Executive Committee Units Plan No 1863 v Kilian (Unit Titles) - [2021] ACAT 81

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

EXECUTIVE COMMITTEE – UNITS PLAN NO 1863 v KILIAN (Unit Titles) [2021] ACAT 81

UT 35/2020
Catchwords: UNIT TITLES – common property – use of common property to store caravans, motor homes, trucks, boats or box trailers – power of an owners corporation to make rules that prescribe how individual unit owners can or cannot use their units – amendment of owners corporation rules – breaches of owners corporation rules – infringement notices – penalty for breach sought – types of orders the Tribunal can make – infringement notice not validly issued – ambiguity in amended rule – application dismissed
Legislation cited: Human Rights Act 2004
Land Titles Act 1925
Land Titles (Unit Titles) Act 1970
Legislation Act 2001
Unit Titles Legislation Amendment Act 2020 (repealed)
Unit Titles Act 2001
Unit Titles (Management) Act 2011 ss 19, 106, 107, 108, 109, 110, 112, 129, sch 4

Cases cited:Scott v Cawsey [1907] HCA 80
The Owners – Unit Plan No 928 v Cochaud [2017] ACAT 66

List of

Texts/Papers cited: DC Pearce, Statutory Interpretation in Australia (LexisNexis 9th edition, 2019)

Tribunal:Senior Member Prof. P Spender

Date of Orders:  1 September 2021
Date of Reasons for Decision:      1 September 2021
AUSTRALIAN CAPITAL TERRITORY          )
CIVIL & ADMINISTRATIVE TRIBUNAL     )          UT 35/2020
BETWEEN:
EXECUTIVE COMMITTEE – UNITS PLAN NO 1863 Applicant

AND:
IRENE KILIAN
Respondent

TRIBUNAL:Senior Member Prof. P Spender

DATE:1 September 2021

ORDER

The Tribunal orders that:
1. The application is dismissed.

…………………………………..

Senior Member Prof. P Spender

REASONS FOR DECISION

The reasons below explain why the Tribunal has made the orders set out above. In the reasons below, a reference to ‘ACAT’ or ‘tribunal’ refers to the ACT Civil and Administrative Tribunal generally, whereas ‘Tribunal’ refers to the current panel. The Owners Units Plan No 1863 is referred to as the ‘Owners Corporation’ or ‘OC’.

Summary of decision

In this case the applicant, presumably on behalf of the Owners Corporation, seeks orders to enforce a rule about parking on common property that was amended by special resolution of the OC in 2019. The OC relied upon the amended rule to issue a rule infringement notice under section 109 of the Unit Titles (Management) Act2011 (UTM Act) to require removal of a caravan. The OC also sought the imposition of a penalty for breach of the amended rule under section 110 of the UTM Act. The Tribunal declines to make the orders sought by the applicant because the rule infringement notice did not satisfy a mandatory requirement under section 109 of the UTM Act. In the alternative, the Tribunal has noted an ambiguity in the present drafting of the amended rule which affects its enforceability and further declines to make the orders sought by the applicant on that ground

Background

This matter concerns residential property, known as ‘The Sanctuary’, at Lyneham, ACT, where the applicant is the Executive Committee (EC) of the OC and the respondent is an owner of unit 29 in Units Plan No. 1863 (UP 1863). The respondent occupied unit 29 with her partner, Mr Wally Kilian. During the relevant period the property was managed by a managing agent, L. J. Hooker Strata ACT. Certain persons performed functions on behalf of L. J. Hooker Strata ACT, namely Tim Maly and Jane Waslin. These persons are referred to in the documents filed in the tribunal as “Strata Manager UP 1863” (Strata Manager/s).
Around February 2019 a complaint was received by the EC of the OC about caravans/campers/boats parked in driveways at the property. The complaint stated that driveways are available for the use of unit occupants provided that any parked vehicle or trailer does not encroach on paths or roads.[1] Around April 2019 further complaints were received from members of the OC regarding the caravan at unit 29. On 10 April 2019 a member of the EC received an email from an owner making the following comments:
We are sending this [email] to let you know of our disapproval with allowing Boats, Trailers and Caravans to be parked within this complex. We feel this has down graded the look of the Sanctuary compared to the lovely area we bought into. This is a beautiful complex and we wouldn’t like it to become a parking area for the above.[2]
[1] Applicant’s submissions dated 16 December 2020, EC Minutes 13 February 2019 page 2
[2] Exhibit A2, witness statement of Keith Orkney dated 14 December 2020 at [4]
The sender of the email later became the proposer (the Proposer) of a motion to amend rule 16, Schedule 4, Rules of UP 1863.[3] Rule 16 regulated the use of common property and sub-rules 16(6) and 16(7) regulated parking on the common property by residents and visitors respectively.[4] At the time, rule 16(6) stated as follows:
Residents may only park registered vehicles on the hardstand immediately in front of the garage of the unit in which they reside and must park so as to not infringe the roadway.[5]
[3] Exhibit A2, witness statement of Keith Orkney dated 14 December 2020 at [5]
[4] Schedule 4, Rules of Units Plan 1863, registered February 2020, attached to the application in UT 35/2020 filed 8 September 2020 page 13
[5] Respondent’s submissions dated 9 February 2021 page 1
The recipient of the email passed on the Proposer’s email to another member of the EC, Mr Keith Orkney, with the following comments:
I agree that our cherished resort look is being replaced by that of a trailer park.[6]
[6] Exhibit A2, witness statement of Keith Orkney dated 14 December 2020 at [4]
The EC minutes dated 17 April 2019 state that the EC began contemplating a rule change and mentioned correspondence advising the occupants of unit 29 about complaints raised by members of the OC.[7] Mr Orkney communicated with the Proposer about a proposed motion to amend rule 16 as follows:
As you are probably know I am on the EC and we are in the process of finalising the AGM papers over the next few weeks.
I wanted to raise a couple of points on the motion.
…
Second, in essence the motion excludes caravans, trucks, boats, trailers and the like from the existing rule. However, some may argue that this means there is now no rule to cover these items, particularly where they are registered in the same way as other vehicles. The accidental implication is that these items which are excluded from vehicles then have no rule applied to them. This means in essence they can be parked anywhere. Obviously not your intention but I thought I should raise that point with you before the AGM papers are finalised.[8]
[7] EC Minutes 17 April 2019 page 2 in applicant’s submissions dated 16 December 2020
[8] Exhibit A2, witness statement of Keith Orkney dated 14 December 2020 at [5]
The Proposer made amendments to text of the motion to amend rule 16(6) so it stated as follows:
(6) Residents may only park registered vehicles (excluding caravans, motor homes, trucks, boats, and box trailers) on the hardstand immediately in front of the garage of the unit in which they reside and must be parked so as not to infringe the roadway.[9] [original emphasis]
[9] Applicant’s submissions dated 16 December 2020, Addendum to the AGM, undated, page 1
This version was distributed to members of the OC for the Annual General Meeting (AGM) that was held on 28 August 2019.[10]
[10] Applicant’s submissions dated 16 December 2020, Addendum to the AGM undated, page 1
The minutes of the AGM of 28 August 2019 state the following:
The chair spoke on this matter and could not recommend this rule change, as it would be difficult to enforce.
[A member of the EC] informed the owners that the Executive Committee had not taken a view about whether the practice was acceptable or not. He noted that the motion was on the agenda because an owner had put this proposal forward.[11]
[11] Applicant’s submissions dated 16 December 2020, Minutes of the Reduced Quorum AGM held 28 August 2019 page 12
At the AGM, the Proposer spoke on the motion with words to the effect that the EC had declined to propose the motion because it considered the motion to be divisive. The Proposer expressed the view that the vehicles were obtrusive.[12]
[12] Applicant’s submissions dated 16 December 2020, Minutes of the Reduced Quorum AGM held 28 August 2019 page 13
At the AGM, the respondent, Ms Kilian, read her objections to the motion. She advised that “the large driveway for their caravan had been a factor in deciding to purchase Unit 29 because the caravan is part of their lifestyle”.[13]
[13] Applicant’s submissions dated 16 December 2020, Minutes of the Reduced Quorum AGM 4 September 2019 page 13
The Proposer agreed to make amendments to provide for temporary parking of vehicles, to withdraw the motion and review the wording so that it could be reconsidered at a proposed General Meeting (GM) at which other proposed rule changes would be discussed.[14]
[14] Applicant’s submissions dated 16 December 2020, Minutes of the Reduced Quorum AGM 4 September 2019 page 13
On 4 December 2019 a GM of the OC passed a motion by special resolution in the form of the amended rule 16(6).[15] The explanatory notes to the resolution stated as follows:
The genesis of the proposed changes comes from the number of large vehicles that are currently (or previously) parked on The Sanctuary common property … and are causing nuisance and annoyance to other residents. These vehicles are considered a blemish on the streetscape as they affect the general appearance of the Sanctuary which is otherwise noted for its lawns, trees and gardens. The presence of these vehicles is an open invitation for other residents to do the same and leaves an unfavourable impression on prospective buyers. Anecdotally they have a negative impact on property values. This can create a degree of disharmony with nearby residents.
These large vehicles also present a public safety hazard as they block vision of drivers and neighbours when backing out from their garages and driveways. Elderly people and children, walking on the roadways and footpaths, are at particular risk.[16]
[15] Applicant’s submissions dated 16 December 2020, Minutes of a Reduced Quorum General Meeting 4 December 2019 page 6
[16] Applicant’s submissions dated 16 December 2020, Minutes of Reduced Quorum General Meeting 4 December 2019 page 6
The minutes of the GM state that the Proposer of the motion had amended the resolution due to numerous comments.[17] However, the following discussion was also noted in the minutes:
*It was mentioned the ambiguity around the amendments, it is a significant amendment. These retrospective changes are an unfair violation to owner’s [sic] rights.
Tim Maly [the Strata Manager at the time] spoke on a misunderstanding as most of the rules are retrospective – several amendments have been approved over the years by the owners. Additional amendments are required from time to time and this is what is happening now.
… this rule [is] a sensible motion. …
*Retrospective or not all – from an owner – Tim Maly informed if it is not retrospective then there is no point in changing the motion.
… the motion should be mentioned to be retrospective.[18]
[17] Applicant’s submissions dated 16 December 2020, Minutes of Reduced Quorum General Meeting 4 December 2019 page 6
[18] Applicant’s submissions dated 16 December 2020, Minutes of Reduced Quorum General Meeting 4 December 2019 pages 7-8
The amended motion was carried as a special resolution and 50 votes were cast in favour of it.[19]
[19] Applicant’s submissions dated 16 December 2020, Minutes of Reduced Quorum General Meeting 4 December 2019 page 8
The amended rule 16 was registered with the Access Canberra Land Titles Office on 28 February 2020.[20]
[20] Application dated 8 September 2020, Schedule 4, Rules of Units Plan 1863, registered February 2020
The text of the registered version of the rules contained explanatory notes. The full text of the registered amended sub-rules 16(6) and (7) (Amended Rule 16) is as follows:
(6) Residents may only park registered vehicles (excluding caravans, motor homes, trucks, boats and box trailers) on the common property hardstand in front of the garage of the unit in which they reside and must be parked so as not to infringe the roadway.
Notes
1Sub-clause (6) is not intended to apply for a 24 hour period where an excluded vehicle is being loaded or unloaded.
2In sub-clause (6) an excluded truck does not include small trucks, vehicles used for professional purposes by the resident.
(7) Visitors may only park registered vehicles (excluding caravans, motor homes, trucks, boats and box trailers) in the spaces signposted for visitor parking or in accordance with (6) of this rule with the permission of the owner, occupier or user of a unit and must be parked so as not to infringe the roadway.
Notes
1Sub-clause (6) is not intended to apply for a 24 hour period where an excluded vehicle is being loaded or unloaded.
2In sub-clause (6) an excluded truck does not include small trucks, vehicles used for professional purposes by the resident.[21]
[21] Application dated 8 September 2020, Schedule 4, Rules of Units Plan 1863, registered February 2020 page 13
In a letter dated 24 March 2020 distributed to members of the OC, the EC drew the owners’ attention to the changes in Amended Rule 16.[22] The letter also stated that the “amended Rules were registered in February 2020 and are now to be observed”.[23] However, “some of the vehicles covered by the new Rule are still on common property.”[24]
[22] Applicant’s submissions dated 16 December 2020, EC Letter dated 24 March 2020
[23] Applicant’s submissions dated 16 December 2020, EC Letter dated 24 March 2020
[24] Applicant’s submissions dated 16 December 2020, EC Letter dated 24 March 2020
On 13 May 2020 the EC instructed the Strata Manager to write to the owners or occupants of those units that had excluded vehicles parked in breach of Amended Rule 16.[25] On 20 May 2020 the Strata Manager sent a letter to the respondent seeking advice on the actions that were being taken to remove the caravan parked in breach of Amended Rule 16.[26] The letter warned that “[i]f at the end of 30 days from the date of this letter the vehicle/s have not been removed, or you have not provided advice on their removal, the Executive Committee will have no option other than to issue you with a rule infringement notice under S.109 the Unit Titles Management Act, 2011 UTMA”.[27] On 8 July 2020 the EC instructed the Strata Manager to issue an infringement notice under section 109 of the UTM Act to owners of three units that continued to park caravans, boats and/or trailers in breach of Amended Rule 16.[28] On 16 July 2020 an infringement notice pursuant to section 109 of the UTM Act was given by the Strata Manager to the respondent. The infringement notice required compliance with Amended Rule 16 by removal of the vehicle immediately or at least by 31 July 2020.[29] The notice noted that the position of the respondent had “not changed” and “from that, the Executive Committee understands that you believe the new Rule does not apply to owners who purchased their units prior to the 2019 AGM”.[30]
[25] Applicant’s submissions dated 16 December 2020, Minutes of Executive Committee Meeting 13 May 2020 page 18
[26] Applicant’s submissions dated 16 December 2020, Strata Manager Letter dated 20 May 2020
[27] Applicant’s submissions dated 16 December 2020, Strata Manager Letter dated 20 May 2020
[28] Applicant’s submissions dated 16 December 2020, Minutes of Executive Meeting 8 July 2020 page 1
[29] Applicant’s submissions dated 16 December 2020, Infringement Notice dated 16 July 2020
[30] Applicant’s submissions dated 16 December 2020, Infringement Notice dated 16 July 2020
During July 2020 a working group was formed by the OC to review the rules of the OC. A letter to the owners from the Strata Manager stated that the EC felt that the opportunity should be taken to “correct some anomalies that have been recognised in the rules and also look at those rules that owners had specifically corresponded about”.[31] Owners have been invited to prepare their own proposals for consideration by the OC at a future AGM.
[31] Applicant’s submissions dated 16 December 2020, Strata Manager Letter 9 July 2020
The OC filed an application in the tribunal on 8 September 2020 seeking the following orders:
As per Rule 16(6) and (7), we seek an order for the owner and occupant of unit 29 to discontinue parking their caravan (an excluded vehicle) on the common property hardstands in front of the garage which they reside (unit 29).
We seek that the respondent also pay the costs incurred by the Owners Corporation in these proceedings.[32]
[32] Application – Unit Titles (Management) Act 2011 dated 8 September 2020 page 2
In submissions subsequently filed, the applicant sought orders that the caravan be removed from the common property of UP 1863 within one month.[33]

The applicant’s submissions

[33] Applicant’s submissions dated 16 December 2020 page 2

The applicant made the following submissions in favour of the orders sought in their application.[34] The relevant submissions are reproduced in full so the ambit of the applicant’s case is clear:
[34] Applicant’s submissions dated 16 December 2020
FACTS
1.     This case is about the application of Unit Plan 1863 (UP1863) Rule 16(6). The Rule states [as follows]:
(6)Residents may only park registered vehicles (excluding caravans, motor homes, trucks, boats and box trailers) on the common property hardstand in front of the garage of the unit in which they reside and must be parked so as not to infringe the roadway.
Notes
1Sub clause (6) is not intended to apply for a 24 hour period where an excluded vehicle is being loaded or unloaded.
2In sub clause (6) an excluded tuck does not include small trucks, vehicles used for professional purposes by the resident.
2.     The common property hardstand begins approximately 5 metres out from the garage at unit 29.
3.     The caravan is in excess of 7 metres long and therefore cannot fit without extending into the common property.
4.     The caravan is too high to be put inside the owner’s garage.
5.     As far as we are aware the owner agrees with these facts.
LAW
6.     The UTMA allows an OC to establish rules that are to be administered by the Executive Committee (EC) on behalf of owners.
7.     The OC for UP1863 has established rule 16(6) at a General Meeting.
The timeline and relevant documents for the establishment of this rule were attached to the submission.[35]
[35] Applicant’s submissions dated 16 December 2020
The submissions continued:
ISSUES
9.     The owner’s purchase of the unit predates the establishment of the rule. The EC believes that the tribunal needs to decide whether the rule can be applied retrospectively.
10.    Most of the 185 units at UP1863 have approximately 2 metres of the driveway in front of their property attached to the property. The remainder of the driveway which varies from about 3 metres to 10 metres in a few cases is part of the common property. There are only three units (72, 73 and 74) that have a driveway attached to their property that would allow a caravan in excess of 7 metres in length to be parked outside the garage and on their property. The EC believes the Tribunal needs to decide if it is equitable to have 3 units that can circumvent this rule and 182 units that cannot.
11.    More, but not all, units could conceivably park a smaller caravan on the property attached to their unit. This is a possible scenario but when this rule was agreed by the OC there were only 6 vehicles that did not comply with the rule. The other five vehicle owners have since complied with the rule and made alternate arrangements for the parking of the item excluded by the Rule. The EC believes the Tribunal needs to decide whether this rule represents an unreasonable limitation on an individual owner use of common property.
12.    The rule also states that any parked vehicle should not infringe the roadway. In some cases, this is not possible where the total length of the driveway is insufficient to accommodate a reasonable sized family vehicle. This is also an issue in some visitor parking bays. The EC believes the Tribunal needs to decide whether this aspect of the rule is unreasonable as it affects many owners.
13.    The EC has the understanding that the owners have stated they will not remove the vehicle under any circumstances.
14.    Short term breaches of this rule by owners, residents and contractors occur often.[36]
[36] Applicant’s submission dated 16 December 2020 pages 1-2

In the submissions, the OC raised the following arguments for the consideration by the Tribunal:
ARGUMENTS
15.    The UTMA requires that owners have reasonable access to common property. The EC is not in a position to determine what that reasonable access is when the OC has established rules that limit that access in a specific manner.
16.    The EC is obliged to administer the Rules and apply them as instructed by the OC. There are other rules that allow some scope for exceptions but not in the case of Rule 16(6). Other Rules that allow for submissions and permission if less than 5% of owners object are not applicable in this case.
17.    If the Rule 16(6) is valid the EC sees no alternative but for the Tribunal to decide in favour of the removal of the vehicle. On the basis that the Rule is valid, and not unreasonable in relation to the requirements of the UTMA then the EC has no alternative but to seek the order outlined below.[37]

The respondent’s submissions

[37] Applicant’s submission dated 16 December 2020 page 2

The orders sought by the respondent were as follows:
1.       We are permitted to continue to keep [our] caravan at Unit 29, The Sanctuary; or
2.       [Amended Rule 16] is withdrawn (or rescinded) and we revert back to the previous Rules of The Sanctuary; or
3.       [Amended Rule 16] is amended to reflect a Retrospective or Grandfather Clause from the date of registration.[38]
…
[38] Respondent’s submissions 9 February 2021
The respondent pointed to the previous rule 16(6) which is stated above.[39]
[39] Respondent’s submissions dated 9 February 2021 page 1
The respondent made various arguments as follows. The Tribunal has attempted to capture most of these arguments below but acknowledges that there is some overlap in the points made:
(a)The process undertaken by the EC to retrospectively introduce this new rule was flawed and inappropriate. The process was marred by insufficient consultation and lack of transparency.
(b)Large vehicles are a common occurrence at the Sanctuary and these are owned by residents (a personal asset), visitors or service providers.
(c)Large vehicles are not a nuisance or annoyance to others or a blemish on the streetscape.
(d)Residents are entitled to park a personal asset (such as a truck, caravan, motorhome, boat or box trailer). This category of vehicles does not present an unfavourable impression on prospective buyers and the presence of excluded vehicles has no negative impact on property values.
(e)The respondent’s caravan is not a safety hazard, does not block the vision of neighbours and has no safety impact on residents using the roadways and footpaths. The caravan does not cause inconvenience to immediate neighbours or any resident.
(f)The 5m exclusive hardstand in front of the unit is significantly larger than most units within the complex.
(g)The matter of aesthetic appreciation is subjective.
(h)The site plan of the Sanctuary shows that the setback of unit 29 and the caravan are well back from the footpath and the roadway.
(i)The caravan does not cause a safety issue to any resident utilising the footpath or road user particularly compared to other residents who park vehicles over the footpath and onto the roadway.
(j)The respondent and her partner have owned a caravan for over 50 years and engaged in an outdoor lifestyle for their entire life. One of the major considerations when purchasing the unit 19 years ago was its large driveway that enabled her to comfortably park the caravan on the property. They were not impeded from doing so by the OC rules until rule 16 was amended.
(k)The Amended Rule 16 has had significant impact on the respondent’s lifestyle, mental and physical health and stress levels since the matter was first raised in February 2019.
(l)The implications of relocating the caravan off site will be a financial strain that has never previously applied and cannot be met.
(m)The respondent cannot meet the additional costs of storage of the caravan off site.
(n)The rule change has taken away a right retrospectively compared to the previous rules and Schedule 4 of the UTM Act. Rules are generally established for future consideration around what can and cannot be done in a complex.
(o)Over the years it has been possible to obtain approval, through the EC, of actions taken by unit owners that were contrary to an existing rule.
(p)This reversal of rights is contrary to the intention of the UTM Act and goes beyond the intent of amending the rules for the Sanctuary to ensure and maintain uniformity for all owners.
(q)The rule change is not within the spirit or the intention of a harmonious and cohesive living environment as it does not take into consideration the individual needs, lifestyle requirements and enjoyment of an owner or resident.[40]
[40] Respondent’s submissions dated 15 October 2020 pages 1-6
The respondent pointed to some additional arguments in their submissions dated February 2021, citing section 108 of the UTM Act. She argued that the Amended Rule 16 or alternative rule (using the language in the amended UTM Act following the passage of the Unit Titles Legislation Amendment Act 2020) is not valid to the extent that it results in the rules being incompatible with human rights under the Human Rights Act 2004, or otherwise being harsh, unconscionable or oppressive. In addition, they made the following points:
(a)The caravan utilises approximately 7.2m of actual space in the driveway therefore encroaches a mere 2.2m onto the common property.
(b)The parking of vehicles that infringe the driveway is a daily occurrence in the complex since the new rule was registered but not one rule infringement notice has been issued to residents by the EC. This demonstrates that the OC has chosen not to pursue these breaches.
(c)By registering this rule the OC has granted a special privilege to the remaining residents of the other 184 units in the complex without the approval of the OC at a general meeting.
(d)The Amended Rule 16 now gives visitors more rights in this area than the respondent as owner.[41]
[41] Respondent’s submissions dated 9 February 2021
In their submissions filed subsequent to the hearing, the respondent made the further additional points:
(a)The rule now excludes the respondent from accessing the common property portion of the driveway.
(b)The Amended Rule 16 is wrong, harsh, unmanageable, unenforceable, targeted, selective, victimising, unfair, unreasonable, discriminating, defensive, not in the spirit or the intention of the UTM Act and invalid.
(c)The new rule takes away an entitlement from an owner who purchased a unit under the previous UP 1863 rule that had no reference to the type of vehicles not wanted in the complex.
(d)This current rule makes no reference to retrospectivity for the benefit of owners already in possession of a restricted vehicle.
(e)By registering this rule the OC has effectively excluded only unit 29 from accessing common property which remains available to the remaining residents of the other 184 units.
(f)This rule impacts only one resident, the respondent.[42]
[42] Respondent’s submissions dated 21 April 2021
A hearing was held in this matter on 22 February 2021. At the end of the hearing the Tribunal made a timetable for submissions to be filed about outstanding issues. The last submission was due on 3 May 2021. Liberty was given to the parties to approach the tribunal should any issues arise.

Post hearing submissions

During the course of this dispute the respondent and the EC raised questions about the potential ‘retrospectivity’ of Amended Rule 16. The respondent argued that the rule was invalid due to its retrospective operation and its incompatibility with human rights. During the hearing of this application the Tribunal suggested that the applicant might consider obtaining legal advice, however the applicant did not file any submissions supporting the validity of amended rule. Generally speaking, the applicant raised questions about the operation of the rule without putting affirmative arguments in support of the amended rule. The submissions filed after the hearing by the Strata Manager on behalf of the applicant[43] substantially repeated its earlier submissions (which are set out above), although it was argued that section 19(2) of the UTM Act provides that the OC must give all members of the OC the opportunity for the reasonable use and enjoyment of the common property. The submissions asserted that the unapproved occupation of the common property by the caravan prevents the applicant from discharging its duty under section 19(2) of the UTM Act and prevents other owners from using the common property of UP 1863. This point was merely asserted. It was not supported by submissions which elaborated the point or by evidence, despite the Tribunal giving liberty to the parties to apply to the Tribunal should any issues arise. The applicant sought the following orders at this point of the proceedings:
Pursuant to section 129(1)(a) the Tribunal orders the respondents to not permit the caravan to occupy the common property of UP1863 for a period greater than 24 hours and
The Tribunal orders the respondents to pay a penalty of five penalty units each.[44]
[43] Applicant’s submissions dated 22 March 2021
[44] Applicant’s submissions dated 22 March 2021 page 2
No submissions were filed by the applicant in reply that were due on 3 May 2021.

The legislation

The application is regulated by republication 11 of the UTM Act. Unless otherwise stated, all references to the UTM Act below are to republication 11. Republication 11 was effective from 1 July 2019 to 29 April 2020. During this period, the relevant special resolution was passed at the GM and the amended rules were registered. Extensive amendments to the UTM Act came into effect on 30 April 2020 pursuant to the Unit Titles Legislation Amendment Act 2020. The relevant version of the Unit Titles Act 2001 (Unit Titles Act) (insofar as it is relevant) is republication version 31 which was effective from 27 April 2016 – 31 May 2020.
The relevant provisions of the UTM Act stated under section 106 that the rules of the owners corporation were constituted by the default rules in Schedule 4 of the UTM Act, but the note to that provision stated that the owners corporation may amend the default rules under section 108:
106 What are the rules of an owners corporation?
The rules of an owners corporation are set out in schedule 4 (the default rules).
NoteThe owners corporation may amend the default rules under s 108.
Pursuant to section 107 of the UTM Act, the effect of the rules are agreements under seal between the owners corporation and each of its members and between each member and each other member under which the corporation and its members agree to be bound by the rules of the corporation.
Subsections 108(1)-(2) stated that an owners corporation may, by special resolution, amend its rules and the amendment takes effect upon registration of a sealed copy of the special resolution:
108 Owners corporation may amend rules
(1)An owners corporation may, by special resolution, amend its rules.
(2)An amendment of the rules of an owners corporation takes effect—
(a)on the registration of a copy of the special resolution making the amendment, certified under the seal of the corporation as a true copy; or
(b)from a later date stated in the resolution. …
‘Registration’ in this provision means registered with the registrar-general under the Land Titles Act 1925 or the Land Titles (Unit Titles) Act 1970.[45]
[45] Definition of ‘registered’ UTM Act Dictionary and definition of ‘registered’ Unit Titles Act Dictionary.
Subsection 108(4) is also relevant to the dispute. At the time, it stated:
(4) An amendment to the rules of an owners corporation has no effect to the extent that it results in the rules—
(a)being inconsistent with this Act or another territory law; or
(b)giving a function to the corporation that is not incidental or ancillary to the exercise of its functions under this Act; or
(c)prohibiting or restricting any dealing (including devolution, transfer, lease and mortgage) with—
(i)an interest in a unit; or
(ii)the equitable estate of a unit owner in the common property; or
(d)prohibiting or restricting the installation, operation or maintenance of sustainability or utility infrastructure.
Subsection 108(5) explained that:
(5) In this section:
amendment, of rules, includes variation, rescission, substitution or addition.
Pursuant to section 109, if there is a belief that a person has breached the rules, the owners corporation may give notice to the person to remedy the contravention via a rule infringement notice:
109 Breach of rules—rule infringement notice
(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 (a rule infringement notice) requiring the person to remedy the contravention.
…
(3)A rule infringement notice must state the following:
(a)that the owners corporation believes the person is contravening, or has contravened, a provision of the rules;
(b)the provision of the rules the owners corporation believes is, or was, contravened;
(c)details sufficient to identify the contravention;
(d)if the owners corporation believes the contravention is continuing—the period (which must be reasonable in the circumstances) within which the person must remedy the contravention;
(e)if the owners corporation believes the contravention is likely to be repeated—that the person must not repeat the contravention;
(f)if the person does not comply with the notice—
(i)the person commits an offence; and
(ii)the owners corporation may, without further notice, apply to the ACAT for an order in relation to the failure to comply with the notice.
…
If a person fails to comply with a rule infringement notice, they commit an offence under section 110 of the UTM Act:
110 Breach of rules—failure to comply with rule infringement notice
(1)A person commits an offence if the person—
(a)is given a rule infringement notice under section 109; and
(b)does not comply with the notice.
Maximum penalty: 5 penalty units.
(2)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 mentioned in the notice in the way detailed for section 109(3)(c).
The UTM Act states in section 112 that the rules of an owners corporation should be interpreted as if the rules were an Act and the Legislation Act applies, as follows:
112 Application of Legislation Act
(1) The Legislation Act applies to the rules of an owners corporation as if the rules were an Act and as if each rule were a section of an Act.
(2) Terms used in the rules of an owners corporation have the same meaning as in this Act, unless the contrary intention appears.
Section 129 of the UTM Act provides for the orders that ACAT can make:
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;
(b)an order requiring a party to exercise a function under this Act;
(c)an order requiring an owners corporation to do a stated thing that is ancillary to a function of the corporation under this Act;
…
(e)a declaration—
(i)that a general meeting or executive committee meeting is void for irregularity; or
(ii)that a resolution of a general meeting or executive committee meeting is void for irregularity; or
(iii)that a rule of the owners corporation is invalid for irregularity;
(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;
…
(j)an order requiring an owners corporation to make or repeal a rule and register a copy of the resolution making or repealing the rule;
…
(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.
As stated above, the applicant raised section 19 of the UTM Act in submissions filed after the hearing.[46] Section 19 states:
[46] Applicant’s submissions dated 22 March 2021
19 Common property
(1)An owners corporation for a units plan holds the common property as agent for—
(a)if all the units are owned by the same person—the owner; or
(b)in any other case—the unit owners as tenants in common in shares proportional to their unit entitlement.
…
(2)The owners corporation must give all members of the corporation opportunity for the reasonable use and enjoyment of the common property.

Consideration

The remedy sought by the applicant was removal of the caravan which involved the Tribunal exercising its powers under section 129(1)(a) by making an order requiring a party to do, or refrain from doing, a stated thing. The power to require the respondent to remove the caravan is based on her alleged breach of Amended Rule 16 and this breach was alleged to be established by the giving of a rule infringement notice under section 109 of the UTM Act. The applicant also sought orders after the hearing about imposing a penalty under section 110 of the UTM Act.
The Tribunal has extensive nominated powers under section 129(1) of the UTM Act and these nominated powers are expanded by section 129(2) of the UTM Act which allow the Tribunal to may make any other order it considers reasonably necessary or convenient to resolve a dispute under this part. Subsection 129(3) goes further by stating that section 129 does not limit the orders the ACAT may make in relation to a dispute under this part. However, section 129 is not a roving remit for the Tribunal to make orders at large. The Tribunal must work within the parameters of the cases that are made by the parties. The Tribunal notes that after the hearing the applicant made a bare assertion that section 19 of the UTM Act applied to the dispute without elaborating this argument or putting on evidence to support it. Similarly, the respondent argued that their caravan should be ‘grandfathered’ under the amended rule but the applicant did not address this argument or the arguments raised by the respondent about whether the amendment had retrospective operation.
In this case, the application sought particular orders under section 129(1)(a) which are predicated upon the enforceability of Amended Rule 16 and the rule infringement notice dated 16 July 2020 in sections 108 and 109 respectively. The Tribunal will proceed on this basis. As stated above, the Tribunal notes that the applicant made a comment about section 19 of the UTM Act but because the comment was late (occurring after the hearing) and unsupported, the Tribunal gives it no further consideration. The late orders sought by the applicant for the imposition of a penalty under section 110(1) are considered below.
There is no dispute that the OC registered the amendments to the rules made by the special resolution in February 2020 pursuant to section 108 of the UTM Act. Pursuant to section 108(2) of the UTM Act the amended rule in Amended Rule 16 takes effect on the registration.

As stated above, the relevant version of section 108 of the UTM Act is the wording of that provision under republication 11. As discussed above, this version of section 108 operated before the extensive amendments to the UTM Act came into effect on 30 April 2020. The new version of section 108 creates additional provisions that contemplate the invalidity of an alternative rule if it results in the rules being incompatible with a human right under the Human Rights Act 2004, or otherwise being harsh, unconscionable or oppressive. The previous section 108 states that an amendment to the rules has no effect if it results in the rules being inconsistent with this Act or another Territory law or other circumstances which are not relevant to the current dispute.
The Tribunal has concluded that the earlier version of section 108 applies to the current dispute and to Amended Rule 16, therefore the provisions that were argued by the respondent which require the Tribunal to consider the validity of an alternative rule by assessing its compatibility with human rights or otherwise being harsh, unconscionable or oppressive are not relevant. However, section 112, which did operate at the relevant time, requires the Tribunal to consider the operation of the Legislation Act. As stated above, the Legislation Act applies to the rules of an owners corporation as if the rules were enacted and as if each rule were a section of an Act. The consequence of this provision is considered below.
Breach of the rules is regulated by section 109 which allows the EC to pass an ordinary resolution to authorise the owners corporation to issue a rule infringement notice if the EC reasonably believes that the person has contravened a provision of the corporation’s rules and the circumstances of the contravention make it likely that contravention will continue or be repeated. The minutes of the EC of 8 July 2020 state that the EC instructed the Strata Manager to “issue an Infringement Notice under section 109 to owners of three units that continue to park caravans and boats at the front of their units”.[47] The Tribunal infers that this instruction to the Strata Manager was pursuant to an ordinary resolution of the EC pursuant to section 109 of the UTM Act.
[47] Applicant’s submissions dated 16 December 2020, Minutes of Executive Committee Meeting 8 July 2020 page 1
Section 110 of the UTM Act states that a person commits an offence if they are given a rule infringement notice under section 109 and do not comply with the notice. The maximum penalty for failure to comply with a rule infringement notice is 5 penalty units. Section 109 nominates certain mandatory inclusions in the rule infringement notice. In particular, section 109(3)(f)(i) states that the notice must state that if the person does not comply with the notice the person commits an offence. The mandatory requirements for information that must be included in a rule infringement notice operated at the time that the rule infringement notice was purportedly given i.e. on 16 July 2020.[48] The rule infringement notice that was given to the respondent on that day did not state the mandatory requirement under section 109(3)(f)(i) of the UTM Act, in particular that if the person does not comply with the notice the person commits an offence. Therefore, there is a question about the validity of the notice. The consequence of the omission is either that the notice is invalid or it at least raises the question of whether the Tribunal should in its discretion make the orders sought by the applicant. The Tribunal considers that the power to make orders requiring removal of the caravan should be predicated upon a rule infringement notice that complies with section 109. Therefore, the orders sought by the applicant pursuant to section 129(1) of the UTM Act are declined on this ground.
[48] Applicant’s submissions dated 16 December 2020, Infringement Notice dated 16 July 2020
As of the filing of submissions in this matter in May 2021, the Tribunal understands that the caravan has not been moved by the respondent. Therefore, the OC may give a further valid rule infringement notice which contains the relevant mandatory requirement in section 109(3)(f)(i), purportedly relying upon Amended Rule 16.
If the Tribunal is wrong about the dispositive effect of the non-compliance with section 109(3)(f), it will now consider whether the Amended Rule 16 can support enforcement action under section 109 of the UTM Act. The Tribunal notes that the alleged breach of the rules is encompassed by Amended Rule 16(6) and therefore does not give further consideration to Amended Rule 16(7).
There is a question about the meaning of the Amended Rule 16(6). An ambiguity was pointed out by Mr Orkney to the Proposer when the motion to amend the rules was first raised. As stated by Mr Orkney in his witness statement, “the implication is that these items are excluded from ‘vehicles’ which means they have no rule applied to them. This means in essence they can be parked anywhere.”[49] Although the motion was amended by the Proposer, the ambiguity was the subject of comment at the GM on 4 December 2019.[50]
[49] Witness statement of Keith Orkney dated 14 December 2020 at [5]
[50] Applicant’s submissions dated 16 December 2020, Minutes of Reduced Quorum General Meeting 4 December 2019 pages 7-8
The Tribunal has concluded that the Amended Rule 16(6) as it is presently drafted contains a significant ambiguity. It is not clear if the exception “registered vehicles (excluding caravans, motor homes, trucks, boats and box trailers)” operates to allow caravans etc to be parked on the common property hardstand in front of the garage or if caravans etc are exempted from the operation of the sub-rule generally so that residents may not park those particular registered vehicles on the common property hardstand. The notes that form part of Amended Rule 16(6) provide some further commentary e.g., about small trucks but do not resolve the uncertainty.
The Tribunal is obliged to apply the Legislation Act under section 112 of the UTM Act as if the rule were a section of an Act when interpreting the amended rule. This may involve some attempt to resolve the uncertainty in the present drafting by the use of intrinsic and extrinsic material, but the Tribunal does not have the benefit of any submissions or evidence that would have assisted this exercise. The interpretative exercise is complicated by the operation of section 110 of the UTM Act which is a penal provision because it creates an offence for failure to comply with a rule infringement notice and imposes a maximum penalty of 5 penalty units. As stated above, the applicant sought orders after the hearing that the Tribunal impose the maximum penalty of 5 penalty units under section 110 of the UTM Act. Therefore, the operation of section 110 of the UTM Act as a penal provision was contemplated by the applicant. The interpretation of penal provisions is generally strict.[51]
[51] DC Pearce, Statutory Interpretation in Australia (LexisNexis 9th edition, 2019) at [9.11], [9.13] citing inter alia, Isaacs J in Scott v Cawsey [1907] HCA 80; (1907) 5 CLR 132, pages 154–5
Presidential Member Robinson made the following comments about the enforceability of an ineffective rule in The Owners – Unit Plan No 928 v Cochaud:
I am not [of] the view that House Rule 6, as currently worded, is of … effect to the extent that is applies to private lot property. I am therefore not satisfied that the Infringement Notice was validly issued, and decline to make the orders sought by the applicant. On that basis, I have little choice but to dismiss the application.[52]
[52] [2017] ACAT 66 at [139]
The present Tribunal will adopt the same approach. There is a question about the enforceability of Amended Rule 16(6) as it is currently worded and in particular if it has sufficient rigour to be the subject of a rule infringement notice under section 109 of the UTM Act. Therefore, the present Tribunal is not satisfied that the rule infringement notice was validly issued and declines to make the orders sought by the applicant. On this alternative basis, the application must also be dismissed.

Conclusion

In the result, the Tribunal declines to make the orders sought by the applicant because the rule infringement notice cannot support orders under section 129 of the UTM Act to require the respondent to remove the caravan which is based on a failure to comply with a rule infringement notice under section 110 of the UTM Act where the rule infringement notice has not included a mandatory requirement under section 109 of the UTM Act. In the alternative, the Tribunal has noted an uncertainty or ambiguity in Amended Rule 16 which affects its enforceability and is not satisfied that the rule infringement notice was validly issued, and declines to make the orders sought by the applicant.
The application is dismissed.
………………………………..

Senior Member Prof. P Spender

Date(s) of hearing:	22 February 2021
Applicant:	Ms J Waslin, authorised representative
Respondent:	In person