The Dogs of Strata War or The By-Law is Dead: Long Live the By-Law
Cooper’s Case about by-laws deconstructed …
The latest lesson about how real property law relates to by-laws and strata lot ownership.
[6:25 minutes estimated reading time, 1249 words]
The Covid-19 pandemic made 2020 the dog’s year: everyone wanted a furry companion, their humans were at home most of the time, there were long walks and park visits galore, and they became one of the few ‘legal’ interaction tools for many locked down Australians.
And, thanks to the recently decided Cooper’s Case, the NSW Court of Appeal has ruled that a strata by-law that imposes a blanket ban on pets is invalid.
So, it just gets better and better for our canine friends [especially in the never-ending strataland pet wars].
Arguably, the strata dogs have also done all of us strata humans a favour with the Cooper decision.
That’s because, beyond the simple news that Cooper’s Case is about blanket pet bans in by-laws, Cooper’s Case actually reveals that many other types of by-laws are invalid and ineffective. So if properly challenged those by-laws cannot be enforced.
And, therefore, I believe that the strata by-law as we know it is dead, and a new and better type of by-law can now emerge.
About strata by-laws
Strata by-laws are a very useful and popular tool that allows strata buildings to regulate activities and relations between owners, residents and others in their buildings. They have existed since the earliest days of strata and most states publish standard sets and model by-laws for buildings.
Since the 1970’s there’s been an explosion of new and extra by-laws created by developers, strata buildings and managers to cover extra issues of concern. Everything from complex systems for apartment alterations to specifying the precise pantone colours of apartment blinds.
Here’s a 2019 Guardian article by Gary Nunn that illustrates some of these by-law excesses.
But, all this hyperactivity that has wallpapered strataland with by-laws hasn’t really achieved that much. After all, think about the following questions.
Do most owners [and worse yet non-owner residents] know which by-laws apply at their building?
Do more and more detailed by-laws make managers and committees feel like they’re in control when, in fact, not much has changed?
How many residents and owners are threatened with by-law breach actions for alleged breaches, without any real impact?
How much formal by-law enforcement action is actually taken and, how effective is it?
So, you could say that’s a lot of by-law efforts for very minor results. Why?
By-laws are not just a set of behavioural controls agreed between a group of people [like house rules or soccer club by-laws].
Nor are they like laws imposed by governments with statutory force as a result [PS - I don’t subscribe to the popular view that strata is the 4th tier of government but more about that in another newsletter].
By-laws are a statutorily created legal arrangement between strata property owners that governs their rights and obligations in relation to that property. As such they are contingent on the primary and underlying property rights that are incident with ownership.
Interestingly Justice Basten in Cooper’s Case equated by-laws with easements, which elevates them into a complex property instrument.
That means they are more legally delicate than many imagine and unless drafted to properly fit with the underlying property rights of owners and residents and are written precisely, they will not work as intended or at all.
Therefore, by-laws need to be more carefully crafted to be effective and not simply copied from someone else’s building, reactively issued in response to a one-off problem or written to suit the operational convenience or whims of committees or managers.
The downgrading of by-law drafting work and the copy and paste/DIY by-law approach that’s been taken over in the last few decades isn’t good enough anymore.
What Cooper’s case tells us
I won’t bother with the details of the case as they have been widely reported and commented on elsewhere. And, you can read the decision here for yourself.
So, what guidance can we get from the NSW Court of Appeal about by-laws in the future?
1. The power to make by-laws is inherently constrained by the indefeasible nature of owners’ property rights.
2. If a by-law restricts activities, the restriction must protect another owner’s ability to enjoy their property rights.
3. The connection between the restriction and the protected rights must be ‘rational’; or logical and obvious.
4. By-law validity must be considered objectively; not based on individual or specific experiences, beliefs or knowledge.
5. Societal values are relevant to the assessment of by-law validity.
6. Administrative convenience or certainty for strata buildings doesn’t justify restrictive by-laws.
7. Majority views (even if unanimous] do not protect or enhance by-law validity [according to Justice Fagan at least].
8. By-laws will be inherently invalid if they infringe these tests, despite the specific controls in s 139 on harsh, unconscionable or oppressive by-laws.
9. Where there are other mechanisms [like other laws or by-laws] to deal the problem behaviours, that may be enough to make a by-law on the matter invalid.
Additionally, the NSW Court of Appeal was critical of the actual pet by-law, the applicable strata laws and of those making, enforcing and considering the by-law; which suggests it does not like the authoritarian like approach typically taken in strata building management.
Let me illustrate that with some quotes from the decision.
‘the language of s 136(1) is awkward’ about the law [pp11]
‘neither one, nor all, of the model by-laws can confine or determine the scope or operation of the Act’ about the model by-laws [pp13]
‘by-law 14, set out at above, and drafted with little regard for syntax’ about the Horizon by-law [pp20]
‘this exercise was of limited assistance’ about the NCAT decision when applying definitions [pp22]
‘it failed to identify the standards against which the by-law is to be assessed’ about the NCAT Appeal Panel decision under s 136(1) [pp23]
‘minority rights as to the use of residential property should not be overridden by a contrary majority view’ about Horizon’s by-law approval [pp32]
Consequently, it seems clear that many by-laws will fail similar analyses (and attitudes) so that they are invalid and/or would be ruled invalid by Courts.
This includes many of the model and statutory by-laws. After all, is a by-law that prohibits children playing on most common property all that different to the Horizon pet by-law?
In reality, many behaviours that strata buildings have tried to address via by-laws can be controlled by existing strata and other laws. But, it’s been very difficult, slow and costly to do so due to the degradation, complexity and cost of enforcement processes.
Where to from here?
Firstly, NSW strata buildings with pet ban by-laws have been effectively left without an effective by-law governing animals in their buildings … leaving an animal-free for all.
Secondly, it’s likely that an owner or resident accused of breaching a by-law will now say it’s invalid on Cooper Case principles [that it’s harsh, unconscionable or oppressive] and will regularly win that argument.
Thirdly, by-law drafting needs to improve to make them valid and effective.
Fourthly, strata buildings will actually need to consider animal applications on their real merits.
But, then again, maybe there’ll be a High Court appeal … and the decision reversed.
One final matter …
I was also very pleased to learn three new words [‘triune’, ‘hendiadys’ and ‘protean’] to add to my vocabulary thanks to Justice Basten.
Jan 06, 2021