Lloyd v The Owners Corporation Units Plan 527 (Unit Titles) - [2020] ACAT 75

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

LLOYD v THE OWNERS CORPORATION UNITS PLAN 527 (Unit Titles) [2020] ACAT 75

UT 14/2020
Catchwords: UNIT TITLES –review of motion defeated at general meeting – motion to permit use of common property by unit owner required to be unopposed – review on the merits – correct and preferable decision – whether objections are unreasonable – whether necessary to balance competing interests – objections found to be reasonable – application dismissed

Legislation cited: Unit Titles Management Act 2011 ss 22, 129

Cases cited:Ainsworth v Albrecht [2016] HCA 40
Bonansea v the Owners – Unit Plan No 421 [2019] ACAT 10
Clews v the Owners – Unit Plan 3069 [2019] ACAT 63

Tribunal: Senior Member H Robinson

Date of Orders:  23 September 2020
Date of Reasons for Decision:         23 September 2020
AUSTRALIAN CAPITAL TERRITORY
CIVIL & ADMINISTRATIVE TRIBUNAL           UT 14/2020

BETWEEN:
KIMBERLY LLOYD
Applicant

AND:
THE OWNERS CORPORATION – UNITS PLAN 527
Respondent

TRIBUNAL: Senior Member H Robinson

DATE:23 September 2020

ORDER

The Tribunal orders:

Application dismissed.

……………………………..
Senior Member H Robinson

REASONS FOR DECISION

This is an application by an owner of a unit in the respondent unit corporation (the complex) seeking an order under section 129(1)(g) of the Unit Titles Management Act 2011 (the UTM Act) giving effect to an unsuccessful motion seeking a special privilege to park her vehicle on an area of common property outside the garage to her unit.

The motion

The motion under review (the Motion) proposed:
The owners of Units Plan 527 agree to granting the Owner of unit 2 special privilege indefinitely (or until the privilege is retracted in way of a special resolution) for the areas highlighted by the red boundary in the above image for, the purpose of parking vehicles.[1]
[1] Minutes of annual general meeting 2020 page 3
The ‘image’ referred to in the motion is a paved area extending a couple of metres from the doors to the garage of her unit. The area is part of, or adjoins, an access way that leads to the driveway to a neighbouring unit, Unit 3.

The legislation

The applicant seeks a special privilege under section 22 of the UTM Act. This provides:
22. Special privileges relating to common property
(1)   An owners corporation for a units plan may, if authorised by an unopposed resolution, grant a special privilege, other than a sublease, for the enjoyment of the common property, or any part of the common property, to—
(a)     a unit owner; or
(b)     someone else with an interest in a unit.
(2)   A grant under subsection (1) may be terminated, in accordance with a special resolution, by written notice given by the owners corporation to the person to whom the grant was made.
A ‘unopposed resolution’ means a resolution of a general meeting passed as required by schedule 3, section 3.17, which states:
3.17 Unopposed resolutions
The requirements for passing an unopposed resolution at a general meeting are that—
(a)no votes are cast against the resolution; and
(b)at least 1 vote is cast in favour of the resolution.
The Tribunal is granted the power to review and amend or give effect to an unsuccessful motion pursuant to section 129(g) of the UTM Act, which provides that:
Kinds of ACAT orders
(1) The ACAT may make the following orders:
…
(g) an order giving effect to an unsuccessful motion for a resolution of a general meeting (either as originally proposed or as amended by the ACAT) if the ACAT is satisfied after a merits review of the motion that opposition to the motion was unreasonable;

Procedural background

The matter was listed for directions on 1 July 2020. On this occasion, the respondent questioned whether the applicant had put a motion before the Corporation that was capable of being reviewed by the Tribunal under section 129(g).
In order to remove any doubt, the Tribunal directed the applicant to put a motion to the 2020 Annual General Meeting (the AGM).
The AGM was held on 6 August 2020. The motion was put and opposed by a minority of owners and therefore didn’t gain the unanimous support required to grant a special privilege under section 22 of the UTM Act.
The parties attended a further directions hearing on 14 August 2020, at which it was agreed that the Tribunal would decide the matter ‘in Chambers’, on the basis of material already filed by the parties, and the minutes of the AGM to be filed by the respondent.
On each occasion the applicant represented herself, and the respondent was represented by Ms Lindbeck and Mr Sanguineti, both members of the executive committee. Mr Sanguiniti is also the owner of Unit 3.

The documents

The Tribunal has before it:
(a)the applicant’s application dated 29 May 2020, with attached submission;
(b)the respondent’s response filed 19 June 2020;
(c)the applicant’s reply dated 22 June 2020;
(d)an amended version of the respondent’s response signed 22 June 2020;
(e)an image filed by the applicant on 28 June 2020;
(f)minutes of the Annual General Meeting 2020;
(g)a handout provided to members at the AGM by the applicant.
The applicant sought to file additional material after the decision was reserved. The respondent’s objected to this material. I have not had regard to it.

The complex

The complex consists of ten units, each situated on a large individual lot of between 500 and 1003 square metres. A common driveway runs through the complex.
The respondent’s submissions set out the history of the complex. It was constructed in the late 1980s. Towards the end of the project, there was a downturn in the economy, and the builder began to cut costs in various ways, including reducing the size of the concrete drives to each unit.
The cuts affected a number of units, including Unit 3, which is currently owned by Mr Sanguineti. The unit has a double garage, but was sold with a single driveway that opened into a double driveway directly in front of the unit.
Access to Unit 3 appears to have been problematic from the start, and was raised at the first AGM in 1989. The agents for the complex wrote to the builder, stating that:[2]
The owners of units 3 and 7 appear to be experiencing difficulty in obtaining access to their garage from the road through the complex as the access road appears to be too narrow. Your assistance in widening the driveways to these two units would be appreciated, as the owners feel that sufficient width should have been allowed in the first instance.
[2] Response filed by respondent 19 June 2020 page 16
The builder responded that:[3]
The access road to Unit 3 was in place at the time of purchase of the Unit. It is wide enough to service one Unit but if the owner wishes to widen it and the other members agree then the costs should be borne by the owner and not the Body Corporate.
[3] Response filed by respondent 19 June 2020 page 17
The builder’s suggestion is, I understand, what happened. The owner of Unit 3 sought, and gained, approval to concrete an additional area of driveway, widening it and connecting it to the main road through the complex. The additional concreted area was clearly within the unit lot property for that unit, but opens onto the common area outside Unit 2’s garages.
The applicant purchased Unit 2 in 2013. Unit 2 is next to Unit 3.
Unit 2 seems to be somewhat unfortunately located on its lot. While I do not have access to precise measurements, it appears that the border of the lot is a short distance beyond the doors to the Unit’s garage, a little over a metre on the south side and a little under two metres on the north side This means that most vehicles parked in front of Unit 2’s garages will extend perhaps a metre or two over the lot property into common property.
Direct access to the widened driveway area of Unit 3 is partially blocked when the owner of Unit 2 parks her vehicles on the common property in the front of her garages. How much of an inconvenience this is was the subject of submissions by the parties.

The applicant’s submissions

The applicant has been parking her vehicle outside her garage since 2017. She uses her garage for storage. She says she needs to park close to her property, as she has a young child, and will often need to unload the car of groceries etc in two or three stages, which involves leaving the child in the car or the unit. She also has some five close friends who have disability parking permits, who use the other space outside her unit as they would struggle to access her premises from the available visitor parking spots.
She further says that she is not the first owner of Unit 2 to park in the area. She filed a satellite photograph from 2004 that shows a previous resident parking a vehicle in the same location. I note that while this may occasion have been coincidentally timed with the satellite overhead, I am prepared to accept that previous residents parked on the common property from time to time.
The applicant further submits that access to the Unit 3 garages is in any case not impeded by her parking her vehicles outside of her garages. Even with her vehicle parked in common property, there remains clearance of 3.8 metres between the rear of the applicant’s vehicle and the edge of the access road. She submits that Mr Sanguiniti can access his garages by driving to the right of her vehicles and then swerve to the left after passing them to access his garage.
The applicant submits that Unit 3 should be viewed as akin to a battle axe block, with adequate access to its garages by way of a single lane driveway. The double driveway was added later and should not be a basis for restricting use of the common property. She argued that the access problem was not to the unit, but to that part of the driveway that was widened when the complex design did not envisage it.

The corporation’s response

In response to the application, the respondent argues that Mr Sanguiniti’s access to both his driveway and his garage is impeded by the applicant parking her vehicles on the property.
The respondent submitted that the deposited plan shows that there is limited parking in front of the garage. On this basis, the applicant should have been aware, at the time of purchase of the unit, of her entitlements. Additionally, due diligence on the purchasing of the unit would have disclosed that the parking issues had existed since that initial AGM in 1989 and that several other units have also modified their driveways to accommodate this.
The respondent further argues that any special privilege would potentially result in an increase in insurance liability. The only evidence of this is an extract of an email from an insurance broker to Mr Sanguiniti. As I do not have the full email, nor any of the documents or instructions provided to the insurance broker, I cannot give any weight to this evidence.
Finally, the respondent seeks an order prohibiting parking on common property on the ground that it is in breach of the Corporation’s rules. The respondent has not lodged a counterclaim or an application, and therefore this issue is not properly before the Tribunal.

Consideration

A review under section 129(1)(g) is a two-stage process. The first step in the process is a merits review to determine what is the correct and preferable decision. The second is an assessment as to whether the objections to the motion are unreasonable. The section requires the assessment of unreasonableness, at least, to be done at the time the motion was defeated and by reference to why it was opposed.[4]
[4] Bonansea v The Owners – Unit Plant No 421 at [21]
For convenience, I will look at the issue of unreasonableness first, because this is the greater challenge for the applicant.
Mr Sanguiniti prepared the owner’s corporation’s submissions. He voted against motion, and is doubtlessly the party most affected by it. I take the matters set out in the respondent’s submissions to be the basis of Mr Sanguiniti’s objection to the proposal. The question is whether those objections are unreasonable.
The leading case on the issue of ‘unreasonableness’ in this context is the High Court case of Ainsworth v Albrecht [2016] HCA 40 (Ainsworth). In that case, the court considered a Queensland body corporate’s decision to refuse a lot owner permission to use about five metres of common property airspace between the existing balconies of his unit. Various other owners objected, mainly on the grounds of aesthetics, and the lack of benefit to the owners corporation.
The decision and its application to the UTM Act was discussed by Acting Presidential Member Orr in Clews v the Owners – Unit Plan 3069 [2019] ACAT 63:
Unit owners at a general meeting are free to vote on motions however they see fit. They are equivalent to shareholders of a corporation, or voters in a democracy. However, the power in section 129(1)(g) of the UTM Act allows unreasonable votes in relation to unit titles management to be overridden. In my view, the concept of unreasonable means objectively unreasonable in the particular context.
In Ainsworth the High Court considered this type of provision in the context of proposed construction by Mr Albrecht on common property airspace between two balconies to a unit owned by him, but opposed by Mr Ainsworth and other unit owners, and stated at that it:
...is no light thing to conclude that opposition by a lot owner to a resolution is unreasonable where adoption of the resolution will have the effect of appropriating part of the common property to the exclusive use of the owner of another lot, for no return to the body corporate or the other lot owners; ... and potentially creating a risk of interference with the tranquillity or privacy of an objecting lot owner.
The judgment at [57] noted that nothing in the relevant legislative scheme suggested that an opponent to a proposal acts unreasonably in failing to act sympathetically or altruistically towards a proponent who seeks to diminish the property rights of the opponent.
However, the High Court stated that while it was neither necessary nor desirable to attempt an exhaustive statement of when an order should be made, that “... opposition to a proposal that could not, on any rational view, adversely affect the material enjoyment of an opponent’s property rights may be seen to be unreasonable ”. Similarly, it noted that opposition “prompted by spite, or ill-will, or a desire for attention, may be seen to be unreasonable in all the circumstances”. In the case before the Court the proposal “was apt to create a reasonable apprehension that it would affect adversely the property rights of opponents of the proposal and the enjoyment of those rights.” The opposition could not therefore be said to be unreasonable.
Similar observations were made by Presidential Member McCarthy in Bonansea v the Owners – Unit Plan no 421 [2019] ACAT 10 (Bonansea).[5]
The Tribunal must focus upon whether the opposition of the other unit owners to the motion was unreasonable, not upon whether the owners corporation acted reasonably in refusing to give approval or the reasonableness of the motion. Nor is it for the Tribunal to achieve what it thinks is a reasonable balance between competing viewpoints.
[5] At [30]
However, Presidential Member McCarthy also made it clear that to be reasonable, the reasons must be relevant to the context in which they are considered:
Opposition must be based on a factor or factors that adversely affect the interests of other unit owners in their use and enjoyment of their units, or in the common property as occurred in Ainsworth.[6]
[6] At [33]
Mr Sanguiniti’s objections are, essentially:
(a)the insurance issue; and
(b)the access issue.
As noted above, I am not satisfied that the insurance concerns are substantiated on the material available. I therefore do not give them any weight.
The access issue is more difficult.
I do not accept that access to Unit 3’s garages is seriously impeded by the applicant parking her vehicles on the common property. However, I accept that access to the left-hand side of the Unit 3’s driveway may be impeded. I accept that access the left-hand side of the double garage from the right-hand side of the driveway is more difficult than it would be from the left-hand side driveway, as there is less space to line the vehicle up.
It is impossible, on the evidence, to assess just how significant an interference this is. However, it is not a matter of no substance. I am satisfied that ease of access to his driveway and garages is a matter capable of affecting Mr Sanguiniti’s use and enjoyment of his lot property.
Approaching this from an outside perspective, it seems to be unfortunate that some compromise cannot be reached in the name of maintaining good relationships between neighbours, particularly given the applicant currently has care of a young child which makes parking a distance from her house impractical. However, as the High Court made it clear in Ainsworth, there is no legal requirement that an owner be beneficent or generous. Owners are entitled to protect their own, legitimate interests.
I acknowledge that the disadvantage to the applicant outweighs the disadvantage to Unit 3, but the test does not call for a comparison of interests. As Acting Presidential Member Orr said in Clews:[7]
The Tribunal agrees that the detriments are disproportionate; the current adverse effects on Mr Clews are greater than the adverse effects on the objectors if the lease purpose is expanded. But I do not think that such a balancing exercise is involved here. The question is whether the objections are reasonable, not whether they are fair or proportionate.
[7] At [77]
I cannot conclude that the objections are unreasonable, at least not within the meaning of that word in the UTM Act. This is a fundamental issue. Therefore, no matter what my determination on the merits of the case, I must dismiss the application.
The applicant will no doubt be disappointed and frustrated by this decision. I empathise with her position. However, she is not without alternatives. She has garages in which she can park her vehicles, albeit she is at present using them storage. That is her choice.
It is also worth noting that an unopposed resolution under section 22 of the UTM Act can be revoked by a special resolution, so the right, even if granted, is not necessarily a permanent fix for the applicant’s difficult situation. A more permanent solution, perhaps involving a conversion of an area of her property for parking, may be a more practical solution.
……………………………..
Senior Member H Robinson

HEARING DETAILS

FILE NUMBER:	UT 14/2020
PARTIES, APPLICANT:	Kimberley Lloyd
PARTIES, RESPONDENT:	The Owners Corporation - Units Plan 527
COUNSEL APPEARING, APPLICANT	N/A
COUNSEL APPEARING, RESPONDENT	N/A
SOLICITORS FOR APPLICANT	N/A
SOLICITORS FOR RESPONDENT	N/A
TRIBUNAL MEMBERS:	Senior Member H Robinson
DATES OF HEARING:	14 August 2020