Maher & Anor v The Owners – Units Plan No 3115 & Ors (Civil Dispute)

[2021] ACAT 110

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

MAHER & ANOR v THE OWNERS – UNITS PLAN NO 3115 & ORS (Civil Dispute) [2021] ACAT 110

XD 293/2021

Catchwords:               CIVIL DISPUTE – damages application and nuisance application – purported joinder of parties as applicants without an order of the tribunal found to be ineffective – relief claimed under section 129 of the Unit Titles (Management) Act 2011 held to be not available in a civil dispute application – damages claim of the first and second applicant doomed to fail for lack of causation – original allegation as to the nature of loss and damage suffered by the first and second applicant found to be colourable – purported claim by the first party joined for damages for distress found to be misconceived and not available in the tribunal – tribunal held not to have jurisdiction to hear and determine claims for ‘mental harm’ and ‘personal injury’ under part 3.2 and chapter 5 respectively of the Civil Law (Wrongs) Act 2002 – application dismissed at the initiative of the tribunal on the grounds that it is ‘lacking in substance’ – recusal application made on the grounds that the tribunal had a direct interest in the applicants’ claim failing – recusal application dismissed – discussion of circumstances in which it is appropriate for the tribunal, on its own initiative, to summarily dismiss an application, or part of an application, under section 32(2)(b) of the ACAT Act – observations on systemic problems arising from the tribunal’s lack of power to order costs in appropriate circumstances

Legislation cited:        ACT Civil and Administrative Tribunal Act 2008 ss 6, 7, 7A, 15, 16, 29, 32, 48

Civil Law (Wrongs) Act 2002 ss 32, 34, 35, 45, 49, 50, 51, 59, 78, 79
Residential Tenancies Act 1997 ss 6, 6AA, 71, 71B
Unit Titles (Management) Act 2011 s 129

Subordinate

Legislation cited:        ACT Civil and Administrative Tribunal Procedures Rules 2020 rr 8, 39

Cases cited:ACTEW Corporation Limited v Mihaljevic [2004] ACTSC 59

Andreopoulos v University of Canberra [2020] ACAT 95
British American Tobacco Australia Services Ltd v Laurie [2011] HCA 2
CNY17 v Minister for Immigration and Border Protection [2019] HCA 50
Dirkis v Public Trustee and Guardian [2021] ACAT 57 Jamieson Mary v Australian Worker’s Union & Anor [1999] VCAT 628
Johnson & Anor v The Owners – Units Pan 4373 [2020] ACAT 114
McElwaine v The Owners – Strata Plan 75975 [2017] NSWCA 239
Michael Wilson & Partners v Nicholls [2011] HCA 48
Sarbandi v Sharif [2017] ACAT 57
Smith v Owners Corporation – Unit Plan 3115 [2021] ACAT 28
State Electricity Commission of Victoria v Rabel& Ors [1998] 1 VR 102
Tame v New South Wales [2002] HCA 35
The Owners – Units Plan No. 3115 v The Trustees of the Master Builders Fidelity Fund Scheme [2019] FCA 115
The Owners – Units Plan No. 3115 v The Trustees of the Master Builders Fidelity Fund Scheme [2019] FCAFC 227

Tribunal:  Senior Member M Orlov

Date of Orders:  17 November 2021

Date of Reasons for Decision:      17 November 2021

AUSTRALIAN CAPITAL TERRITORY          )

CIVIL & ADMINISTRATIVE TRIBUNAL     )          XD 293/2021

BETWEEN:

MICHAEL MAHER

First Applicant

AILEEN MAHER

Second Applicant

AND:

THE OWNERS – UNITS PLAN NO 3115

Respondent

TRIBUNAL:Senior Member M. Orlov

DATE:28 October 2021

ORDER

The Tribunal orders that:

1.The civil dispute application filed on 23 March 2021 (as amended at various times subsequently) is dismissed.

2.The application for Senior Member Orlov to be recused is dismissed.

……..……signed…………..

Senior Member M Orlov

AUSTRALIAN CAPITAL TERRITORY          )

CIVIL & ADMINISTRATIVE TRIBUNAL     )          XD 293/2021

BETWEEN:

MICHAEL MAHER

First Applicant

AILEEN MAHER

Second Applicant

AND:

THE OWNERS – UNITS PLAN NO 3115

Respondent

AND:

MIKALA MAHER

First Party Joined

HUGH SMITH

Second Party Joined

TRIBUNAL:Senior Member M. Orlov

DATE:17 November 2021

ORDER

The Tribunal orders that:

1.Mikala Maher and Hugh Smith are joined as parties to the application for the limited purpose of giving effect to the orders of 28 October 2021.

……..……………………..

Senior Member M Orlov

Contents

REASONS FOR DECISION

Introduction

Background

The tribunal’s summary powers

Procedural history

The civil dispute application

The response

The tribunal’s orders made on 28 June 2021

The amended statement of claim

Jurisdictional limitations

The purported joinder of the 3rd and 4th applicant

Ms Maher’s interest in the application

Mr Smith’s ‘interest’ in the application

Mr and Mrs Maher’s amended claim for lost rent

Ms Maher’s and Mr Smith’s ‘claim’ for the market value of the car spaces

Ms Maher’s claim for damage to her physical and mental health

The tribunal’s orders on 9 August 2021

The 23 August 2021 further amended statement of claim

Subpoenas to produce documents

The 2 September 2021 application for interim or other orders

The hearing on 10 September 2021

The parties’ submissions

The applicants’ position

The respondent’s position

Findings

The recusal application

REASONS FOR DECISION

Introduction

1.The applicants claim damages in negligence and nuisance from the respondent pursuant to a civil dispute application filed on 23 March 2021, which has been amended twice since then and which the applicants wish to amend a third time. Pursuant to orders made on 9 August 2021, the matter was given a hearing date on 1 October 2021.

2.On 10 September 2021, the matter came before me to hear an application for interim or other orders by which the applicants sought an order vacating the hearing and various other procedural directions. At that point, the applicants had filed a further amended statement of claim (misdescribed as an amended statement of claim) and, in accordance with orders made on 28 June 2021 and 9 August 2021, had filed and served all the evidence in chief on which they intended to rely in support of their claim, including proof of damage. The respondent had not provided an amended response to the further amended statement of claim (or to the previous amended statement of claim) and had not served any evidence. Both parties had issued subpoenas for production of documents.

3.After hearing from the parties I vacated the hearing and all previous directions for the preparation of the matter for hearing, adjourned the subpoenas, and ordered that:

(a)by 17 September 2021, the parties file and serve written submissions, limited to five pages, as to whether the application (as detailed in the amended statement of claim filed on 23 August 2021) should be dismissed under section 32(b) of the ACT Civil and Administrative Tribunal Act 2008 (ACAT Act) as lacking in substance;

(b)by 22 September 2021, the parties file and serve any responsive submissions limited to two pages;

(c)the Tribunal would decide, of its own motion, whether the application should be dismissed under section 32(b) of the ACAT Act on the papers.

4.Having considered the parties submissions I am satisfied that the application is lacking in substance and should be dismissed.

5.In their written submissions, the applicants sought an order that I be recused for reasons that will become apparent later. I am satisfied that the recusal application is without merit and should be dismissed also.

6.These are my reasons for both decisions.

Background

7.Michael and Aileen Maher (Mr and Mrs Maher) own unit 47 in Units Plan No 3115, which is a strata apartment complex known as ‘Elara’. Associated with the unit is a basement carparking space that can accommodate two cars. Mr and Mrs Maher’s daughter, Mikala Maher (Ms Maher), has rented the unit from her parents since about 18 December 2018 for $400 per week. Hugh Smith (Mr Smith), a litigation solicitor, is Ms Maher’s partner and lives with her in the unit.

8.The respondent is the owners corporation of Elara.

9.On 11 December 2019, the respondent’s strata manager arranged for temporary propping to be installed in the basement carpark while repairs were carried out. The propping was removed on 27 July 2020. It appears to be uncontroversial that the unit 47 car space could not be used while the propping was in place and alternative parking arrangements were not made available.

10.Mr Maher decided unilaterally to reduce his daughter’s weekly rent while the car space remained unavailable. The net reduction in rent amounted to $9,450. Thus, instead of paying $12,800 in rent during the relevant period, Ms Maher paid only $3,350, a 74% reduction from $400 per week to about $105 per week. Presumably on Mr Smith’s advice, Mr and Mrs Maher apparently considered that in those circumstances they were entitled to recover the foregone rent from the respondent as damages for nuisance and negligence.

11.That was where the problems with this application started. As I will explain, Mr and Mrs Maher’s claim was doomed to fail from the outset because the cause of their alleged ‘loss’ was Mr Maher’s decision unilaterally to reduce his daughter’s rent rather than any act or omission of the respondent.

12.However, as the procedural history of the application shows, the problems with the application went from bad to worse.

13.First, it is necessary to say something about the circumstances in which it may be appropriate for the tribunal to exercise its summary power to dismiss an application, or part of an application, on its own initiative.

The tribunal’s summary powers

14.The objects of the ACAT set out in section 6 include:

(b)     to ensure that access to the tribunal is simple and inexpensive, for all people who need to deal with the Tribunal; and

(c)     to ensure that applications to the tribunal are resolved as quickly as is consistent with achieving justice; and

(d)     to ensure that decisions of the tribunal are fair…

15.In exercising its functions under the ACAT Act the tribunal must abide by the tribunal principles, which are stated in section 7 of the Act. They require the tribunal to:

(a)     seek to ensure the procedures of the tribunal –

(i)are as simple, quick, inexpensive and informal as is consistent with achieving justice; and

(ii)are implemented in a way that facilitates the resolution of the issues between the parties so that the cost of the parties and the tribunal is proportionate to the importance and complexity of the subject matter of the proceeding; and

(b)     observe natural justice and procedural fairness.

16.Each party to a proceeding and their authorised representative has a duty, pursuant to section 7A of the ACAT Act:

(a)     to cooperate with the Tribunal to give effect to the tribunal principles mentioned in section 7; and

(b)     to comply with the Act and any directions.

17.This is reinforced by rule 8 of the ACT Civil and Administrative Tribunal Procedures Rules 2020 (ACAT Rules) which states:

(1)     Each of the following people has a duty to cooperate with the tribunal to give effect to the objects and principles of the Act and these rules, to participate in the processes of the tribunal and to comply with directions and orders of the tribunal:

(a)a party to a proceeding;

(b)an authorised representative of a party to a proceeding;

…

(c)anyone else allowed to participate in a proceeding.

(2)     The tribunal must implement its practices and procedures to facilitate the resolution of issues between the parties to a proceeding in a way that the cost to the parties and the tribunal is proportionate to the importance and complexity of the proceedings.

18.Although section 48(1) of the ACAT Act states that “[t]he parties to an application must bear their own costs unless the Act or another territory law otherwise provides or the tribunal otherwise orders”, this has been held not to confer a discretion on the tribunal to order costs when it considers there are circumstances that justify departing from the usual position. That is most unfortunate.

19.It means that there is no effective constraint on a party pursuing an unmeritorious application, or mounting an unmeritorious defence to an application, exposing the other party to the time, trouble, and expense of being involved in the proceeding and requiring the tribunal to make its resources available at considerable cost to the public purse.

20.Nor is there any cost incentive for parties to settle their grievances or disputes at an early stage, avoiding the need for a hearing.

21.Further, although section 7A of the ACAT Act and rule 8 of the ACAT Rules imposes duties on the parties and their authorised representatives to cooperate with the tribunal, the tribunal lacks the ability to sanction contravening conduct except in the limited circumstances provided for in section 49 of the ACAT Act.

22.Courts have the power to make a costs order against an unsuccessful party. The ability to order costs generally is seen as an adequate remedy for prejudice to a party caused by delay, failure to comply with orders, adjournments, and having to defend claims that ultimately fail. Unsurprisingly, courts traditionally have set a very low bar when deciding whether a claim gives rise to a triable issue. Parties are entitled to have their day in court, but at the risk of an adverse costs order.

23.That is not the case in the tribunal. The absence of any cost consequences for parties means that the tribunal must deal frequently with claims that would never see the light of day if there was even the slightest risk of an adverse costs order.

24.This is a systemic problem that places significant strain on parties’ and the tribunal’s resources. While access to justice is an important goal, there is always a need to strike a balance. Giving one person a risk-free platform to pursue an unmeritorious claim may be seen to serve the interests of access to justice, but it inevitably must come at a high price for the person at the receiving end of the claim. A system that produces ‘justice’ for one person at the cost of ‘injustice’ to another is a system in urgent need of legislative review.

25.Unless the Government amends section 48 of the ACAT Act to clarify that the tribunal may make an order for costs, even if only in exceptional circumstances, the tribunal must find another way to resolve claims at an early stage that lack sufficient merit to be allowed to proceed, and it must do so “simply and inexpensively” and in a manner that is “consistent with achieving justice” and “fair” for all parties to the application.

26.In those circumstances, the tribunal’s power to dismiss an application, or part of an application, summarily under section 32 of the ACAT Act necessarily must assume greater practical importance in the day-to-day management of the tribunal’s substantial and ever-increasing case load.

27.Sections 6, 7, 7A and 48 inform the statutory context in which the power conferred by section 32 must be understood and exercised. Section 32 provides:

(1)     This section applies if the tribunal considers that an application, or part of an application is –

(a)frivolous or vexatious; or

(b)lacking in substance; or

(c)otherwise an abuse of process; or

(d)made by a person who has been dealt with by a court or tribunal in Australia as frivolous or vexatious.

(2)     The tribunal may, by order, do one or more of the following:

(a)refuse to hear the application or part of the application;

(b)dismiss the application or part of the application;

(c)direct that the person who made the application not make a subsequent application to the tribunal of the kind stated in the direction –

(i)within a stated period of time; or

(ii)without the leave of the tribunal.

(3)     The tribunal may make an order under subsection (2) on its own initiative or on application by a party.

(4)     The tribunal may vary or revoke a direction given under subsection (2)(c) –

(a)on its own initiative; or

(b)on application by the person who is the subject of the order.

28.Applications for an order under section 32 usually are brought at an early stage of the proceedings. Because the tribunal is not a pleadings jurisdiction and most persons appearing before the tribunal are self-represented, applications founded on even obvious deficiencies in the expression of the grounds of claim rarely succeed. Where the applicant has not served their evidence, it is often difficult for the tribunal to get a real sense of the issues that may emerge once the applicant has put on their evidence and of the real prospects of success of the claim. Cautionary statements to the effect that the power of summary dismissal should be used sparingly and only in clear cases remain relevant and inform the tribunal’s approach to such applications.

29.The principles that guide the exercise of the tribunal’s discretion under section 32 are taken generally to derive from the Victorian Court of Appeal decision in State Electricity Commission of Victoria v Rabel& Ors [1998] 1 VR 102 (Rabel), which were restated by the Victorian Civil and Administrative Tribunal in Jamieson Mary v Australian Worker’s Union& Anor [1999] VCAT 628. That restatement has been adopted and applied consistently in decisions of this tribunal. It is sufficient for present purposes to reproduce only the following parts of the restatement:[1]

(1)     [the section] permits an order to be made at any time including on the Tribunal’s own initiative. The procedure to be adopted is in the Tribunal’s discretion. The proceeding may be determined on the pleadings and submissions alone, or by allowing the parties to put forward further material, including affidavits and oral evidence.

(2)     If in a proceeding a complainant indicates to the Tribunal that the whole of their case is contained in the material put before the Tribunal, the Tribunal is entitled to determine the matter by asking whether, on all the material before it, there is a question of real substance to go to a full hearing.

…

(6)     For a dismissal or strike out to succeed, a respondent must show, or the Tribunal when proceeding on its own initiative must be satisfied, that the complainant’s case is obviously hopeless and untenable or that it could on no reasonable view justify relief…

…

(8)     A complaint can be dismissed or struck out if it is obviously unsustainable in law or in fact. This will include, but is not limited to, a case where a complaint can be said to disclose no reasonable cause of action, or where the respondent can show a defence sufficient to warrant the summary termination of the complaint.

[1] Reproduced in Dirkis v Public Trustee and Guardian [2021] ACAT 57 at [18]

30.As Ormiston J observed in Rabel at [14], an application will be lacking in substance if it is based on an “untenable proposition of law or fact”.

31.As will appear, this was a case where the applicants’ authorised representative, a litigation solicitor, acknowledged that all the evidence on which the applicants relied was before the tribunal and contended that, based on the pleadings and evidence, the applicants were entitled to succeed.

32.It has long been a feature of civil litigation that a defendant can elect at the close of the plaintiff’s case to call no evidence and require the case to be decided on the evidence already adduced. An applicant in a civil dispute application who bears the burden of proof must provide sufficient evidence to prove every essential element of the cause of action on which the applicant sues. The applicant cannot rely on the respondent to go into evidence, or call a particular witness, or tender a particular document, to cure any evidentiary deficiency in the applicant’s case.

33.Where, as in this case, the tribunal has before it all of the material on which the applicant intends to rely, including to prove loss and damage, and it appears to the tribunal that the application cannot succeed based on that material, or is most unlikely to do so, it is open to the tribunal to give the applicant an opportunity to demonstrate why an order should not be made dismissing the application, or part of the application, under section 32(2)(b) as lacking in substance.

34.Often in uncomplicated matters involving limited evidence and unsophisticated parties it may be preferable to allow the matter to go to a hearing. Little may be gained in those circumstances by convening a hearing or giving the parties an opportunity to make submissions in writing as to whether an application should be dismissed summarily.

35.In complex matters, where the evidence of both parties is before the tribunal, it is difficult to imagine circumstances where it would be an appropriate exercise of the tribunal’s discretion to decide the matter under section 32(2)(b) rather than on the merits considering all the evidence.[2]

[2] Andreopoulos v University of Canberra [2020] ACAT 95 at [89]

36.However, even in an apparently complex matter, such as this application has become, where the cost to the parties and the tribunal going forward is likely to be substantial and there is a real question whether the claims the applicants wish to pursue are legally or factually misconceived, the tribunal would be derelict in the performance of its statutory duty to the public and to the parties if it allowed the matter to proceed without considering whether intervention under section 32(2)(b) is warranted.

37.My comments are not intended to encourage parties, particularly those with the benefit of legal representation, to be more proactive in making applications for summary dismissal under section 32. The experience in the tribunal, as in most courts, is that such applications are often inappropriate and rarely succeed.

38.In those circumstances, the power given to the tribunal by section 32(2) to make an order under section 32(2) on its own initiative (subject, of course, to observing natural justice and procedural fairness) assumes considerable importance and should be considered for use more often. The tribunal’s function is to serve the interests of justice in accordance with the objects stated in section 6 and to exercise its jurisdictions applying the principles in section 7 of the ACAT Act. It must do so with at least one hand tied behind its back because the risk of an adverse costs order, even where the tribunal considers it would be appropriate to “otherwise order”, is not a factor that influences the commencement and continuation of applications in the tribunal’s jurisdictions. That leaves the tribunal with one hand free, which is the hand that wields the power under section 32 to decide that an application, or part of an application, is lacking in substance and should not be allowed to proceed. It is a vitally important instrument in the administration of justice in the tribunal. It may be a relatively blunt instrument, but that is a matter of legislative choice. My point is that the tribunal should be more vigilant in weeding out matters at an early stage – appropriately, after a preliminary conference has been held with the parties – where to allow the matter to proceed would be inconsistent with the objects of the ACAT Act and the principles that govern the exercise of the tribunal’s jurisdiction.

39.Those comments should be kept in mind when considering the procedural history of the application, which I turn to next.  

Procedural history

The civil dispute application

40.On 23 March 2021, Mr Smith, acting as Mr and Mrs Maher’s duly authorised representative rather than as their solicitor, filed a civil dispute application on their behalf claiming an amount of $9,450, plus the ACAT filing fee of $162.50 plus unspecified damages from the respondent. The total amount of the claim stated in the application was $9,612.50.

41.The application annexed a statement of claim, signed by Mr Smith, setting out the grounds for the claim. In summary, the statement of claim alleged:

(a)Mr and Mrs Maher were the joint owners of unit 47, which included two car spaces: [1]-[4].

(b)In about late December 2019, the respondent blocked access to the Mr and Mrs Maher’s car spaces by erecting semi-permanent poles and barriers, termed ‘Obstructions’: [5]-[9].

(c)This interfered with Mr and Mrs Maher’s enjoyment and use of the car spaces: [11].

(d)The erection of the Obstructions and the respondent’s refusal to provide alternative parking spaces “was substantial and unreasonable”: [12].

(e)As a result of the nuisance, Mr and Mrs Maher have suffered damage. The following particulars of damage were included in [13]:

The Applicants has [sic] been unable to obtain the market rate for the rental of the Applicants’ Car Spaces

The Applicants have been unable to use the Applicants’ Car Spaces

Access to the storage cage owned by the Applicants has been blocked

Further particulars will be provided

(f)In the alternative, by virtue of its control of the common property, the respondent owed Mr and Mrs Maher a duty of care (although the applicants did not specify whether it was a duty of care to protect the building and/or the applicants as unit owners from the risk of physical harm or injury, or a duty to avoid pure economic loss, which involves quite different legal and factual considerations): [15].

(g)By erecting the Obstructions, without providing or endeavouring to provide alternative parking, the respondent breached its duty of care to Mr and Mrs Maher. The following particulars of the breach of the duty of care were included in [16]:

The Respondent erected the Obstructions

By virtue of the Obstructions, the Respondent prevented the Applicants from accessing the Applicants’ Car Space

The Respondent did not provide alternate parking to the Applicants in substitution for the loss of the Applicants’ Car Spaces

The Respondent did not take reasonable steps to mitigate the loss and damage caused to the Applicants by the erection of the obstructions

The Respondent failed to engage meaningfully or indeed at all with the Applicants with respect to the Obstructions

Res Ipsa Loquitur

(h)As a result of the respondent’s breach of its duty of care, Mr and Mrs Maher have suffered damage. The particulars of damage given earlier in [13] were repeated in [17].

(i)In the premises, Mr and Mrs Maher claimed from the respondent:

(a)$9,450.00 being the market value of the car spaces calculated daily;

(b)Interest;

(c)General Damages;

(d)Exemplary Damages:

(e)$75.00 being the filing fee.

The response

42.On 25 May 2021, Kerin Benson Lawyers (KBL) filed a response to the application on behalf of the owners corporation. In summary, the response admitted that propping was erected in late December 2019, blocking access to the applicants’ car space. In answer to the claims in nuisance and in negligence, the response alleged (in summary):

(a)The propping was erected substantially in accordance with the approach specified in an emergency rectification order (ERO) issued by the Territory to B&T Constructions (ACT) Pty Ltd on 20 September 2012. The propping was necessary to ensure the structural safety of Elara and to protect the basement carpark roof from the risk of collapse. Further, erecting the propping was the only way the respondent could comply with section 100 of the Unit Titles (Management) Act 2011 (UTM Act) (which relates to building insurance requirements). The propping was removed on 19 June 2020 following completion of remediation works: [9].

(b)The applicants do not occupy the unit and do not use the car spaces. The applicants have not suffered any actual loss “unless it can be proved that there has been an adjustment in rent received (if any) due to the tenant’s inability to use the Car Space”: [13].

(c)If the erection of the propping caused substantial and unreasonable interference with the enjoyment and use of the car space by the owner and/or occupier of the unit, the interference created was necessary to prevent a real and imminent harm. The necessity was unavoidable and arose without the respondent’s fault: [14], [15].

(d)The respondent accepted that it owed a duty of care to owners and occupiers of individual units in Elara (I interpret this to mean a duty to protect the building and owners from the risk of physical harm) and alleged that the purpose of the propping was to “safeguard the structural integrity of the whole building and the safety of all owners, occupiers and invitees”. The erection of propping in accordance with the ERO was the only way the respondent could comply with section 100 of the UTMA. The likely harm to the owners and/or occupiers of the unit because of not being able to access the car space was relatively minor compared to the danger the basement carpark roof may collapse and the consequences of the respondent breaching section 100 of the UTMA (presumably by failing to obtain building insurance). Finding another approach to ensuring the structural integrity of Elara without affecting access to the car park was too burdensome, if not impossible. The respondent took reasonable precautions to minimise interference with the car space. Finally, a reasonable person in the respondent’s position would have erected the propping: [18].

43.The respondent’s answer to the applicant’s claim raised complex technical and factual issues that would require both parties to rely on expert evidence, making a lengthy and expensive hearing unavoidable.

The tribunal’s orders made on 28 June 2021

44.The tribunal conducted a preliminary conference with the parties on 28 June 2021. By orders made on that date the matter was adjourned for a further conference on 9 August 2021, and the applicants were directed to lodge with the Tribunal and serve on the respondents, by 12 July 2021, an amended application and the evidence on which they intended to rely to substantiate the claim for loss.

45.On 13 July 2021, Mr Smith filed an amended statement of claim and witness statements by Ms Maher and himself. On 19 July 2021, the applicants filed a handwritten statement by Mr Maher dated 17 July 2021.

The amended statement of claim

46.The amended statement of claim did not follow the usual convention of being marked up to show the tribunal and the respondent where changes had been made.

47.A notable difference when comparing the amended statement of claim with the original is that the nuisance claim no longer appeared. The amended application now sought damages in negligence only. The duty of care was said to be owed to the applicants “by virtue of [the respondent’s] control of the common property” and was breached by the respondent “erecting the Obstructions”.

48.The following revised particulars of damage were included in paragraph 14:

The First and Second Applicants have suffered loss of rental income.

The Third and Fourth Applicants have lost the ability to obtain the market value of the Car Spaces.

The physical and mental health of the Third Applicant has been significantly affected.

49.The prayers for relief in paragraph 15 now sought:

a.     An order that the Respondent pays to the First and Second applicants $9,450.00, being the amount of rent reduction provided to the Tenants.

b.     General damages.

c.      Exemplary damages.

d.     Interest.

50.For the first time paragraph 15 included the following additional prayers for relief:

e. A declaration that the members of the EC are in breach of the code of conduct contained in Schedule 1 of the Unit Titles (Management) Act 2011 (ACT) (Act).

f.      An order pursuant to section 129 of the Act that the EC of Elara publish this decision on the Elara notice board and provide each unit owner and tenant in Elara with a physical copy of this decision.

g.     An order pursuant to section 129 of the Act that the EC are to engage in ‘good faith’ negotiations with respect to any damages claims arising from building works at Elara.

h.     An order pursuant to section 129 of the Act that the EC commission an independent third party approved by the Applicants, to commission in a timely manner a further report (being a report other than the Wise Plan Report conducted by a party other than a party that conducted the Wise Plan Report) to assess how to minimise loss and damage suffered by unit owners and tenants by planned future building works. This report is to consider positive risk mitigation strategies (Further Report).

i.      An order pursuant to section 129 of the Act that the EC are to provide to the Applicants in hard copy, copies of all general meeting and annual general meeting [sic] from 1 July 2016 to the date of this order.

51.There are some obvious problems with the relief sought in paragraphs 15(e) to (i). First, the tribunal does not have jurisdiction in hearing a civil dispute application to entertain or grant relief in relation to a matter that arises under the UTM Act. Second, the relief is sought against members of the Executive Committee who are not parties to the application. Third, the grounds on which the relief is sought are not stated.

52.As the jurisdictional issue disposes of this part of the amended statement of claim, I will digress to explain the tribunal’s jurisdiction in civil and unit titles matters.

Jurisdictional limitations

53.It has been said repeatedly that the tribunal’s jurisdiction is entirely statutory. It does not have an inherent jurisdiction. The tribunal’s power to do anything must be found in the ACAT Act or in other authorising legislation. The tribunal does not exercise different jurisdictions concurrently.

54.The tribunals jurisdiction in relation to ‘civil disputes’ is governed by part 4 of the ACAT Act. Sections 15 and 16 include important definitions. A ‘civil dispute’ means a dispute in relation to which a ‘civil dispute application’ can be made. A ‘civil dispute application’ means an application that consists of one or more of the following applications:

(a)A ‘contract application’, which means an application in relation to a contract, and includes an application for damages for breach of contract.

(b)A ‘damages application’, which means an application for damages for negligence or for any other tort except nuisance or trespass.

(c)A ‘debt application’, which means an application for the recovery of a debt.

(d)A ‘goods application’, which means an application in relation to the provision of goods or services, and includes an application for damages for the detention, or return, of goods.

(e)A ‘nuisance application’, which means an application for relief for nuisance.

(f)A ‘trespass application’, which means an application for relief for trespass to land.

(g)An application for a ‘debt declaration’.[3]

(h)An application for a ‘common boundaries declaration’, which means a determination under the Common Boundaries Act 1981, and includes a variation of a determination.

(i)An application for an order under the Australian Consumer Law (ACT).

(j)An application stated to be a civil dispute application in an authorising law.

[3] It is unnecessary to refer to the definition in section 15 because of its length.

55.The tribunal’s jurisdiction in relation to disputes between (among others) an owner and occupier of a unit and the owners corporation and/or the executive committee, is governed by part 8 of the UTM Act, which is the relevant authorising law. None of the applications authorised by part 8 are stated to be a civil dispute application.

56.This proceeding was commenced as a civil dispute application in the tribunal’s civil dispute jurisdiction. If any of the applicants wish to obtain orders in relation to a dispute with the executive committee, they must do so by a unit titles application in the tribunal’s unit titles jurisdiction, which will be heard and determined as a separate matter.

57.The relief sought in paragraphs 15(e) to (i) of the amended statement of claim is not available to the applicants in this proceeding and that part of the application must be dismissed.

The purported joinder of the 3^rd and 4^th applicant

58.By the amended statement of claim, Ms Maher and Mr Smith purported to join themselves as parties to the application, respectively as the third and fourth applicant.

59.I note however, that no application has been made to the tribunal to date for an order joining either of them as a party to the application. A check of the tribunal’s ICMS system, where a permanent digital record is kept of all orders made in relation to all applications, confirms that neither Ms Maher nor Mr Smith is a party to the application.

60.I digress for a moment to explain the tribunal’s powers and procedures relating to joinder of parties. Section 29(1) of the ACAT Act provides that the parties to an application are the applicant and the respondent unless the section or an authorising law otherwise provides. Pursuant to section 29(5) the tribunal may, by written notice to the parties to an application, join a person as a new party to the application if the person has an interest in the application. Rule 39 of the ACAT Rules deals with necessary parties. Subrule (1) provides that each person whose presence as a party is necessary to enable the tribunal to adjudicate effectively and completely on all issues in dispute in a proceeding must be included as a party to the proceeding. Subrule (3) provides that the tribunal may order that a person be joined as a party or substituted for a party to the proceeding. Subrule (5) provides that the tribunal may make an order under subrule (3) on application by a party, another person, or on its own initiative.

61.The practice in the tribunal is to require a person who wishes to be joined as a party to file and serve an application for interim or other orders, supported by evidence to satisfy the tribunal that the person has a relevant interest in the application. A relevant consideration where a person wishes to be joined as an applicant to a civil dispute application, is whether the person has a genuine cause of action. The other party or parties to the original application are given an opportunity to be heard in opposition to the application for joinder. If joinder is opposed on the grounds that the claim the new applicant seeks to bring or be joined to is frivolous or vexatious, lacking in substance, or otherwise an abuse of process, the tribunal will determine that issue before it considers making an order for joinder. That important procedural step was never taken in this case.

62.A person cannot simply make themselves a party to an existing application by naming themselves as such in an amended application, even where leave to file an amended application is given. Unless and until the tribunal considers whether it is appropriate to make an order under rule 39(3) of the ACAT Rules, and does so, a person in that position is not a party to the application regardless of what the amended application (or in this case, an amended statement of claim) may say.

Ms Maher’s interest in the application

63.The question whether Ms Maher has a relevant interest in the civil dispute application brought by her parents has never been considered by the tribunal. According to Mr Maher’s witness statement dated 17 July 2021, he “rented the unit to Ms Mikala Maher for $400 per week” from about 18 December 2018. He then says:

From 11 December 2019 to 27 July 2020, I reduced the rent payable by Ms Maher to me by $9,450.00. I considered $9,450.00 to be the market value of the car spaces blocked by the propping during this period.

64.Ms Maher describes herself in her witness dated 12 July 2021 as an “occupier” of the unit. Although she lives there with her partner, Mr Smith, according to her evidence she pays the rent. At paragraph 16 of her statement she says:

As a result of the Propping being installed, I did not pay rent to the owners of the Unit who are also applicants in these proceedings in the amount of $9,450.00 being the market value of the Car Spaces calculated daily between 11 December 2019 and 27 July 2019. This means that in the period 11 December 2019 to 27 July 2019, rather than paying $12,800.00 in rent, I only paid $3,350.00 in rent. [Emphasis added]

65.Ms Maher does not claim that the reduction in rent granted to her by her father did not fully compensate her for any inconvenience or additional cost she may have incurred because of losing access to the car space. While her evidence may have some bearing on proof of Mr and Mrs Maher’s claim (about which I have more to say later), it does not show that she has a relevant interest in the application.

66.However, Ms Maher claims in paragraph 8 of her witness statement that she was “extremely distressed” upon learning that access to her car space would be blocked. She complains about not being provided an alternative parking space, (although she provides no evidence that alternative parking spaces were available, or could reasonably have been made available, for her use). She says in paragraph 14 that in June 2021, a dispute arose between her and the tenants of a neighbouring unit about where she could park her vehicle, which again caused her “great distress”, compounding her feelings of “being scared about parking the car outside of the basement and potential harm that could occur to me when I was forced to walk long distances from the ad-hoc spots I could find to park my car to the Unit at night”. In paragraph 15, Ms Maher claims that “the installation of the propping without the provision of further parking has caused me significant distress” and that from early 2020 she “developed chronic migraines” which she attributes to the stress she was placed under. She also claims to have felt “belittled and demeaned by the flagrant disregard EC and Elara had for my situation and the effect it had on my health and my job”.

67.The point of this evidence emerges in part in paragraphs [18] to [20], where Ms Maher says:

18.    I do not see why the propping could not have been erected in a way that allowed the Cars to park in the Car Spaces, this could have been achieved in the following ways:

a.The installation of H Frames; and/or

b.The installation of propping spaced in a matter [sic] that allowed access to the Car Spaces.

19.    Further to [18] I do not see why parking could not have been managed in a way which mitigated its effect on my partner and I through, for example, a parking roster with respect to the visitor parks or spare parking spaces owned by unit owners.

20. As a result of the EC’s conduct in this matter, I am of the view that the members of the EC are in breach of the Code of Conduct in Schedule 1 of the Unit Titles (Management) Act 2011 (ACT).

68.However, as I have explained, the intermingling of issues arising under the UTM Act with issues arising in the tribunal’s civil dispute jurisdiction is impermissible.

69.Thus, the only basis upon which Ms Maher could have an interest in the application is if she has an arguable claim for damages for the alleged effect the erection of the propping had on her physical and mental health. Such a claim faces insurmountable obstacles, as I will explain later, which means she does not have a relevant interest in the application which would justify her being joined as an applicant to the proceeding.

Mr Smith’s ‘interest’ in the application

70.The question whether Mr Smith has a relevant interest in the application is more easily answered.

71.Mr Smith describes himself in his witness statement dated 13 July 2021, as an “occupier and tenant” of the unit. Except for that assertion, the statement does not give any evidence relevant to his status as an “occupier and tenant”,[4] nor that he claims to have suffered any compensable loss or damage because of the respondent’s conduct. The statement annexes a copy of the tribunal’s decision in Smith v Owners Corporation – Unit Plan 3115 [2021] ACAT 28, which relates to an earlier claim Mr Smith brought successfully against the owners corporation for the replacement cost of a bicycle stolen from the common property, which he claimed happened because of the owners corporation’s negligence in failing to provide alternative arrangements for secure storage while the propping was in place. It appears Mr Smith thinks the decision makes out the applicants’ case that the owners corporation owes the applicants a duty of care to avoid pure economic loss. I doubt that it does, but in any event that is immaterial to the present issues. The point is that while the applicants may be expected to rely on the decision in support of their submissions in relation to the respondents’ duty of care, the decision is not evidence. It has no probative value in relation to any fact in issue in the current proceeding.[5] The scope of the respondent’s alleged duty of care to avoid the loss suffered by each applicant must be clearly identified and must be proved by evidence, including evidence establishing that each claimant was relevantly ‘vulnerable’ to the respondent’s alleged lack of care. The applicants bear the onus on this issue.

[4]     Under the Residential Tenancies Act 1997 a ‘tenant’ is a person who has a right of occupation under a ‘residential tenancy agreement’ [section 6(1)]; a ‘co-tenant’ is a person who is one of two or more tenants under a ‘residential tenancy agreement’ [section 6AA]; and an ‘occupant’ is a person who has a right of occupation under an ‘occupancy agreement’ [section 71B(1)].

[5]     See the discussion of the tribunal’s approach to evidence where the rules of evidence are not applied in Sarbandi v Sharif [2017] ACAT 57 at [52]-[58].

72.Importantly, neither Mr Maher, nor his daughter, nor Mr Smith give any evidence of a residential tenancy agreement under which Mr Smith has a right to occupy the unit as a co-tenant with Ms Maher, or that he is liable for, and pays rent, to Mr and Mrs Maher under such an agreement. Mr Maher’s evidence that he rents the unit to his daughter and Ms Maher’s evidence that she pays the rent and was the beneficiary of her father’s decision to reduce the rent, suggests that Ms Maher is the tenant and Mr Smith occupies the unit at her discretion. Whilst he is, in that sense, an ‘occupier’, there is no evidence that he personally has suffered any compensable loss because of the events and circumstances the subject of the present application and nor does he claim in his witness statement that he has suffered any loss.

73.Mr Smith’s real purpose in purporting to join himself as an applicant to the proceeding, is to seek relief under the UTM Act, rather than damages for a civil wrong. As I have explained, this is based on a fundamental misunderstanding of the tribunal’s civil dispute jurisdiction.

74.I am not satisfied that Mr Smith has, or ever has had, any relevant interest in the civil dispute application that would justify him being joined as an applicant to the proceeding.

75.Mr Smith, of course, remains the duly authorised representative of Mr and Mrs Maher and is entitled to participate in the proceeding on that basis.

Mr and Mrs Maher’s amended claim for lost rent

76.Mr and Mrs Maher’s claim for loss of rental income is a claim for pure economic loss. To establish the claim, Mr and Mrs Maher must establish:

(a)the owners corporation owed them a duty of care to avoid economic loss (that necessarily would require evidence establishing that they were relevantly ‘vulnerable’ to the respondent’s lack of due care in erecting the propping, in the sense of being unable to take any reasonable measures to protect themselves against the risk of loss);

(b)the owners corporation breached its duty of care by erecting propping that blocked access to their car space and failing to provide alternative parking (that necessarily would require evidence that alternative parking arrangements were or could have been made available and that it was unreasonable for the owners corporation to fail to do so);

(c)the owners corporation’s breach of duty caused Mr and Mrs Maher to lose rental income (that inevitably encounters the problem that Mr Maher was not compelled to reduce the rent but rather chose freely to do so); and

(d)the quantum of their loss.

77.The problems with this claim are manifest. Most obviously, according to Mr Maher’s evidence, he decided unilaterally to reduce his daughter’s rent when access to the car space was blocked. He may have been prompted to do so by the loss of access but that does not mean that he and his wife were ‘vulnerable’, in the relevant sense, to economic loss caused by the respondent’s allegedly negligent act.

78.Nor does it make the respondent’s actions in erecting the propping the relevant cause of Mr and Mrs Maher’s ‘loss’ of rental. Whatever Mr Maher’s motivation for reducing his daughter’s rent, he was under no legal obligation to do so. Section 45 of the Civil Law (Wrongs) Act 2002 makes it clear that a decision that negligence caused harm to a person comprises two elements. First, the negligence must be a necessary condition of the happening of the harm. Second, it must be appropriate for the scope of the negligent person’s liability to extend to the harm so caused. Further, pursuant to section 45(3), in deciding the scope of liability, it is necessary to consider, among other things, whether, and why, responsibility for the harm should be imposed on the negligent party.

79.An insurmountable obstacle to the claim is that Mr Maher was not under any legal obligation to reduce the rent. It would be otherwise only if an application had been bought in the tribunal under part 5 of the Residential Tenancies Act 1997 (RT Act), where section 71(1) provides that, on application by a tenant, the ACAT must order a reduction in the rental rate payable under a residential tenancy agreement if it considers that the tenant’s use or enjoyment of the premises has diminished significantly as a result of, among other things, the loss of use of all or part of the premises.

80.If such an application had been made and the tribunal had been satisfied as to the matters required to be established under section 71(1), any reduction in rent that the tribunal may have ordered (which would not necessarily have been calculated by reference to a notionally foregone ‘market rate’ at which the spaces could have been rented to others) would have constituted a ‘loss of rental’ causally related to the obstruction of access.

81.However, as Mr Maher took it upon himself to reduce the rent voluntarily, the cause of any rental loss was his own voluntary decision and not any act or omission on the part of the owners corporation.

82.The first and second applicant’s claim for loss of rental income is doomed to fail and accordingly ‘lacks substance’ in the sense required by section 32(2)(b) of the ACAT Act.

Ms Maher’s and Mr Smith’s ‘claim’ for the market value of the car spaces

83.Ms Maher’s and Mr Smith’s claim to have lost the ability to obtain the market value of the car spaces is obscure to say the least. It lacks any evidentiary basis in the material filed by the applicants. I am satisfied that it ‘lacks substance’ in the sense required by section 32(2)(b) of the ACAT Act.

84.I surmise that the particulars simply reflect a lack of care in drafting the amendments, noting that the original statement of claim attributed to the first and second applicants loss and damage caused by being “unable to obtain the market rate for the rental of the Applicants’ Car Spaces”.

85.I observe that there is no suggestion in Mr Maher’s witness statement, or indeed in any other evidence relied upon by the applicants, that Mr and Mrs Maher ever rented the car space independently of the unit, nor for that matter, that Ms Maher or Mr Smith ever did so. When the propping was in place, the car spaces formed part of the premises Mr Maher rented to his daughter. The original allegation made in the statement of claim that Mr and Mrs Maher suffered a loss by “being unable to obtain the market rate for the rental of the Applicants’ Car Spaces”, in my opinion, was colourable and never should have been made.

Ms Maher’s claim for damage to her physical and mental health

86.The claim that Ms Maher’s physical and mental health has been significantly affected by the respondent’s alleged negligence appears to be a claim for damages for personal or mental injury. If so, it faces insurmountable obstacles.

87.At common law, in the absence of physical injury, mental or emotional distress or suffering is generally not compensable unless a recognised psychiatric injury or illness can be established. In Tame v New South Wales,[6] Gummow and Kirby JJ said at [193]:

In Australia, as in England, Canada and New Zealand, a plaintiff who is unable affirmatively to establish the existence of a recognisable psychiatric illness is not entitled to recover. Grief and sorrow are among the “ordinary and inevitable incidents of life”; the very universality of those emotions denies to them the character of compensable loss under the tort of negligence. Fright, distress or embarrassment, without more, will not ground an action in negligence. Emotional harm of that nature may be evanescent or trivial. [Footnotes omitted]

[6] [2002] HCA 35 at [193] per Gummow and Kirby JJ

88.In the ACT the position is governed by the Civil Law (Wrongs) Act 2002 (CL Act).

89.Chapter 3 of the CL Act deals with liability for death or injury. Part 3.2 applies to claims for mental harm. ‘Mental harm to a person’ is defined in section 32 to mean “impairment of the person’s mental condition”. ‘Consequential mental harm’ to a person means mental harm to the person that is a “consequence of bodily injury to the person”. ‘Pure mental harm’ to a person means “mental harm to the person other than consequential mental harm”. Ms Maher’s complaint seems to relate to pure mental harm.

90.Section 34 places significant limits on a person’s duty of care to avoid causing mental harm to another person:

(1)     A person (the defendant) does not owe a duty to another person (the plaintiff) to take care not to cause the plaintiff mental harm unless a reasonable person in the defendant’s position would have foreseen that a person of normal fortitude in the plaintiff’s position might, in the circumstances of the case, suffer a recognised psychiatric illness if reasonable care were not taken.

(2)     For the application of this section in relation to pure mental harm to a person, the circumstances of the case to which the court must have regard include –

(a)whether or not the mental harm was suffered as the result of a sudden shock; and

(b)whether the plaintiff witnessed, at the scene, a person being killed, injured or put in danger; and

(c)the nature of the relationship between the plaintiff and anyone killed, injured or put in danger; and

(d)whether or not there was a pre-existing relationship between the plaintiff and the defendant.

(3)     For the application of this section in relation to consequential mental harm to a person, the circumstances of the case to which the court must have regard include the nature of the bodily injury out of which the mental  harm arose.

(4)     This section does not affect the duty of care a person (the defendant) has to another person (the plaintiff) if the defendant knows, or ought reasonably to know, that the plaintiff is a person of less than normal fortitude.

91.‘Court’ is defined in the Dictionary to the CL Act by reference to other sections that give the meaning of ‘court’ in a particular chapter or part of the Act. There is no definition applicable to part 3.2. In that context, where ‘court’ appears in section 34, it must be given its ordinary meaning, which does not include a ‘tribunal’.[7] By way of contrast, for the purposes of Chapter 14, which provides for limitations on legal costs, ‘court’ includes a tribunal or arbitrator.[8]

[7]     Note that ‘court’ is not defined in the Legislation Act 2001, although ‘tribunal’ is defined: “includes any entity that is authorised to hear, receive and examine evidence”.

[8] CL Act sections 180 and 186

92.Section 35 limits the circumstances in which damages are recoverable for mental harm:

(1)     Damages must not be awarded for pure mental harm to a person resulting from negligence unless the harm consists of a recognised psychiatric illness.

(2)     Damages must not be awarded for economic loss for consequential mental harm to a person resulting from negligence unless the harm consists of a recognised psychiatric illness.

93.Chapter 5 of the CL Act applies to personal injury claims. ‘Personal injury’ is defined in the Dictionary to the Act as bodily injury, including mental or nervous shock and death. ‘Claim’ is defined in section 49 to include a “claim (however described) for damages based on a liability for personal injury, whether the liability is based in tort or contract or on another form of action (including breach of statutory duty)…”. Section 50 provides that chapter 5 applies to all claims for damages for personal injury, subject to certain immaterial exceptions.

94.Part 5.2 of the CL Act sets out a mandatory claims procedures. Section 51(1) states that “before a claimant brings a proceeding against someone else (a respondent) based on a claim in relation to a personal injury, the claimant must give the respondent written notice of the claim”. Section 51(2) identifies the information that a notice must contain and the documents that must accompany a notice. Section 51(3) limits the time for giving a notice under subsection (1). Relevantly, for a proceeding not based on a motor accident claim or child abuse claim, the notice must be given within the period ending on the earlier of:

(a)     the day that is 9 months after—

(i)the day the accident giving rise to the personal injury happened; or

(ii)if symptoms of the injury are not immediately apparent – the day symptoms of the injury first appear;

(b)     the day that is 4 months after the later of the following days:

(i)the day the claimant first instructs a lawyer to provide advice about seeking damages for the personal injury;

(ii)the day the respondent is identified.

95.Section 59 states:

(1)     If a claimant does not give a complying notice of claim, the claimant cannot proceed further with the claim unless—

(a)…

…

(c)the court, on application by the claimant—

(i)declares that the claimant has remedied the noncompliance; or

(ii)authorises the claimant to proceed further with the claim despite the noncompliance. [Emphasis added]

96.Part 5.3 of the CL Act imposes obligations on parties to give documents and information. Part 5.4 deals with pre-court procedures. Section 78 confers power on the court to enforce compliance with a party’s duty imposed under part 5.2 or part 5.3. Section 79 gives the court power to grant leave to a claimant to begin a proceeding in the court for damages based on a liability for personal injury despite noncompliance with chapter 5 in an urgent case.

97.Part 7.1 of the CL Act applies to all claims for damages for personal injury and governs how a court may award damages for personal injury.

98.It will be noticed that all these provisions speak of what a ‘court’ can do. For chapter 5 the Dictionary provides that ‘court’ has the meaning given in section 49, which states:

court, in relation to a claim, means—

(a)     if a proceeding based on the claim has been begun—the court hearing the proceeding; or

(b)     if no proceeding based on the claim has been begun—a court with jurisdiction to hear the claim.

99.For part 7.1 ‘court’ includes an arbitrator (but not a tribunal).

100.The tribunal is not a ‘court’ for the purposes of chapter 5 of the CL Act. The tribunal does not have jurisdiction to hear and determine Ms Maher’s claim, whether it is characterised as a claim for pure mental harm or a claim for personal injury.

101.That makes it unnecessary to dwell on the fact that Ms Maher does not claim to have suffered a recognised psychiatric illness and has provided no medical evidence, nor on the consequences of non-compliance with the procedural requirements of chapter 5 of the CL Act.

102.Ms Maher’s claim is founded on untenable propositions of law and fact and accordingly ‘lacks substance’ in the sense required by section 32(2)(b) of the ACAT Act. As she is currently not a party, the ‘claim’ is incompetent and, strictly speaking, does not need to be dismissed. However, there has been sufficient confusion in the conduct of this application to date to justify making an order that Ms Maher and Mr Smith be joined as parties to the application for the limited purpose of giving effect to the orders made pursuant to my decision.

The tribunal’s orders on 9 August 2021

103.The preliminary conference adjourned on 28 June 2021 resumed on 9 August 2021. Unfortunately, it appears that none of the problems with the applicants’ amended claim (including that Ms Maher and Mr Smith had not been made parties to the application) were picked up by the respondent or the tribunal. Instead, the matter was given a hearing date on 1 October 2021 and directions were made for the preparation of the matter for hearing including that, by 23 August 2021, the applicants must provide an amended application pleading nuisance (presumably because the claim pleaded in the original statement of claim was omitted in error) and setting out the orders the applicants seek, and any further witness statements, expert reports, and documents on which the applicants intend to rely as evidence. Corresponding orders were made for the respondent to provide an amended response and the evidence on which the respondent intends to rely by 13 September 2021. Any subpoenas to produce documents were required to be served by 10 September 2021.

The 23 August 2021 further amended statement of claim

104.The applicants filed a further amended statement of claim (misdescribed as an amended statement of claim) on or about 23 August 2021. Under a heading ‘Respondent’s Conduct Caused Nuisance’ the applicants now alleged:

14A.  Further and in the Alternative to [11] to [14] above, between in or about late December 2019 to on or about 19 June 2020, by virtue of the Respondent erecting the Obstructions, the Applicants were denied access to the Applicants’ Car Spaces.

14B.  The erection of the Obstructions caused substantial and unreasonable interference to the Applicants.

14C.  By virtue of its control of the common property, the Respondent owed the Applicants a duty of care (Duty of Care).

14D. by [sic] erecting the Obstructions, without providing or endeavouring to provide alternative arrangements for the Applicants, the Respondent breached its duty of care to the Applicants.

105.It would be charitable to describe the amendments as confused. The particulars of damage and prayers for relief remained unchanged. None of the deficiencies in the earlier version of the amended statement of claim were addressed or remedied.

106.At about the same time, the applicants filed two documents on which they proposed to rely as evidence at the hearing. One appears to be a screenshot from Google Maps marked up to show the location of parking stations in the grounds of the University of Canberra in the general vicinity of the unit. The other is a printout from the University of Canberra website giving details of the parking rates for 2021. 

107.Presumably, this was intended to be relied upon as evidence of the ‘market rate’ for car parking on which Mr Maher ostensibly based his decision to reduce his daughter’s rent by $9,450, notwithstanding the period in question was 11 December 2019 to 27 July 2020, and not 2021.  

Subpoenas to produce documents

108.Both parties issued subpoenas. The subpoena issued by Mr Smith to the respondent deserves special mention. By the subpoena, Mr Smith sought production of the following documents:

1.     All correspondence from 20 September 2012 to 27 July 2020 (Relevant Period) between the Executive Committee of the Respondent (Respondent) with respect to the Emergency Rectification Order dated 20 September 2012 (ERO).

2.     A copy of the ERO.

3.     All correspondence during the Relevant Period between the Executive Committee of the Respondent (Respondent) with respect to the ERO.

4.     All correspondence during the Relevant Period between the Respondent and the strata manager for the Respondent (Independent) with respect to the ERO.

5.     All correspondence during the Relevant Period between the Respondent and/or Independent and the Respondent’s Insurer with respect to the ERO.

6.     All correspondence during the Relevant Period between the Respondent and/or Independent and any builder solicited by the Respondent and/or Independent to perform works in compliance with the ERO (Compliance Works).

7.     All minutes of meeting in which the resolutions were passed with respect to the ERO.

8.     Any risk management plan or correspondence relating to any proposed risk management plan with respect to the ERO and the Works.

9.     All correspondence between the Respondent and/or Independent to owners of the Respondent with respect to the Compliance Works.

10.    All document [sic] including correspondence stating that the poles erected to block the Applicants’ Car Spaces (Poles) must be erected as a result of the ERO.

11.    Any document including correspondence with respect to the Respondent’s consideration of the manner in which the Poles were to be erected.

12.    All documents including correspondence with third parties with respect to the Respondent’s consideration of mitigating the effect that the Poles would have on owners.

13.    All correspondence between the Respondent and/or Independent and the ACT Government with respect to inquiries seeking alternate parking or any alternate arrangement for owners affected by the Poles.

14.    All correspondence between the Respondent (being the EC) with respect to Compliance Works to be conducted from September 2021 onwards.

15.    All correspondence between the Respondent and/or Independent with respect to Compliance Works to be conducted from September 2021 onwards.

16.    All correspondence between the Respondent and/or Independent with respect to Compliance Works to be conducted from September 2021 onwards.

17.    All correspondence between the Respondent and/or Independent with respect to risk mitigation plans with respect to Compliance Works to be conducted from September 2021 onwards.

18.    All building quotes and correspondence between the Respondent and/or Independent and builders with respect to future Compliance Works.

109.Even on the most generous view of the issues raised by way of defence to the claims in nuisance and negligence in the respondent’s response to the original statement of claim, the subpoena sought production of documents that clearly have nothing to do with the applicants’ civil claim. The documents relating to Compliance Works to be conducted from September 2021 and “future Compliance Works” are obvious examples.

110.What is clear beyond argument, is that compliance with the subpoena, including any challenge to its width, would impose a significant burden on the respondent.

The 2 September 2021 application for interim or other orders

111.By an application for interim or other orders filed on 2 September 2021 the applicants sought the following orders:

(a)Orders 4, 5, 6 and 7 of the orders made on 9 August 2021 are vacated (i.e. the remaining procedural directions for the matter to be made ready for hearing on 1 October 2021).

(b)The hearing on 1 October 2021 is vacated.

(c)The applicants are to file and serve a further amended statement of claim and any evidence on which it intends to rely addressing the relief sought in paragraphs 15(e) to 15(j) of the amended statement of claim by 1 October 2021.

(d)The respondent is to file and serve its defence and any evidence on which it intends to rely by 29 October 2021.

(e)The proceedings are listed for further directions on a date not before 1 November 2021.

112.In a witness statement dated 2 September 2021 that Mr Smith filed in support of the application, he referred to the imminent sale of a unit belonging to Mr David Allen, the Chairman of the Executive Committee, because of which Mr Allen would cease to be an owner. The witness statement continued:

6.     The relief sought by the Applicants in these Proceedings seek orders with respect to the previous conduct of the Owners Corporation and the future conduct of the Owners Corporations [sic].

7.     In light of Mr Allen’s impending departure from the Respondent, the Applicants are of the view that the Tribunal must be allowed to consider taking a more active role in the future conduct of the Respondent than was initially envisioned by the Applicants.

8.     The Applicants hold this view for the following reasons:

a.The Works could potentially cost $3M - $6M;

b.The Respondent has created a credit faciality [sic] with respect to the Works in the value of $3M - $6M; and

c.…

9.     The potential consequences for the owners of the Respondent as a result of the previous alleged mismanagement of the Works and any potential future mismanagement are accordingly significant.

10.    There is a real risk, were the Tribunal to find that the Works have been mismanaged, that the mismanagement will be compounded by Mr Allen’s departure and the Respondent scrambling to rectify past issues and deal with future issues stemming from the Works.

11.    Potential consequences of continuing mismanagement include:

a.The appointment of a receiver to the Respondent;

b.A refusal by the Insurer of the Respondent to provide continuing coverage; and

c.Damage occurring to unit owners similar to the damage that has occurred in this case and Smith v Owners Corporation – Unit Plan 3115 [2021] ACAT 28.

12.    In circumstances where:

a.Mr Allen is leaving the Respondent and the make up of the Executive Committee of the Respondent will be altered in October 2021; and

b.the potential consequences to the owners of the Respondent (including the Applicants) of any further mismanagement is significant; and

c.there is real and significant risk of the Applicants suffering significant future loss and damage as a result of the conduct of the Executive Committee of the Respondent (after Mr Allen’s absence);

the Applicants consider that they must file significant further evidence in the Proceedings so that the Tribunal can properly consider making orders pursuant to section 129 of the Unit Titles (Management) Act 2011 (ACT).

113.None of this has anything to do with the civil dispute application commenced by Mr and Mrs Maher on 23 March 2021.

The hearing on 10 September 2021

114.At the commencement of the hearing, I said:

Now, Mr Smith, before we proceed I should indicate that I acted for the Owners Corporation in the Elara proceedings in the Federal Court, instructed by Kerin Benson Lawyers, so I have some familiarity with the matter. I don’t think that precludes me from dealing with the issue today.

Mr Smith agreed.[9]

[9] Transcript of proceedings 10 September 2021, page 2 lines 20-24. The “Elara proceedings in the Federal court” is a reference to The Owners – Units Plan No. 3115 v The Trustees of the Master Builders Fidelity Fund Scheme [2019] FCA 115 and, on appeal, The Owners – Units Plan No. 3115 v The Trustees of the Master Builders Fidelity Fund Scheme [2019] FCAFC 227 which related to an unsuccessful claim for indemnity against the cost of repairing defective building works under fidelity fund certificates issued to the builder by the Trustees of the scheme (a statutory alternative to homeowners warranty insurance).

115.Mr Smith confirmed that the applicants had filed an amended statement of claim and all the evidence on which the applicants intended to rely in support of their claim in accordance with the tribunal’s previous orders. He identified the evidence as the witness statements of Mikala Maher, Michael Maher (Mikala’s father), Mr Smith and the two single page documents mentioned earlier.[10] I have described the contents of the evidence earlier in these reasons.

[10] Transcript of proceedings 10 September 2021, page 3 line 14 - page 5 line.30

116.Mr Smith confirmed three times that this was all the applicants’ evidence:

(a)Page 3 of the transcript records:

SENIOR MEMBER: So, all of the evidence on which you rely is in?

MR SMITH: All of the evidence on which I rely is in, yes.

(b)After Mr Smith identified the evidence mentioned in the previous paragraph, page 5 of the transcript records:

SENIOR MEMBER: Right, so that is the totality of your evidence?

MR SMITH: Yes.

(c)After Mr Smith agreed that the “subpoena documents go to your response to a defence which has not yet been filed”,[11] page 7 of the transcript records:

SENIOR MEMBER: Yes, all right. But so far as your case is concerned, in terms of your case in support of your claim, it is as pleaded and on the evidence that you have put forward?

MR SMITH: That’s correct.

SENIOR MEMBER: So if the Owners Corporation doesn’t put on any evidence or a substantive defence, you would say that on those facts you are entitled to a decision in your favour?

MR SMITH: That is correct.

[11] Transcript of proceedings 10 September 2021, page 6 lines 3-43

117.Ms Wei, who appeared for the respondent, confirmed that “all of the work lies ahead for the respondent, which is to provide a response and put on evidence and expert reports and so on”.[12]  

[12] Transcript of proceedings 10 September 2021, page 8 lines 39-43

118.I then addressed the parties as follows:

I have looked at the amended statement of claim and I have read the evidence of Ms Maher. I have now looked at the statement of Mr Smith and I have also read the statement of Michael Maher, and I understand this is the entirety of the applicant’s evidence in support of its claim. I have also considered carefully the terms of the amended statement of claim. There is in my mind a very real issue whether this matter ought not properly be dealt with under section 32 of the ACAT Act and summarily dismissed.

…

I consider that the whole claim is – my present view is that the whole claim is misconceived and I am inviting… you and the respondent, before the respondent is required to put on a defence, to address the question whether the statement of claim and the proceeding should be struck out as lacking in substance.[13]

[13] Transcript of proceedings 10 September 2021, page 8 lines 5-12 and page 8 lines 37-41

119.After some further discussion prompted by an interjection from Ms Maher, I advised Mr Smith:

…you understand the process that is involved in a summary determination of a matter. So they are the matters that you need to address. I will not be deciding this matter, if you like, on the merits on the basis of a contested hearing. I am deciding it on the basis of the case as pleaded and the evidence upon which you rely.[14]

[14] Transcript of proceedings 10 September 2021, page 19 lines 35-39

120.I have referred earlier to the orders I made for the parties to file submissions.

The parties’ submissions

The applicants’ position

121.The applicants’ submissions filed on 14 September 2021 in summary contained the following propositions:

(a)The test for striking out a pleading is as discussed in ACTEW Corporation Limited v Mihaljevic [2004] ACTSC 59 at [26]-[27] by Master Harper.

(b)An occupier has standing to sue an owners corporation in negligence – referring to Smith v Owners Corporation – Units Plan 3115 [2021] ACAT 28 at [8]. Further, the applicants can bring common law claims against an owners corporation arising out of the performance of its statutory duties – referring to McElwaine v The Owners – Strata Plan 75975 [2017] NSWCA 239 at [26].

(c)It is uncontroversial that the first and second applicant, as unit owners, have standing to seek orders “pursuant to section 129 of the ACAT Act and that pursuant to section 129(5) the orders that ACAT can make are not limited by sections 129(4) to 129(4) [sic] of the ACAT Act”.[15] (The references to the ACAT Act should be to the UTM Act).

[15] Applicant’s submissions filed on 14 September 2021 at paragraph 7

(d)Orders “pursuant to section 129 of the ACAT Act would flow were there to be a finding of negligence or nuisance on the part of the Respondent in circumstances where the Applicants fear recurrences of the Respondent’s conduct”.[16]

[16] Applicant’s submissions filed on 14 September 2021 at paragraph 8

(e)The applicants are prejudiced by the failure or refusal of the respondent to provide minutes of meetings where decisions were made in relation to the erection of the ‘Poles’, in that if the respondent had complied with the requests “it would have been open to the Applicants to seek a merits review of these resolutions pursuant to section 129(1)(f) of the Act”.[17]

[17] Applicant’s submissions filed on 14 September 2021 at paragraphs 9, 10

(f)The respondent’s refusal to provide the minutes of meeting, together with the order made on 10 September 2021 adjourning the subpoenas, constitute a denial of procedural fairness to the applicants in this proceeding.[18]

[18] Applicant’s submissions filed on 14 September 2021 at paragraph 12

(g)Although the applicants accept that there “are some irregularities with the pleadings” and that “there is scope for the pleadings being amended to more succinctly reflect the claim” against the respondent and “outline a quantification of the sum sought…with respect to the rent reduction”, the tribunal and the respondent “have the benefit of the Applicants’ evidence having already been filed”.[19] The submissions continued at [16]-[19]:

[19] Applicant’s submissions filed on 14 September 2021 at paragraphs 13-15

16.The Applicants’ evidence filed to date clearly shows that the Applicants rely on evidence that shows that each of the elements of nuisance and negligence are satisfied.

17.The Applicants also note that section 8 of the ACAT Act states that the Tribunal need not comply with the rules of evidence applying in the ACT. It is therefore open for the Tribunal to conduct its own inquiry into the evidence and form conclusions at the hearing based on oral evidence given by the parties.

18.It would be most unfortunate were the Tribunal to strike-out the Applicants’ claim, having denied the Applicants the ability to obtain documents (those documents being denied to them by the Respondent despite the Orders) which would allow the Applicants to add more specificity to their pleadings.

19.In any event, the pleadings, coupled with the evidence filed in these proceedings to date are sufficient to show the case against the Respondent.

(h)The applicants claim damages for nuisance, “being the damage caused to the Third and Fourth Applicants” as detailed in paragraph [15] of Ms Maher’s statement.[20] (I observe that in paragraph [15], Ms Maher claims that the installation of the propping without the provision of further parking has caused her “significant distress” which she attributes – without medical evidence – as a cause or contributing factor to “chronic migraines” she developed in early 2020. She makes no mention of any “damage” caused to Mr Smith).

(i)The submission continues at [26]:

Regardless of the reduction of rent received by the Third and Fourth Applicants, it is open to the Tribunal to make a finding of nuisance and award compensatory damages. If the tribunal finds that the reduction in rent provided to the Third and Fourth Applicants is satisfactory compensation for the nuisance, then that is a finding open to the Tribunal, however that it [sic] not a finding that the Tribunal can make on a summary basis especially in circumstances where the evidence filed in the Tribunal satisfies the elements of a claim in nuisance.

(j)In relation to the claim by the first and second applicants that they suffered loss because of the respondent’s negligence, the applicants rely on paragraph [16] of Ms Maher’s witness statement and paragraphs [1] to [3] of Mr Maher’s witness statement. (I have referred to the contents of these paragraphs earlier).

[20] Applicant’s submissions filed on 14 September 2021 at paragraph 25

122.The submissions then addressed the grounds upon which the applicants claimed that I should recuse myself. I deal with that issue at the end of these reasons.

123.It will be apparent from my earlier analysis of the applicants’ amended statement of claim that none of these submissions address the reasons I have identified why the application, as amended from time to time, ‘lacks substance’ in the sense that section 32(2)(b) requires.

The respondent’s position

124.The respondent supported summary dismissal of the application, but did so primarily relying on arguments going to the merits of its defences to the claims. While there may be circumstances where a respondent can establish that is has an unassailable defence in law or in fact to a claim, that is not this case. Questions, such as whether the respondent owed a duty of care to the first and second applicant to avoid causing pure economic loss, or to the third applicant to avoid causing her to suffer mental harm, and questions of necessity which may be relevant to decide whether a nuisance is excusable are insusceptible generally to being decided on a summary basis. It is therefore unnecessary to refer to the respondent’s submission in relation to these issues, nor to the applicants’ responses to the submissions.

125.However, the respondent correctly identified that at common law, damages for mental or emotional distress or suffering are not recoverable unless a recognised psychiatric illness can be shown.

126.The respondent also submitted that most of the relief claimed in sub-paragraphs 15(e) to (i) is beyond the tribunal’s jurisdiction, referring to the observations of Senior Member Katavic in Johnson & Anor v The Owners – Units Plan 4373 [2020] ACAT 114 at [12]:

…The Tribunal does not have a general regulatory role under the UTM Act. Its jurisdiction is determined by the kinds of disputes that may be brought before it for determination and the kinds of orders it may make in accordance with section 129. The Tribunal is not vested with a general power to simply inquire into the conduct of an owners corporation or executive committee.

127.The submission has considerable force, particularly considering the applicants’ submissions in reply, which highlight the impermissible collateral objectives the applicants seek to achieve by means of the present application:

15.    It is acknowledged between the parties that works will be ongoing and that future loss and damage could be suffered by the Applicants. The relief sought with respect to the conduct of the Executive Committee of the Respondent moving forward relates to what is an ongoing dispute between the Applicants and the Respondent.

16.    The Applicants have sought the relevant resolutions with respect to ongoing work and compensation and have been denied access to them. The Applicants have further been denied access to these resolutions by virtue of the orders entered in these proceedings on 10 September 2021. It is a denial of natural justice to strikeout the Applicants’ relief sought pursuant to this section in circumstances where the Applicants’ ability to either plead or make out this relief more fully have been denied to the Applicants by the Respondent and the Tribunal.

17.    By making orders pursuant to section 129 of the Unit Titles (Management) Act 2001 the tribunal would be assisting the parties in resolving the ongoing dispute between them, which is an ongoing dispute that will result in further proceedings if the Owners Corporation behaves in a manner consistent with its conduct in these proceedings.

18.    It is disingenuous to say that the Tribunal cannot make orders with respect to the executive committee in circumstances where the executive committee is the controlling mind of the Owners Corporation. The Tribunal can make orders with respect to the executive committee in the context of section 129 of the Act.

128.However, I do not need to dwell on these issues. They will arise for decision, if at all, only if an application is brought in the tribunal’s jurisdiction under the UTM Act.

Findings

129.For all these reasons I am comfortably satisfied that:

(a)the civil dispute application filed on 23 March 2021, as amended from time to time, is lacking in substance insofar as it relates to the damages claim and nuisance claim of the first and second applicant;

(b)neither the third applicant, nor the fourth applicant, is presently a party to the application;

(c)insofar as the application relates to a purported damages claim or nuisance claim by the third and fourth applicant, the claims are lacking in substance;

(d)insofar as the application seeks the relief set out in paragraphs 15(e) to (i) of the prayers for relief, the Tribunal lacks jurisdiction to grant the relief in this application;

(e)the continuation of the proceeding by the applicants would amount to an abuse of process; and

(f)allowing the proceeding to continue would be contrary to the objects and principles in sections 6 and 7 of the ACAT Act.

130.Those circumstances make it appropriate to dismiss the application under section 32(2)(b) of the ACAT Act. For the limited purpose of giving effect to the orders made in consequence of these reasons, insofar as they affect Ms Maher and Mr Smith, it is appropriate to make an order joining each of them as a party to the application.

The recusal application

131.The test for apprehended bias is well known. It is whether a fair-minded lay observer might reasonably apprehend that the decision-maker might not bring an impartial mind to the resolution of the question the decision-maker is required to decide. The test involves two steps. The first step requires that the party seeking an order for recusal “must identify what it is that might lead a decision-maker to decide a case other than on its legal and factual merits”. The second requires that “a logical connection must be articulated between the identified thing and the feared deviation from deciding the case on its merits”.[21]

[21] CNY17 v Minister for Immigration and Border Protection [2019] HCA 50 at [56]-[58]

132.The applicants’ written submissions filed on 14 September 2021, sought an order that I recuse myself on the following grounds, which I reproduce in full:

37.    From a cursory search, the Applicants are aware that Mr Orlov acted for the Respondent in the matters of The Owners – Unit Plan No. 3115 v The Trustees of the Master Builders Fidelity Fund Scheme [2019] FCA 115(First Instance Proceedings) and The Owners – Units Plan No. 3115 v The Trustees of the Master Builders Fidelity Fund Scheme [2019] FCAFC 227 (Appeal Proceedings) (collectively, OC Proceedings). The Applicants are aware that the Respondent commenced proceedings against that [sic] builder of the complex (Builder) in the ACT Supreme Court, being proceedings number 185 of 2013 (ACTSC Proceedings), which do not appear to have been decided on a final basis where these proceedings related to the claim against the Builder which gave rise to the:

a.OC Proceedings; and

b.Erection of the Poles which have caused loss and damage to the Applicants.

38.    By virtue of Mr Orlov’s role in the OC Proceedings and potentially the ACTSC Proceedings, Mr Orlov has knowledge of the facts that the Applicants seek to be made aware of and have been denied access to as a result of the Respondent’s refusal to provide minutes and other documents sought by the Applicants to date; see [9] above. Those facts, being the conduct of the Respondent that gave rise to the erection of the Poles.

39.    As outlined at [11] and [12] above, by virtue of the Orders which were made by Mr Orlov of his own volition, without consent by either party, Mr Orlov has denied the Applicants the ability to examine documents that they were denied by the Respondent and consequently denied the Applicants of the ability to seek a merits review of any resolution that could have affected the way in which owners were compensated (or not) as a result of the erection of the Poles or any further works that arise by virtue of the Emergency Rectification Order.

40.    The First Instance Proceedings were decided by Justice Griffiths on 13 February 2019 and the Appeal Proceedings were decided by Justices Robertson, Anastassiou and O’Bryan [on] 12 December 2019 being one day after the Poles were erected.

41.    It must be inferred, that Mr Orlov’s advice with respect to the OC Proceedings and possibly the ACTSC Proceedings had a bearing on the decision-making (or lack thereof) of the Respondent in the timeframe leading up to the erection of the Poles.

42.    Unfortunately, given that [sic] Respondent’s refusal to produce documents and the Orders entered by Mr Orlov, the Applicants are unable to assert more fully what they believe to be the facts of this matter, being either that:

a.Mr Orlov’s initial advice to the solicitors for the Respondent was incorrect; or

b.The Respondent did not heed Mr Orlov’s advice.

43.    Frankly, if [42.a] is correct, it remains open to the Respondent or the current solicitors for the Respondent in these proceedings, who were Mr Orlov’s instructors in the OC proceedings and possibly the ACTSC Proceedings, to sue Mr Orlov for professional negligence. That limitation period has not passed. The Applicants have asked for Mr Orlov’s advice, which the First and Second Applicants are entitled to as owners of Unit 47, and have been refused access to this advice by the Respondent. This is one of the bases of the Applicants’ complaints against the Respondent.

44.    If [42.b] is correct, then it is an element of negligence which is the subject of these proceedings.

45.    Regardless of whether it is 42.a or 42.b which is correct, Mr Orlov has direct knowledge of these facts which the Applicants have been denied access to.

46.    Mr Orlov’s involvement in this matter is accordingly inappropriate and unreconcilable with the basic premises of natural justice given that one can only assume that it was either:

a.Mr Orlov’s incorrect advice; or

b.The Respondent’s failure to heed Mr Orlov’s correct advice;

that resulted in the Poles being erected in the urgent and haphazard [sic] in late 2019 which is the basis of the Applicants’ claim.

47.    It is unfortunate that the Orders have effectively denied the Applicants ability to seek a merits review, with respect to the erection of the Poles, in circumstances where Mr Orlov’s involvement may have an impact of [sic] the Respondents’ [sic] decision-making process.

48.    In the circumstances the Applicants submit that it must be the case that a fair-minded lay observer might reasonably apprehend that Mr Orlov might not bring an impartial and unprejudiced mind to the resolution of the question the [sic] Mr Orlov is required to decide. Indeed, the Applicants submit that Mr Orlov has a direct interest in the Applicants’ claim failing. See Johnson v Johnson [2000] HCA 48 (Johnson) at [17] and [43] above.

49.    Even when one takes into account the qualification in R v Sussex Justices; Ex Parte McCarthy [1924] I KB 256 at 259 per Lord Hewart CJ that the observer is a professional judge whose training, tradition and oath or affirmation require [the judge] to discard the irrelevant, the immaterial and the prejudicial, the Senior Member’s relationship with the Respondent and knowledge of facts that the Applicant has been denied access to (that lack of knowledge and access being a basis of the Applicants’ complaint), means that there must be a finding of apprehended bias or direct bias against Mr Orlov given his influence over facts relevant to these proceedings. [Emphasis added].

133.The allegation that I have a direct interest in the applicants’ claim failing is extraordinary. It is for others to decide whether it was made recklessly.

134.It is sufficient to say that the entire submission is founded on unsubstantiated speculation. The facts are:

(a)I am aware that the Owners Corporation commenced proceedings against the builder in the ACT Supreme Court in May 2013.

(b)I am aware that an Emergency Rectification Order was made at an earlier time, but have never seen the order.

(c)I was first briefed in the matter in January 2017.

(d)The builder went into administration in May 2017.

(e)Liquidators were appointed in July 2017.

(f)I subsequently was briefed by and appeared for the owners corporation and eligible unit owners in proceedings in the Federal Court in relation to claims against the Master Builders Fidelity Fund and subsequently on the appeal.

(g)At no stage have I given advice to the owners corporation, or their solicitors, in relation to rectification of defects, the need to undertake urgent remedial works or the nature of such remedial works, the erection of propping in late 2019 or anything even remotely connected with the decision to erect propping at that time, or the performance of remedial works between December 2019 and July 2021, of which I was unaware until I heard this application.

135.As was observed in Michael Wilson & Partners v Nicholls[22] “an allegation of apprehended bias requires an objective assessment of the connection between the facts and circumstances said to give rise to the apprehension and the asserted conclusion that the judge might not bring an impartial mind to bear upon the issues that are to be decided”.

[22] [2011] HCA 48 at [67] per Gummow ACJ, Hayne, Crennan and Bell JJ

136.The hypothetical fair-minded lay observer “would, before forming a view about the existence of a reasonable apprehension of bias, take the trouble to inform himself or herself to the extent necessary to make a fair judgment”.[23]

[23] British American Tobacco Australia Services Ltd v Laurie [2011] HCA 2 at [47] per French CJ

137.It appears that the applicants did not do so in this case.

138.Nothing in the abovementioned circumstances could reasonably give rise to an apprehension that I would not bring a dispassionate and impartial mind to the question whether the applicants’ case is lacking in substance based on the pleadings and the evidence on which the applicants stated they intended to rely. The ‘fears’ expressed by the applicants assume that one of two possibilities must be true: either I gave advice, which was wrong, or I gave correct advice, which was not followed. In fact, neither is true and there is no basis to think otherwise.  

139.Accordingly, I decline to recuse myself.

………………………………..

Senior Member M Orlov

Date of hearing	10 September 2021
First and Second Applicants:	Mr Hugh Smith, Authorised Representative
Solicitor for the Respondent:	Ms Bingxuan Wei, Kerin Benson Lawyers