22 April 2020
The appeals panel of the NSW Civil and Administrative Tribunal (NCAT) has considered the interpretation of a by-law in the recent decision of The Owners – Strata Plan No 91157 v Yoolee Holdings Pty Limited; Yoolee Holdings Pty Limited v The Owners – Strata Plan No 91157  NSWCATAP 6 (Yoolee Decision)
The Yoolee Decision provides a timely reminder that a by-law will be interpreted based on the four corners of the document. The decision should serve as a cautionary tale to drafters of strata by-laws to be clear and concise drafting by-laws.
Yoolee Holdings Pty Limited (Yoolee) owned all of the retail lots and three of the four commercial lots in a mixed use strata scheme at Milsons Point.
Yoolee sought to lodge a development application with North Sydney Council to undertake building works to the lots it owned and to change the lots’ use to a college (Development Application).
North Sydney Council required a letter from the Owners Corporation confirming that they consented to Yoolee’s Development Application before the Development Application could be accepted by the Council.
Relevantly, By-law 37.1 of the strata by-laws provided that:
“37.1 Approval by a Government Agency
An Owner or Occupier of a Retail Lot or a Commercial Lot may use their Retail Lot or Commercial Lot for any purpose, and during the hours, approved by a Government Agency. The Owners Corporation must without delay give its consent to the lodgement of an application to a Government Agency (as owner for the purposes of the Planning Act) for a particular use, or for specified hours, if requested by an Owner or Occupier of a Retail Lot or Commercial Lot.”
Yoolee tried a number of times to obtain the Owners Corporation’s consent to the Development Application, including by referring the Owners Corporation to By-law 37.1.
Frustrated by the process and unable to progress its Development Application, Yoolee commenced proceedings at NCAT seeking an order that the Owners Corporation consent to the application.
Decision at first instance
At first instance, NCAT ruled in favour of Yoolee and held that:
The Owners Corporation subsequently appealed NCAT's decision, arguing that NCAT was mistaken in its interpretation of By-law 37.1.
Decision on appeal
When considering the correct interpretation of By-law 37.1, the Appeal Panel of NCAT found that:
Given the above, the Appeal Panel ruled that the order made by NCAT at the first instance should be quashed and the matter should be remitted back to the relevant panel for reconsideration.
The Yoolee Decision highlights the importance of drafting clear and concise by-laws.
If the intention of a by-law is to allow retail and commercial lots owners flexibility to lodge any development application, then the drafting of the by-law needs to be wide enough to allow for this.
Authors: Elly Ashley & Bribie Stansfield
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