s 237 appointment appeals by owners
The Owners – Strata Plan 2010 v Kahn [2022] NSWCATAP 9
In short
Owners who were not parties to the first instance compulsory appointment have no standing to bring an appeal to the decision making orders for a full or plenary compulsory appointment.
There are alternate means of permitting an appeal, which should be considered with legal consultation.
Background
The respondent, an owner in an eight lot residential scheme, brought a s 237 application for compulsory appointment against the owners corporation. An underlying issue was the owners corporation’s refusal to make a common property rights by-law in favour of the respondent. The Tribunal made an order for a compulsorily appointed strata managing agent to exercise all of the functions of the owners corporation (being a full appointment, or with “plenary” powers). The owners corporation, effectively through the remaining lot owners, consented to that appointment but sought unsuccessfully to limit those powers in respect of making the previously refused common property rights by-law.
With the owners corporation under compulsory appointment, the remaining lot owners lodged an appeal purportedly in the name of the owners corporation. The appeal was without the consent of the compulsorily appointment managing agent and accordingly without the consent of the owners corporation. The lot owners were nominally joined to the proceedings as appellants.
The law
Section 80(1) of the NCAT Act only permits an appeal from the Tribunal by a party to the proceedings in which the decision was made.
On appeal
The lot owners made a number of arguments as to why they should be permitted to bring the appeal, either in their own names or on behalf of the owners corporation, which were in broad terms contrary to established law.
The appellants were unsuccessful on all grounds of appeal.
Key propositions
The summary in paragraph 3 of the decision sets out the strategic options available to lot owners not party to proceedings who are or may be dissatisfied with an order for compulsory appointment. Briefly, they can be summarised as follows:
any interested lot owner can seek to be joined as a non-participating party to the initial proceedings, prior to their determination, to preserve a right of appeal;
either as a non-participating party or through the owners corporation, seek a limitation on the appointment of a compulsory strata manager to the effect of preserving the democracy of the owners in appealing the decision through the owners corporation;
make a fresh application to the Tribunal seeking to vary the terms of the appointment so as to permit the consideration and voting on any appeal; or
initiate a derivative action in the Supreme Court seeking leave to bring an appeal in the name of the owners corporation.
See related: Abraham v The Owners – Strata Plan No 61419 [2024] NSWCATAP 21