. The only reason the OC did not get all of the orders sought in their application of 28 November 2017 was because Mrs Frampton sold her lot before the decision was handed down. 2. The Framptons were entirely unsuccessful in their application. 3. The OC was successful in achieving a monetary penalty against Mrs Frampton for breaches, and continuing non-compliance, of the by-laws. 4. The OC addressed the Tribunal about special circumstances in paragraphs 58 to 60.7 of their submissions at pages 226 to 227 of the NCAT Book. The Tribunal agrees that the circumstances outlined in those submissions amount to special circumstances. The OC mentioned costs again in their supplementary submissions on page 244 of the NCAT Book. 5. At paragraph 51 of the Framptons' 13 October 2017 submissions the Framptons wrote "If the Applicants are successful in these proceedings [referring to themselves], they propose to seek leave to file further submissions on costs." They made some short submissions as to costs thereafter. The Framptons have been entirely unsuccessful in this litigation but the Tribunal will still allow them the chance to put on what further submissions they wish to, about costs. 6. Finally, the OC's submissions dated 6 April 2018 on page 361 are taken into account. The Tribunal agrees with each of the submissions in paragraphs 88 to 93 inclusive. However the OC concludes in paragraph 94 by requesting to be heard further on costs and to provide copies of offers made to the Framptons on a without prejudice basis. 7. The Tribunal is minded to find special circumstances on the basis of the OC's submissions and all the evidence the Tribunal has read, heard and reviewed in these proceedings, and order the Framptons to pay the OC's costs as agreed or assessed on the ordinary basis, from 14 February 2017 to date. However, as both parties wish to be heard further on costs, the Tribunal will allow the parties to make further submissions on costs, bearing in mind the outcome of the proceedings and the Tribunal's preliminary view about the appropriate cost order to make. 8. Bearing in mind the quick, just and cheap resolution of these proceedings, the Tribunal encourages the parties to agree on a cost order by consent, or refrain from making further cost submissions (with the necessary incursion of more costs) and if no further submissions are made, the Tribunal will enter the proposed cost order as above. 9. If however the parties wish to be heard on costs, the Tribunal orders: 1. The OC to make any cost order it wishes to make, with submissions, by 15 March 2019. A copy of the application and submissions may be emailed to both the Tribunal and the Framptons; 2. The Framptons may make any submissions opposing a cost order against them, by 8 April 2019. 1. The parties submissions must include their attitude to the Tribunal determining the question of costs on the papers, pursuant to s.50 of the NCAT Act. 2. If no submissions are received the Tribunal will enter the proposed cost order against the Framptons. If submissions are received the Tribunal will consider them and make a decision as to costs in writing or after an oral hearing, depending on whether the Tribunal determines to dispose with a hearing as to costs. ********** 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: 09 May 2019