Brudenall v The Owners Corporation of Units Plan No 202

[2018] ACAT 113

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

BRUDENALL v THE OWNERS CORPORATION OF UNITS PLAN NO 202 (Unit Titles) [2018] ACAT 113

UT 12/2018

Catchwords:              UNIT TITLES – eligible person for the purpose of section 119 –  interpretation of maintain – maintenance vs capital improvement – scale of maintenance

Legislation cited:      Unit Titles Act 2001 s 51 (section repealed)

Unit Titles Management) Act 2011 ss 24, 119, dictionary

Cases cited:Brudenall & Ors v Owners Corporation Unit Plan No. 202 [2016] ACAT 101

The Owners Corporation Units Plan 202 v Brudenall & Ors [2015] ACAT 64

Tribunal:                   Senior Member G Lunney SC

Date of Orders:  8 November 2018

Date of Reasons for Decision:         8 November 2018

AUSTRALIAN CAPITAL TERRITORY  )

CIVIL & ADMINISTRATIVE TRIBUNAL       )          UT 12/2018

BETWEEN:

SUE BRUDENALL

Applicant

AND:

THE OWNERS CORPORATION OF UNITS PLAN NO 202

Respondent

TRIBUNAL:Senior Member G Lunney SC

DATE:8 November 2018

ORDER

The Tribunal orders that:

1.All orders sought are dismissed

………………………………..

Senior Member G Lunney SC

REASONS FOR DECISION

This application

1.The application seeks declarations relating to expenditure by the respondent owners corporation on roofing maintenance in a units plan with Class A and Class B units. The Class B units are built as townhouses and have their own roofs. The Class A units are apartments in multi-unit buildings and roofs cover more than one apartment. The maintenance proposed and commenced consisted of replacing the old concrete tile roofs with Colorbond pressed steel roofing. The contention of the applicant is that the owners corporation was not responsible for the cost of replacing the roofs on the Class B units because this was not maintenance but capital improvement. She also contended that the owners corporation was obliged to give access to the contract with the roofing contractor to interested unit owners and had not done so.

2.Related to this dispute were section 24(1)(b) of the Unit Titles (Management) Act 2011 (the Act), and a special resolution of the owners corporation passed at an Annual General Meeting in 2002 which has become known as Motion 5. It reads as follows.

MOTION 5

That pursuant to Section 51(3)(f) of the Unit Titles Act 2001 the Corporation be responsible to paint all buildings on the Class B units (being Units 1 – 7 inclusive) and to carry out roofing and structural repairs to all Class B units (being Units 1 – 7 inclusive) but excluding responsibility for internal painting and minor repairs of Class B units (being Units 1- 7 inclusive).

3.This motion refers to section 51(3)(f) of the Unit Titles Act 2001 which is now repealed, but is effectively identical to section 24(1)(b) of the Act. It is as follows.

24 Maintenance obligations

(1)     An owners corporation for a units plan must maintain the following

…

(g)as authorised by a special resolution (if any)—all buildings on all class B units on the units plan.

Example—part (g)

a special resolution authorising the owners corporation to paint all buildings on the class B units and to carry out roofing and structural repairs to all class B units, but excluding responsibility for internal painting and minor repairs of class B units

Note An example is part of the Act, is not exhaustive and may extend, but does not limit, the meaning of the provision in which it appears (see Legislation Act, s 126 and s 132).

4.Motion 5 appears to reproduce the example given in the Act to subsection 24(1)(g). However in referring to section 51(3)(f) [section 24(1)(g)], it is clearly engaging the maintenance obligation contained in the Act.

5.The declarations sought by the applicant were as follows.

1. That agreement to Motion 5 at the 2002 AGM pursuant to s51(3)(f) of the Unit Titles Act 2001 does not oblige the Owners Corporation to pay for improvements or upgrades to the Class B townhouses in addition to paying for their painting, roofing and structural and repairs

2.       That the total replacement work which substantially alters each class B townhouse roof from one of cement tiles to one of colorbond metal, with associated new roofing structures, is a capital works improvement which provides greater functional efficiency and increases value at a high cost for which Class A owners should not have been levied in 2017-18 as a requirement under Motion 5.

3.       That each class B owner should be invoiced by the Owners Corporation for the costs of his/her roofing upgrade to colorbond roofing (including for any associated improvements such as gutterguard and parapet capping) on the completion of the works and after payment of invoices in 2018; these costs to be calculated under UT(M)A 2011, s29 Work on behalf of particular unit owners and s30, Recovery of costs.

4. That the Contract signed in November 2017 by the Chair of the EC on behalf of the Owners Corporation UP 202 for the total roof replacement should be made available to all owners as each owner is a party to the Contact and as Section 119 and Section 121 of the Unit Titles (Management) Act 2011 apply.

Previous litigation

6.There have been two previous reported cases in the ACAT relating to Motion 5 and involving the owners corporation and either Mrs Brudenall or her late husband.

7.The first was The Owners Corporation Units Plan 202 v Brudenall & Ors [2015] ACAT 64. In it the tribunal declared that Motion 5 at the 2002 AGM of the Owners of Units Plan 202 was passed as a special resolution.

8.The second was Brudenall & Ors v Owners Corporation Unit Plan No. 202 [2016] ACAT 101. Having previously found that Motion 5 had been validly passed as a special resolution, the tribunal on merits review determined that the motion should not be amended.

9.Presidential Member Daniel at paragraph 32 said the following:

32.    Alternatively, the Tribunal might decide not to repeal or amend Motion 5 but to leave it in place. Having concluded in the first proceedings that Motion 5 was validly passed, and given that the contributions are currently levied in accordance with the legislation, there is no question of the legality of the current arrangements. Costs of maintaining the class B units as required by Motion 5 are an expense to the owners corporation as a whole, and these costs are met through the annual levying of contributions from owners in accordance with their unit entitlements. This state of affairs is correct according to law – the ‘law’ being the combination of the legislation, which is of general application, and Motion 5 which is a resolution specific to units plan 202.

10.Presidential Member Daniel there acknowledges that payment for maintenance of Class B units is properly authorised by Motion 5.

The hearing

11.It became apparent in the course of the hearing that the motivation for the applicant seeking the declarations numbered 1 to 3 in the orders sought was in order to settle a dispute in interpretation of use of this word ‘maintain’ in Motion 5. The applicant and some other owners were of the view that maintain as used in the Act and Motion 5, meant the repair of an existing structure, and did not include complete replacement of the structure. If the work was not maintenance, then there was no obligation cast on the owners corporation to undertake it and there should not be a charge spread among all owners in the units plan. They advanced a number of arguments in support of their contention which are set out at length in the submissions filed by the applicant in the proceedings. The owners corporation opposed this view.

12.Thus rather than examine each of the orders sought by the applicant, it is appropriate to examine the dispute underlying the orders sought by the applicant to solve it. Then, if appropriate, to decide what orders would be appropriate to resolve it. The dispute can be articulated as follows:

·Was the roofing work undertaken by the owners corporation which involved replacement of old concrete tile roofing with a pressed steel Colorbond product ‘maintenance’ for the purposes of the Units Title (Management) Act and Special Resolution 5?

13.The arguments advanced by the applicant appear to overlook the definition of ‘maintenance’ in the dictionary to the Act which is as follows.

maintenance, of a building, a facility for a utility service or a utility conduit, means maintenance in good repair and working order, and includes—

(a)     repair; and

(b)     replacement; and

(c)     renewal; and

(d)     restoration.

14.Thus ‘maintenance’ as an obligation of the owners corporation is considered on the scale of maintenance of a building as a whole and requires consideration of keeping it in good repair and working order. That process would include repair or replacement of parts of the building when they fell into disrepair or poor working order. The roof of a building is obviously part of the building.

15.It was quite clear on the evidence of witnesses and in the owners corporation minutes that the roofs of the strata complex required intermittent maintenance by way of minor repair from time to time. However over the years the condition of the roofs continued to deteriorate and a stage was reached, and passed, at which it was no longer functionally efficient to make minor repairs on an ad hoc basis. A different approach was required. Appropriate investigations were made and a decision was reached that the preferable way to restore the former efficient function of the roofing in the complex was replacement.

16.At the time that decision was made an arguably more efficient and suitable roofing method than concrete tiles had become available using a pressed steel product called ‘Colorbond’. The Tribunal does not accept the argument that adoption of this product constituted a ‘capital improvement’ to the building. Maintenance is not restricted to using concrete tiles similar to those previously used, or continuing minor repairs long past the time that they were either an efficient or cost effective means of dealing with deterioration of the roofing. The buildings had to have efficient roofing and it was an available option to use the best available method to ensure the building had roofing in good working order. In replacing the deteriorated roofing with the pressed steel material the owners corporation acted in accordance with the definition of ‘maintenance’ in the Act by restoring the former efficient function of the roofing to units in the strata plan. Technology had advanced since the installation of the original concrete tile roofing and in the opinion of the Tribunal the owners corporation was not limited to the former product in its choice of materials in order to conform to its obligation to maintain.

Conclusion

17.The dispute between the applicant and the respondent referred to above which underlies the first three orders sought must be answered ‘yes’. An appropriate order will be made.

Fourth order sought

18.As with the first three orders, this order sought is expressed as an application for a declaration. Also as with the other three, it can be isolated as a single point of dispute as follows:

·Appropriate orders are sought by the applicant from the Tribunal that the owners corporation make available to qualified persons on application pursuant to Part 7 of the Unit Titles (Management) Act to inspect and if required take copies of documents referred to in S119(3) of the Act including a copy of the roofing contract.

19.The evidence fails to establish that any ‘eligible person’ for the purposes of section 119 had made a request and adopted the procedure set out in section 119(5) in attempting to gain access to a copy of the roofing contract. Therefore no dispute between the owners corporation and an owner or occupier was disclosed on the evidence.

20.In any event, there seems to be no utility in pursuing the issue further since documentary material produced by the respondent in the course of making written submissions, but on the face of it apparently admissible in the proceedings, indicates that the applicant is no longer the owner of her former unit in the units plan and has not been so since 20 July 2018. The applicant’s written submissions in reply agree that is the case.

21.In relation to this issue the applicant submits that she and “a number of other previous owners all of whom paid levies in 2017-18 continue to have a material interest in the ACAT decisions”. That may well be the case, however, there is no evidence of any adherence to the procedures of section 119 by any person eligible or otherwise and the conclusion that no dispute exists is unavoidable.

22.It is therefore unnecessary to determine whether the contract constitutes a record of the corporation, whether a copy of the contract was in the control of the owners corporation at a relevant time, and whether production of a redacted copy was sufficient compliance.

Conclusion

23.The fourth order sought must therefore be dismissed for lack of evidence.

………………………………..

Senior Member G Lunney SC

HEARING DETAILS

FILE NUMBER:	UT 12/2018
PARTIES, APPLICANT:	Sue Brudenall
PARTIES, RESPONDENT:	The Owners Corporation of Units Plan No 202
COUNSEL APPEARING, APPLICANT	N/A
COUNSEL APPEARING, RESPONDENT	N/A
SOLICITORS FOR APPLICANT	N/A
SOLICITORS FOR RESPONDENT	Donohue & Co
TRIBUNAL MEMBERS:	Senior Member G Lunney SC
DATES OF HEARING:	12 July 2018