Court of Appeal Supreme Court New South Wales

• Medium Neutral Citation: Chua v The Owners - Strata Plan No 40301 [2014] NSWCA 306
• Hearing dates: 27 August 2014
• Decision date: 27 August 2014
• Before: Basten JA at [1]; Meagher JA at [18]

Decision

1. Refuse the application for leave to appeal.

2. Order that the applicant pay the respondent's costs of the application.

[Note: The Uniform Civil Procedure Rules 2005 provide (Rule 36.11) that unless the Court otherwise orders, a judgment or order is taken to be entered when it is recorded in the Court's computerised court record system. Setting aside and variation of judgments or orders is dealt with by Rules 36.15, 36.16, 36.17 and 36.18. Parties should in particular note the time limit of fourteen days in Rule 36.16.]

• Catchwords: APPEAL - application for leave - failure to give adequate reasons - error of law accepted, but relief refused - decision supported by unchallenged evidence - no adequate basis to doubt correctness of decision of primary judge; REAL PROPERTY - strata title - non-payment of special levy - liability of unit holder - whether notice served by posting to correct address
• Legislation Cited: Local Court Act 2007 (NSW), ss 39, 41; Strata Schemes Management Act 1996 (NSW), ss 78, 118, 236; Supreme Court Act 1970 (NSW), s 101
• Category: Principal judgment
• Parties: Chen Chew Chua (Applicant); The Owners - Strata Plan No 40401 (Respondent)
• Representation: Counsel: Mr B A Coles QC/Mr N Potts (Applicant); Mr M Klooster (Respondent); Solicitors: McGrath Dicembre & Co (Applicant); Gilbert M Johnstone & Co (Respondent)
• File Number(s): CA 2013/378920

Decision under appeal

• Jurisdiction: 9111
• Citation: Chen Chew Chua v The Owners - Strata Plan No. 40301 [2013] NSWSC 1696
• Date of Decision: 2013-11-21 00:00:00
• Before: R S Hulme AJ
• File Number(s): SC 2013/158274

Judgment

1 BASTEN JA: The applicant is the owner of unit 55 in a strata scheme at 301 Castlereagh Street, Sydney. This matter relates to the non-payment by him of a special levy imposed by the owners' corporation. The issue is whether, pursuant to s 78(1) of the Strata Schemes Management Act 1996 (NSW), he, as a lot owner had been served with a written notice of the contribution payable. Whether he had been so served was an essential element of his liability.

2 There was evidence called by the owners' corporation that he had been so served by the sending of a notice to an address recorded by the strata managing agent on its strata roll. The basis of service to such an address is to be found in s 236(3) of the Strata Schemes Management Act. It seems not to have been in dispute that the address to which the notice was sent was either that which had been provided by him pursuant to a notice under s 118 of the Strata Schemes Management Act when he obtained the lot, or it was the address of the lot itself at which he could have been served, in any event, pursuant to s 236(4)(b).

3 The Local Court upheld the application for a judgment against the applicant on the basis that the various elements of his liability had been established. The magistrate accepted that the strata roll correctly had the owner's address for service as being unit 55, which he concluded was probably updated by reference to the s 118 certificate. He further concluded, "Although there is a lack of corroborating material, I would accept the evidence of Mr Howard that the notice was probably sent by post to Unit 55."

4 The applicant challenged the finding of the Local Court by bringing an appeal on a question of law pursuant to s 39(1) of the Local Court Act 2007 (NSW). There was a power to appeal by way of leave from the Supreme Court on a mixed question of law and fact pursuant to s 40. It is not entirely clear that any of the grounds of appeal raised in the summons that came before the primary judge (R S Hulme AJ) in the Common Law Division involved a question of law only. The primary judge acknowledged the issue but did not find it necessary "to explore the question whether such leave should be given": at [5].

5 In the event, the primary judge found that there had been an error of law in the approach adopted by the magistrate, but dismissed the appeal. It was open to him to do so, on one view, on the basis that he had power to make such order as he thought appropriate and, in the event that the error of law was not one which materially affected the decision, he was entitled to dismiss the appeal pursuant to s 41(1)(d) of the Local Court Act.

6 The applicant sought leave to appeal from that judgment to this Court accepting that the amount in dispute was under the amount required pursuant to s 101(2)(r) of the Supreme Court Act 1970 (NSW) to permit an appeal as of right. The primary judge noted that the amount in dispute was in the order of $11,000. It may be more than that, given the possibility of interest and other amounts claimable by the owners' corporation, but there is no suggestion that it is not a relatively low amount compared with the amount required to justify an appeal as of right.

7 The questions, therefore, which come before this Court, are (a) whether there was an error of law in the approach adopted by the magistrate, (b) which was either rejected by the primary judge or (c) dealt with inappropriately by him in failing to grant relief.

Error of law - onus of proof

8 It is convenient to deal first with the suggestion that either the magistrate or the primary judge misapplied the burden of proof by imposing on the applicant (the defendant in the proceedings in the Local Court) the burden of establishing that the notice had not in fact been posted.

9 That was not the approach taken by the magistrate, who said in his reasons of 24 April 2013 that "the onus rests upon the plaintiff on the balance of probabilities, to satisfy the [court] that the notices were properly sent." It is also not a complaint which can be laid against the primary judge, who said that the strata manager was required to prove not that the lot owner in fact received such a notice, but rather simply to prove service: at [6].

10 In a paragraph setting out the considerations for and against the finding that the notice was indeed posted, the primary judge identified the sixth point as being that, "apart from that evidence from Mr Chen, there was no evidence that the notice was not sent": at [13]. This was a statement as to the state of the evidence; it did not purport to express a finding. It did not apply, let alone reverse, the onus of proof.

Error of law - inadequate reasons

11 The second and related ground alleged that the evidence which was relied upon by the owners' corporation to prove posting was the evidence of Mr Howard. Mr Howard described himself in his affidavit as "Strata Manager" but, perhaps more accurately, was the person in charge of the relevant activities within the office of the strata managing agent appointed by the owners' corporation.

12 The complaint about Mr Howard's evidence, which was accepted by the primary judge, related to the manner in which the magistrate had dealt with his cross-examination. The primary judge concluded at [30] that "the attack on Mr Howard's credibility was not unreasonable" and that the magistrate had failed properly to deal with the challenges to Mr Howard's evidence in his reasons. That omission meant that he had not given adequate reasons for his conclusion that Mr Howard's evidence should be accepted. The magistrate had therefore erred in law.

13 It is not necessary for present purposes to determine the precise basis upon which the criticism of the magistrate's reasons was made. In fact, in his decision, the magistrate set out in some detail the cross-examination which was directed to Mr Howard's evidence, before coming to a quite limited finding. The limited finding, as already noted, was that he accepted Mr Howard's evidence that the notice was "probably sent by post to unit 55." The magistrate's finding in that respect was criticised by the judge as being not strictly accurate. What, in fact, Mr Howard said in his evidence was that the firm for which he acted had a system or practice in dealing with notices to be sent to unit holders in respect of levies and other matters of which they needed to be notified.

14 The suggestion that the finding in respect of that evidence was in some way qualified by the cross-examination was denied by the primary judge himself. Whether there was any inadequacy in his reasons in this respect is to be doubted, but was not challenged on this application and need not be pursued. The area of concern was peripheral to the substantive question, as the primary judge held.

Error of law - no evidence ground

15 The substantive question - although not in the terms that it was put by the applicant in submissions or in the draft notice of appeal, but rather as it should have been put to raise an issue of law - was whether there was evidence capable of providing support for the conclusion that the applicant had been served.

16 That there was such evidence seems to be indisputable, but the challenge seems to have been premised on the view that Mr Howard's evidence was worthless. The judge set out a number of issues that arose with respect to the finding made by the magistrate that the notice was probably posted: at [13]. First, he said that "Mr Howard did not in terms say that the notice was probably posted." No doubt that was true; it was an inference to be drawn from what he did say. Secondly, the judge said, "no one was called to say that he or she saw the notices posted." That is hardly a criticism of Mr Howard's evidence. Thirdly, he said that the magistrate "made no attempt to deal with the limits of the evidence that was given." That critique can be put to one side for present purposes. The primary judge continued that "despite the foregoing, there was a deal of material both in the form of unchallenged evidence from Mr Howard and common experience supporting the conclusion that the notices were sent to the Plaintiff by post." As noted above, the only affirmative evidence against posting was that the applicant said he did not get the notice, which was understandable if indeed it was sent to unit 55, which he did not occupy.

17 In short, the challenge to Mr Howard was limited. That was clearly correct. The evidence of a system was unchallenged, as was the evidence that at least two unit holders had received the notices in question.

18 The suggestion that the judge was wrong to say that certain evidence was "unchallenged" came to be the heart of this aspect of the applicant's case. However, the challenge was on the basis that, in substance, Mr Howard had overstated his role in the matter, and that some of the things which he had suggested he did himself, at least by checking what others did, did not in fact occur, and that what was done was done by his assistant.

19 In cross-examination, he agreed that various steps had been taken either by him or his administrative staff or simply by his administrative staff: Tcpt, 08/02/13, p 17. The suggestion that that concession undermined Mr Howard's evidence in some way which cast doubt upon the existence of the system he described was not reasonably available. The evidence of system was not significantly challenged.

20 There being evidence which would support the finding of the magistrate that the notice had been sent by post, the finding was a question of fact. There is no reason to suppose that there was not some evidence and it cannot be said that the evidence was undermined to the extent that it was not capable of supporting the finding. The primary judge did not so conclude, and there is no basis on this application to think that that negative finding would be overturned by this Court. It therefore follows that, there being evidence capable of providing support for the conclusion that the applicant had been served, there was no ground of law upon which the challenge could be maintained.

Conclusion

21 In those circumstances, the decision that the applicant had been properly served with a notice and was therefore liable to payment of the levy was not a decision which could be reviewed by this Court on an appeal limited to a question of law. In my view, in those circumstances, the application for leave to appeal should be refused. The respondent's costs of the application should be paid by the applicant.

22 MEAGHER JA: I agree with Basten JA.

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Decision last updated: 02 September 2014