The recent Appeal Panel (“Appeal Panel”) decision from the New South Wales Civil & Administrative Tribunal (the “Tribunal”) of Shah v The Owners – Strata Plan No. 7655 [2025] NSWCATAP 215 considered the circumstances in which the Tribunal may exercise its discretion to make an order pursuant to section 150 of the Strata Schemes Management Act 2015 (NSW) (“SSMA”).

In short, the Tribunal dismissed a lot owner’s claim that a by-law providing a blank prohibition on renovation works was harsh, unconscionable or oppressive. The Appeal Panel disagreed with the Tribunal and overturned this decision. 

Background

A lot owner requested approval from her owners corporation to carry out renovations to add a second bathroom in her unit. The proposed renovations involved positioning the proposed additional bathroom directly above an existing bedroom of the lot below.

At a general meeting in March 2024, the owners corporation resolved to approve a special by-law which strictly prohibited the installation of a bathroom above any part of a bedroom, or living room of a lot below (the “By-Law”).

The lot owner commenced Tribunal proceedings to seek orders to invalidate the By-Law under section 150 of the SSMA. In March 2025, the Tribunal dismissed this application.

Appeal Panel Proceedings

The lot owner appealed the Tribunal’s decision. During appeal hearing, both parties accepted that the validity of the By-Law depended on its wording and whether the absolute prohibition on renovation works was harsh, unconscionable or oppressive. The Appeal Panel held that the By-Law was invalid because:

1. It did not consider individual circumstances;
   
   
2. It did not give lot owners the opportunity to establish that their proposals would no adversely affect other lot owners; and
   
   
3. The By-Law was a blanket prohibition of renovation works.  

Absolute prohibitions are not automatically invalid. However, the key takeaway from this case is that by-laws should allow consideration of individual circumstances instead of being a blanket prohibition imposed on all lot owners within a scheme.

If you are unsure whether a by-law within your strata scheme is invalid, feel free to reach to out to enquiries@bannermans.com.au or on 02 9929 0226.

Prepared by Bannermans Lawyers

16 March 2026