Colman v The Owners – Strata Plan 61131

1. [1]

   THE COURT: The applicant, Mr Gary Colman, is the owner of Lot 147 in a strata scheme at a residential building in Pyrmont, NSW, known as the Palladium. Lot 147 is an apartment on level 10 of the Palladium and Mr Colman’s title includes a rooftop terrace on level 11, comprising a western and eastern terrace. There are also common property areas on level 11. The respondent is the owners corporation of the strata scheme for the Palladium under s 9 of the Strata Schemes Management Act 2015 (NSW) (SSM Act). The dispute giving rise to these proceedings relates to requests made by Mr Colman in 2019 and 2020 for approval of building works to be carried out on the terrace of Lot 147, some of which affected common property.

2. [2]

   Some of these requests were approved but an application dated 7 January 2020 by Mr Colman for approval of building works including the removal and replacement of tiles and waterproofing on the western terrace of Lot 147 (the waterproofing works) was not approved. It is common ground that, despite a subsequent proposal for a by-law approving the waterproofing works being put to an annual general meeting of the respondent, these works were never approved by the respondent.

3. [3]

   On 16 September 2021 Mr Colman applied to the New South Wales Civil and Administrative Tribunal (the Tribunal) seeking relief including, relevantly, an order under s 126 of the SSM Act and damages under s 232 of the SSM Act for alleged breaches of the respondent’s duties under s 106 of the SSM Act. Whilst we do not have either the Tribunal’s decision (and it is not published on the NSW Caselaw website), or the application to the Tribunal, it appears from the decision in the subsequent appeal proceedings, Colman v The Owners – Strata Plan 61131 [2023] NSWCATAP 308 (discussed below), that these orders were sought in respect a range of works including the waterproofing works. On 7 June 2023 the Tribunal dismissed Mr Colman’s application. On 17 November 2023 the appeal panel of the Tribunal dismissed an appeal by Mr Colman on a question of law under s 80 of the Civil and Administrative Tribunal Act 2013 (NSW) (CAT Act) against that decision (the appeal panel decision).

4. [4]

   Mr Colman then sought leave to appeal from the appeal panel decision to the Supreme Court of NSW on a question of law under s 83(1) of the CAT Act. On 20 February 2025, Kirk J granted leave to appeal on some but not all of the grounds advanced but dismissed the appeal with costs: Colman v The Owners – Strata Plan 61131 [2025] NSWSC 63 (unless otherwise indicated, references in this judgment to [#] are to paragraphs in this judgment). By summons filed 22 May 2025 Mr Colman seeks leave to appeal from the orders of Kirk J, but (as he indicated in his oral submissions before this Court) only as regards the matters where his Honour granted leave to appeal but dismissed the appeal.

5. [5]

   The evidence before this Court comprised over 100 pages of documentary material, including some correspondence and reports relating to Lot 147, the application for approval of building works dated 7 January 2020, extracts from and in some instances complete copies of the submissions that were before the Tribunal and Kirk J, and the notice of appeal to the appeal panel and the summons before Kirk J.

6. [6]

   In circumstances where the material tendered by Mr Colman does not include the transcript of the hearing before Kirk J, there is no basis for us to doubt the correctness of his Honour’s identification, at various points in his judgment, of the way in which Mr Colman’s contentions were put before his Honour. In particular, at [7] Kirk J noted that Mr Colman had “further explained” the subject of his complaint in oral submissions, and at [9] Kirk J identified that the three issues raised by Mr Colman were clarified in oral submissions as being:

7. [7]

   As to issue (1), Kirk J explained at [105] that in his summons Mr Colman had not identified with precision the errors he alleged in the appeal panel decision but that some light was thrown on that in written and oral submissions. His Honour then explained at [106]-[108] that:

8. [8]

   Earlier in his judgment, at [38], Kirk J had explained that:

9. [9]

   Consistent with our approach as set out above at [6], we approach Mr Colman’s application for leave to appeal on the premise that the three issues ultimately raised by Mr Colman before Kirk J were as described above.

10. [10]

    Before this Court, Mr Colman raises only one proposed ground of appeal. He alleges that Kirk J (and the appeal panel and the Tribunal) constructively failed to exercise jurisdiction in determining whether the respondent had breached its obligations under s 106 of the SSM Act. Whilst in his draft notice of appeal Mr Colman alleges six sub-grounds, in his oral submissions he confirmed that he relies only upon three matters as constituting a constructive failure to exercise jurisdiction:

    1. (1)

       That in his Honour’s analysis of whether the appeal panel had erred in rejecting Mr Colman’s claim for damages under s 106(5) of the SSM Act arising out of the waterproofing works (at [107]-[118]), Kirk J ignored or overlooked evidence which supported Mr Colman’s contentions or aspects of the Tribunal’s decision which were plainly wrong (the evidence and Tribunal reasons contention).

    2. (2)

       That Kirk J did not deal at all in his judgment with Mr Colman’s complaint of breach of s 106(5) of the SSM Act by the respondent as regards what Mr Colman describes as the “duct relocation and easement gateway claim for work undertaken … to repair” the common property (the ducting works). Mr Colman says that this work had been approved by the respondent by by-laws 52 and 54, which according to the decision of the appeal panel, were passed at an annual general meeting of the respondent on 16 November 2020. Mr Colman contends that the issue of the costs of the ducting works to the ducts was not addressed by the Tribunal (the ducting contention).

    3. (3)

       That Kirk J erred because his Honour approached Mr Colman’s contentions of breach of s 106(5) of the SSM Act by asking whether such a claim was available in circumstances where the relevant building works were not approved by the respondent. Mr Colman contends that his Honour constructively failed to deal with his claim that the relevant breach entitling him to damages was an ongoing breach of s 106(5) of the SSM Act constituted by the respondent’s ongoing failure to carry out the waterproofing works (the breach contention). He contends that Kirk J should have found that the respondent was in breach of s 106 of the SSM Act and that entitled Mr Colman to damages for that harm.

11. [11]

    We address Mr Colman’s application for leave to appeal by reference to these three matters. As is apparent, these grounds seek to challenge only Kirk J’s approach to the first issue before his Honour, as identified above at [6]-[7].

12. [12]

    For the reasons set out below, Mr Colman has failed to identify an issue of principle, a question of public importance or a reasonably clear injustice going beyond something that is merely arguable: Kassam v Hazzard; Henry v Hazzard (2021) 106 NSWLR 520; [2021] NSWCA 299 at [25]-[27] (Bell P, Meagher and Leeming JJA agreeing). In these circumstances, leave to appeal is refused with costs.

Background

1. [13]

   From 2015 Mr Colman and his wife, Ms Jackie Colman, had been communicating to the respondent their intention to renovate the terrace area on Lot 147. In early 2019 the owner of the apartment immediately below Lot 147, Mr George Efthimiadis (referred to as Mr Midas) complained to the respondent about water ingress from Lot 147. By 1 November 2019 the respondent approved building works to repair an expansion joint on the terrace of Lot 147, which were to be carried out by AussieBuild. This is the trading name of a building company operated by Mr Midas. The scope of work included the removal of “hob and bricks over and around [the] expansion joint and 2 rows of surrounding tiles”. Also on 1 November 2019 Ms Colman sent an email to representatives of the respondent saying that the waterproofing of all the rooftops in the building seemed to be failing and requesting re-waterproofing and re-tiling of the western and eastern terraces of Lot 147 at the respondent’s expense. A representative of the respondent replied that the respondent was unlikely to agree to pay for such works and that they would have to be considered at the upcoming annual general meeting, but it does not appear that they were put to that meeting which occurred on 3 December 2019.

2. [14]

   On 7 January 2020 Mr and Ms Colman applied to the respondent for approval of a range of works, said to be “new work” and “due to emergency joint repair”, including the waterproofing works. There was email correspondence between Mr or Ms Colman and representatives of the respondent on 11-12 January 2020 which, amongst other things, raised the possibility of an inspection of the terrace by the respondent. It is not clear from this correspondence when the waterproofing work commenced, but in these emails the work is said to be “at waterproofing stage now” and it is said that “stopping it exposes all of the consequences of being exposed with rain forecast for a number of days”. That suggests that at least the tiles had by then been removed. These emails also referred to “the builder, George” which appears in context to be a reference to Mr Midas, noting that some of the emails were copied to Mr Midas. In these emails the waterproofing works are described as arising out of the emergency joint repair, as being necessitated by that work, and as “connected, directly consequential EJ [emergency joint] related work”.

3. [15]

   By email of 12 January 2020 at 5.35 pm Ms Reed, on behalf of the respondent, told Ms Colman that “strictly no works other than those previously approved should be undertaken.” It appears that a cease works letter was issued by the respondent on 14 January 2020.

4. [16]

   There followed emails from Mr Midas on 16 and 17 January 2020 to representatives of the respondent about the waterproofing works. He explained in these emails that what was done on the terrace was done to waterproof and certify the terrace, that a simple patch could not be certified and that all this was at no expense to the respondent as the owners of Lot 147 were prepared to cover the cost on the additional scope. He said that “[a]s a result of us not being able to complete the waterproofing” on the terrace, water had come into his property. He also explained that it “was only when we had opened everything up and discovered the extent of the waterproof failure that the entire balcony required waterproofing and correct drainage”. He said this “became an urgent item”. He added:

5. [17]

   Further correspondence ensued. On 29 January 2020 Mr Peter Lucas, General Manager at “Aussie Build pty ltd” (which we infer is AussieBuild), sent an email to Ms Colman, copied to Mr Midas and a representative of the respondent, attaching an undated report relevantly explaining:

6. [18]

   This suggests that Mr and Ms Colman instructed AussieBuild to carry out the waterproofing works and also agreed with AussieBuild that they would pay for those works.

7. [19]

   The waterproofing membrane and new tiles (both part of the waterproofing works) were installed between about 21 February 2020 and 2 March 2020: [27].

8. [20]

   The application for approval of the waterproofing works was considered at a strata committee meeting of the respondent on 16 March 2020 (along with a number of other building works approval applications by Mr and Ms Colman) and was not approved: [32].

9. [21]

   At the respondent’s annual general meeting on 16 November 2020 Mr and Ms Colman proposed special by-law 56 which was expressed to encompass works which were “part of” the application of 7 January 2020: [33].

10. [22]

    As to the ducting works, on 17 November 2020, HVAC Solutions wrote to Ms Colman about proposed work involving the demolition and modification of some ductwork on the terraces of Lot 147. A Fire Engineers Advice dated 14 December 2020 also relates in part to the proposed ductwork modifications and raises issues of noncompliance as regards ductwork.

Constructive failure to exercise jurisdiction

1. [23]

   It is convenient to begin with the ambit of error characterised as a constructive failure to exercise jurisdiction. In this regard, Mr Colman relies upon the variant of constructive failure to exercise jurisdiction identified by the High Court in Dranichnikov v Minister for Immigration and Multicultural Affairs [2003] HCA 26; 77 ALJR 1088. In that case, Gummow and Callinan JJ (with whom Hayne J agreed) at [24]-[25] explained that a constructive failure to exercise jurisdiction could arise from a failure “to respond to a substantial, clearly articulated argument relying upon established facts” and Kirby J at [88] referred to a “basic misunderstanding of the case brought by an applicant” that is “so serious as to undermine the lawfulness of the decision in question in a fundamental way.”

2. [24]

   As subsequently explained in Ming v Director of Public Prosecutions (NSW) (2022) 109 NSWLR 604; [2022] NSWCA 209 at [15]:

3. [25]

   As the analysis in Ming at [15]-[17] shows, a constructive failure to exercise jurisdiction requires more than a failure to consider evidence or address an argument or submission. It requires a failure to understand and determine central or critical elements of the case or claim or a fundamental misunderstanding of the nature of an application: see eg Day v SAS Trustee Corporation [2021] NSWCA 71 at [37] and CZA19 v Federal Circuit Court of Australia (2021) 285 FCR 447; [2021] FCAFC 57 at [34].

4. [26]

   It should be observed that the proposed grounds of appeal relied upon by Mr Colman do not include a failure by Kirk J to give adequate reasons, the ambit of which was considered in Ming at [41]-[42], a passage to which Mr Colman took the Court during his oral submissions.

Consideration of Mr Colman’s contentions of error

1. [27]

   In support of the evidence and Tribunal reasons contention, which focusses on Kirk J’s reasons at [107]-[118], Mr Colman relies upon essentially three matters.

2. [28]

   First, he contends that, at [110], Kirk J extracted what his Honour described as the “key impugned parts of the Tribunal’s reasoning”, comprising [190]-[194] of the Tribunal’s reasons but that his Honour did not identify errors in the Tribunal’s reasoning or contradictions between these paragraphs and the Tribunal’s reasons at [15] or the evidence more generally. The relevant paragraphs of the Tribunal’s reasons are:

3. [29]

   Kirk J at [111] noted that Mr Colman contended that there was a constructive failure to exercise jurisdiction in the Tribunal’s failure to resolve what Mr Colman considered to be a contradiction between the statement at [194] of the Tribunal’s reasons and an earlier statement at [15] of the Tribunal’s reasons that:

4. [30]

   His Honour was thus aware of what Mr Colman submitted was a “contradiction” and at [114] then rejected this submission.

5. [31]

   As to the evidence considered by Kirk J, having referred to the report of Mr Lucas extracted at [17] above, his Honour observed at [26]:

6. [32]

   Kirk J at [115]-[116] noted Mr Colman’s contention that, contrary to [194] of the Tribunal’s reasons, this report was “unchallenged” evidence from the builder that established that the membrane on the terrace needed to be replaced, and which the Tribunal had not dealt with. Kirk J rejected this criticism of the Tribunal’s reasons, finding that it was a matter for the respondent whether or not there was a guarantee for the works in the area of the expansion joint, that the Tribunal had quoted Mr Lucas’ letter at length and that Mr Colman’s complaint was really a challenge to the Tribunal’s fact-finding. Kirk J was thus aware of, and rejected, Mr Colman’s submission that the Tribunal had ignored or overlooked evidence.

7. [33]

   In light of the careful reasoning of Kirk J, Mr Colman’s contention that his Honour simply adopted the Tribunal’s reasoning uncritically, or did not consider the underlying document described at [26], is rejected.

8. [34]

   Second, Mr Colman submits that Kirk J was unaware of and did not consider Mr Midas’ emails of 16 and 17 January 2020, summarised above at [16]. Kirk J did not refer to these emails in his judgment. However, given the way the issues were framed before his Honour, as set out at [6]-[8] above, there was no need for his Honour to do so. The matters raised by Mr Colman before his Honour were whether there was a constructive failure to exercise jurisdiction by the Tribunal having regard to the Tribunal’s reasons at [15], Mr Lucas’ letter and the submissions of the respondent before the Tribunal. Whilst the outline of submissions filed on Mr Colman’s behalf on 21 July 2024 in the proceedings before Kirk J referred to “the unchallenged record from the builder, who had relied on advice from a waterproofer”, that is more aptly construed as a reference to Mr Lucas’ report which actually refers to being “advised by the waterproofer”, whereas Mr Midas’ emails simply refer to the contractor not being able to certify or guarantee the works. In any event, we infer from Kirk J’s judgment that it was Mr Lucas’ report and not Mr Midas’ emails that was the focus of submissions before his Honour. In any event, Mr Lucas’ report captured the essential point of Mr Midas’ emails, which was that the waterproofing works took place after AussieBuild formed the view that the terrace required waterproofing.

9. [35]

   Further, to the extent that Mr Colman relies upon the emails from Mr Midas as also showing that an opportunity was given to the respondent to inspect the terrace, that submission does not support a finding of constructive failure to exercise jurisdiction for the reasons given below at [36]-[38].

10. [36]

    Third, Mr Colman submits that Kirk J did not consider or assess evidence that the respondent was given repeated and timely opportunities to inspect the terrace and to act on this. In support of this submission Mr Colman focusses upon [117], where Kirk J says:

11. [37]

    Contrary to Mr Colman’s contention, this paragraph provides no support for his contention of error, which is rejected. The text quoted by Kirk J is from the respondent’s submissions before the Tribunal and not from the Tribunal’s reasons. Further, in this paragraph Kirk J was simply explaining why he rejected Mr Colman’s contention that the written submissions of the respondent before the Tribunal were an admission of a breach of s 106 of the SSM Act or otherwise supported a finding that the waterproofing issues on the terrace were not new. In any event, the issues raised before Kirk J, set out above at [6]-[8], did not include any contention that the Tribunal or the appeal panel had either made, or erred in making, a finding that Mr and Ms Colman had prevented the respondent from inspecting the terrace and, contrary to Mr Colman’s written and oral submissions.

12. [38]

    Mr Colman’s further contention that, irrespective of whether this issue was raised by Mr Colman, Kirk J was required to examine the evidence to ascertain whether or not Mr and Ms Colman prevented the respondent from inspecting the terrace or whether Mr Midas raised the need for waterproofing with the respondent should also be rejected. It is for the parties to present their respective cases to the Court, and a failure by a party to draw the Court’s attention to evidence is an unpromising basis for a contention of constructive failure to exercise jurisdiction. In any event, contrary to Mr Colman’s written and oral submissions in this Court, there was no relevant factual dispute as to this that Kirk J needed to, or did, resolve, and his Honour referred at [28] to, and was thus well aware of, the application dated 7 January 2020, which asserted a need to carry out the waterproofing works.

13. [39]

    Mr Colman submits that he had a claim before the Tribunal for breach of s 106 of the SSM Act arising by reason of the failure of the respondent to remedy a problem of non-compliant ducting blocking the passage to the fire stair and boilers in the plant room, creating serious occupational health and safety issues, and blocking access routes, which forced Mr and Ms Colman themselves to bear the costs of the ducting works. He says that none of the Tribunal, the appeal panel or Kirk J dealt with this contention and that a substantial and clearly articulated claim that he made was thus overlooked or ignored.

14. [40]

    This contention faces insuperable difficulties.

15. [41]

    First, Mr Colman submits that the issue of the Tribunal and appeal panel’s failure to deal with his claims arising out the ducting works was raised before Kirk J. In this regard he relies upon a footnote to [3(c)] of his opening written outline before Kirk J. That paragraph, in its entirety, reads:

16. [42]

    Footnote 4 referred to “works that were necessitated (for example, ducting works) and were consequent to a fire inspection report” which appears to be a reference to the report we have referred to at [22] above. There is nothing here which could be construed as a claim that the Tribunal and appeal panel erred in failing to resolve a separate claim for damages arising out of a failure by the respondent to pay for the ducting works.

17. [43]

    Mr Colman also relies upon footnote 1 in [10] of his supplementary submissions filed after Kirk J gave leave to the parties to file supplementary submissions on a question of construction. In [10] and footnote 1, under the heading “Construction of section 106 of the Act”, it was submitted that Mr Colman had made a claim to the Tribunal which included a claim for the costs of ducting which was not addressed by the Tribunal and that:

18. [44]

    This was a submission as to the proper construction of s 106 of the SSM Act using the ducting works as an example. It was not a clearly articulated contention that the Tribunal had constructively failed to exercise jurisdiction by not determining a claim arising out of the ducting works.

19. [45]

    Second, the issues which Kirk J identified as being raised by Mr Colman, at [6]-[8] above, do not include any issue as regards the ducting works.

20. [46]

    In these circumstances, we reject the contention this was a clearly articulated claim pressed by Mr Colman before Kirk J.

21. [47]

    In any event, a claim for the cost of moving ventilation ducts was included as a particular of damage in a document described as “amended order details” which appears to have been before the Tribunal. However, as we do not have copies of all of the submissions before the Tribunal nor the transcript of the Tribunal or the appeal panel hearings, it is by no means apparent that a claim under s 106 of the SSM Act arising out of the failure of the respondent to pay for or arrange the ducting works was ultimately pressed as a clearly articulated claim before either the Tribunal or the appeal panel.

22. [48]

    Mr Colman’s contention that Kirk J constructively failed to deal with his claim that the relevant breach entitling him to damages was an ongoing breach of s 106(5) of the SSM Act constituted by the respondent’s ongoing failure to carry out the waterproofing works also lacks merit. As is apparent from [6]-[8] above, the issue as put to Kirk J related to a claim to cover the costs of carrying out the waterproofing works. In this regard, at [105], his Honour identified the issue as pressed before him as being:

23. [49]

    Mr Colman did not make a clearly articulated claim before Kirk J based upon an ongoing breach by the respondent of s 106 of the SSM Act occasioning loss other than the costs of carrying out the waterproofing works. Responding to the contention advanced by Mr Colman, at [120]-[134] Kirk J held that, as a matter of statutory construction, damages could not be claimed under s 106(5) of the SSM Act in respect of work that had been carried out where those works were not approved either prospectively or retrospectively. There was no constructive failure to exercise jurisdiction.

Leave to appeal should be refused

1. [50]

   It follows that Mr Colman’s contentions of error do not identify any arguable constructive failure to exercise jurisdiction by Kirk J. The issue of principle articulated by Mr Colman in his written submissions in support of his summons was that Kirk J had failed to apply the jurisdictional threshold of properly engaging with Mr Colman’s complaint. That issue necessarily falls away in light of our analysis of Mr Colman’s contentions. Contrary to Mr Colman’s written submissions, no concerns as to public confidence in judicial review are raised, nor is there any public interest of those in strata schemes that would be served by a grant of leave to appeal. Mr Colman’s submission that the ducting contention raises issues of safety also falls away once it is appreciated that work on the ducts was approved by the respondent and apparently completed. Moreover, we would not accept that the matters raised by Mr Colman are suggestive of any systemic failure in Tribunal practice or any lack of candour or honesty by corporate respondents.

2. [51]

   In these circumstances, leave to appeal is refused.

Conclusion

1. [52]

   There is no good reason why costs should not follow the event. Indeed, in Mr Colman’s Summary of Argument he accepted that there was no reason why a costs order should not be made in favour of the respondent if his application was refused.

2. [53]

   The orders of the Court are:

   1. (1)

      The summons filed by Mr Colman on 22 May 2025 seeking leave to appeal from the orders of Kirk J on 20 February 2025 is dismissed.

   2. (2)

      The applicant is to pay the respondent’s costs.