On 12 October 2020, the New South Wales Court of Appeal unanimously decided that an owners corporation could not enforce a by-law which imposed a blanket ban on animals.
The ruling means that Angus, the now famous miniature schnauzer, can stay in The Horizon building, but also that blanket bans on animals are no longer permitted in any building anywhere in NSW.
Since being handed down by the Court, the landmark decision of Cooper v The Owners – Strata Plan No 58068  NSWCA 250 (the Cooper Case) has had, and will continue to have, far reaching implications on the governance of owners corporations.
As of last week, the implications of the Cooper Case extended to strata scheme legislation.
On 24 February 2021, the NSW parliament passed the Strata Schemes Management Amendment (Sustainability Infrastructure) Act 2021 (the Sustainability Act), which provides that in NSW, owners corporations will not be able to unreasonably deny permission for residents to have pets.
The Sustainability Act means that residents in strata schemes are one step closer to legally being able to keep their four-legged family member in their apartment.
Background to the Cooper Case
Strata Plan 58068 is a 43 storey strata scheme in Darlinghurst, Sydney known as The Horizon. The Horizon, already a famous Sydney building before the recent Court of Appeal decision, had a strict blanket ban on animals being kept in the building, courtesy of by-law 14 which at the time provided:
"...an owner or occupier of a Lot must not keep or permit any animal to be on a Lot or on the Common Property"
Despite the by-law, a number of the lot owners in the Horizon kept animals in their respective units, including Mrs Cooper who purchased her lot in 2015, and lived with their 14-year old miniature schnauzer, Angus.
During the period November 2018 to March 2019, the strata committee issued Mrs Cooper with a number of notices to comply with by-law 14. In response, Mrs Cooper filed a motion with the strata committee to have the by-law removed. The motion was denied.
In April 2019, the owners commenced proceedings in the NSW Civil and Administrative Tribunal (NCAT) against Mrs Cooper. Shortly after, Mrs Cooper filed a cross-claim seeking orders that the by-law was invalid.
In November 2019, NCAT determined that Mrs Cooper was successful in these proceedings and declared the by-law invalid because it was harsh, unconscionable or oppressive.
In December 2019, the owners filed an appeal against the decision with the NCAT Appeal Panel. The owners were successful on the appeal and the NCAT Appeal Panel made orders that Angus was to be removed from the apartment.
Unhappy with this decision, and with the support of pet lovers state wide, Mrs Cooper appealed to the New South Wales Court of Appeal.
The legislation considered by the Court of Appeal
The Strata Scheme Management Act 2015 (NSW) (SSMA) contains restraints to the powers otherwise granted to owners corporations, including those found in section 136 and section 139 which relevantly provide:
by-laws may be made in relation to the management, administration, control, use or enjoyment of the lots or the common property and lots of a strata scheme.
By-laws cannot be unjust. A by-law must not be harsh, unconscionable or oppressive.
These restraints are enforceable by NCAT under s 150 of the SSMA which provides:
"The Tribunal may, on the application of a person entitled to vote on the motion to make a by-law or the lessor of a leasehold strata scheme, make an order declaring a by-law to be invalid if the Tribunal considers that an owners corporation did not have the power to make the by-law or that the by-law is harsh, unconscionable or oppressive."
The decision and principals established by the Court of Appeal
On 12 October 2020, the Court of Appeal handed down its judgment in the Cooper Case, declaring by-law 14 invalid because it was beyond power, and harsh, unconscionable or oppressive in breach of the SSMA.
The Cooper Case helpfully enunciated a number of general principles which strata committees and owners should consider when determining whether a proposal to exercise the power to make a new by-law and the terms of that new by-law are, as a matter of law, permissible.
The following principals are of particular relevance:
- the owners corporation's power under s 136(1) of the SSMA is not unconstrained. Specifically, a by-law which restricts the lawful use of each lot on a basis which "lacks a rational connection with the enjoyment of other lots and the common property is beyond the power to make by-laws conferred upon the owners corporation under s 136" [at 61];
- for any by-law to be valid under the SSMA, it must be directed towards the prevention of lot owners using their lots or the common property in a way which could rationally impact upon other owners' enjoyment of the building;
- the possible administrative convenience for the owners corporation or strata committee that might result from a blanket ban does not justify interference with the ordinary rights of lot owners [at 46]; and
- while owners corporations should be empowered to manage and control a strata scheme, this power needs to be monitored and constrained to ensure minorities are not oppressed, since "a liberal democracy is not a majoritarian dictatorship; it operates under legal constraints designed to protect minorities from oppression" [at 48].
The ruling in the Cooper Case sets a precedent which is binding in lower Courts in NSW and NCAT, particularly for those by-laws which are in the same or similar terms to The Horizon's former by-law 14.
The effect of the Cooper Case on other by-laws
This decision not only relates to by-laws which ban animals but also changes the way owners corporations can govern their strata schemes more generally.
In particular, the standards and principles set out in the Cooper Case do not apply only to "blanket bans", such as that encapsulated in the now invalid by-law 14. Similarly, the principles don't only apply to those by-laws relating to animals.
All by-laws must meet the threshold set out in the Cooper Case, and failure to do so exposes the by-law in issue to challenge an order by NCAT declaring it invalid.
This means that all strata schemes need to review their by-laws to ensure they comply with the principles in the Cooper Case and repeal or amend as necessary any offending by-laws.
Before issuing a breach notice, we strongly recommend all owners corporations and strata managers consider whether the by-law they are seeking to enforce is actually enforceable.
The fallout: what have we seen since helping the Coopers to victory?
Since the Cooper Case was handed down, we've heard many happy stories of pet lovers being able to invite a new four-legged family member into their home (or often, finally enjoy the freedom of being able to openly keep the pet they have had in their apartment for many years).
Unfortunately, it hasn't been so easy for some.
Since the Cooper Case, we have been providing an increasing number of advices to concerned animal lovers and strata committees alike, interested in fully understanding the implications of this decision on their current by-laws and what it means for them.
It has been surprising to hear that a number of owners corporations and strata managers are just not adhering to or otherwise accepting the principles set out by the Court of Appeal.
We have seen some owners corporations repealing the blanket ban on animals only to replace it with a draconian pet application regime that is almost as oppressive as the blanket ban itself. A pet application form that is akin to a tenant applying to rent a property (including requiring references for the pet), for example, is arguably in breach of the SSMA and should be reconsidered.
Interestingly, we have also seen a number of by-laws which allow animals to be kept with consent of the strata committee, but which have effectively been enforced as a blanket ban, since the committee routinely refuses approval of any applications they receive. This regime is similarly liable to thorough review by NCAT.
Sadly, we have also been told of instances of bullying as a result of lot owners legally bringing their pet onto the strata scheme. The instances are varied in degree, but all of them are equally troubling and should be reported to the police as necessary.
The Sustainability Act: new legislation enacting the principles of the Cooper Case
Following the Cooper Case and significant lobbying by Mrs Cooper, the Sustainability Act was passed last week, meaning that the SSMA will soon be amended to make it illegal for owners corporations to unreasonably ban the keeping of animals.
The new law means that any by-laws or decisions about the keeping of animals on a lot which are considered "unreasonable" will have no force or effect.
Consistent with the principles established in the Cooper Case, if an animal does not interfere with another occupant's use and enjoyment of their lot or common property, prohibiting keeping of the animal will be unreasonable and have no effect.
In the coming months, we expect that parliament will also consider enacting regulations providing guidance as to the term "unreasonable".
Attempts by owners corporations to ignore the principles of the Cooper Case cannot continue and may prove costly. We expect that some owners corporations may seek to take a limited view of what it means to 'unreasonably prohibit the keeping of an animal on a lot'.
Owners corporations will potentially face cost orders from NCAT if lot owners are forced to appeal decisions of strata committees regarding the prohibition of the keeping of their pet, notwithstanding the Cooper Case and impending changes to the SSMA.
Owners corporations should now amend their by-laws to allow for a pet application process which balances the needs of all lot owners, and ensure all decisions made with respect to animals are reasonable and accord with both the requirements of the Cooper Case and the Sustainability Act.
What about tenants?
Whether a tenant can keep a pet is governed by the terms of the lease. It is often the case though that the landlord consents to the pet, but the by-law in the building doesn't allow it. In this event, it is the landlord, not the tenant, who must make an application to have the by-law amended. Often a landlord doesn't have the appetite to take on this challenge and it is a matter for the tenant to navigate and reach agreement with the owners corporation as best they can.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.