A defence is not a cross-claim – Lot owner denied claim for unreasonable refusal of by-law

A recent decision by the New South Wales Civil and Administrative Tribunal highlights the need for a respondent to make a separate application (a cross-application) if the respondent seeks orders from the Tribunal which are not part of the applicants claim.


In the case of The Owners – Strata Plan No. 98503 v Morrell [2021] NSWCATCD 124, the owners corporation made an application against Angela Morrell, a lot owner, for installing by-fold windows to enclose a balcony.


The bi-fold windows were installed by Ms Morrell without approval from the owners corporation (in the form of a common property rights by-law). Ms Morrell requested the owners corporation approve the installation of the bi-fold windows retrospectively by seeking that a common property rights by-law be approved at a general meeting. However, the motion was defeated.


The balcony is common property and the owners corporation sought orders from the Tribunal requiring Ms Morrell remove the by-fold windows and make good the damage pursuant to section 132 of the Strata Schemes Management Act 2015 (“SSMA”).


The Tribunal found that by installing the by-fold windows without obtaining the approval of the owners corporation (in the form of a common property rights by-law), Ms Morrell was in breach of section 108 of the SSMA and in breach of the by-laws which prohibited work being undertaken on common property without approval.


Ms Morrell attempted to defend the application on the basis that the installation of the by-fold windows was necessary to make the common property comply with the National Construction Code. Ms Morrell relied upon a report by an expert to support this defence.


The Tribunal found that the compliance of the bi-fold windows was irrelevant and that it was not appropriate for a lot owner to undertake work on the common property on its own accord as there are statutory provisions in place which provide such issues may be resolved in a way which maintains order amongst the strata lot owners. Such provisions do not allow an individual owner to engage a contractor to perform work on common property without the approval of the owners corporation.


Alternatively, Ms Morrell sought to defend the application on the basis that the Tribunal should make an order that he owners corporation unreasonably refused to make the common property rights by-law, the motion for which had been defeated at the general meeting. This submission was made on the basis that the Tribunal make an order pursuant to section 149(1) of the SSMA.


Section 149(1) of the SSMA is the section which empowers the Tribunal to make a common property rights by-law which the owners corporation has unreasonably refused to make.


The Tribunal noted that for it to make an order pursuant to section 149(1) there needed to be an application made and no such application had been made.


The Tribunal said:

In my opinion, the cumulative effect of subsection 149(1) and Division 3 of Part 12 of the SSMA, as well as sections 39 and 40 of the NCAT Act and section 23 of the NCAT Rules, is that a strata schemes application, or strata and community schemes application, must be filed by the respondent in order for the Tribunal to have jurisdiction to make the orders sought by the respondent. It is not sufficient for the respondent to simply seek that such orders be made in written and oral submissions in reply to the strata schemes application made by the applicant.

and


As set out above, no such application was made by the respondent. Accordingly, in my opinion, I do not have jurisdiction to make the orders sought by the respondent and I decline to do so.

The Tribunal made orders requiring Ms Morrell to remove the bi-fold windows and make good all damage caused to the common property within 6 months and, in the event that Ms Morrell does not comply, the owners corporation may have access to the lot to undertake the work required.


The information provided in this article is general information only and should not be relied upon as legal advice or be used as a substitute for obtaining legal advice. The specific circumstances relating to you impact upon your legal rights and obligations and personal legal advice based upon your circumstances should be obtained. This area of law changes frequently and the law may have changed after the time this article was prepared, up-to-date legal advice should be obtained. Please do not hesitate to contact Williamson Lawyers if we may be of assistance.