By-Law Banning Pets in Strata Building Invalidated by Order of Court of Appeal Supreme Court of New South Wales

13/01/2021

Many people live in buildings which are subject to Strata Schemes.  Those buildings consist of varying sizes from a two Lot strata scheme to townhouses in a Strata Scheme and small and large apartment complexes.  Various Owners own a Lot within the Strata Scheme.  The Lot is defined by reference to the Strata Plan and the laws applying to Strata Schemes.  All parts which are not part of the Lot are common property owned by the Owners Corporation.  The Owners Corporation consist of all the Lot owners. 

The Strata Schemes Management Act 2015 and prior Acts set out the basis of making rules by way of by-laws.  By-laws regulate the conduct of Lot owners and occupiers whilst on the common property or inside their own Lots.

There are issues as to the extent that one can make a by-law and separately the Owners Corporation do not have unfettered authority to make any by-laws or any decisions that they wish to make.

The powers given to the Owners Corporation must be exercised properly within the power.  We refer to our article on fraud on the minority in which we give some advice in relation to this aspect.

In the recent case decided in October 2020 the Supreme Court of New South Wales was considering a decision of the NSW Civil and Administrative Tribunal (NCAT) and a decision of the Appeal Panel of NCAT given on 27 May 2020. 

The Owners Corporation is the owner of the property known as The Horizon Apartments in Darlinghurst.  The Horizon building has approximately 340 Lots in a high rise building. 

When the building was newly being constructed it was registered as a Strata Scheme.  The original By-laws dealt with many issues including a by-law which had a blanket ban on pets or animals on the common property or any Lot and the effect of it was to prohibit Lot owners (other than those with a disability requiring an assistance animal) keeping an animal or permitting an animal to be on a Lot.  This included animals which had no material impact on any other Lot or the Common Property. 

This by-law was challenged by the Lot owners of one Lot who wished to keep a miniature schnauzer as a pet. 

On 21 November 2019 Senior Member GK Burdon SC sitting at NCAT upheld the applicant’s claim and declared the by-law invalid as Section 139(1) of the Strata Schemes Management Act provided that “a by-law must not be harsh, unconscionable or oppressive”. 

The Owners Corporation appeal to the Appeal Panel of NCAT which set aside the orders of the Senior Member.

Thereafter the Owners Corporation appealed to the Court of Appeal Supreme Court of New South Wales. 

The Court of Appeal heard the matter on 23 September 2020 and gave a decision 12 October 2020.  The Court of Appeal held the by-law was invalid. 

The terms of the by-law were as follows:

“An owner or occupier of a Lot must not keep or permit any animal on a Lot or on the common property.”

This is a common form of a by-law dictating owners or occupiers must not keep or permit animals on a Lot or on the common property. 

The Lot owner submitted that the by-law breached Section 139(1) of the Strata Schemes Management Act as it was harsh, unconscionable or oppressive and therefore should be found invalid.

The Owners Corporation submitted that this was an original by-law in place since the scheme was created and argued the Lot owner should take no issue with a by-law which she knew about and voluntarily accepted by purchasing a Lot in the apartments.  The Court did not accept that any such limitation existed, or that original by-laws were immune to challenge.  What any Lot owner did or did not know about any existing by-law is not relevant to whether the by-law is harsh, unconscionable or oppressive.

The Owners Corporation also attempted to argue the by-law was necessary as a matter of convenience to ensure there was not a flood of applications seeking to keep pets, all requiring individual determination.  The Court did not accept this.  Convenience for the Owners Corporation would not justify a harsh, unconscionable or oppressive by-law.

Additionally the Court has the power to invalidate a by-law made beyond the power of the Owners Corporation.  The Strata Schemes Management Act confers a by-law making power on the Owners Corporation, but this is not unconstrained and should only be exercised for proper purposes, e.g. for the benefit of all Lot owners.  The Court held at [64] that “there is no sound reason to construe a by-law making power broadly so as to permit a by-law which limits the choice of all Lot owners in the use and enjoyment of their Lots, without conferring any material benefit on those who would not have exercised the right if available.”  In short by-laws should not limit the activities of Lot owners to prevent disruption to others.  If no disruption would be caused there is no basis for limiting lawful activities.

The by-law was therefore held to be invalid as it was harsh, unconscionable or oppressive and because it was made beyond the statutory by-law making power of the Owners Corporation.

The decision has ramifications for many Strata Schemes which has an overriding by-law banning pets.  It is likely that such a by-law will be found invalid for similar reasons as in the above case.

On the other hand by-laws which require consent of the Owners Corporation to keep pets are less likely to be found to be invalid.  The issue that arises is whether such a by-law is arguably in the best interest of Lot owners and this will depend on the factual circumstances relating to the Strata Scheme.

Watson & Watson are lawyers experienced in all aspects of Strata disputes, rights and obligations of the Owners Corporation and the various Lot owners.  Please contact Watson & Watson by contacting Richard Watson or his Personal Assistant Shereen DaGloria for advice in relation to any issues that arise in relation to the Owners Corporation of which you are a Lot owner or on the Strata Committee or on behalf of the Owners Corporation.

This is only a preliminary view and is not to be taken as legal advice without first contacting Watson & Watson Solicitors on 9221 6011.