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In this podcast, Dan Toombs talks with Strata Law Expert, David Sachs on the recent Court of Appeal decision that is going to change everything.




David, a pretty significant decision by the Court of Appeal, a very significant decision, and it will have wide-ranging implications for every strata scheme in New South Wales.

Dan. The first, the narrow way of looking at it is how it applies to pet bylaws. The broader way of looking at it is how it applies to some other bylaws that might have similar sort of legal characteristics to the no pets wide-ranging law dealing with the narrow one. First, it’s fair to say that every strata scheme that has a bylaw on its books that bans pets.

Now these bylaws are invalid.

Now, when I say invalid, it doesn’t mean that from today onwards they are dissolved and they don’t exist. It means that if someone seeks to challenge them and brings a challenge to the Civil and Administrative Tribunal, then the tribunal must. Repeal those bylaws and then they will then be removed from the bylaws of that strata scheme. What does this mean more broadly in terms of bylaws that perhaps are a little bit more intrusive than what they should be on a person’s quality of life?

Well, when one looks at the reasons that the Court of Appeal used in order to justify banning no pets bylaws, one will say that they did it for two reasons. One, they said that an owner’s corporation can only make a bylaw that regulates the way in which a lot is used. If that regulation is significantly connected to the way in which other owners use their lots or the way in which other owners use the common property. So just looking at that point, you can’t make a bylaw that just tells a person in unit X what they can do in X unless the way in which they control that lot has something to do with other owners, like smoking.

For example, you could prevent somebody from smoking in their lot, but only to the extent that the smoke drift is going into other units or onto the common property and therefore being a nuisance or a health hazard to other owners. But you could not make a bylaw that prevented people from smoking in their lot under any circumstances where windows and doors were closed and therefore there was no smoke drift onto other lots. The second ground for striking down the no pets bylaws was because they said by-laws that by reference to community standards as determined by the Court of Appeal judges, they thought that a blanket restriction on people having any pets was harsh, unconscionable or oppressive, in particular oppressive.

Now, where this will apply in with commonly made bylaws is it will have implications for Airbnb, anti-Airbnb bylaws and attempts by owners corporations to restrict the way in which people are able to rent out their premises or order food from Uber and have people come onto the common property and deliver food, or for people to deliver parcels to the lot, or for people to have visitors into their property, or for people to be able to operate businesses from home and have people come and see them.

Because once you start looking at the way in which those things actually work and what it is that they’re controlling, some of those things can be construed as being an interference with property owners rights to use their property freely and probably within in accordance with planning laws. But they do not in any way inhibit the way in which other people are able to use their lots or the common property.

David, does this mean that you know, owners, corporations are now in a bit of a flurry of activity trying to get a little bit introspective about their full collection of bylaws generally?

They should they certainly should be doing that, and another one that I was going to mention, Dan, is to do with hard flooring bylaws, which you see in lots of strata schemes. We ran a case today. I haven’t got the decision yet in the Civil and Administrative Tribunal, where we were seeking to strike down a hard flooring bylaw that we said imposed an unrealistic requirement for noise attenuation on the basis that it unduly intruded upon lot owners rights to be able to furnish and decorate their apartment as they saw fit without reference to appropriate standards to be expected of adjoining lot owners in their use of enjoyment of their lawns or the common property.

We expect to be successful on that. But there is a way where within two weeks of Cooper’s case, we’re arguing that the reasoning there should be used to strike down a hard flooring bylaw. And as corporations just need to be careful that they don’t overreach with their bylaws, that they carefully consider exactly what their jurisdiction is when they’re making a bylaw. And they don’t go beyond that, because if they do go beyond it, then the bylaw is potentially invalid in all respects.

Let’s not forget the court doesn’t or the tribunal doesn’t rewrite the bylaws. So it brings it within the boundaries of what’s appropriate. If the bylaw as registered goes beyond what’s appropriate, then the whole of the bylaw will be struck out. And then it’s a matter for the owners corporation to start from scratch again and see what’s able to be done.

So for Owners Corporation, listening to this podcast? What’s your advice to them? They should be reviewing their bylaws if they’ve got any of these ones that I guess regulate the way in which people are able to use their lots and make sure that that they don’t go too far and that they’re not overreaching.

Nobody in an owner’s corporation wants to get involved in a dispute in the tribunal unless it’s absolutely necessary. All of those things are always expensive and they always ferment acrimony.

And that doesn’t suit an owners corporation at all. It’s a waste of money. And it’s certainly, certainly a waste of everybody’s emotional energy. If people spend some time making sure that their bylaws are appropriately tailored now before there is a dispute and that they’ll actually be sustainable, then they can avoid the arguments, the angst, and they can certainly avoid the legal costs of being a party to a court dispute or a tribunal dispute. Let’s not forget, I know Mrs Cooperman’s in her case that went to the Court of Appeal, got some go fund me funding. But I think that the total cost, by the time she’d been the tribunal, the appeals panel and the Court of Appeal were not much short of half a million dollars. That’s a lot of money. That’s a lot of money to deal with a dispute and it’s a lot of money to deal with it.

David, if corporations need help and they want to act on your advice, obviously Sachs Gerace have got loads of experience in this regard.

This is exactly what we do. And we’re across all of these matters and what the implications of them are. And we can give advice about any bylaw that deals with strata and give advice about whether it crosses the line and if it does, what should be done about i