Fan v Owners Corporation Up 4787 (Unit Titles) - [2021] ACAT 15

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

FAN v OWNERS CORPORATION UP 4787 (Unit Titles) [2021] ACAT 15

UT 27/2020
Catchwords: UNIT TITLES – use of common property – security and parking arrangements – application disputing decisions of a General Meeting and Executive Committee – Tribunal’s powers under section 129 of the Unit Titles (Management) Act 2011 – merits review – public health emergency declaration – where meetings held subject to COVID-19 public health measures – application of COVID-19 legislative and regulation amendments – compliance with COVID-19 provisions – application dismissed

Legislation cited: Unit Titles Legislation Amendment Act2020 ss 119, 120, 145
Unit Titles (Management) Act2011 ss 6, 19, 45, 60, 129, sch 2, 3

Subordinate

Legislation cited: Unit Titles (Management) Amendment Regulation2020 (No 1) s 4
Unit Titles (Management) Regulations 2011 ss 10, 11

Tribunal:Senior Member L Beacroft
Date of Orders:  3 March 2021
Date of Reasons for Decision:         3 March 2021
AUSTRALIAN CAPITAL TERRITORY          )
CIVIL & ADMINISTRATIVE TRIBUNAL     )          UT 27/2020

BETWEEN:
TINGYU FAN
Applicant

AND:
OWNERS CORPORATION UP 4787
Respondent

TRIBUNAL:Senior Member L Beacroft

DATE:3 March 2021

ORDER

The Tribunal orders that:

The application is dismissed.
………………………………..
Senior Member L Beacroft

REASONS FOR DECISION

Background

Mr Tingyu Fan (the applicant) owns a unit (the unit) in a complex in Canberra (the complex) and applied for various orders against the Owners Corporation UP 4787 for the complex (the respondent). In summary, the applicant disputed decisions made at a General Meeting (GM) and by the Executive Committee (EC) about security and parking arrangements at the complex. The legislation relevant to this dispute is the Unit Titles (Management) Act2011 (the Act) and the Unit Titles (Management) Regulations 2011 (the Regulations). For the reasons set out below the Tribunal makes the order set out above to dismiss the applicant’s application.

Parties’ submissions

Summary of applicant’s claims

During the proceedings Mr Fan withdrew some of his claims[1] and clarified that he sought the following orders:[2]
1)Apology for communications regarding alleged dog issues: an order that the respondent apologise to Mr Fan about correspondence he received from the unit complex manager about alleged incidents where his dog urinated at the front entry. Mr Fan denies this occurred, and the respondent has not proceeded with an infringement notice, or charged Mr Fan for any cleaning costs.[3]
2)Declaration that the decisions by the GM about security arrangements involving CCTV and special levies are void or that they are repealed: an order that the GM held on 30 July 2020 was not held consistent with the Act, any motions passed at the GM are not valid and do not have merit,[4] voting was not transparent in that members could not see the voting occur,[5] the poll distorted the voting in that votes were not of equal value but proportionate to the unit entitlement held by the owner,[6] the developer exercised three or more proxies contrary to the Act,[7] and the special levies for installing CCTV and a contingency fund for building improvements allegedly approved at the GM are not payable and must be refunded.[8]
3) Declaration that the decision by the EC about parking arrangements is void or that it is repealed; Mr Fan seeks an order that an agreement between the respondent and Parking Enforcement Services Pty Ltd (Wilsons Parking) (the Wilsons Parking Agreement) is not valid, in that the EC was not authorised to enter into the Wilsons Parking Agreement; that the current parking signage and enforcement of this signage by Wilsons Parking is inconsistent with section 19(2) of the Act and should be removed and not enforced; and that the parking fine issued by Wilsons Parking to a Kia Sedan on 28 July 2020 for “exceeding time limit” in the sum of $65[9] (the relevant parking fine) is invalid and should be withdrawn.
[1] Transcript of proceedings 9 November 2020 at page 6
[2] Transcript of proceedings 9 November 2020 at pages 6, 7-11
[3] Witness Statement Tingyu Fan 6 October 2020 at [2]-[7]
[4] Transcript of proceedings 9 November 2020 at page 18
[5] Transcript of proceedings 9 November 2020 at page 23
[6] Witness Statement Tingyu Fan 6 October 2020 at [22]
[7] Applicant’s application, dated 14 September 2020 at [10] citing Schedule 3 section 3.27 to the Act
[8] Witness Statement Tingyu Fan dated 6 October 2020 at [15]-[24]
[9] Application submitted 3 August 2020
Mr Fan provided evidence that he leased another vehicle at the time the relevant parking fine was issued.[10] He claims that it was issued to Mr Fan’s cleaner, and Mr Fan claims that she is his tradesperson and therefore entitled to park where she did given other tradespersons park there.[11] However, in his evidence Mr Fan stated that if the relevant parking fine is validly issued then he agrees he should pay it, even though it was his cleaner’s car.[12]
Summary of respondent’s claims
[10] Letter from Lennox Motors dated 22 October 2020, attachment to applicant’s response to respondent’s final submission
[11] Witness Statement Tingyu Fan dated 6 October 2020 at [8]-[14]
[12] Transcript of proceedings 9 November 2020 at page 9; Witness Statement Tingyu Fan dated 6 October 2020 at [13]
The respondent denies the applicant’s contentions and opposes the orders.[13] In summary, the respondent’s response to the applicant’s claims is as follows:
1) Apology for communications regarding alleged dog issues
[13] Transcript of proceedings 9 November 2020 at pages 11-16
Given the infringement notice concerning alleged dog issues was not issued, no cleaning fee was imposed for these, and only a warning given to Mr Fan, the respondent contends there is no order required to be made by the Tribunal.[14]
2) Declaration that the decisions by the GM about security arrangements involving CCTV and special levies are void or that they are repealed
[14] Respondent’s submissions in reply dated 14 September 2020 page 5
The respondent contends that at the first AGM on 18 February 2020 (FAGM) the EC was “clearly mandated…to address CCTV and Ivy Security as a matter of urgency”.[15] The EC then conducted a process for obtaining quotations and received two. A GM was held on 30 July 2020 to approve the quotation that the EC recommended, to impose a special levy to meet the costs of these works, and to impose an additional special levy for contingency building improvements. The GM was conducted while the COVID-19 emergency declaration was declared in the ACT, and the EC conducted the GM in a manner that it contends was necessary given the latter declaration.[16]
[15] Respondent’s submission filed 8 December 2020 page 1; and Minutes of the FAGM Items 10.2, 10.6 at page 102
[16] Respondent’s submission filed 8 December 2020 pages 1-3
The respondent also contends that the issue raised by the applicant about the developer’s votes is misconceived and based on a misreading of the relevant provision: section 3.27, Schedule 3 to the Act prohibits a developer from exercising more than three proxy votes when acting as a proxy under a contract for sale, unless certain requirements are met. However, in this case the developer was not exercising proxies, but appointed the Chair as its proxy for the seven votes related to the units it then owned, which is not a contravention of the Act.[17]
[17] Respondent’s submissions in reply dated 14 September 2020 page 10
The respondent provided evidence to support its contention that the GM was conducted as follows. A notice dated 8 July 2020 of a GM to be held on 30 July 2020 was provided to all unit holders. The notice included a notice of three Motions:
(a)To approve a quotation for CCTV provided by ARA Security by ordinary resolution.
(b)To approve a special levy to fund the above CCTV works by special resolution.
(c)To approve a further special levy to allow for contingency building improvements by special resolution.[18]
[18] Respondent’s submission dated 8 December 2020 pages 4-42
Prior to the meeting, owners were provided with procurement and related documents on a shared virtual hub with owners, further information and answers to queries were provided at two forums conducted in July 2020, and also queries were answered and shared on the hub with owners. Although Mr Fan denied he attended the pre-meeting forums,[19] the respondent submitted a number of witness statements including a screen shot of Mr Fan raising an issue to evidence that Mr Fan participated in a forum about the GM on 1 July 2020.[20] In pre-meeting documents the EC explained, among other matters, that the vote would be by proxy due to COVID-19 restrictions for most owners, and it was also explained what would occur if a quorum was not reached at the GM.[21] Although Mr Fan claims that the second unsuccessful quotation was not provided as part of the GM documentation,[22] the respondent submitted evidence that this quotation was provided to members on the hub on 20 June 2020,[23] which they confirmed in a later submission.[24]
[19] Transcript of proceedings 9 November 2020 at page 17
[20] Respondent’s submission dated 8 December 2020 pages 113-116
[21] Respondent’s submission dated 8 December 2020 pages 1-59, 5
[22] Applicant’s submission dated 18 January 2021
[23] Respondent’s submission dated 14 September 2020, attachment C
[24] Respondent’s submission dated 18 January 2021
At the GM, personal attendance was restricted and only the EC members, Civium staff (strata managers), and a unit holder (who called for a poll as explained below) were present. Other unit holders voted by proxy or absentee. The Minutes[25] show that a poll vote was called for by a member present at the meeting for each of the three Motions, that a poll was conducted, that each of the Motions was passed, and that the three Motions each met the voting thresholds to be passed by a significant majority in each case. The respondent submitted detailed records of the vote for each Motion.[26] Due to the limited attendance in person of unit holders, the meeting had a reduced quorum – after the GM, the required statutory notice was provided to owners.[27] No owner followed up the Notice by raising a petition to revoke the decisions, and therefore the decisions took effect on 28 August 2020.[28]
3) Declaration that the decision by EC about parking arrangements is void or that it is repealed
[25] Respondent’s submission dated 8 December 2020 pages 43-59
[26] Respondent’s submission dated 8 December 2020 pages 50-59
[27] Respondent’s submission dated 8 December 2020 pages 48-50
[28] Unit Titles (Management) Act2011 Schedule 3 section 3.11
The respondent contends that the Inaugural Minutes dated 2 December 2019[29] were acknowledged at the FAGM held on 18 February 2020. The Inaugural Minutes include confirmation that Motion 22 was passed – in summary, Motion 22 was that residents and their visitors could not park on common property, or any area outside of their allocated space within the complex. At the FAGM, the Rules were approved to be registered (with some amendments irrelevant to these proceedings) including Rules 5 and 19 as follows: Rule 5 states that an owner must not use the common property or permit it to be used to interfere unreasonably with the use of, and enjoyment of, the common property by an owner, occupier or user of another unit, and Rule 19 states that all residents are to park in their designated car parking space, unless permission is obtained from the building manager.[30] Also, at the FAGM, Motion 6 was passed, which authorises the EC to execute “appropriate, preventative and on-going maintenance contracts relative to the high-quality upkeep of [the complex]”.[31] The FAGM Minutes further note that quotations for CCTV to improve security were in the process of being obtained for the EC to consider, and that there was some discussion of better signage in the common property, and some emerging parking issues.[32]
[29] Respondent’s submission dated 8 December 2020 pages 69-78, 99
[30] Respondent’s submission dated 8 December 2020 pages 93, 96, 100, 104, 107
[31] Respondent’s submission dated 8 December 2020 page 100
[32] Respondent’s submission dated 8 December 2020 page 102
At a meeting of the EC on 22 April 2020, the Minutes show that the EC decided to proceed to engage Wilsons Parking.[33] The EC entered into the Wilson’s Parking Agreement on 30 April 2020, commencing 1 May 2020 for one year. Under the contract, the respondent is liable for the costs of initial parking signage, Wilsons Parking is responsible for enforcement, and the management fee payable by the respondent under the contract is $0, with Wilson Parking receiving monies from fines it issues for non-compliance with parking requirements at the complex to recoup its costs.[34]
[33] Respondent’s submission dated 8 December 2020 page 122
[34] Respondent’s submission dated 8 December 2020 pages 108-112
The respondent contends that Motion 22, shown as passed in the Minutes for the meeting on 2 December 2019 that were then accepted at the FAGM on 18 February 2020, and the related Rules (Rules 5 and 19) passed at the FAGM, provide the basis for prohibiting parking in common areas unless otherwise specified. The respondent further contends that Motion 6 at the FAGM on 18 February 2020 authorised the EC to sign a contract with Wilsons Parking.[35] The respondent contends that the agreement with Wilsons Parking ensures that all owners and their guests have the opportunity for reasonable use and enjoyment of the common property, while giving access to emergency services, for example the ACT Fire Brigade,[36] consistent with the Act. On this basis, the respondent contends that the relevant parking fine is valid and payable.[37]

Legislation

[35] Respondent’s submissions in reply, 14 September 2020 page 4
[36] Transcript of proceedings 9 November 2020 page 12
[37] Respondent’s submissions in reply, 14 September 2020 page 6; respondent’s submission dated 8 December 2020 pages 121-122

Under the Act the EC can “engage or employ people on the terms it considers appropriate to help in the exercise of the corporation’s functions” including service contractors.[38] This power is limited to an engagement on a “short-term-basis” or for “functions other than those for which a …service contractor would usually be engaged to undertake”.[39] A service contract can be entered into by ordinary resolution. If it is for more than three years, a special resolution is required and if not obtained then the service contract is void.[40]
[38] Unit Titles (Management) Act2011 section 45(1)
[39] Unit Titles (Management) Act2011 section 45(2)
[40] Unit Titles (Management) Act2011 section 60(3)-(4)
At the time of the GM (30 July 2020), a COVID-19 Declaration was in place,[41] which in summary required the following: “avoid large crowds… keep 1.5 metres apart whenever possible… continue good hand and respiratory hygiene… stay home if you are unwell and get tested if you are experiencing any COVID-19 symptoms”.[42] Following an amendment to the Act that commenced on 30 April 2020,[43] the Act allows for a general meeting to be held virtually,[44] and for a EC meeting to be held virtually,[45] provided owners can hear or otherwise know what others are saying. Also, an amendment to the Regulations commencing 1 May 2020 states that an owners corporation and an EC are exempt from any requirements in the Act, schedule 2 or schedule 3, that requires members of the owners corporation or the executive committee to be physically present at a meeting.[46] On 1 November 2020, amendments to the Regulations commenced about voting by virtual means to support the above mentioned new provision for virtual meetings – these amendments enable virtual voting, provided that the motion that is to be decided at a virtual meeting is not amended at the meeting.[47]
[41] Public Health (Emergency) Declaration Further Extension 2020 (No 10)
[42] ACT COVID-19 Update dated 20 July 2020
[43] Unit Titles (Management) Act 2011, as amended by Unit Titles Legislation Amendment Act2020 (A2020-4)
[44] Unit Titles (Management) Act 2011 Schedule 3 section 3.1(2)-(3), as inserted by Unit Titles Legislation Amendment Act2020 (A2020-4), section 120
[45] Unit Titles (Management) Act 2011 Schedule 2 section 2.8(3)-(4), as inserted by Unit Titles Legislation Amendment Act2020 (A2020-4), section 119
[46] Unit Titles (Management) Regulation 2011 section 11, as inserted by Unit Titles (Management) Amendment Regulation2020 (No 1) (SL2020-17), section 4
[47] Unit Titles (Management) Regulation 2011 section 10, as inserted by Unit Titles Legislation Amendment Act 2020 (A2020-4), section 145
The Act empowers the Tribunal to make orders in relation to disputes between a unit holder, in this case Mr Fan and the owners corporation for a units plan, in this matter.[48] Section 129 sets out the kinds of orders the Tribunal may make, and it includes the power to make a declaration that a meeting of the members, the EC or a resolution is void due to irregularity;[49] to repeal or amend a resolution of a meeting or EC based on a merit review of the resolution;[50] and “any other order it considers reasonably necessary or convenient to resolve a dispute under this part”.[51] The Tribunal’s powers are broad but subject to the objects of the Act which includes to “assist in the resolution of disputes”.[52]

Findings

1) Apology for communications regarding alleged dog issues
[48] Unit Titles (Management) Act 2011 section 129
[49] Unit Titles (Management) Act2011 section 129(1)(e)
[50] Unit Titles (Management) Act2011 section 129(1)(f)
[51] Unit Titles (Management) Act2011 section 129(2)
[52] Unit Titles (Management) Act2011 section 6(c)

The Tribunal dismisses the applicant’s application for it to order an apology. The Tribunal’s powers under section 129 of the Act are provided to assist in the resolution of disputes. In this case, the Tribunal finds that the dispute is not current and has been resolved, in that the respondent has not proceeded with any infringement action. The Tribunal’s powers are not available to respond to hurt feelings, which appears to be the basis of the applicant’s submissions.
2) Declaration that the decisions by the GM about security arrangements involving CCTV and special levies are void or that they are repealed
The Tribunal dismisses the applicant’s application in regard to this issue.
The Tribunal has undertaken a merits review of the decisions made at the GM about the preferred service provider for CCTV and the two special levies, and confirms each of these decisions. The Tribunal finds that the process for selecting the preferred service provider was professionally undertaken, in that a “Requirements Outline” document was developed and there was a competitive process with two quotations received. These quotations were analysed and follow-up meetings were held with the two contractors that quoted. All essential information was shared in a timely manner with members before the GM, and the reasons stated by the EC for recommending the quotation by the preferred service provider are coherent.[53] The Tribunal finds that each of the decisions to impose special levies are reasonable in the circumstances of this case. One motion for a special levy follows on from the Motion to approve the installation of CCTV by the preferred service provider, and the other is a motion about a special levy that is prudent given that the complex is new and establishing itself. The Tribunal confirms the merit of these decisions. There is no evidence of conflict of interest.
[53] Respondent’s submissions dated 8 December 2020 and 21 January 2021
The Tribunal has considered the issue of whether the GM was properly conducted under the Act. If the GM was not conducted in accordance with the Act it may be that the decisions would be void and that the decisions would need to be considered by a GM for ratification or otherwise. However, this is not the case here, and the Tribunal finds that the GM was conducted in accordance with the Act.

At the time of the GM, the Act and Regulations allowed a meeting to be conducted virtually. Unfortunately, the Regulations to guide voting other than in person had not been notified on the date of the GM. In the absence of this guidance, the meeting was conducted by proxy and absentee voting in order to meet the requirements of the Declaration. The Tribunal notes that there were no amendments to the motions voted on at the GM, which is consistent with the Regulations to guide voting other than in person that were notified after the GM.[54] At the time of the GM, the Act provided an exemption from any requirements in the Act, schedule 2 or schedule 3, that requires members of the owners corporation or the executive committee to be physically present at a meeting. The inability to personally observe the vote, which the applicant claims is a lack of transparency, is not a reason for finding that the GM was conducted contrary to the Act.
[54] See above at [15]
The Tribunal further finds that a poll was called for, it was conducted consistent with Act, and that voting records submitted by the respondent are evidence of the accuracy of count.[55] The fact that the poll had an effect on the value of votes and the ultimate outcome of the vote, is not a reason to find that the vote was conducted contrary to the Act as the applicant claims; on the contrary, this is what is prescribed when a poll is called for under the Act.[56]
[55] Respondent’s submissions dated 8 December 2020 pages 51-59
[56] Unit Titles (Management) Act2011 Schedule 3 section 3.28
The Tribunal further finds that there was no contravention of section 3.27, Schedule 3 to the Act, about the developer’s votes. Section 3.27 prohibits a developer from exercising more than three proxy votes when acting as a proxy under a contract for sale unless certain requirements are met. However, in this case the developer was not exercising proxies but appointed the Chair as its proxy for the seven votes related to the units it then owned, which is not a contravention of the Act.
The Tribunal finds that the GM meeting was conducted consistent with the Act and that it was a valid meeting.
3) Declaration that the decision by EC about parking arrangements is void or that it is repealed
The Tribunal dismisses the applicant’s application in regard to this issue.
The Tribunal confirms the merits of the decision of the EC to enter into the Wilsons Parking Agreement. It is at no cost to the body corporate, delivers safe and appropriate parking management services in the common areas of the complex, including management of emergency services access, is only for one year, and will end on 30 April 2021. The fact that one owner is inconvenienced in their use of the common property by the Wilsons Parking Agreement is not evidence that it contravenes the Act. Section 19 guarantees “all members of the corporation” reasonable use and enjoyment of the common property. In this case, the Tribunal finds that the Wilsons Parking Agreement provides an effective mechanism by which all owners can have the opportunity for reasonable use and enjoyment of the common property, while giving access to emergency services, for example the ACT Fire Brigade, consistent with section 19 of the Act.
The Tribunal has considered the issue of whether the EC decision was properly authorised under the Act. The Tribunal finds that resolution 6 at the FAGM, while general in scope, is an ordinary resolution that authorises the EC to enter an agreement (along with other necessary basic services) to support safety and proper use of common areas in the complex in its initial period of operation. The Tribunal also finds that, in this case, the Wilsons Parking Agreement is a short-term engagement of services and so within the power of the EC under the Act to ensure safe and appropriate parking management services are in place – in the Tribunal’s view, a short-term agreement for parking services for a new complex can be up to one year, given the necessary infrastructure involved such as signage.
The Tribunal notes that the Wilsons Parking Agreement will expire shortly, and makes the observation that it may be prudent for any renewal or new parking agreement to be authorised by a resolution specific to that agreement passed at a GM.
The Tribunal accepts the applicant’s evidence that the relevant parking fine was issued to the applicant’s cleaner, and that it was not his car that was issued the fine. The Tribunal has reviewed the signage and it is clear that the parking contravened it[57] – if other cars were not issued a parking fine when they over-stayed, as the applicant claims, this does not deny the validity of the relevant parking fine. The Tribunal finds that the relevant parking fine is valid. The Tribunal notes that the applicant has stated that he is liable to pay the relevant parking fine if it is validly issued.
[57] Attachment to respondent’s submission dated 7 October 2020
………………………………..
Senior Member L Beacroft

Date(s) of hearing	9 November 2020
Applicant:	In person
Respondent:	Mark Zezulka, authorised representative