Bisa v The Owners Units Plan 1547 (Unit Titles)
[2023] ACAT 46
•25 August 2023
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
BISA v THE OWNERS – UNITS PLAN 1547 (Unit Titles) [2023] ACAT 46
UT 44/2022
Catchwords: UNIT TITLES – granting of special privilege to the exclusive use of common property – seeking order that the Corporation unreasonably refused to make special privilege rules – operation of special privilege granted terminated by legislation – Corporation decision not to renew special privilege – whether Corporation acted unreasonably in opposing motions to grant special privilege – the operation of section 129(1) and section 129(2) of the ACT Civil and Administrative Tribunal Act 2008 – finding that it was not unreasonable for the Corporation to oppose motions – whether section 129(1)(d) provides wide-ranging powers to the ACAT to order payment of money but only up to the particular limit of $1,000 – application is dismissed
Legislation cited: ACT Civil and Administrative Tribunal Act 2008 s 18
Unit Titles (Management) Act 2011 ss 20, 30, 31, 112A, 112B, 125, 126, 127, 128, 129
Unit Titles (Management) Act 2011 Republication 13 s 167
Unit Titles (Management) Act 2011 Republication 8 s 22
Units Titles Legislation Amendment Act 2020 s 112
Subordinate
Legislation cited: Territory Plan 2008 – 11.1 Parking and Vehicular Access General Code, ss 3.1.5, 3.2.5, Sch 1 – Residential ones
Territory Plan 2008 Republication 168 – 3.4 Multi Unit Housing Development Code
Cases cited:Ainsworth v Albrecht [2016] HCA 40
Bonansea v The Owners – Unit Plan No 421 [2019] ACAT 10
Bond v Hopkins (1802) 1 Sch & Lefr 413
Cobiac v Liddy [1969] HCA 26
Executive Committee – Units Plan No 1863 v Kilian [2021] ACAT 81
Garcia v The Owners – Units Plan 10 [2017] ACAT 91
Houssein v Under-Secretary of Industrial Relations and Technology (NSW) [1982] HCA 2
Kakavas v Crown Melbourne Ltd [2013] HCA 25
Lloyd v The Owners Corporation Units Plan 527 [2020] ACAT 75
McMillan & Anor v Owners Corporation – Units Plan 79 [2019] ACAT 86
Meaney v The Owners Corporation Units Plan 40 [2013] ACAT 72
Mitchell & Ors v The Owners – Unit Plan 3940 [2018] ACAT 86
Perpetual Executors and Trustees Association of Australia Ltd v Federal Commissioner of Taxation [1948] HCA 24
Project Blue Sky Inc v The Australian Broadcasting Authority [1998] HCA 28
Refrigerated Express Lines (A’ Asia) Pty Ltd v Australian Meat and Live-stock Corporation [1980] FCA 45
Ross v R [1979] HCA 29
Stubbings v Jams 2 Pty Ltd [2022] HCA 6
The Owners Units Plan No 14 v Wright [2020] ACAT 60
Tribunal:Member W Hawkins
Date of Orders: 25 August 2023
Date of Reasons for Decision: 25 August 2023
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) UT 44/2022BETWEEN:
JOANNA BISA
ApplicantAND:
THE OWNERS – UNITS PLAN 1547
RespondentTRIBUNAL:Member W Hawkins
DATE:25 August 2023
ORDER
The Tribunal orders that:
1.The application is dismissed.
………………………………..
Member W HawkinsREASONS FOR DECISION
Introduction
1.In an application dated 15 November 2022, the applicant Joanna Bisa (Bisa) sought a merits review against the respondent, The Owners – Units Plan No 1547 (the Corporation) pursuant to section 129(1)(g) of the Unit Titles (Management) Act 2011 (UTMA or the Act) with respect to two unsuccessful motions concerning a special privilege for the exclusive use of common property, being Visitor Carpark 1. The building in which the owners are located is known as ‘The York’ in Kingston, ACT. Bisa, as trustee for Daniel Bisa Family Trust, (the owner of unit 2 in The York), sought an order from the ACAT (pursuant to section 128(2)(a) of the UTMA) declaring that the Corporation unreasonably refused to make special privilege rules under section 112A of the UTMA as required by Motions 12 and 13 (Unsuccessful Motions) stated in the Notice of Annual General Meeting of the Corporation on 1 August 2022 (2022 AGM).
2.Pursuant to section 129(1)(g) of the UTMA, Bisa sought an order from the ACAT giving effect to the Unsuccessful Motions as originally proposed or as amended by the ACAT on the basis that the ACAT was satisfied (after a merits review of the motion) that the opposition to the Unsuccessful Motions was unreasonable. Pursuant to section 129(2) of the UTMA, Bisa sought an order making and registering an appropriate alternative rule of the Corporation or other binding mechanism that in the event that the applicable special privilege rule referred to in the foregoing is either amended or revoked such that the owner of unit 2 no longer enjoys a right of exclusive use of Visitor Carpark 1, that as a condition subsequent to the amendment or revocation, the owner of unit 2 be compensated by the Corporation with the value of the compensation to be equal to the market value of an equivalent carpark in The York as at the date upon which the special privilege rule was amended or revoked. The application requested that the compensation to be assessed and paid within no later than four months following the date upon which the special privilege rule was amended or revoked.[1]
[1] Application dated 18 November 2022 at [6]
3.A hearing was held in this matter on 29 March 2023. The applicant was represented by Ben Fuller, solicitor of Minter Ellison Lawyers, and the respondent was represented by Matthew McGirr, of counsel instructed by Mia Haas, solicitor of Kerin Benson Lawyers. Angelina Anderson attended on behalf of Civium Strata and the Corporation. Oral submissions were made and at the conclusion of the hearing, my decision was reserved. Subsequently, and by consent, directions were made in chambers for the filing and exchange of further written submissions. The further submissions were filed and exchanged by 13 April 2023.
Background
4.At the Annual General Meeting on 28 July 2015 (2015 AGM), a motion was passed to allow the Executive Committee to progress the option of selling two visitor carparks with the general agreement that the fairest option would be to put the carparks to an auction process to the current lot owners only. Surplus monies from the auction were to go into the sinking fund of the Corporation.[2] The privilege was subsequently granted by Motion 3 passed at the General Meeting held on 25 August 2015 (2015 GM), which allowed for the auction of the special privilege rights over the visitor car spaces. The privileges were subsequently granted by Motion 3 passed unopposed at the general meeting held on 15 March 2016 (2016 GM).[3] Motion 3 of the 2016 GM provided that:
the Owners Corporation grants consent to the resident of Unit 2 an exclusive use of Visitor Carpark 1[4]
[2] Exhibit A1 Applicant Bundle: Minutes of the AGM of The Owners – Units Plan 1547 held on 28 July 2015, pages 52-4
[3] Exhibit A1 Applicant Bundle: Minutes of the General Meeting of The Owners – Units Plan 1547 held 15 March 2016, pages 126-7
[4] Exhibit A1 Applicant Bundle: Minutes of the General Meeting of The Owners – Units Plan 1547 held 15 March 2016, pages 126-7
5.In the meantime, the owner of unit 2 had marketed unit 2 for sale by auction on 24 October 2015. The property was marketed on the basis that it had two undercover carparks.
6.The applicant purchased unit 2 and the consideration for the special privilege relating to carpark one was paid to the respondent at settlement of the purchase on 12 February 2016.[5]
[5] Exhibit A1 Applicant Bundle: Settlement Statement dated 12 February 2016, page 56
7.It was not in dispute that the applicant paid the agreed fee of $26,500 and the owner of unit 5 paid $27,000 as consideration for the grant of the respective special privileges over the respective visitor carparks one and two respectively.[6]
[6] Applicant’s submissions dated 6 February 2023 at [8] and Transcript of proceedings dated 29 March 2023, pages 9-11
8.Pursuant to the operation of Part 13 – Transitional – Units Titles Legislation Amendment Act 2020 of the Unit Titles (Management) Act 2011 as between 1 November 2020 – 8 April 2021 (UTMA Republication 13), the special privilege for the exclusive use of Visitor Carpark 1 that had been granted at the 2016 GM terminated on 1 July 2021.[7]
[7] Units Titles Legislation Amendment Act 2020, s 167 [Republication 13 of the Unit Titles (Management) Act 2011, as between 1 November 2020 – 8 April 2021, s 167]
9.Section 167(2)(c) of the UTMA Republication 13 provided that, if an owners corporation had granted a special privilege for the enjoyment of common property, or any part of the common property, to a unit owner or someone else with an interest in a unit and that special privilege had not been terminated on or after the commencement date of the Units Titles Legislation Amendment Act 2020 (1 November 2020), that special privilege terminated on 1 July 2021 (unless it had been terminated earlier). For a special privilege to continue after the commencement date, the special privilege would need to be granted again and not be inconsistent with the requirements of the new section 112A of the UTMA including the registration of the special privilege as a rule of the Corporation.
10.As a consequence of the legislative change, Bisa sought to have the special privilege reinstated during the Annual General Meeting held on 1 August 2022 (2022 AGM) by motions 12 and 13. Each of the motions was defeated.[8]
[8] Exhibit A1 Applicant Bundle: Exhibit A1 Minutes of the AGM of The Owners – Units Plan 1547 held 1 August 2022, pages 268-272
11.The Unsuccessful Motions were as follows:
Adoption of Special Privilege Rule (SPECIAL RESOLUTION)
Motion Submitted by the Owner of Unit 2 (Jo Bisa) and Unit 5 (Nicole Chant)
That in accordance with section 112A of the Act, the Owners Corporation agrees to grant the special privilege rights to the Owner of Unit 2 and the Owner of Unit 5 to the car spaces on the terms contained in the Special Privilege Rule set out in Attachment B to this Meeting Request, which details the matters required by section 112A(3) of the Act.[9]
Alternate Rules (SPECIAL RESOLUTION)
Motion Submitted by the Owner of Unit 2 (Jo Bisa) and Unit 5 (Nicole Chant)
That the Owners Corporation adopt and register the alternate rule as per the Special Privilege Rule set out at Attachment B in the event that Motion 1 is passed with or without minor amendments, within 3 months of this meeting.[10]
[9] Exhibit A1 Applicant Bundle: Notice of Annual General Meeting for 1 August 2022, page 217
[10] Exhibit A1 Applicant Bundle: Notice of Annual General Meeting for 1 August 2022, page 218
12.As a consequence of the motions being defeated, the special privilege was not reinstated, and due to the operation of section 167(2)(c) of the UTMA Republication 13, Bisa’s special privilege to use Visitor Carpark 1 terminated on 1 July 2021.
The evidence and submissions
13.The applicant tendered a bundle of documents[11] and a statement of Daniel Bisa, the husband of the applicant, dated 6 February 2022.[12] The respondent tendered submissions filed 20 March 2023[13] and otherwise relied upon the applicant’s bundle.[14] Daniel Bisa was not required to give evidence or be cross examined. I do not propose to individually identify the tendered documents but will refer to them as necessary in these reasons. The parties filed additional written submissions and made oral submissions at the hearing. The written submissions are referred to below. The oral submissions will be referred to where appropriate.
[11] Exhibit A1 Applicant Bundle
[12] Exhibit A2 Statement Daniel Bisa dated 6 February 2023
[13] Exhibit R1 Respondent’s Submissions dated 20 March 2023
[14] Transcript of proceedings, 29 March 2023, page 5
Applicant’s submissions
14.The applicant’s original submissions were filed 6 February 2023.[15] The applicant filed additional submissions on 27 March 2023 and 6 April 2023. During the course of the hearing, I sought submissions on whether section 129(1)(d) of the UTMA operated as a limitation on the ACAT’s power to make orders for monetary compensation under section 129(2). Section 129(1)(d) limits the ACAT’s power to make an order requiring a person to pay to the Territory or someone else to an amount of $1,000. In response to that request, the applicant filed further submissions dated 6 April 2023. The applicant also filed submissions in reply to the respondent’s submissions on section 129(1)(d) on 13 April 2023.
Applicant’s submissions 6 February 2023
[15] See Exhibit A1, pages 1-2 and 29-38
15.The applicant contended that the original sale by auction to the original owner of unit 2 was validly granted by unopposed resolution Motion 3 in accordance with section 22 of the UTMA (as that provision appeared in the UTMA at that time).[16] Even if the special privilege was not validly granted at that time, the effect of section 167(2)(a) of the UTMA Republication 13 was that the special privilege is now taken to have been validly granted.[17]
[16] Applicant’s submissions dated 6 February 2023, page 29 at [1.2], quoting Republication 8 of the Unit Titles (Management) Act 2011, s 22
[17] Applicant’s submissions dated 6 February 2023, page 29 at [1.3]
16.A special privilege could be granted on terms without limit, subject only to amendment or revocation in accordance with the provisions of the UTMA and any applicable rules of the Corporation.[18]
[18] Applicant’s submissions dated 6 February 2023, page 29 at [1.4]
17.Both the Corporation and the original owner of unit 2 intended that the effect of the transaction was to “sell” Visitor Carpark 1 to the owner of unit 2, and therefore the grant should continue indefinitely into the future and until such time as the owner of unit 2 wished to terminate the special privilege.[19]
[19] Applicant’s submissions dated 6 February 2023, page 29 at [1.5]
18.The applicant contended that while the underlying common property comprising Visitor Carpark 1 was not actually “sold” to the owner of unit 2, the intention was that the transaction would (as far as the Corporation was concerned) have that effect in practice through the grant of the special privilege on the terms upon which it was granted.[20]
[20] Applicant’s submissions dated 6 February 2023, page 29 at [1.6]
19.The applicant, as the now owner of unit 2, paid the agreed fee into the sinking fund for the benefit of the Corporation to provide funds to upgrade The York and otherwise discharge debts of the Corporation to the developer of The York.[21] The Corporation thereafter expended the money on upgrades to The York and the applicant submitted that the Corporation continues to enjoy the benefit of the upgrades financed by the transaction.[22] Therefore in equity, the Corporation’s conscience (and the conscience of the unit owners comprising the Corporation) continues to be bound by the transaction and in all the circumstances it was unconscionable and therefore unreasonable for the Corporation to refuse to make a special privilege rule in the form requested by the owner of unit 2. The special privilege rule was intended to reinstate the special privilege granted to the owner and thereafter terminated by the operation of section 167(2)(d) of the UTMA Republication 13.[23]
[21] Applicant’s submissions dated 6 February 2023, page at [1.7]
[22] Applicant’s submissions dated 6 February 2023, page 29 at [1.8]
[23] Applicant’s submissions dated 6 February 2023, pages 29-30 at [1.9]-[1.10]
20.The applicant argued that, in accordance with section 129(1)(g), the opposition by the members of the Corporation to the Unsuccessful Motions put forward by the applicant to reinstate the special privilege to the owner of unit 2, which had been terminated by the operation of section 167(2)(d) of the UTMA Republication 13, was unreasonable.[24]
[24] Applicant’s submissions dated 6 February 2023, page 30 at [2]
Respondent’s submissions
21.The respondent’s original submissions were filed 20 March 2023. The respondent filed additional submissions on 6 April 2023 pursuant to my direction in relation to whether section 129(1)(d) of the UTMA operated as a limitation on the ACAT’s power to make orders for monetary compensation under section 129(2) of the UTMA.
Respondent’s submissions filed 20 March 2023
22.First, the respondents submitted that, to the extent that the applicant contended (if at all) that Motion 3 passed at the 2016 GM authorised the auction process of visitor carparks (that is, the special privileges) the motion would be potentially invalid pursuant to section 20(2) of the UTMA on the basis that the Corporation may not transfer, sublet or mortgage, at law or in equity, its interest in the common property.[25] The respondent’s concern was that the “transaction” at least potentially amounted to a transfer of a sublease of the common property.
[25] Respondent’s submissions dated 20 March 2023 at [9]
23.Second, the respondent said in respect of Motion 3 passed at the 2016 GM purportedly granting a special privilege to the owner of unit 2 for the exclusive use of a visitor car space, the motion was potentially invalid because it is inconsistent with clause 3(d) of Form 5 of the Units Plan as well as Multi Unit Housing Development Code (Code) applicable at that time. That clause requires a “minimum of 22 hard standing car parking spaces of which 4 parking spaces are to be reserved for visitors”.[26] Appendix III of the Code required 0.25 parking spaces per dwelling for developments of more than two dwellings. Applying the Code to The York, which had 17 units, the Code required a minimum of four visitor car spaces.
[26] Respondent’s submissions dated 20 March 2023 at [10][, quoting Exhibit A1 Applicant’s Bundle: Unit Plans – Units 1547, page 108]
24.The current Parking and Vehicular Access General Code also requires that there be a minimum of four visitor car spaces at The York.[27] The respondent argued that a valid change of “purpose” of the car spaces from visitor parking spaces to parking spaces for the exclusive use of unit 2 via a special privilege right required a variation of the lease purpose clause. Such a variation requires development approval which requires consideration as to whether the proposed variation complies with the Territory Plan. No development approval was provided with respect to the privilege/exclusive use of the visitor car space.[28]
[27] Respondent’s submissions dated 20 March 2023 at [10], quoting Schedule 2 to the Parking and Vehicular Access General Code, as per s 3.2.5
[28] Respondent’s submissions dated 20 March 2023 at [10]
25.The respondent’s third submission was that although the applicant contended that the votes at the 2022 AGM was unreasonable, the vote (with the exception of the applicant and her husband Daniel Bisa) was unanimous. The respondent stated that the applicant had not articulated how or why the vote was unreasonable. Aside from that, the respondent said that there is no evidence nor any factual findings available to sustain a finding of the alleged requisite unreasonableness. The respondent referred to Ainsworth v Albrecht (Ainsworth)[29] where it was held that to conclude that opposition by a lot owner to a resolution is unreasonable is “no light thing”.[30]
[29] [2016] HCA 40
[30] Respondent’s submissions dated 20 March 2023 at [11] citing Ainsworth at [55]
26.To the extent that the applicant contended that the revocation of the special privilege – or (as the respondent preferred to describe it) the “defeating” of Motions 12 and 13 – was unreasonable, the respondent submitted that there was nothing inconsistent with the legislative scheme and particularly the 2020 legislative amendment.[31]
[31] Respondent’s submissions dated 20 March 2023 at [12]
27.The respondent asserted that if the applicant alleged that the other unit owners profited from the auction of a special privilege (for example, to fund building upgrades and discharging debts owing to the developer), the applicant had not articulated how that intrudes on the inquiry to be undertaken in dealing with the application. The respondent also asserted that, arguably, those funds were used to fund upgrades or for discharging debts which tend to suggest that the granting of the special privilege was reasonable in the circumstances.[32]
[32] Respondent’s submissions dated 20 March 2023 at [13]
28.The respondent stated that the application should be refused as there was nothing to sustain a finding that an alternative decision was correct and preferable.[33]
[33] Respondent’s submissions dated 20 March 2023 at [14]
Applicant’s submissions in reply filed 27 March 2023 to the respondent’s outline of submissions filed 20 March 2023
29.In response to the respondent’s first submission, the applicant repeated their contention that Motion 3 passed at the 2015 AGM authorised an auction process for the grant of special privileges over the two visitor carparks to the successful bidders and not an auction for the transfer of title to the two visitor carparks. However, when the transaction was looked at as a whole and in context, the applicant contended that the “sale” of the two visitor carparks was a descriptor used by the chair of the Corporation.[34] This “practical outcome” was then “pursued” by the Corporation by Motion 5 passed at the 2015 AGM. Motion 5 operated so that the holder of the special privileges could prevent, through their opposition, the bringing of a motion to rescind the special privilege rights.[35]
[34] Applicant’s reply to respondent’s outline of submissions dated 27 March 2023 at [1.2]
[35] Applicant’s reply to respondent’s outline of submissions dated 27 March 2023 at [1.3]
30.In response to the respondent’s arguments that Motion 3 was at least “potentially invalid” due to the operation of certain planning instruments, the applicant submitted that the respondent had not explained why the tribunal has jurisdiction in the present matter that arises under the UTMA to review the scheme and effect of those planning instruments; and even if inconsistency was found by the Tribunal, that inconsistency does not lead to the conclusion that Motion 3 was invalid. The applicant then submitted that there were strong arguments against “invalidity”. These arguments were:
(a)On 1 November 2020, due to the operation of section 167(2)(a) of the UTMA Republication 13, the special privilege granted to the owner of unit 2 would be taken to have been validly granted and thus curing any invalidity.[36]
(b)In any event, pursuant to Mitchell & Ors v The Owners – Unit Plan 3940 (Mitchell),[37] the tribunal cannot make a determination in this matter that there was a requirement for the relevant owner to seek a development approval because that kind of review would be a “collateral review” and the tribunal does not have power to undertake such a review.[38] Further, to the extent that there was any breach of the Crown lease by a lessor or tenant, that is a matter for the relevant regulatory authorities and not for the tribunal.[39] The validity of the relevant motions or approval was not premised on the relevant owner obtaining development approval.[40] The Corporation is not given any power in relation to planning law under the UTMA, so a failure by the owner to obtain any necessary approvals does not make the grant void.[41]
(c)The applicant did not agree that the circumstances amounted to a change of “purpose” and thereby require a development approval. Additionally, the applicant submits that in any event, it was not appropriate for the tribunal in the matter to consider the question following Mitchell, and for the reasons given above.[42]
[36] Applicant’s reply to respondent’s outline of submissions dated 27 March 2023 at [2.3](a)
[37] [2018] ACAT 86
[38] Applicant’s reply to respondent’s outline of submissions dated 27 March 2023 at [2.3(b)(i)]
[39] Applicant’s reply to respondent’s outline of submissions dated 27 March 2023 at [2.3(b)(ii)]
[40] Applicant’s reply to respondent’s outline of submissions dated 27 March 2023 at [2.3(b)(iii)]
[41] Applicant’s reply to respondent’s outline of submissions dated 27 March 2023 at [2.3(b)(iv)]
[42] Applicant’s reply to respondent’s outline of submissions dated 27 March 2023 at [2.3(c)(i)] and [2.3(c) (ii)]
31.The applicant submitted that they had clearly articulated in their earlier submissions how and why the resolutions at the 2022 AGM were unreasonable.[43] They further argued that there was clear evidence and a clear factual basis for the unreasonableness of the opposition to the motion.[44] The applicant then referred to those facts that they argued were not disputed by the respondent including the passing of various motions; that the owners of units 2 and 5 paid for the grant of the special privileges; that the Corporation then used those funds raised from the owners of units 2 and 5 to pay debts owed to the developer of the complex and did not seek to raise funds from all owners; and that contrary to the terms of the various motions, no compensation was offered to the owners of units 2 and 5.[45]
[43] Applicant’s reply to respondent’s outline of submissions dated 27 March 2023 at [3.1]
[44] Applicant’s reply to respondent’s outline of submissions dated 27 March 2023 at [3.2]
[45] Applicant’s reply to respondent’s outline of submissions dated 27 March 2023 at [3.3]
32.The applicant distinguished Ainsworth by arguing that unlike that case where there was no return to the Corporation or other lot owners, in the present case the Corporation (and other unit owners) had received consideration for the special benefit and had applied the consideration to their benefit.[46]
[46] Applicant’s reply to respondent’s outline of submissions dated 27 March 2023 at [3.4]
33.The applicant argued that the issue of “unreasonableness” was central and said that the owners of unit 2 had paid for the grant of the special privilege of exclusive use and it would be “unconscionable” for the other owners to take both the benefit of the monies paid at auction and also “opportunistically” reclaim the amenity of the use of the visitor carpark without following due process under the UTMA after the legislative termination of the special privilege.[47] The applicant also submitted that the respondent ignored the overall intent and effect of the transaction created by the motions passed at the various general meetings. The applicant submitted that a “correct” understanding of the scheme of motions passed “condemns” the behaviour of the current Corporation as being unreasonable in refusing the applicant’s proposed resolutions at the 2022 AGM.[48] The applicant argued that the Corporation’s refusal to pass the Unsuccessful Motions at the 2022 AGM in all the circumstances was both unconscionable and unreasonable, and referred to general equitable principles.[49] Finally, the applicant said that the respondent did not address or explain why the scheme of the original resolutions providing the special privilege should not be treated as continuing and be given respect by the reinstatement of the “status quo” which had only been extinguished by the legislative change.[50]
[47] Applicant’s reply to respondent’s outline of submissions dated 27 March 2023 at [4.1] and [4.2]
[48] Applicant’s reply to respondent’s outline of submissions dated 27 March 2023 at [4.3]
[49] Applicant’s reply to respondent’s outline of submissions dated 27 March 2023 at [4.5]
[50] Applicant’s reply to respondent’s outline of submissions dated 27 March 2023 at [4.6]
Submissions in relation to section 129(1) and (2) of the UTMA
34.At the conclusion of the hearing, I made directions for the filing and exchange of supplementary submissions confined to addressing the interaction between section 129(1) and (2) of the UTMA. As stated above, the issue in question was whether section 129(1) prevents the tribunal from making an order that would require the respondent to pay a sum of money to the applicant greater than $1,000.
Applicant
35.The applicant referred to general principles of statutory interpretation and emphasised that context should be considered before purpose.[51] The applicant contends section 129 of the UTMA should be interpreted in the context of sections 125 to 128.[52] Additionally, the applicant suggests section 129 has a three tiered structure so as to meet the challenge of the various types of disputes where orders of the ACAT can be made. The first tier is section 129(1); the second tier is section 129(2) and so on.[53] The first tier lists a range of specific orders that the tribunal can make; the second tier lists orders beyond the specific orders to be made if the tribunal considers them be reasonable and necessary to resolve a dispute.[54] The final tier expressly broadens the tribunal’s power with respect to the scope of orders that may be made. The applicant submitted that section 129 does not limit the orders that the tribunal can make. Therefore, the tribunal can make an order for payment of an amount greater than $1,000 as otherwise it would frustrate the overall purpose of Part 8 of the UTMA.[55]
[51] Applicant’s submissions section 129(1)(d) and section 129(2) of the UTMA dated 6 April 2022
[52] Applicant’s submissions section 129(1)(d) and section 129(2) of the UTMA dated 6 April 2022 at [8]
[53] Applicant’s submissions section 129(1)(d) and section 129(2) of the UTMA dated 6 April 2022 at [9]
[54] Applicant’s submissions section 129(1)(d) and section 129(2) of the UTMA dated 6 April 2022 at [9]
[55] Applicant’s submissions section 129(1)(d) and section 129(2) of the UTMA dated 6 April 2022 at [10]-[11]
36.However, the applicant stressed that the subsections did not empower the tribunal with unfettered jurisdiction to make an order. The tribunal must consider the order to be “reasonably necessary or convenient” to resolve the dispute[56] and the tribunal “must work within the parameters of the cases that are made by the parties”.[57]
[56] Applicant’s submissions section 129(1)(d) and section 129(2) of the UTMA dated 6 April 2022 at [12]-[13]
[57] Applicant’s submissions section 129(1)(d) and section 129(2) of the UTMA dated 6 April 2022 at [14], citing Executive Committee – Units Plan 1863 v Kilian [2021] ACAT 81 at [49]
37.Concerning previous decisions of the tribunal on the relationship between section 129(1)(d) and section 129(2), the applicant did not identify any direct authority, however they referred to a comment made in Garcia v The Owners – Units Plan[58] to the effect that section 129(1) may not be a limitation on “money claims”.[59] Further, although section 18 of the ACT Civil and Administrative Tribunal Act 2008 (ACAT Act) imposes a $25,000 cap on civil dispute applications, the application brought by the applicant in these proceedings may not be caught by the monetary limit because it is not of a type listed in section 18 of the ACAT Act.[60]
Respondent
[58] [2017] ACAT 91
[59] Applicant’s submissions section 129(1)(d) and section 129(2) of the UTMA dated 6 April 2022 at [17]-[18], citing Garcia v The Owners – Units Plan 10 [2017] ACAT 91 at [7]
[60] Applicant’s submissions section 129(1)(d) and section 129(2) of the UTMA dated 6 April 2022 at [18]
38.Firstly, the respondent referred to key principles of statutory interpretation and referred to Project Blue Sky Inc v The Australian Broadcasting Authority (Project Blue Sky)[61] where it was stated:
no clause, sentence, or word shall be superfluous, if by any other construction, they may all be made useful and pertinent.[62]
[61] [1998] HCA 28
[62] Respondent’s submissions dated 20 March 2023 at [3](a), quoting Project Blue Sky at [71]
39.In other words, the tribunal must avoid a construction, that would render section 129(1)(d) superfluous, if by another construction, it would become useful and pertinent.[63] The respondent then referred to the principle that the general application gives way to specific provisions when in conflict and referred to Perpetual Executors and Trustees Association of Australia Ltd v Federal Commissioner of Taxation.[64] Consequently, to the extent that section 129(2) of the UTMA is construed as a provision of a general nature, providing the ACAT with a wide-ranging general power to resolve a dispute, such a power should be read down to the extent that section 129(1) contains the more specific provisions.[65]
[63] Respondent’s submissions dated 20 March 2023 at [3](a)
[64] Respondent’s submissions dated 20 March 2023 at [3](b), citing Perpetual Executors and Trustees Association of Australian Ltd v Federal Commissioner of Taxation [1948] HCA 24, page 29
[65] Respondent’s submissions dated 20 March 2023 at [3](b), citing Refrigerated Express Lines (A’ Asia) Pty Ltd v Australian Meat and Live-stock Corporation [1980] FCA 45, pages 28-9
40.Secondly, the respondent submitted that the key question in construing these provisions is to determine what is intended in section 129(1)(d) by the words “an order requiring a person to pay”. Once that is determined, then one must identify what kinds of orders are subject to the $1,000 “cap”. The respondent argued that the relevant words should be interpreted as a phrase of wide import and should be read as including orders that are properly described as “compensation, restitution or money claims”. Consequently, although the tribunal has a wide-ranging power to order payment of money, it is only up to the particular limit. The respondent drew the distinction between this language and provisions where the UTMA otherwise expressly provides a power to order payment of money such as sections 30 and 31 which allows for the recovery of a debt.[66]
[66] Respondent’s submissions dated 20 March 2023 at [7]
41.The respondent also referred to The Owners Units Plan No 14 v Wright.[67] In that matter the tribunal refused to make an order under section 129(1)(d) on the basis that that the subsection does not confer a costs power on the tribunal.[68]
[67] [2020] ACAT 60
[68] [2020] ACAT 60 at [104]
42.Ultimately, the respondent argued that section 129(2) provides the ACAT with flexibility to make orders it considers necessary or convenient to resolve a dispute. However, section 129(2) cannot be read to abrogate the specific limitation imposed on the ACAT to make orders for a person to pay money to the Territory or another person, as such a reading would render the limited nature of the power in section 129(1)(d) to be essentially meaningless.[69]
The applicant’s submissions in reply
[69] Respondent’s submissions dated 20 March 2023 at [8]
43.The applicant filed submissions in reply to the respondent’s supplementary submissions on 13 April 2023. The applicant further commented upon Project Blue Sky and accepted that a court or tribunal should strive to give meaning to every word of the statutory provision.[70] However, the applicant argued that Project Blue Sky also requires an analysis of the statutory text as a whole in light of context and purpose, noting this approach may require reconciling conflicting provisions. This may require a court to determine what might be the leading provision and which the subordinate provision.[71] As a result, section 129(1)(d) and section 129(2) can be read harmoniously to give effect to the goal of Part 8 of the UTMA.[72] In other words, the specific monetary limits that might be imposed by section 129(1)(d) of $1,000 may be exceeded by the ACAT, provided that the necessary threshold imposed by section 129(2) is met. Therefore, the ACAT must be satisfied that the order is “reasonably necessary or convenient” to resolve the issue under Part 8 and that if there is a conflict between the sections then it is an apparent conflict only and not an actual conflict when the provisions are read in their context, having regard to the statutory purpose.[73]
[70] Applicant’s reply to respondent’s supplementary submissions dated 13 April 2023 at [3]
[71] Applicant’s reply to respondent’s supplementary submissions dated 13 April 2023 at [4], citing Project Blue Sky at [70]
[72] Applicant’s reply to respondent’s supplementary submissions dated 13 April 2023 at [5]
[73] Applicant’s reply to respondent’s supplementary submissions dated 13 April 2023 at [5]
44.The applicant then referred to the syntactical presumption generalia specialibus non derogant that general laws do not prevail over special laws and – discussing the application of the maxim and the decisions in Cobiac v Liddy[74] and Houssein v Under-Secretary of Industrial Relations and Technology (NSW),[75] argued that the maxim did not arise in the interpretation of the legislation in the present matter because section 129(2) of the Act is itself specific in its expression and intended effect. Therefore, the ACAT’s jurisdiction under section 129(2) must be distinguished from that under section 129(1)(d).[76] In the event, if the maxim was to be applied, then the applicant submitted that, following a line of cases including Ross v R,[77] in the event of a conflict between two sections of an act, the later section 129(2) prevails.[78]
[74] [1969] HCA 26
[75] [1982] HCA 2
[76] Applicant’s reply to respondent’s supplementary submissions dated 13 April 2023 at [6]-[9]
[77] [1979] HCA 29
[78] Applicant’s reply to respondent’s supplementary submissions dated 13 April 2023 at [10]
45.The applicant submitted that the respondent had not explained how section 129(1)(d) is to be the dominant provision and that, ultimately, any resulting confusion can only be resolved harmoniously by the applicant’s suggested approach.[79]
[79] Applicant’s reply to respondent’s supplementary submissions dated 13 April 2023 at [12]-[13]
46.Finally, the applicant submitted that their interpretation did not render the operation of section 129(1)(d) meaningless. Additionally, their interpretation simplifies the approach to what constitutes an “order requiring a person to pay” to avoid confusion and complexity by recognising that the two provisions have a separate but complementary operation.[80]
[80] Applicant’s reply to respondent’s supplementary submissions dated 13 April 2023 at [14]-[17]
Consideration and findings
47.Section 128(2)(a) of the UTMA provides that the ACAT may make an order declaring that the Corporation: unreasonably withheld consent to make a special privilege rule under section 112A; or has imposed an unreasonable maintenance obligation on the grantee under section 112A(3)(a); or has unreasonably refused to amend or revoke a special privilege rule under section 112B. In the present application, only the first situation is relevant.[81]
[81] Application dated 15 November 2022 at [6]
48.Section 129(1)(g) of the UTMA provides that the ACAT may make an order giving effect to an unsuccessful motion for a resolution of a general meeting (either as originally proposed or as amended by the ACAT) if the ACAT is satisfied, after a merits review of the motion, that opposition to the motion was unreasonable. In Lloyd v The Owners Corporation Units Plan 527 (Lloyd),[82] the tribunal said:
A review under section 129(1)(g) is a two stage process. The first step is a merits review to determine what is the correct and preferable decision. The second is an assessment as to whether the objections to the motion were unreasonable. The section requires the assessment of unreasonableness, at least, to be undertaken at the time the motion was defeated and by reference to why it was opposed.[83]
[82] [2020] ACAT 75
[83] Lloyd at [31]
49.The provision thus marries two legal concepts, merits review and unreasonableness. It is therefore quite different to the preceding subsection 129(1)(f) which refers to orders that the ACAT may make in relation to successful motions. That subsection only requires a merits review.
50.It is well established that the process of merits review usually requires the reviewing body to “stand in the shoes” of the original decision maker and make the correct or preferable decision. In applying this model to section 129(1)(g), the original decision maker is the Corporation.
51.In Meaney v The Owners Corporation Units Plan 40,[84] the tribunal discussed the general features of merits review and conveniently summarised them as follows:
First, the review is essentially ‘de novo’ and the Tribunal is able to consider issues of both fact and law anew …
Secondly, the Tribunal considers and determines these issues as at the date of the hearing before the Tribunal, not as at the time of the original decision. That means the Tribunal is able to consider evidence not available before the owners corporation in reaching its decision. Although this would seem to conflict with the use of the past tense in subsection 129(1)(g), I am satisfied that the use of the word ‘was’ is not intended to require the Tribunal to embark on what would be, essentially, a ‘judicial-type review’ of the original opposition to the motion. The latter approach has the potential to create procedural and legal complexities which would impose a burden upon litigants, inconsistent with the objectives of the ACAT, and would be contrary to the well-established principles of merits review …
Thirdly, when conducting merits review there is no threshold question of reasonableness or unreasonableness of the original decision to be determined before the Tribunal may proceed to make an order.[85]
[84] [2013] ACAT 72
[85] Meaney v The Owners Corporation Units Plan 40 [2013] ACAT 72 (‘Meaney’) at [34]-[36]
52.What then does it mean for a decision to be ‘unreasonable’? The word ‘unreasonable’ is not defined in the UTMA. There is extensive authority canvassing when administrative decisions are or are not considered to be ‘unreasonable’ and therefore liable to be set aside. An administrative decision may be ‘unreasonable’ where it is capricious or irrational, illogical or perverse, or is inconsistent with other decisions on like or similar facts or has no evidentiary basis or is based on an error of fact which is fundamental to the decision.[86]
[86] Meaney at [39]-[40]
53.In some cases, a defect in the process leading to the making of the administrative decision will render the decision unreasonable. This might operate in situations where the process leading to the making of the decision lacked natural justice, for example the decision-making process denying a right to be heard or a general lack of procedural fairness.
54.Including the word “may” in the introductory words of subsection 129(1) makes it clear that the power provided to the tribunal by section 129(1)(g) is discretionary. Therefore, even if the tribunal is satisfied that opposition to a motion was unreasonable, it is not obliged to make an order giving effect to the motion. It is at this point that merits review would require that the tribunal make the correct or preferable decision and decide whether to give effect to the Unsuccessful Motion or not.[87]
[87] Meaney at [43]
55.The tribunal should not intervene lightly, as some regard must be had to the “community democracy” established by the UTMA.[88] Indeed, as stated in Ainsworth, “[i]t is no light thing to conclude that opposition by a lot owner to a resolution is unreasonable”.[89]
[88] McMillan & Anor v Owners Corporation – Units Plan79 [2019] ACAT 86 at [79]
[89] Ainsworth at [55]
56.Similar observations were made by the tribunal in Bonansea v The Owners – Unit Plan No 421 (Bonansea)[90] which are relevant here:
The Tribunal must focus upon whether the opposition of the other unit owners to the motion was unreasonable, not upon whether the owners corporation acted reasonably in refusing to give approval or the reasonableness of the motion. Nor is it for the Tribunal to achieve what it thinks is a reasonable balance between competing viewpoints.[91]
[90] [2019] ACAT 10
[91] [2019] ACAT 10 at [30]
57.The tribunal in Bonansea also made it clear that, to be reasonable, the reasons must be relevant to the context in which they are considered:
Opposition must be based on a factor or factors that adversely affect the interests of other unit owners in their use and enjoyment of their units, or in the common property as occurred in Ainsworth.[92]
[92] [2019] ACAT 10 at [33]
58.In considering the two-stage process, it is not necessary to always consider the merits first and then consider whether the objections to the motion are unreasonable. In Lloyd, the tribunal found that it was more convenient to look at the issue of unreasonableness first because it was the “greater challenge” for the applicant.[93] Further, in Lloyd, the tribunal, after finding that the objections were not unreasonable, continued:
…no matter what my determination on the merits of the case, I must dismiss the application[94]
[93] [2020] ACAT 75 at [32]
[94] [2020] ACAT 75 at [45]
59.I agree with the submission of the respondent that the greater challenge for the applicant in the present matter is the question whether the objections to the motions were unreasonable.[95] I will therefore consider that aspect first and then consider the merits of the case.
Was the opposition to the Unsuccessful Motions unreasonable?
[95] Transcript dated 29 March 2023, page 37
60.The applicant and the respondent had opposing views on the validity of the special privilege. As previously mentioned, the privileges were granted by Motion 3 passed unopposed at the general meeting held on 15 March 2016. The applicant had paid $26,500 as consideration for the grant of the special privilege over Visitor Carpark 1 on 12 February 2016. The respondent argued that the motion was at least potentially invalid pursuant to section 20(2) of the UTMA on the basis that the Corporation may not transfer, sublet or mortgage, at law or in equity, its interest in the common property. Although the practical effect may have been equivalent to a sale of visitor carparks to the successful bidders, it remained an auction process for the grant of special privileges over the two visitor carparks and not an auction for the transfer of title to the two visitor carparks. This was evidenced by the minutes of the 2015 AGM.[96]
[96] Exhibit A1 Applicant’s Bundle: Minutes of Annual General Meeting dated 28 July 2015, pages 52-4
61.Notwithstanding that it was a special privilege, there remains the possibility that the motion was potentially invalid pursuant to section 20(2) of the UTMA. The respondent made submissions about the UTMA as it was worded at the relevant time. The respondent argued that the grant in 2016 was in the nature of a sublease and perhaps a fee simple.[97] Based upon the law as it stood at that time, the respondent further argued that the only way that the visitor’s carpark could be alienated was by agreement and consent of the holder of the special privilege and that went beyond privilege and went towards a sublease.[98] As a result, the respondent submitted that there was a question as to the validity of the special privilege that was originally granted.[99]
[97] Transcript of proceedings, 29 March 2023, page 51
[98] Transcript of proceedings, 29 March 2023, page 51
[99] Transcript of proceedings, 29 March 2023, page 51
62.In my view, there is an issue as to whether this special privilege should have been granted by the Corporation and this is a factor that ought to be taken into account when considering the merits of the current owners corporation resolutions.[100] In my view, the transaction was the granting of a special privilege rather than a sublease. The parties at the relevant time did not intend it to be more than the granting of a special privilege, involving the payment of some monies and in return exclusive use of the carparks on a perpetual basis subject to the unit holder deciding to relinquish the special privilege or the Corporation taking appropriate steps to terminate the special privilege. Having considered the submissions and all of the circumstances in the granting of the special privilege, it is not necessary for me to make any finding as to whether there was a breach of section 20(2) of the UTMA.
[100] Transcript of proceedings, 29 March 2023, page 51
63.The respondent also argued that Motion 3 passed at the 2016 GM granting the special privilege was potentially invalid because it was inconsistent with the units plan as well as the Multi Unit Housing Development Code applicable at that time. Following Mitchell, it is not appropriate for me to consider that question. As clearly stated in Mitchell, the tribunal is a “creature of statute”; it has no inherent jurisdiction and may only exercise the powers conferred upon it by legislation.[101] As a consequence, this would require me to make a determination as to whether there was, at law, a requirement to seek development approval. As stated in Mitchell, the power of the tribunal to engage in this type of collateral review of the lawfulness or correctness of an underlying decision is limited. For similar reasons the tribunal has no power to review disputes involving any non-parties such as Access Canberra or the Territory under the UTMA.[102] To the extent that there might be a breach of a crown lease by a lessor or tenant, that is a matter for the relevant regulatory authorities. The tribunal generally declines to undertake collateral reviews.[103] I therefore do not make any finding that the special privilege was invalid because it was allegedly inconsistent with the planning laws generally or the Code.
[101] Mitchell at [52]
[102] Mitchell at [52]-[54]
[103] Mitchell at [57]
64.The next ground, that the unanimous vote (but for the applicant and her husband’s votes on Motion 12) on rejecting the resolutions was unreasonable is perhaps the most contentious. Notwithstanding the submissions made by the applicant on this ground, the applicant did not articulate how, or why, that was so. Moreover, there was no evidence available to sustain a finding of the requisite unreasonableness.
65.In Ainsworth, the High Court held that:
…opposition to a resolution [may] be overridden only where opposition by lot owners other than the proponent is unreasonable. The unreasonableness of the opposition to the first respondent’s proposal is to be determined in a context in which lot owners voting in respect of the proposed resolution are exercising their right to vote as an aspect of their proprietary rights as owners of lots included in the Scheme. In this context, the unreasonableness with which Item 10 of Sched 5 is concerned is unreasonableness on the part of the opposing lot owners having regard to those lot owners’ interests under the Scheme.[104]
[104] Ainsworth at [58]
66.In Bonansea, Presidential Member McCarthy said:
The same approach must be applied under section 129(1)(g) of the UTMA. The Tribunal must focus upon whether the opposition of the other unit owners to the motion was unreasonable, not upon whether the owners corporation acted reasonably in refusing to give approval or the reasonableness of the motion. Nor is it for the Tribunal to achieve what it thinks is a reasonable balance between competing viewpoints. The Tribunal’s task is first to identify the ground or grounds of opposition to the motion and then to consider whether that ground or those grounds was ‘a rational basis for opposition’.[105]
[105] Bonansea at [30]
67.Concerning the meaning of ‘unreasonable’, the assessment is an objective one; the tribunal must consider the opposition to the motion objectively, rather than by reference to the subjective mindset of the individuals. However, the objective circumstances include the nature and purpose of the units and, where relevant, a loss of amenity.[106] Presidential Member McCarthy in Bonansea continued:
[T]he ‘unreasonableness’ … is unreasonableness on the part of the opposing unit owners having regard to their interests under the Units Plan. It follows, in my view, that opposition must be based on a factor or factors that adversely affect the interests of other unit owners in their use and enjoyment of their units, or in the common property …
[T]he language of section 129(1)(g) requires the Tribunal … to consider why the motion ‘was’ opposed and whether opposition for those reasons ‘was unreasonable’, not other reasons that might become apparent or new evidence produced after the event. Facts or circumstances that become known after the event may cause a unit owner to bring a further motion, but are not a basis upon which the Tribunal can find that opposition to a motion ‘was unreasonable’.[107]
[106] Bonansea at [31]-[32]
[107] Bonansea at [33]-[34]
68.In the present application the situation is a little different to that discussed in Bonansea. In Bonansea, the grant of the special privilege was for the approval of proposed renovations and extensions to a unit. The special privilege had not been in existence previously. In the current proceedings it was opposition to the reinstating of a special privilege that had only been terminated due to the passing of legislation which had extinguished the special privilege.
69.The primary reasons given by the respondent in the present case for opposing the motions brought by the applicant are set out in the Explanatory Notes submitted by the Executive Committee in the Notice of Annual General Meeting for the AGM held on 1 August 2022:
1. The Executive Committee does not support the Motion submitted by the owner of Unit 2 and Unit 5, which if successful will take away the only 2 Visitor Car Spaces we have at The York.
2. The Owners Corporation obtained legal advice from a legal firm that specialises in Body Corporate Matters when the Legislation revoked Special Privileges and allowed The York to take back the only 2 visitor car spaces we have. On Page 5 of the legal advice, the law firm states, ‘this is a matter to be resolved between the seller and purchaser of these units.’
3. The York received development approval with visitor car spaces. If ACT Planning requires The York to provide visitor car spaces, we are concerned about the legality of a motion submitted for a special privilege on our only two visitor car spaces if ACT Planning requires The York to provide visitor car spaces.
4. Residents of The York have 1 car space, yet the owner of Unit 2 and Unit 5 want 2 car spaces each. This does not present as fair or equitable to the rest of us with only 1 car space.
5. The owner of Unit 2 and Unit 5, have had 6 years personal exclusive use of our only visitor car spaces and during that time, we haven’t been able to provide any visitor car spaces to visitors to the complex, or for our contractors who have nowhere to park when they need to attend.
6. In 2015, when the Special Privilege was granted The York was being run as a Serviced Apartment Hotel and one person (the developer) and his wife owned the majority of the units at The York. The situation today is very different and what took place 6 years ago is not relevant as we are not a Serviced Apartment Hotel and we all only own one unit each.
7. A Special Privilege is not for life and Unit 2 and Unit 5 have had a very good run of 6 Years.
8. The Legislation revoked the Special Privilege for Unit 2 and Unit 5, not the owners corporation.
9. To lose the 2 Visitor Car Spaces again disadvantages every other owner at The York.
10. The York should not lose the amenity of visitor car Spaces.[108]
(errors in original)
[108] See Exhibit A1 Applicant’s Bundle: Notice of Annual General Meeting, pages 218
70.The applicant examined each of the reasons in turn and submitted that each particular reason was unreasonable; factually incorrect; unconscionable; based on incorrect statutory interpretation; or potentially could be dealt with by utilising section 112B of the UTMA.[109]
[109] Applicant’s submissions dated 6 February 2023 at [29]-[48]
71.I consider that if I was to find one or more of the reasons is reasonable, that reason alone might have been sufficient for members of the Corporation to vote as they did. Consequently, the actions of the Corporation could not be held to be unreasonable. Even if members of the Corporation based their decision on factually incorrect reasons, then that by itself may not be sufficient for the decision to be unreasonable.
72.Assessing the relevant strength or soundness of the reasons can be a difficult exercise. Other unit holders may not be acting unreasonably by “failing to act sympathetically or altruistically” towards the applicant.[110] As Presidential Member McCarthy opined in Bonansea, “it may benefit him, but it would be detrimental to them”.[111]
[110] Ainsworth at [57]
[111] Bonansea at [93]
73.In undertaking the exercise, it may not be necessary to look at each and every reason given by the respondent. It may be sufficient to look at the most cogent or significant reasons. If those reasons alone are reasonable basis for the respondent in coming to the decision which it did, then the decision may be reasonable at least to a prima facie standard.
74.The first note made by the Executive Committee stated that the Executive Committee did not support the motion as it would, if successful, take away the only two visitor car spaces at The York.[112] The spaces were used by tradespeople working at The York and, of course, social visitors to the complex. The third note[113] returned to the number of visitor spaces and argued that the motion was possibly inconsistent with the Multi Unit Housing Development Code as discussed above and the Parking and Vehicular Access General Code applicable at that time.[114] Although this view expressed in the note may be incorrect, nevertheless, following Mitchell, the possible inconsistency with planning requirements may have been in the minds of the voters when they were considering the reduction of visitor car spaces and the effects upon them. The ninth note[115] articulated that to lose the two visitor car spaces disadvantages every other owner at The York and the tenth note[116] emphasised that The York should not lose the amenity of visitor car spaces.[117]
[112] Exhibit A1 Applicant’s Bundle: Notice of AGM to be held 1 August 2022, Explanatory Note 1, page 218
[113] Exhibit A1 Applicant’s Bundle: Notice of AGM to be held 1 August 2022, Explanatory Note 3, page 218
[114] Respondent’s Outline of Submissions dated 20 March 2023 at [10]
[115] Exhibit A1 Applicant’s Bundle: Notice of AGM to be held 1 August 2022, Explanatory Note 9, page 218
[116] Exhibit A1 Applicant’s Bundle: Notice of AGM to be held 1 August 2022, Explanatory Note 10, page 218
[117] Exhibit A1 Applicant’s Bundle: Notice of AGM to be held 1 August 2022, at pages 210-220
75.The second note[118] referred to legal advice given to the Corporation and the reduction of visitor car spaces. These reasons are cogent grounds for the opposition given to the motion. The note does not specifically refer to the firm that gave the advice, nor does it appear to annex or attach the full advice. However, it extracts part of the advice as follows: “this is a matter to be resolved between the seller and purchaser of these units”.[119]
[118] Exhibit A1 Applicant’s Bundle: Notice of AGM to be held 1 August 2022, Explanatory Note 2, page 218
[119] Exhibit A1 Applicant’s Bundle: Notice of AGM to be held 1 August 2022, Explanatory Note 2, page 218
76.From the applicant’s bundle of documents, it can be seen that the legal advice was received by letter dated 23 December 2021 from Kerin Benson Lawyers.[120] It is not clear how widely the letter was circulated beyond the Executive Committee. Within the applicant’s bundle of documents, there is an email from Nicole Chant dated 3 December 2021 to Civium and others (including the applicant) which refers to the Executive Committee obtaining legal advice and a request to circulate the advice prior to calling any meeting regarding special privileges, whilst also referring to section 112A of the UTMA.[121] The 2022 report of the Executive Committee of The York refers to the advice being circulated to owners of units.[122] The minutes of the 2022 AGM also refer to a lawyer acting for the owner of unit 13, who attended the 2022 AGM on behalf of her client. This lawyer also spoke to the motion, special privileges and the legislation. The lawyer informed the meeting that her instructions were to oppose the motion.[123]
[120] Exhibit A1 Applicant’s Bundle: Letter Kerin Benson Lawyers to The Owners – Units Plan 1547 dated 23 December, pages 179-84
[121] Exhibit A1 Applicant’s Bundle: Email from Nicole Chant to Civium and others dated 3 December 2021, pages 173-5
[122] Exhibit A1 Applicant’s Bundle: Notice of AGM to be held 1 August 2022, pages 219-20
[123] Exhibit A1 Applicant’s Bundle: Minutes of AGM 1 August 2022, page 272
77.Assuming that the legal advice was circulated before the 2022 AGM, in my view, given the caution expressed by the lawyers concerning the matters canvassed, such as the validity of the motions at the 2015 GM and 2016 GM; the validity of “taking away” the visitor carparks; the current status of the special privileges granted; the validity of motion 5 of the 2015 GM; and the reimbursement of the auction price, it is not surprising that the majority of the attendees voted the way that they did. Even if the advice was not circulated beforehand, it would be similarly unsurprising that the attendees voted against the motions given the reference to the advice in the notice of the meeting and the fact that another lawyer was present who spoke against the motions and opposed them. Even if lawyers disagree about the accuracy or correctness of the advice, and even if the advice may or not be correct, it does not make it unreasonable for the participants to have regard to the advice when voting. The applicant also had the opportunity to circulate material in support of the resolutions before the 2022 AGM and spoke in favour of it at the meeting for approximately 40 minutes, with Daniel Bisa also speaking in favour of it for approximately 15 minutes.[124] Notwithstanding the applicant’s and her husband’s efforts, the motions were not passed.
[124] Exhibit A1 Applicant’s Bundle: Minutes of AGM 1 August 2022, page 272
78.The applicant submitted that it would be unconscionable and unreasonable for the other owners to take the benefit of the funds obtained from the auction by the owner of unit 2 and then reclaim the amenity of the use of the visitor carparks opportunistically without following any due process under the UTMA on the basis of the legislative termination of the special privilege. The applicant emphasised that they were essentially seeking the reinstatement of the status quo prior to the legislative change. The respondent did not directly address unconscionability in their written or oral submissions but did address unreasonableness. The applicant referred to Bond v Hopkins and in particular, the principle:
That it was against conscience to suffer the party who had entered and expanded his money on the faith of a parole agreement to be treated as a trespasser, and the other party to enjoy the advantage of the money had had laid out.[125]
[125] (1802) 1 Sch & Lefr 413
79.More recently, the High Court in Stubbings v Jams 2 Pty Ltd,[126] cited with approval earlier statements of the Court in Kakavas v Crown Melbourne Ltd,[127] as follows:
The plaintiff must be able to point to conduct on the part of the defendant, beyond the ordinary conduct of the business, which makes it just to require the defendant to restore the plaintiff to his or her previous position.[128]
[126] [2022] HCA 6
[127] [2013] HCA 25
[128] [2022] HCA 6 at [38], quoting Kakavas v Crown Melbourne Ltd [2013] HCA 25 at [20]
80.In the present situation, it was the legislation that led to the loss of the special benefit rather than the direct action of the respondents. In any event the loss was the exclusivity of the parking space. The applicant could still use the space as a visitor space along with the other unit holders. Further, the benefits or improvements resulting from the upgrades or maintenance funded by the applicant’s payment of $26,500 are of continuing benefit to all unit holders of The York including the applicant. In my view, the applicant continues to benefit from the upgrades or maintenance whether they reside in the unit or rent it out. In my view, the actions of the other unit holders cannot be described or found to be unconscionable or unreasonable in the circumstances here.
81.I do not agree with the applicant’s submission that because the respondent did not explain why the resulting scheme of the original resolution should not have continuing effect and should be respected by reinstating the status quo in place before the legislative change supports the applicant’s argument. With respect to the applicant, it is not incumbent upon the respondent to justify why the “status quo” should not have continuing effect. Rather, if there is to be any “onus”, it is for the applicant to satisfy the Tribunal that the Corporation unreasonably refused to make the special privilege rules under section 112A. I also do not agree that the scheme of the original resolutions should be treated as an ongoing “bond” on the Corporation and only defeated if the Corporation itself passed resolutions which overturned the scheme of the original resolutions. In my view, to require the Corporation to pass resolutions overturning the scheme of the original resolutions is neither practical nor necessary.
82.I find that it was not unreasonable for the General Meeting of the Corporation to oppose the Unsuccessful Motions at the 2022 AGM.
Merits review
83.However, notwithstanding my finding that it was not unreasonable for the Corporation to oppose the Unsuccessful Motions at the 2022 AGM, in my view it is necessary for me to undertake a merits review of the relevant motions.
84.In my view, the appropriate test is whether, in all the circumstances, the Corporation made the correct or preferred decision. I agree with the applicant’s submission that in considering the merits, I must have regard to what benefits or causes detriment to both the applicant and the Corporation.[129]
[129] Transcript of proceedings, 29 March 2023, pages 44-5
85.The applicant submitted in detail the detriments that they had suffered as a consequence of the voting at the 2022 AGM. The applicant, however, did not adequately canvas why the members voted in the way that they did in the meeting and that they would ordinarily act in their own rational interests. Voting in favour would mean the continuation of the loss of the two visitor carparks. Ironically, perhaps, the applicant would also gain a visitor carpark as the Unsuccessful Motions also related to the similar special privilege afforded to the owner of unit 5.
86.The respondent referred to the Contract for Sale and especially Form 5, containing the Schedule of Provisions, Covenants and Conditions Subject to Which the Lease of the Common Property is Held.[130] Form 5 specifically refers to the Proprietors – Units Plan 1547 covenanting with the Commonwealth of Australia to have at all times, and to maintain and repair four visitor parking spaces during the term of the lease.[131] The respondent suggested that the applicant could have made enquiries of the relevant authorities to ensure either actual approval or approval in principle could be obtained, and that there was no evidence that the applicant had done so.[132] In my view, that may or may not have been possible. Consequently, my findings are based on the evidence advanced in the proceedings, that is, Form 5. Form 5 raises a significant potential legal issue as to whether a valid special privilege could be created regarding the relevant carpark space. Regarding the merits, an issue for the applicant is that the special privilege, as it was, would have continued until the person holding the special privilege surrendered it. But for the legislative change, the privilege could only be “undone” with the consent of the grantee of the special privilege. Although it was conceded by the respondent that payment of monies in 2016 was a relevant factor as it was a benefit to the Corporation, they submitted there was to be no further payment of monies or compensation or advantage given to the Corporation to approve the motion.[133] The important factor, in my view, was any advantage given (whether it be monetary or otherwise) and the applicant has not been able to identify what, if any, further or additional advantage there was to the Corporation in approving the motion.
[130] Exhibit A1 Applicant’s Bundle: Units Plan – Units 1547, pages 56-122 and specifically, pages 98-101
[131] Exhibit A1 Applicant’s Bundle: Units Plan – Units 1547, Form 5 at Clause 3 (b)-(f) and specifically at Clause 3(d), pages 98-9
[132] Transcript of proceedings, 29 March 2023, page 46
[133] Transcript of proceedings, 29 March 2023, page 44
87.An important consideration is also section 129(4) of the UTMA, that subsection conveniently reads:
In considering whether to make an order in relation to a special privilege in relation to common property, the ACAT must have regard to –
(a) the interests of all unit owners in the use and enjoyment of their unit and the common property; and
(b) the rights and reasonable expectations of a person deriving or anticipation a benefit under a special privilege in relation to the common property.
88.The respondent described this as a “balancing exercise” between the interests of the person deriving or anticipating a benefit under a special privilege in relation to the common property, and the interests of the other unit holders.[134] The respondent submitted that a difficulty with the applicant’s case was that no analysis was given as to what would be in the interests of all the unit holders.[135] I agree with this submission. A merits review requires me to weigh up the interests of all the unit holders and not just the applicant.
[134] Transcript of proceedings, 29 March 2023, page 47
[135] Transcript of proceedings, 29 March 2023, pages 47-8
89.Therefore, after conducting a merits review pursuant to section 129(1)(g), and in particular, weighing up the interests of all the unit owners and not just the applicant to the motions, I am satisfied that after a merits review opposition to the unsuccessful motions was not unreasonable.
90.As discussed above, the Unsuccessful Motions are defined as Motions 12 and 13. However, in light of my findings in relation to Motion 12, it follows that a separate consideration of Motion 13 is not necessary.
Consideration of sections 129(1)(d) and section 129(2) of the UTMA
91.As previously mentioned, during the hearing, I asked the parties to consider how to interpret section 129(1)(d) that, in effect, empowers the ACAT to make an order requiring a person to pay to the Territory or someone else an amount of not more than $1,000, and how this provision interacted with subsection 129(2). The parties provided detailed submissions in response. Given the outcome of these proceedings, I do not need to address this issue. However, it may be of some assistance if I express a view.
92.The parties were not able to identify any authoritative statement regarding the relationship between the two subsections. The applicant referred to remarks by Senior Member Orr KC in Garcia v The Owners – Units Plan 10.[136] Senior Member Orr KC commented on earlier equivalent sections of the UTMA and observed (but without ultimately deciding the point) that section 129(1)(d) “may not be a limitation on money claims but given the outcome of these proceedings it is not necessary to resolve this issue”.[137]
[136] [2017] ACAT 91
[137] [2017] ACAT 91 at [7]
93.Senior Member Orr KC also referred to the general limitation on civil claims contained in section 18 of the ACAT Act of $25,000. The applicant argued that the present application was not so limited. The respondent, by contrast, adopted a strict statutory interpretation to the provisions and ultimately submitted, although there was some scope of flexibility for the ACAT to make orders it considers necessary or convenient to resolve a dispute, the upper limit in matters such as the present would remain at no greater than $1,000.
94.In my view, there has been no authoritative statement regarding the relationship between section 129(1)(d) and section 129(2). I have considered the submissions and the authorities referred to. I prefer the submissions of the respondent and conclude that section 129(1)(d) provides a wide-ranging power to the ACAT to order a payment of money but only up to the particular limit of $1,000. In my view, section 129(2) is directed towards providing the ACAT with some degree of flexibility to make orders it considers necessary or appropriate to resolve a dispute. If section 129(2) was to operate as the applicant has submitted, it would abrogate the specific monetary limit imposed by section 129(1)(d). Such an operation would in my view, infringe upon the monetary limitations imposed by the subsection and in effect (as the respondent has submitted) render the limited nature of the power conferred by section 129(1)(d) “meaningless”.
Conclusion
95.For the reasons set out above and after conducting a merits review I find that the Unsuccessful Motions 12 and 13 at the General Meeting of Units Plan 1547 held on 1 August 2022 was a correct decision and that opposition to the Unsuccessful Motions was not unreasonable.
………………………………..
Member W Hawkins
Date(s) of hearing: 29 March 2023 Solicitors for the Applicant: Mr B Fuller, Minter Ellison Lawyers Solicitors for the Respondent: Mr C Kerin, Kerin Benson Lawyers
0
17
8