Lei v The Owners – Units Plan No 592 & Anor (Unit Titles) - [2023] ACAT 21

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

LEI v THE OWNERS – UNITS PLAN NO 592 & ANOR (Unit Titles) [2023] ACAT 21

UT 25/2022
Catchwords: UNIT TITLES – use of common property – new electricity and water pipes – whether pipes were approved – whether approval could validly have been granted – effect of owners being told the work could proceed – whether minor – whether pipes will unreasonably interfere with the reasonable use and enjoyment of common property by members – remedies
Legislation cited: Legislation Act 2001 ss 126, 132
Unit Titles (Management) Act 2011 ss 20, 23, 112A, 125, 129, sch 2 s 2, sch 3 s 3, Dictionary
Unit Titles Act 2001 Dictionary

List of

Texts/Papers cited: Macquarie Dictionary Online (2023)

Tribunal:Senior Member R Orr KC

Date of Orders:  29 March 2023
Date of Reasons for Decision:      29 March 2023
AUSTRALIAN CAPITAL TERRITORY          )
CIVIL & ADMINISTRATIVE TRIBUNAL     )          UT 25/2022

BETWEEN:

ROCKY LEI
Applicant

AND:

THE OWNERS – UNITS PLANS NO 592
First Respondent

DARGADS PTY LTD
Second Respondent

TRIBUNAL:Senior Member R Orr KC
DATE:29 March 2023

ORDER

The Tribunal orders that:

The Owners – Units Plan No 592 (Owners Corporation), acting through the executive committee, and the second respondent must investigate alternative routes for providing water and electricity to unit 3 which do not pass in front of the windows for units 7 and 8.
If there are one or more such alternative routes, they must use their best endeavours to ensure that an alternative route is appropriately approved under the Unit Titles (Management) Act 2011 (Act).
If there is an alternative route and this is appropriately approved the Owners Corporation, through the executive committee, and the second respondent can implement that alternative. The costs of doing so should be shared, with half the cost met by the Owners Corporation and half by the second respondent.
If there is no appropriate alternative, or an alternative route is not appropriately approved by 26 July 2023, the Owners Corporation, acting through the executive committee, and the second respondent must use their best endeavours to ensure that the current arrangement is appropriately approved under the Act by 27 September 2023.

………………………………..

Senior Member R Orr KC

REASONS FOR DECISION

These proceedings concern an amended application under the Unit Titles (Management) Act 2011 filed on 6 July 2022 by Rocky Lei (applicant or Mr Lei), who owns unit 7 in Units Plan 592 (UP 999), against The Owners – Units Plan No 592 (Owners Corporation or first respondent). Mr Lei and Mrs Lei sell tailored curtains and do clothing alterations from unit 7.[1] Mr and Mrs Lei attended the hearings and were assisted by their son, Andy Lei.
[1] Transcript of proceedings, 6 September 2022, page 25
These proceedings were originally only against the manager for the Owners Corporation, Civium (manager), and then only the Owners Corporation. As noted below, the Owners Corporation unfortunately did not participate in the hearings, though representatives of the manager did to a limited extent.
By order of the tribunal, Dargads Pty Ltd, the owner of unit 3, was joined as a second respondent (second respondent or Dargads). The directors of Dargads, Rebecca Guymer and Daniel Allen, participated in the hearing. They run a hair salon. They bought the unit in 2021 and arranged for a new fit out for their unit, and new water and electricity pipes to their unit which run on the common property along the frontage of Mr Lei’s unit 7, and unit 8 next door.
In an amended application, Mr Lei sought the following orders:
(a)pursuant to section 129(3) Unit Titles (Management) Act, a declaration that the easement for the benefit of unit 3 across the frontage of units 7 and 8 has not been validly granted;
(b)pursuant to section 129(1)(a) and (c), the water pipe and electrical power line across the frontage of units 7 and 8 be removed.
The basic position of Mr Lei was that he was unclear whether any easement had been granted, or any other approval had been given by the executive committee, possibly under section 2.4 of Schedule 2 of the Unit Titles (Management) Act, in relation to the pipes, but if it had, it was unlawful to do so since it was not minor and did unreasonably interfere with the reasonable use and enjoyment of the common property by other members of the corporation, in particular himself. In his view, the pipes should be removed and put somewhere else. He said there were alternatives.
The position of the second respondent was that approval had been given by the executive committee for the use of the common property, presumably under section 2.4 of Schedule 2, and at any rate this was what they had been told or lead to believe. They arranged for the work to be done on this basis. They were open to the pipes being moved and put somewhere else as long as this was not done at their expense, but at the expense of the Owners Corporation, or perhaps the manager.

Summary of the decision of this Tribunal

It is unclear whether the Owners Corporation approved the water and electricity pipes, though there is some indication that they did, at least informally. It does seem that the second respondent was told that they could proceed to install the pipes.
If the pipes had been approved under section 2.4 of Schedule 2, on the basis that there were alternatives to putting these in front of Mr Lei’s windows, I do not think that they could have been approved. I do not think that the criteria in section 2.4 were met, in that the pipes would unreasonably interfere with the reasonable enjoyment of the common property by other members of the corporation, that is Mr Lei.
But the work has been completed and is in place. Because there do seem to be alternatives, in my view, the Owners Corporation, through the executive committee, and the second respondent should investigate alternative routes for providing water and electricity to unit 3 which do not pass in front of the windows for units 7 and 8. If there are one or more such alternative routes, they must use their best endeavours to ensure that an alternative route is appropriately approved under the Unit Titles (Management) Act. If there is an alternative route and this is appropriately approved the Owners Corporation, through the executive committee, and the second respondent should implement that alternative. The costs of doing so should be shared, with half the costs met by the Owners Corporation and half by the second respondent.
If there is no appropriate alternative, or an alternative route is not appropriately approved, the Owners Corporation, acting through the executive committee, and the second respondent must use their best endeavours to ensure that the current arrangement is appropriately approved under the Act.
If there are no alternatives, I think the current pipes could be approved under section 2.4 of Schedule 2, because they reasonably interfere with the enjoyment of the property by units 7 and 8, that is because this is the only way of providing appropriate water and electricity to unit 3.

Hearing

There were hearings in relation to this matter on 6 September 2022 and 11 October 2022.

Applicant

The amended application by Mr Lei asked for the orders set out above at paragraph [4], and at the hearing on 6 September he provided some background and photos (exhibits A1, A2, A3 and A4), assisted by his son Andy. He provided no other documentation at this time.
Mr Lei provided submissions with attachments filed on 25 September 2022 for the hearing on 11 October 2022 (exhibit A5). He participated in that hearing helped by his son Andy. At the hearing on 11 October 2022, Alan Tutt, the owner of unit 9, made some comments in support of the applicant.[2]
[2] Transcript of proceedings, 11 October 2022, pages 24-29
As set out below, the tribunal sought on a number of occasions to get the Owners Corporation to participate in the hearing. An order was made on 11 October 2022, allowing the Owners Corporation to put in submissions. It did not do so. That order allowed the applicant and the second respondent to put in further submissions in response to the Owners Corporation. Purportedly, in accordance with this order, the applicant put in further submissions on 17 November 2022. In my view, the applicant was not entitled to do so. Further, these submissions were the type of submissions which should have been made in the application or before the hearings, not after the hearings. To some extent, they set out arguments which the applicant made in the hearings, and I will have regard to them on this basis.

First respondent, Owners Corporation

The manager participated in the preliminary hearings for this matter and provided some documentation. At the hearing on 6 September 2022, the Owners Corporation did not attend, and they did not enable the manager to attend on their behalf. After that hearing, the tribunal wrote to the Owners Corporation noting that it was unusual for an owners corporation not to attend a hearing; that because of this it was not possible to investigate the issues properly; that the tribunal is willing to resume the hearing to in effect allow the Owners Corporation to attend; if they do not do so, the tribunal will proceed to determine the matter which could possibly involve the tribunal making orders against the Owners Corporation, such as requiring it to do work at its expense.
The hearing on 11 October was therefore principally held to enable the Owners Corporation to attend and participate in this matter. They did not do so. Nicholas Broughton and Amanda He attended for the manager, and they participated to the extent they were able to. They provided a bundle of documents (exhibit C1). Mr Broughton indicated that there were difficulties in getting enough executive committee members to respond to enable fuller participation.[3] Orders made on this day allowed the Owners Corporation a further opportunity to file and serve evidence on which it relies by 1 November 2022, and the other parties could respond to this by 15 November 2022. No such evidence or submissions were provided by the Owners Corporation. I have noted above that Mr Lei none‑the‑less provided a response.

Second respondent, Dargads

[3] Transcript of proceedings, 11 October 2022, page 34

The second respondent provided submissions dated 27 July 2022 (exhibit R1) and further submissions dated 29 August 2022 (exhibit R2). They also provided a statement by Luke O’Connor, an electrician, dated 30 August 2022 (exhibit R4), and Greg Eldridge, a plumber, dated 30 August 2022 (exhibit R3). The second respondents also provided a map of the building (exhibit R5). Ms Guymer and Mr Allen participated in the hearings and set out their position. They provided a further email from Mr Eldridge which is discussed at paragraph [33] below.

History

The basic facts were that Dargads bought their unit in about August 2021. It had previously been a bookstore. They wanted to use it as a hair salon. They needed to upgrade the facilities. There were negotiations about this, and they say they were granted approval for the work on about 30 July 2021. Mr Broughton confirmed this.[4] There were significant emails about this development, and I only note the key ones below.
[4] Transcript of proceedings, 11 October 2022, page 31
Dargads said that all relevant drawings were provided to the Owners Corporation. There is an email dated 13 July from Ms Guymer to Mr Bariesheff of Civium which stated: “Please find attached the fit out design and plumbing plan for our new premises”; it then drew attention to the need to upgrade the waste pipe, and the difficulties they were having in getting the consent to this from Mr Lei. Those drawings do not seem to exist any longer, and Ms Guymer said she did not believe they showed the water and electricity pipes but that this was just something that they would have to do; it was “implied and obvious.” Many of the issues in this case may have been avoided if a formal, clear application in relation to the pipes had been made by the second respondent.[5]
[5] Transcript of proceedings, 6 September 2022, pages 39-40
An email from Mr Bariesheff of Civium on 30 July 2021 stated:
I have received confirmation from the committee that they are satisfied with the letter of exemption from your certifier and have no objection to the works outlined in your fit-out plan; however they have noted the following: “In regard to the electrical and plumbing work, we do expect those trades to provide their own certificates of compliance once the works have been completed to ensure they’ve been done correctly.” & “I’d like to reiterate the Committee’s acceptance relates to unit 3 and cannot include granting access to, or works in, the unit below. Unit 3 is responsible for ensuring those permissions and clearances separately”.
It is fairly clear that the reference to the work in the unit below related to the request by the second respondent to run an enlarged waste pipe through the unit below at the second respondent’s expense. Mr Lei did not agree to this, it seems as some sort of agent for the actual owner of the relevant unit 8; no evidence was provided to the tribunal as to the basis on which Mr Lei could do this. This work was the first option put forward by the second respondent to address their need for additional waste capacity.
The second option was to run a new waste pipe down the outside of the building. The email of 30 July 2021 stated that the executive committee did not support this. Therefore, the second respondent implemented option 3, which as the plumber Mr Eldridge stated, was to install a specific pump and hair arrestor, which would chop up any waste and allow it to travel down the existing pipe. This option was much more expensive for the second respondent and gave rise to some risk of blockage but was able to be implemented by the second respondent within its premises.[6] The pipes at issue in these proceedings are distinct from the waste disposal system, though this position sometimes became confused.
[6] Statement of Mr Eldridge; transcript of proceedings, 11 October 2022, pages 21-22
The pipes in issue here were a water pipe which Mr Eldridge said ran from the only water point available to unit 3 in the nearest path so as not to cause any disturbance, using specific brackets to prevent water hammering. The pipe ran on common property outside Mr Lei’s unit towards the top of the front window to the shop. Mr Eldridge said he understood that this work was approved by the strata manager, and it was signed off by the plumbing inspector.[7]
[7] Statement of Mr Eldridge
Mr O’Connor, the electrician, said that in order to complete the electrical fit out, an upgrade of the existing wiring was needed. To not do so was unsafe. The upgraded wiring was too thick to be physically pulled through the existing channel, so it was also routed along the side of the building, on common property, towards the top of the front window to Mr Lei’s shop. He understood that the owners of unit 3 had body corporate permission for this. He said he did this in a way so as to not make it an eyesore.
On about 16 July 2021, the electrician, Mr O’Connor, began installing the new electricity wiring; Mr Lei became upset; the electrician stopped; Mr Allen rang the manager and spoke to Mr Bariesheff of Civium and explained the situation; Mr Bariesheff rang back and said something like: “go ahead” or “proceed on” because it is in common property.[8]
[8] Transcript of proceedings, 6 September 2022, pages 43-44
There is an email of 5 August 2021 from the manager which stated:
As previously advised, responses received from the committee indicated approval of the initially proposed drainage upgrade following the certifiers letter. [It seems this was a reference to the email of 30 July 2021]. However, the approval was limited to the effects to the common property that the works would have, noting that access requirements to the unit below would need to be independently obtained for that unit owner as they cannot give that approval on the owner’s behalf.[9]
This email is to some extent about the waste disposal issue discussed at paragraphs [22]-[23] above. However, this email does suggest that there was general approval for use of the common property in relation to the upgrade.
[9] Transcript of proceedings, 6 September 2022, page 50; exhibit C1
Ms Guymer said that their trades people had the objective of making the new pipes neat and not an eyesore, run along the common property, underneath the slab of the upper floor, and underneath an old awning.[10]
[10] Transcript of proceedings, 6 September 2022, pages 46-49
There is a further email dated 22 August 2022 from a member of the executive committee to the manager:
In regard to the pipework from unit 3, I don’t like the location where it ended up, however as unit 8 would not permit a reasonable penetration through their shop, there really wasn’t anywhere else it could go and it is definitely ugly. I am not sure of the grounds that unit 8 has to complain as the external area are common and belong to all owners, though technically there hasn’t been any formal approval granted by the owners corporation for the installation. I think a general meeting should have been held at the time to discuss and approve but it never was.[11]
[11] Attachment to Exhibit A5
A few points can be made about this email. Dargads, Ms Guymer and Mr Allen were not a party to the email. These comments seem to confuse the waste disposal issue with the water and electricity issue. Whilst it suggests there was no formal approval of the pipes, it suggests there may have been informal approval.
At the hearing, Mr Andy Lei said on behalf of his father that “there were routing options that didn’t include going across the front of our – our window and I have voiced to the tribunal that we don’t have any problems with Ms Guymer carrying on with needing pipes or electricity but we just simply can’t have them across like that”. When asked whether there was another way it could have been done, Mr Andy Lei responded: “Yes, absolutely”.[12] Mrs Lei stated that: “If you can put the pipe in the top, not in the window, no problem”.[13] Mr Lei later indicated that he would not agree to an alternative until he saw the details.[14]
[12] Transcript of proceedings, 6 September 2022, pages 72-73, 78
[13] Transcript of proceedings, 6 September 2022, pages 87-88
[14] Transcript of proceedings, 11 October 2022, page 7
Ms Guymer stated that they were not opposed to putting the pipes somewhere else, but not at their cost since they had already expended money putting in the pipes where they thought they were approved. She thought the Owners Corporation should bear the cost. Later she suggested that the manager should bear the cost, but they are not a party to the proceedings; it would be possible for a claim to be made against them by the Owners Corporation, but in these proceedings no such claim was made.[15]
[15] Transcript of proceedings, 11 October 2022, page 8
The second respondent also provided an email from Mr Eldridge, the plumber, dated 10 October 2022 who strongly recommended against relocating the pipe above the awning as it exposes it to the elements with Canberra low winter temperature. He still thinks that the awning offers protection and makes it less obvious. As an alternative, he suggested relocating the pipe to rise up the column and over the roof of the building. This would be more noticeable and require thicker insulation. He estimated the cost at $2,500.

Consideration

Role of tribunal

The tribunal can hear disputes between the owners corporation and owners (section 125). This is such a dispute.
In relation to such disputes, the tribunal may (emphasis added) make a range of orders (section 129). This includes an order requiring a party to do, or refrain from doing, a stated thing; an order requiring an owners corporation to do a stated thing that is ancillary to a function of the corporation under this Act; make a declaration that a resolution of an executive committee meeting is void for irregularity; an order repealing or amending a resolution of a general meeting or executive committee based on a merits review of the resolution by the ACT Civil and Administrative Tribunal (ACAT) (section 129(1)). Further the ACAT may (emphasis added) make any other order it considers reasonably necessary or convenient to resolve a dispute under this part (section 129(2)). As noted, such orders are discretionary; that is even if a party has done something inappropriate, there is no obligation to make an order.
Decision of Owners Corporation

The Owners Corporation through the executive committee did not participate in these proceedings. This makes it difficult to resolve. The Tribunal made significant efforts to allow the Owners Corporation through the executive committee to participate and pointed out to them that if they did not participate, the Tribunal would proceed to determine the matter which could possibly involve the Tribunal making orders against the Owners Corporation, such as requiring it to do work at its expense.[16]
[16] See paragraph [16] above
Section 2.1(1) of Schedule 2 of the Unit Titles (Management) Act states that the executive committee must keep minutes of its proceedings; failure to do so is an offence. No minutes were provided to the Tribunal in these proceedings, notwithstanding that it seems from the emails above that some decisions were taken. As noted above, there was email correspondence about decisions.
Easement
Section 20 of the Unit Titles (Management) Act provides that an owners corporation for a units plan may, if authorised by a special resolution, on conditions and for purposes stated in the resolution, grant or vary an easement over any part of the common property. A special resolution is a resolution of a general meeting passed as required by Schedule 3, section 3.16. No one suggested that there had been such a special resolution in this case.
A note under section 20 draws attention to section 23(1)(c). Section 23(1) provides in part that an owners corporation may;
… if authorised by an ordinary resolution –
(a) approve the installation of sustainability or utility infrastructure on the common property; and
…
(c) grant an easement or any other right over any part of the common property for the purpose of installation, operation or maintenance of the sustainability or utility infrastructure.
An ordinary resolution is a resolution at a general meeting passed as required by Schedule 3, section 3.15. Utility services includes the supply of water, drainage services, and electricity services.[17] No one suggested that there had been such an ordinary resolution in this case.
[17] Unit Titles (Management) Act, Dictionary; and Unit Titles Act 2001, Dictionary
Section 112A also provides for the grant of special privileges in relation to common property.
Approved use of common property
Section 2.4 in Schedule 2 of the Act provides:
The executive committee of an owners corporation may approve an application by a member of the corporation to use the common property if—
(a) the use applied for is minor; and
(b) the use will not unreasonably interfere with the reasonable use and enjoyment of the common property by other members of the corporation. [Emphasis added]
An example of minor use given under this section is “installation of airconditioner or awning on unit that extends over common property”. I note that an example is part of an Act, and can be used to interpret the Act, is not exhaustive, and may extend, but not limit, the meaning of the Act.[18]
[18] Legislation Act 2001, sections 126(4) and 132(1)
The default rules for an owners corporation provide for approval of a structure on common property.[19] The manager provided a copy of the current rules for the Owners Corporation which provide in article 4 that a unit owner shall not, except in accordance with the written permission by the executive committee, erect or alter any structure in or on the unit or the common property. This is similar to section 2.4, Schedule 2.
[19] Unit Titles (Management) Regulations 2011, rule 1.4
The operation of this section was a major issue in these proceedings. The applicant said in summary that there had been no approval, and if there had, it was in effect invalid since it was outside the power. The second respondent said there had been approval, which was within power, but even if there was not, they had been told they could proceed, and had expended money on this basis which should not be thrown away by requiring removal of the pipes.
Minor
Minor means lesser, as in size, extent, or importance, or being the lesser of two.[20] In my view, the pipes are not major. They are comparable to the examples of an air conditioner or awning. I think therefore they are minor.
Use
[20] Macquarie Dictionary online
The pipes do not interfere at all with the use of the common property by Mr and Mrs Lei. They did not suggest that they used this common property. The pipes also do not prevent use of the shop. There is already an awning outside the shop which also does not interfere with the use of the common property and the shop. I note that it is the use and enjoyment of the common property by members of the Owners Corporation which is relevant, and not of their customers or others.
Enjoyment
he applicant principally argued that the pipes interfere with his enjoyment of the common property. Mr and Mrs Lei complained about having to look at the pipes through their window all day. They and others thought it ugly.[21] I note that the second respondent and their tradesmen said they had made efforts to make the pipes neat and not an eyesore.
[21] Transcript of proceedings, 11 October 2022, page 25; see also paragraph [28] above
As noted, the pipes are comparable to the example of an air conditioner, which can also be ugly. Of course, a factor here is that it is likely that an air conditioner outside a unit, or looked on by an owner of a unit, is for the benefit of the owner of the unit, though this is not necessarily the case.
Unreasonably interfere with enjoyment
Another factor here is that it seems that there are alternative routes for the pipes which would not take them in front of Mr Lei’s shop. In my view, the executive committee, and the Tribunal, can take this into account in deciding whether the pipes unreasonably interfere with the enjoyment of the common property outside a shop by the owner of the shop which looks out on them. In my view, they are likely to unreasonably interfere with the enjoyment if there is an alternative route for the pipes.
If there were no alternative routes, the position would in my view be different. In this case the pipes would not unreasonably interfere with the enjoyment. There would be a significant reason for this interference, the provision of water and electricity, on a reasonable and safe basis, to unit 3.

Conclusion

For these reasons, I am not willing to just require the removal of the pipes. As noted, the second respondent was told that they could proceed with the pipes, and this was implied in some dealings. They were in my view entitled to have reasonable and safe access to water and electricity for their premises. The applicant did not immediately bring proceedings but delayed for over a year to do so. I also note that the second respondent appears to have failed to make a formal, clear application in relation to the pipes. The position the parties find themselves in was the result to some extent of the actions, or inactions, of the executive committee, manager and second respondent.
On this basis, I think it is appropriate to order that Owners Corporation, through the executive committee, together with the second respondent, investigate alternative methods for providing the necessary water and electricity to unit 3 which do not pass in front of the windows for unit 7 and unit 8. The evidence before this Tribunal and the position of the parties suggests that there are such alternatives. If the Owners Corporation, through the executive committee, and the second respondent identify a suitable alternative, they must take steps to ensure that the use of this route is lawful. As noted, the dispute in this case arose because the parties seemed to make little effort to comply with the requirements of the Unit Titles (Management) Act. In resolving the dispute, they must ensure that they comply with the requirements of the Act. I have set out in this decision the possible ways of doing so, including the relatively easy use of section 2.4 in Schedule 2.
If an alternative route is possible and appropriately approved, the Owners Corporation, through the executive committee, and the second respondent can implement that alternative. In my view the costs should be shared by Owners Corporation and the second respondent. I agree that the second respondent should not bear the full cost, but it seems to me that their failure to properly and clearly apply for approval for the placement of the pipes means that they should share some responsibility for meeting the costs of replacing them.
If there is no appropriate alternative, I think the pipes can remain, provided that the Owners Corporation, through the executive committee, and the second respondent take steps to ensure that this arrangement complies with the requirements of the Act. I have noted that in my view in these circumstances there could be approval under section 2.4 in Schedule 2, but there will be a need for the executive committee to consider this and record any decision.
I have made orders implementing this position.
If further issues arise which cannot be resolved under the processes in the Act, a further application can be made to the tribunal.
………………………………..

Senior Member R Orr KC

Date(s) of hearing:

6 September and 11 October 2022

Applicant:

In person

First respondent:

Second respondent

No appearance

In person