Court strikes down ‘no pets’ strata by-law

The NSW Court of Appeal has decided that strata owners have the same rights as home owners to keep pets, so long as the pets don't disturb the neighbours in the strata scheme or interfere with the use of the common property.

The Decision

The judgment of the NSW Court of Appeal is Cooper v The Owners – Strata Plan No 58068 [2020] NSWCA 250 (12 October 2020) (Basten JA, Macfarlan JA and Fagan J agreeing).

The Court struck down strata by-law 14 in Strata Plan 58068 which contained a blanket prohibition on keeping animals. It stated:

14.1 Subject to section 139(5) of the Act, an owner or occupier of a Lot must not keep or permit any animal to be on a Lot or on the Common Property.

14.2 [assistance animals are permitted, subject to satisfactory evidence]

Note: animal is not defined in the Act, but can be assumed to include dogs, cats, birds in cages and fish in secure aquariums; assistance animals are ‘dogs or other animals’ which assist persons with a disability.

Strata by-law 14 was struck down because it contravened s 139(1) of the Strata Schemes Management Act 2015 (NSW) (the Strata Management Act), which states:

139(1) A by-law must not be harsh, unconscionable or oppressive.

Note: Any such by-law may be invalidated by the Tribunal (see section 150)

The Reasoning

The Coopers purchased a strata title lot in a high-rise (43-storey) apartment building in Darlinghurst, Sydney known as The Horizon. Strata by-law 14 was in force when they purchased.

They moved “Angus”, a miniature schnauzer dog, into their apartment not long after they purchased. “Angus” was 9 years old, weighed approximately 9.5 kgs, did not bark, and was always leashed for daily walks. The owners corporation applied to remove “Angus” because it was a breach of by-law 14 to keep him in their apartment. The Coopers applied to the Tribunal (NCAT) to declare the by-law invalid because it contravened s 139(1).

The Court of Appeal’s reasoning was as follows:

1. Freehold strata ownership is a well-known form of real property, and keeping a pet animal is “an ordinary incident of the ownership of real property”. “The fundamental principle of indefeasibility of title to real property under the Torrens system has significance [to] constraints imposed by by-laws”.
    
2. Under s 136(1), by-laws may only be made for a proper purpose. That is, to (i) confer specific functions on the owners corporation with respect to, or (ii) make provision directly in relation to, the use and enjoyment of the lots and the common property for the purpose of managing administering or controlling the strata scheme.
    
3. The Strata Management Act provides that certain by-laws may limit a lot owner’s rights, such as by-laws to limit the number of adults who may reside in a lot (s 137), to prohibit short-term rental accommodation (s 137A) and to not cause a nuisance or hazard to the occupier of any other lot or the common property, such as the penetration of smoke from smoking (s 153).
    
4. The Court said model by-laws 6 (Noise), 9 (Smoke Penetration) and 12 (Appearance of lot) were valid despite limiting an owner’s rights because “each of these provisions is expressly designed to deal with activities which may adversely affect the amenity of other lots, including the use of common property and the external appearance of the building”.
    
5. The prohibition of animals under by-law 14 did not derive validity from any provision in the Strata Management Act. The Act contains these provisions as to animals: s 139(5) which provides that a by-law may not prohibit the keeping on a lot of an assistance animal: and s 158 which provides that the Tribunal may order the removal of an animal if it “causes a nuisance or hazard to the owner or occupier of another lot or unreasonably interferes with the use or enjoyment of another lot or of the common property”.
    
6. The Court viewed the words “harsh, unconscionable or oppressive”, in s 139(1) as a group (a triune), objectively. According to Basten JA (and Macfarlane JA), by-law 14 “lacks a rational connection with the enjoyment of other lots and the common property”. According to Fagan J, by-law 14 “provides no material benefit to other occupiers” and so it was “oppressive”. By-law 14 was therefore invalid because it contravened s 139(1).
    
7. In reaching its decision, the Court considered and rejected these submissions made by the owners corporation (OC):
    
   • The OC argued that the strata scheme reflected community standards in adopting by-law 14, the owners being entitled to regulate their own affairs through by-laws and decisions of the owners corporation. The owners had voted to retain the by-law with an 83% majority vote. Characterising this submission as “relying on democratic governance principles”, Basten JA observed that “a liberal democracy is not a majoritarian dictatorship; it operates under legal constraints designed to protect minorities from oppression. The Strata Management Act contains such restraints, both in s 136 and s 139, enforceable by NCAT under s 150.”
   • The OC argued that Coopers had purchased the property with by-law 14 in place, and should therefore not be allowed to complain. This was irrelevant to the validity of the by-law. Basten JA observed that s 139(1) “focuses on the character of the particular by-law, rather than the state
     of knowledge … of any particular lot owner”. Fagan J observed that “the oppressive character of a by-law [is] inherent from the time of its adoption.”
   • The OC argued that “It was appropriate to formulate the prohibition in blanket terms to avoid the need to draw invidious distinctions which might in turn invite a flood of applications in a large building with some 341 lots.” Basten JA said that by-laws for pets were not the only by-laws which required individual consideration - there are a number of by-laws which require an “evaluative judgment”, such as whether noise or behaviour is “likely to interfere with the peaceful enjoyment of the owner”. Also, there was no reason to suppose the owners corporation “would be flooded with applications”. In addition, the Strata Management Act provides steps to resolve disputes as to animals in ss 157 & 158.
      
8. In the result, “Angus” was able to remain because there was no longer any by-law which prohibited him from being kept in the apartment.
    
9. And the Court ordered the owners corporation to pay the Coopers’ legal costs in the proceedings.

Analysis: It’s time to replace ‘no pets’ by-laws with pet friendly by-laws

The owners of The Horizon strata scheme failed to keep up with the times.

When The Horizon strata scheme was registered in 1998, Model By-Law 16 (see Strata Schemes Management Regulation 1997 – Schedule 1) contained three options for the keeping of animals for a strata scheme to choose from:

• Option A required the owner or occupier to obtain the written approval of the owners corporation to keep any animal (other than a fish in a secure aquarium).
• Option B allowed a cat, a small dog or a small caged bird, or fish kept in a secure aquarium, to be kept without approval, but required approval for other animals.
• Option C prohibited the keeping of any animal.

The Horizon strata scheme chose Option C – the blanket prohibition - for its by-laws.

On 30 November 2016, the Strata Schemes Management Act 2015 came into force. It replaced the former Act. A new Model By-Law 5 was introduced under the Strata Schemes Management Regulation 2016 (NSW) - Schedule 3. Model By-Law 5 was more pet friendly, which was a reflection of changed community standards since 1997. No longer was there an Option C. Model By-Law 5 It contained modified versions of Options A and B.

• Option A requires the owner or occupier to notify the owners corporation if they keep an animal on a lot.
• Option B requires the owner or occupier to obtain the written approval of the owners corporation to keep an animal on their lot.

There are also special provisions inserted in the Strata Management Act – to deal with refusals of consent (s 157) and for the removal of animals (s 156 and s 158).

The Horizon strata scheme did not decide to replace the by-law banning pets with a pet friendly by-law, despite the change in the law and change in community standards.

The Court of Appeal’s decision to strike down the by-law banning pets was in this sense inevitable.

Conclusion

Any strata scheme which has an Option C by-law – which bans pets - needs to replace it now with an Option B style by-law, which requires written approval for keeping of pets.

Option B is a ‘model’ not compulsory, by-law, which means that the strata scheme is able to adopt its own version. It can include more restrictions if desired.

Care needs to be taken in drafting that the restrictions imposed are directed to regulation of conduct. In the words of s 158(1) of the Strata Management Act, to circumstances where “the animal causes a nuisance or hazard to the owner or occupier of another lot or unreasonably interferes with the use or enjoyment of another lot or of the common property”.

Otherwise, the by-law is liable to be declared invalid as ‘harsh, unconscionable or oppressive” under s 139(1) of the Strata Management Act for the reasons set out in Cooper’s Case.

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