Corby v The Owners Corporation - Units Plan No 1035

[2019] ACAT 45

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

CORBY v THE OWNERS CORPORATION – UNITS PLAN NO 1035 (Unit Titles) [2019] ACAT 45

UT 33/2018

Catchwords:                UNIT TITLES – challenge to rule infringement notice – whether breach of rule that a unit owner must not use the common property to interfere unreasonably with the use by an owner of another unit – challenge to recovery of expenditure in relation to the rule infringement notice

Legislation cited:        Legislation Act 2001 ss 126, 140

Unit Titles (Management) Act 2011 ss 16, 19, 20, 31, 79, 80, 107, 108, 109, 125, 129

Cases cited:In the matter of Ruling Tribunal Section 31 of the Unit Titles (Management) Act 2011 [2017] ACAT 56

The Owners – Units Plan 928 v Cochaud [2017] ACAT 66

Tribunal:Senior Member R Orr QC

Date of Orders:  8 May 2019

Date of Reasons for Decision:         8 May 2019

AUSTRALIAN CAPITAL TERRITORY  )

CIVIL & ADMINISTRATIVE TRIBUNAL       )          UT 33/2018

BETWEEN:

PATRICIA MAREE CORBY

Applicant

AND:

THE OWNERS CORPORATION – UNITS PLAN NO 1035

Respondent

TRIBUNAL:Senior Member R Orr QC

DATE:8 May 2019

ORDER

The Tribunal orders that:

1.The resolution of the executive committee of the respondent to authorise the issue of a rule infringement notice, dated 14 August 2018, to the applicant is repealed. The rule infringement notice is of no effect.

2.There is no debt of $649 owed by the applicant to the respondent, as purportedly reflected in the invoice dated 11 September 2018. The resolution of the executive committee of the respondent to recover the purported debt is repealed. The invoice is of no effect.

3.The financial statements of the respondent should be amended to reflect these orders.

………………………………..

Senior Member R Orr QC

REASONS FOR DECISION

1.The applicant in this proceeding is Patricia Corby (Ms Corby or applicant), who is the owner of unit 13 in Units Plan No 1035 (UP 1035), which comprises 42 units, and is known as Rosewood Park. Ms Corby brings these proceedings against The Owners Corporation – Units Plan No 1035 (owners corporation or respondent) in relation to action taken by it following its attempt to mark as a visitor parking place part of the common property of the complex directly outside Ms Corby’s unit.

2.In particular Ms Corby makes an application under section 129 of the Unit Titles (Management) Act 2011 (Unit Titles Management Act or Act) seeking to overturn an infringement notice issued against her dated 14 August 2018 (infringement notice), and an invoice for $649 dated 11 September 2018 under which the owners corporation sought to claim from her amounts spent by it in relation to the infringement notice (invoice). The owners corporation is the respondent in these proceedings and defended its actions.

Summary of Tribunal decision

3.The infringement notice was issued on the basis that Ms Corby had breached rule 5 of the Owners – Units Plan No 1035 Rules (Rules) which provides that a unit owner must not use the common property to interfere unreasonably with the use of the property by an owner of another unit. The Tribunal finds that there was no basis for a reasonable belief that rule 5 had been breached, and therefore no basis for issuing the infringement notice, and repeals the resolution to do so.

4.The invoice was issued on the basis that there was a statutory debt arising from the breach of the Rules for the costs incurred in issuing the infringement notice. The Tribunal finds that there was no such breach, nor any other basis to support the statutory debt. The Tribunal finds that there is no debt and repeals the decision of the committee to pursue it by issuing the invoice.

Hearing

5.Ms Corby made an application under the Unit Titles Management Act on 30 November 2018 (Application). The Application included reasons for the Application and annexed a number of documents. The respondent to the Application was the owners corporation and it provided a document titled ‘Respondent’s points of defence’ filed on 22 January 2019 (Points of defence) which included a number of documents. Ms Corby provided a document titled ‘Applicant’s further evidence and responses to the respondent’s points of defence’ dated 29 January 2019 (Applicant’s further evidence). The hearing before the Tribunal took place on 13 February 2019. Ms Corby represented herself, and Ms Nicole Wilde of Tisher Liner FC Law represented the respondent. Ms Corby provided further documents and gave oral evidence. Ms Wilde provided further documents (Exhibit R1), and Mark Mansfield (Mr Mansfield), principal of Capital Strata Management Services the manager for the owners corporation, and Greg King (Mr King), a safety expert, gave oral evidence for the respondent.

Background

6.The executive committee for the owners corporation met on 11 April 2018 and the minutes recorded, in part, as follows:

Pavement marking for visitor vehicle bays and unit parking

Members discussed UP1035 undertaking pavement marking and numbering to clearly identify visitor vehicle parking bays on the common property and to number the common property pavement outside each unit with the unit’s number.

Members noted that there are only a limited number of visitor bays on the common property and that UP 1035 should seek to maximise the number of visitor parking bays.

Members noted that UP 1035 units plan indicates there is room to create a visitor bay on the common property adjacent to the garden bed straddling the common property and unit 13. Members unanimously agreed that this area be designated as a visitor parking bay.

Members unanimously agreed that UP 1035 engage a contractor to undertake this work which was estimated to cost around $1,000.[1]

[1] Exhibit R1, document 8

7.Ms Corby, the applicant, owns unit 13. She bought the property in 2001, moved in in 2004, and in the past had been a member of the executive committee for a number of years.[2] South of her unit on the eastern side there is her garage, then a common property driveway, then the internal road. South of Ms Corby’s unit on the western side is Ms Corby’s private garden, and then a garden on the common property and then a strip of common property, the subject of these proceedings (parking spot). There is a path south from Ms Corby’s property to the internal road, with her garage and the common property driveway to the garage on one side, and her garden, the common property garden and then the common property parking spot on the other. Ms Corby says that she and visitors to her property had used this parking spot since she first entered the complex. There was no other parking space for her unit. Most units had a car parking space which was part of the unit entitlement. Ms Corby stated that when she bought the property she was told that the parking spot was her car park; she now knows that it is common property.[3]

[2] Transcript of proceedings 13 February 2018 at page 12

[3] Transcript of proceedings 13 February 2019 at pages 12-13, 19

8.Mr Mansfield indicated that no-one from the executive committee or the manager talked to Ms Corby before the decision of 11 April 2018 set out in paragraph 6 above was made, nor did anyone tell Ms Corby of the decision, nor were the minutes of the meeting published.[4] The manager engaged Mr King to implement the decision of 11 April.

[4] Transcript of proceedings 13 February 2019 at page 40

9.Ms Corby says that ‘13’ was painted on the parking spot on about 24 July 2018. She said that no notice had been received by her in relation to this work.[5]

[5] Applicant’s further evidence at [5]

10.She said that she then had a visit from Mr King on about 26 July 2018 and he told her that the ‘13’ which had been painted on the parking spot would be erased and replaced by a visitors parking notice. She said that Mr King stated that he “thought it very strange as how was [she] going to enter/exit [her] unit”. She said that Mr King rang Mr Mansfield and that Mr King said he would meet Mr Mansfield to sort it out as Mr King “did not think it was right”.[6] Ms Corby said that this was the first time she had been told of the proposal to create a visitor parking spot outside her unit. On no occasion did the executive committee or the manager tell her about it.[7]

[6] Applicant’s further evidence at [5]

[7] Transcript of proceedings 13 February 2019 at pages 11-12, 40

11.Ms Corby stated that Mr King visited her on about 3 August, she invited him in, and he told her that Mr Mansfield had instructed him to go ahead with removing the ‘13’ and marking the parking spot as ‘visitors’. She said he stated he did not think it was right but that he had been employed to do the work.[8]

[8] Applicant’s further evidence at [5]

12.Ms Corby stated that Mr King returned on about 7 August 2018 and was using an angle grinder to remove the ‘13’ on the parking spot. She said she initially spoke to Mr King from her property and then moved and stood in the area of the parking spot only to protect the entry/exit to her unit and asked Mr King what he would he do if she stayed there. She stated Mr King said he could not proceed with the work and he rang Mr Mansfield and then left. Ms Corby stated that even if she wanted to she would not have been physically capable of preventing Mr King from proceeding with the work, and that she was aware that she could not interfere with a contractor engaged by the owners corporation.[9]

[9] Application, reasons for application at page 1; Applicant’s further evidence at [5]

13.While there are some inconsistencies in dates, this interaction is essentially confirmed by Mr King. Mr King stated that he painted the ‘13’ on a car space and was then asked to remove this and paint the word ‘visitor’. He said that on approximately 8 August 2018 he went to do this and was met by the owner of unit 13, who said that where he had painted was her ‘allocated parking space’ and asked what he would do if she stood on the area to be painted and did not move. He replied that obviously he could not proceed and he then decided to leave so as to not get involved with this dispute. In oral evidence Mr King stated that he rang Mr Mansfield to say Ms Corby asked him the question if she stood there, what would he do, and he said obviously if she stood there, he couldn’t continue.[10] He said he returned a few days later but this was disputed by Ms Corby, and seems inconsistent with the email which is discussed in the following paragraph.[11] Mr King admitted that Ms Corby was never abusive towards him.[12]

[10] Transcript of proceedings 13 February 2019 at page 56

[11] Exhibit R1, document 25, statutory declaration of Mr King; transcript of proceedings 13 February 2019 at pages 50 and 56

[12] Transcript of proceedings 13 February 2019 at page 53

14.The respondent provided a copy of an email from Mr Mansfield to the executive committee dated 7 August 2018. This email reported that when the contractor attended to erase the number 13 and repaint it with a visitor bay marking “Ms Corby stood on the area of the pavement to prevent the contractor undertaking the work.” He said he advised the contractor to leave, and that the work could be completed at another time, and the contractor was asked to invoice any costs for Ms Corby preventing the work. It was then said that “in light of her conduct, we recommend that Ms Corby be issued with an infringement notice … for breaching UP1035’s Rules in causing a nuisance, interfering with the common property and to stop preventing UP 1035 carrying out the work to the common property car bay” and that “the cost of the infringement process will be invoiced to Ms Corby.”[13]

[13] Exhibit R1, document 11

15.Neither Mr Mansfield nor any member of the executive committee sought to discuss these events with Ms Corby.[14]

[14] Transcript of proceedings 13 February 2019 at page 40

16.The committee agreed to the recommended course. On 14 August 2018, Tisher Liner FC Law wrote to Ms Corby.[15] This letter attached a rule infringement notice. It was still the case that neither Mr Mansfield nor anyone else from the manager, nor any member of the committee, had spoken to Ms Corby about the issue.

[15] Application, annexure A

17.As to the infringement notice, it was said in the letter that the contractor made an error when he marked the number ‘13’ rather than ‘visitors’ on the parking spot, and that when he returned to correct the error he called the manager to inform them that he was unable to complete the corrective painting work as Ms Corby was standing on the common property pavement to prevent the corrective work. It was said that this conduct “interferes and continues to interfere unreasonably with the use and enjoyment of common property … because the practical effect is that guests to the Property are unlikely to park in the car space believing that it is” Ms Corby’s unit car park, which it is not.[16] It was said that this was a breach of rule 5 of the Rules. Similar statements were made in the formal infringement notice dated 14 August 2018. Under the heading ‘How you must remedy the contravention’ the notice stated “You must refrain from prohibiting the Owners Corporation contractors’ rectifying the line marking errors on the common property, legally owned by the Owners Corporation”.[17]

[16] Application, annexure A

[17] Application, annexure B, errors in original

18.The letter also discussed the costs incurred in issuing the infringement notice and stated that as a result of the ‘breaches’ the manager had incurred legal and administrative costs, the breaches were wilful, and therefore Ms Corby was liable for the costs under section 31 of the Act.[18] The manager issued an invoice to Ms Corby for $649 concerning the costs incurred in relation to the infringement notice dated 11 September 2018.[19]

Unit Titles Management Act

[18] Application, annexure A

[19] Exhibit R1, document 28

19.Section 125 of the Unit Titles Management Act provides that it applies to a dispute relating to an owners corporation for a units plan between the corporation and an owner or occupier of a unit in the units plan. This is such a dispute.

20.A party to the dispute may apply to the ACAT for an order in relation to the other party if the application relates to the dispute. Section 129 of the Unit Titles Management Act relevantly provides as follows:

129   Kinds of ACAT orders

(1)     The ACAT may make the following orders:

(a)an order requiring a party to do, or refrain from doing, a stated thing;

…

(f)an order repealing or amending a resolution of a general meeting or executive committee based on a merits review of the resolution by the ACAT;

…

(2)     The ACAT may make any other order it considers reasonably necessary or convenient to resolve a dispute under this part.

(3)     This section does not limit the orders the ACAT may make in relation to a dispute under this part.

21.The Tribunal is therefore able to order the repeal or amend the decisions of the executive committee on behalf of the owners corporation to issue the infringement notice and the invoice (such remedies are sought in proposed orders 2 and 3 in the Application), and the effect of such a decision is to withdraw the infringement notice (such a remedy is sought in proposed order 1 in the Application), and to make other reasonably necessary or convenient orders.

22.The owners corporation does not own the common property of the complex. Section 19(1) of the Act provides that the owners corporation “holds the common property as agent for … the unit owners as tenants in common”. The common property is owned by Ms Corby and the other unit owners. The owners corporation is their agent. It has the function of the control, management and administration of the common property (section 16(1)(b)).

23.Further, section 19(2) of the Act provides that the owners corporation “must give all members of the corporation opportunity for the reasonable use and enjoyment of the common property”. Ms Corby has this right under the Act.

24.The owners corporation may deal with common property under section 20 of the Act. There is no evidence it has done so in relation to the parking spot.

Rule infringement notice

25.Section 109 of the Act provides in part:

(1)     This section applies if the executive committee of an owners corporation reasonably believes that—

(a)the owner or occupier (the person) of a unit has contravened a provision of the corporation’s rules; and

(b)the circumstances of the contravention make it likely that the contravention will continue or be repeated.

(2)     The owners corporation may, if authorised by an ordinary resolution of the executive committee, give the person a notice (rule infringement notice) requiring the person to remedy the contravention (section 109(2)).

Section 109(3) sets out what the notice must state. Section 110(1) provides that a person commits an offence if the person is given a rule infringement notice under section 109, and does not comply with the notice. This is a serious consequence. However, the person does not commit an offence under this section if, when the rule infringement notice is given to the person, the person is not contravening, or has not contravened, the provision.[20]

[20] Unit Titles (Management) Act 2011 section 110(2)

26.Rule 5 of the Rules states:

5. Use of common property

A unit owner must not use the common property or permit it to be used, to interfere unreasonably with the use and enjoyment of the property by an owner, occupier or user of another unit.

27.There is also a rule 13 which provides in part that “no resident … is permitted to park any vehicle in the common property visitor parking bays …”. This was not relied on by the executive committee in issuing the rule infringement notice. But it does explain some of the concerns of Ms Corby in relation to the painting of a ‘visitors’ notice on the parking spot outside her unit. Because this rule was not relevant to the infringement notice it was not given any attention in the hearing, but the Tribunal notes that there is an issue about the relationship between this rule and section 19(2) of the Act, in light of section 108(3)(a) of the Act.[21]

[21] See The Owners – Units Plan 928 v Cochaud [2017] ACAT 66, especially at [90]; Christopher Kerin, Guide to ACT Strata Law (2017) at [3.11]

28.The Application asks the Tribunal to conduct a merits review of the decision of the executive committee, on behalf of the owners corporation, to issue the infringement notice.[22] I cannot see how the executive committee could reasonably have thought that Ms Corby breached rule 5, and therefore do not think that this was the correct or preferable decision.

[22] Unit Titles (Management) Act 2011 section 129(1)(f)

29.First, rule 5 applied if Ms Corby was using the common property. The word ‘use’ has a range of meanings, some of them very general, but it seems in this context that it means “to employ for some purpose; put into service; turn to account”.[23] It appears that Ms Corby was not using the common property in this sense; she was just standing on it to discuss matters with Mr King. Ms Corby and Mr King agreed that Ms Corby asked what Mr King would do if she stood on the parking spot and did not move. This suggests that Ms Corby was considering taking this course. But neither she nor Mr King suggested that she had commenced to do that. If she had, this may have been closer to a use, but both agreed it had not got to that point before Mr King left. Mr King stated that he left so as not to get involved with this dispute, not because Ms Corby was refusing to move from the parking spot. Mr King did not even ask her to move to allow him to work. The account of events by Mr Mansfield in his email of 7 August 2018 is somewhat different, but Mr Mansfield was not present and his version should therefore not be accepted.

[23] Macquarie Dictionary (Pan McMillan, 7^th ed, 2017)

30.Second, even assuming Ms Corby was using the common property that use must interfere unreasonably with the use and enjoyment of the property by others. Ms Corby was having a conversation with Mr King; she was not in my view acting unreasonably. She predictably held strong views about the parking space. No-one from the owners corporation or manager had discussed with her what was going to happen to the parking space. Mr King was the only person who had raised the issue with her, and she was discussing this with him. She had no information about the executive committee’s decision or the basis for it. I do not think expressing to Mr King her views that what he was doing was wrong and would have a significant impact on her life can amount to unreasonable interference.

31.Third, under rule 5 the unreasonable interference must be with the use and enjoyment of the property by an owner, occupier or user of another unit. Mr King did not fall into any of those categories. Mr King was a contractor for the executive committee, acting on behalf of the owners corporation, and on that basis it could be argued that he was an agent for the committee, which was made up of owners, and the owners corporation. But the respondent did not suggest that this was enough to make Mr King an owner for the purposes of rule 5.

32.The owners corporation, in the letter to Ms Corby and in the rule infringement notice, rather argued that her actions breached the rule because “standing on the area of the pavement to prevent the contractor undertaking the corrective works interferes and continues to interfere unreasonably with the use and enjoyment of common property at the Property because the practical effect is that guests to the property are unlikely to park in the car space believing that it is your units car park. Which it is not.”[24] As noted above, Ms Corby was standing on the parking spot to have a discussion with Mr King. She was not directly interfering unreasonably with the use and enjoyment of the property by an owner, occupier or user of another unit; she was preventing no such person from parking there. The rule says nothing about visitors. Even if visitors had some form of relevant right,  Ms Corby was not directly interfering unreasonably with anyone parking there.

[24] Application, annexure A

33.Even if Ms Corby was preventing the painting of the sign, which I doubt, I do not think this could be said to interfere unreasonably with the use and enjoyment of the property by an owner, occupier or user of another unit on the basis that their visitors would not know they could park there. This is a far too insignificant and remote effect to amount to unreasonable interference with the use by other owners as required by rule 5.

34.Fourth, a rule infringement notice can only be issued if the circumstances of the contravention make it likely that the contravention will continue or be repeated. As discussed, I do not think there was a contravention, so on this basis it could not be repeated. Even if there was a contravention, there was no evidence that it was likely that it would continue or be repeated.

35.Fifth, the email from Mr Mansfield of 7 August 2018 stated that “Ms Corby has been advised previously … in late 2016, that the car bay in front of her unit is common property and therefore is to be used as a visitor car bay rather than her own personal car bay” (emphasis added). The evidence before the Tribunal was that this statement was not correct. The oral evidence of Mr Mansfield was that during an executive committee walk around the complex he said to Ms Corby that  the parking spot was common property and could be used as a car park, but that was a decision for the committee or owners corporation (emphasis added).[25] Ms Corby provided a statutory declaration from Helen Mulley who stated that she was a member of the executive committee in 2016 and 2017, that after a meeting there had been a walk around the complex, that on this walk around they informed Ms Corby regarding the cracks in concrete including her driveway and that “during the meeting and walk around, there was never any mention of numbers to be marked on driveways or changing visitors car parking”.[26] As noted, Ms Corby’s evidence was that the first time she was told of the proposal in relation to the parking spot was in her meeting with Mr King in July 2018, and that on no occasion did the executive committee or the manager tell her about it. It seems unlikely therefore that Ms Corby was told in 2016, and even at its highest Mr Mansfield’s evidence was that he said it was common property which could be used as a car park.

[25] Transcript of proceedings 13 February 2019 at pages 42-43

[26] Exhibit A1

36.Sixth, rule 5 allows reasonable interference. It only prohibits unreasonable interference. It also needs to be read together with section 19(2) of the Act which provides that the owners corporation “must give all members of the corporation opportunity for the reasonable use and enjoyment of the common property”. Ms Corby has a right to this reasonable use of the common property. In my view she was appropriately exercising this right in standing on the parking spot to discuss issues in relation to it with, and to express her views on the subject to, Mr King.

37.Seventh, no-one from the executive committee or manager had told Ms Corby about the proposal in relation to the parking spot, or explained the basis for it. The decision of the executive committee on 11 April 2018 had a direct effect on Ms Corby, indeed an effect greater than on any other unit owner. The creation of the visitor parking spot had a direct impact on Ms Corby’s access to her unit. Ms Corby’s evidence was that Mr King acknowledged this. In these circumstances I think that the executive committee or manager should have discussed the issue with her, and advised her of the effect of the proposed decision and the reasons for it, and given her an opportunity to express her views. In the absence of them doing so, I do not think her reaction towards Mr King was unreasonable, or a breach of rule 5. Further, before issuing the infringement notice they should have talked to her and obtained her side of the story.

38.Eighth, if someone had spoken to Ms Corby they would have found out that she was in fact quite disabled. She uses a walker and a portable oxygen cylinder. Due to her ongoing medical issues, in her view ambulance and portable trolley access is required to her unit at all times. Access is also required by Ms Corby and others assisting her to the unit. On this basis, I think that at the very least Ms Corby’s disability was relevant to the decision by the executive committee, and to the issuing of the rule infringement notice. The failure of the executive committee or manager at any time to talk to Ms Corby meant that this was not taken into account.

39.There was some suggestion that the manager had had difficult dealings in the past with Ms Corby, but the Tribunal questioned presentation of evidence on this subject because no notice had been given of it in the pre-hearing processes, and the evidence was not pressed by the respondent.[27] But I note that even if there had been difficult interactions in the past, this is no basis for failing to talk to Ms Corby about these issues: indeed, in my view, it makes the failure to consult more significant, since without such a fair process the decisions made may be inappropriately influenced by these past experiences.

[27] Transcript of proceedings 13 February 2019 at pages 34-35

40.In some merits reviews proceedings in other contexts, the failure to consult or provide a fair process to the person affected is remedied by the tribunal hearing. I do not think this is the case here. There was no such fair process before the rule infringement notice was issued. The Tribunal hearing does not cure this. The Tribunal was not asked to issue a new infringement notice, and probably could not do so. As noted there were also a range of other problems with the decision.

41.Ms Wilde argued appropriately and forcefully that requiring the executive committee to consult with Ms Corby before making the decision on 11 April 2018 and issuing the infringement notice and invoice was imposing too high a standard on a volunteer committee. I think that this general point is well made, and the limited resources and time available to executive committees to carry out their functions is a consideration in matters concerning the Act. But I do not agree that in the circumstances of this case requiring some discussion with Ms Corby is setting too high a standard. As noted several times above, in this case the executive committee made a decision which had a more significant impact on Ms Corby than any other unit owner. But there was no communication with her about it. The committee then considered and acted on the basis of a report from Mr Mansfield in issuing an infringement notice with no communication with Ms Corby, and without getting her side of the story. As discussed below, it seeks also to recover expenditure from Ms Corby with no communication with her concerning its decisions, indeed without any indication from the executive committee or manager that they believed Ms Corby had done something wrong and further should pay the costs of issuing the infringement notice. In my view this is an unfair process which does not show respect to Ms Corby as a unit owner directly and significantly affected by the decisions.

42.Mr Mansfield indicated that this was the first infringement notice that he had issued for this particular complex.[28] Providing a fair process in doing so would not therefore be particularly onerous. He also suggested that there was some urgency about getting the sign painted.[29] But Ms Corby gave evidence that there had never been any markings in front of any units for the last 25 years.[30] In these circumstances there does not seem any basis for suggesting that the creation and painting of the parking spot, and then issuing of the infringement notice and invoice were so urgent that they could not have been discussed with Ms Corby as the person most directly affected.

[28] Transcript of proceedings 13 February 2019 at page 39

[29] Transcript of proceedings 13 February 2019 at page 41

[30] Transcript of proceedings 13 February 2019 at page 18

43.For these reasons the Tribunal thinks that, on a merits review, the decision to issue the rule infringement notice was not the correct or preferable decision. The Tribunal does not think that the executive committee could have had a ‘reasonable belief’ that rule 5 had been breached, and on its review the Tribunal does not think that the rule was breached. The Tribunal does not think that a rule infringement notice should have been issued. The Tribunal will make an order repealing the resolution of the executive committee to issue the rule infringement notice. That notice therefore is of no effect.

Recovery of expenditure

44.Section 31 of the Act provides in part that:

Recovery of expenditure resulting from member or unit occupier’s fault

(1)     This section applies if an owners corporation for a units plan has in carrying out its functions incurred an expense, or carried out work, that is necessary because of—

(a)a wilful or negligent act or omission of a member of the corporation, or an occupier of the member’s unit; or

(b)a breach of its rules by a member of the corporation, or an occupier of the member’s unit.

(2)     The amount spent or the cost of the work is recoverable by the owners corporation from the member as a debt.

…

(4)     In this section:

expense, includes a reasonable legal expense reasonably incurred, including a legal expense relating to a proceeding in the ACAT.

work, carried out by an owners corporation, means maintenance or anything else the corporation is authorised under this Act to do.

45.The letter of 14 August 2018 from Tisher Liner FC Law stated that as a result of the breaches of the rules the manager had incurred legal and administrative costs, the breaches were wilful, and therefore Ms Corby under section 31 of the Act was liable for the costs.

46.As discussed above, I do not think that there was a breach of rule 5 for the purposes of section 31(1)(b). Therefore there is no support for the invoice on this basis.

47.It does not seem appropriate to allow the owners corporation to now seek to support the invoice on any other available basis. But there was some discussion of this in the hearing, so I make the following comments. I do not think that Ms Corby’s actions were negligent.[31] Standing on the common property and talking to Mr King did not breach her duty of care to Mr King or the owners corporation. It is unclear what ‘wilful’ means in section 31(1)(a). The actions of Ms Corby were purposeful acts; they were not accidental. But this does not seem enough in this context. The heading to the section refers to “expenditure resulting from member or unit occupier’s fault”. This heading is part of the Act,[32] and in working out the meaning of the provision this must be read in the context of the Act including this heading.[33] It may be therefore that the wilful act must in some way involve fault on the part of the member, such as failure to comply with a lawful obligation like the payment of general fund contributions due under section 80 of the Act. There was no such fault or failure by Ms Corby here.

[31] Unit Titles (Management) Act 2011, section 31(1)(a)

[32] Legislation Act 2001, section 126(2)

[33] Legislation Act 2001, section 140

48.But at any rate the expense must be necessary because of the wilful act and the cost must be reasonably incurred and a reasonable amount.[34] I do not think that the costs were necessary or reasonably incurred. As noted there was no breach of rule 5. Ms Corby stood on the parking spot to discuss issues with Mr King. This response by Ms Corby was appropriate given that no-one had talked to her about the decision of the executive committee, notwithstanding it significantly affected her. No-one obtained her side of the story in relation to the discussion with Mr King. Nor did anyone indicate to her that the manager and committee felt that her conduct was in breach of rule 5, or wilful or negligent, and give her an opportunity to respond before incurring or pursuing the cost. In my view this is a very different situation from pursuing payment of general fund contributions due under section 80 of the Act, where the owner has received a formal notice containing significant information in relation to their obligations.[35]

[34] In the matter of Ruling Tribunal section 31 of the Unit Titles (Management) Act 2011 [2017] ACAT 56 at [55]-[61]

[35] Unit Titles (Management) Act 2011 section 79

49.The amounts spent by the owners corporation which fall within section 31 are a statutory debt which do not require a decision of the executive committee. The debt arises by operation of the section. For the reasons stated, I do not think that the debt arose. Even if I am wrong about this, the executive committee needed to decide to pursue the debt, and it has done so as set out in the letter of 14 August 2018, and subsequent actions. I will make an order repealing the resolution of the executive committee that the cost of the infringement process be recovered from and invoiced to Ms Corby. The invoice therefore is of no effect. Ms Corby has also asked for an order that the financial statements be amended. I think this is appropriate, and I will include this in the order.

………………………………..

Senior Member R Orr QC

HEARING DETAILS

FILE NUMBER:	UT 33/2018
PARTIES, APPLICANT:	Patricia Maree Corby
PARTIES, RESPONDENT:	The Owners – Units Plan 1035
COUNSEL APPEARING, APPLICANT	N/A
COUNSEL APPEARING, RESPONDENT	Nicole Wilde
SOLICITORS FOR APPLICANT	N/A
SOLICITORS FOR RESPONDENT	Tisher Liner FC Law Pty Ltd
TRIBUNAL MEMBERS:	Senior Member R Orr QC
DATES OF HEARING:	13 February 2019