Case Notes ~ Strata Flooring By-Laws Deemed Unreasonable

NSW accepts expert evidence that 5★ flooring by-laws are too stringent.

Mackinnon v Greenway; Greenway v The Owners – Strata Plan 49770 [2020] NSWCATD 28

This was an application in the NSW Civil and Administrative Tribunal (NCAT) to declare by-laws for the installation of flooring other than carpet to be “harsh unconscionable or oppressive.” The by-laws required a unit owner to comply with a series of steps including providing “a sworn statement that the sound proofing isolation system will achieve … an AAAC 5 Star Rating” and, following installation, to arrange testing by an AAAC member to make sure the flooring had achieved the requisite 5 Star Rating and subsequent verification by the owners corporation at the unit owner’s expense.

The NCAT stated that whether a by-law is harsh, unconscionable or oppressive is an objective test with consideration given to the consequences of the by-law for the use and enjoyment of a unit owner and any adverse impact on the use and enjoyment of other unit owners and/or the common property. It referred to Guram v Owners Corporation SP 36589 [2018] NSWCATCD 39 in which the Tribunal found a by-law that prohibited the installation of timber or ceramic flooring except in ground floor units was invalid in the light of section 110(3)(c) of the Strata Schemes Management Act 2015 that explicitly recognises the installation of floorboards as minor works stating further that “where the Act has made provision and parliament has clearly intended to set out a scheme for these types of works to be considered and approved … even if by-law 3 had force and effect it would be harsh, unconscionable or oppressive.”

In the present case the Tribunal found the by-law was harsh, unconscionable or oppressive based on 12 factors both collectively and individually, including:

(a)   The requirement to achieve 45dB when expert evidence, based on testing of different products found the prescribed standard could not be achieved and determined that a reasonable upper limit was 50dB (4 Star Rating).

(b)   Section 110(2) allows for reasonable conditions, but the by-law gives the executive committee an ‘absolute discretion’ and is not confined to what is reasonable, including consideration of the unit owner’s individual circumstances (i.e., carpet exacerbated the lot owner’s asthma).

(c)   The by-law requires that the unit owner provide a sworn statement about compliance in the future when that is a matter that is unlikely to be within the unit owner’s expertise.

(d)   The by-law requires duplication of verification in that post-installation evidence of compliance from the unit owner is to be followed by verification by the owners corporation at the unit owner’s expense.

The NCAT also considered the issue of ‘marginal compliance’ that had been raised in expert reports and noted that the unit owner’s installation had achieved measurements of 46dB to 47dB. The Tribunal accepted the expert evidence that “a difference of 1 or 2 dB is not discernible by the human ear” and was satisfied that marginal compliance had been achieved. Accordingly, it would be “unreasonable to expect a lot owner to remove and replace flooring in order to achieve a difference which the unchallenged expert evidence suggests is not discernible to the ear.”