Mitchell v The Owners
[2018] ACAT 86
•8 December 2017
ACT CIVIL & ADMINISTRATIVE TRIBUNAL
MITCHELL & ORS v THE OWNERS – UNITS PLAN 3940 (Unit Titles) [2018] ACAT 86
UT 4/2017
Catchwords: UNIT TITLES – whether it is appropriate to ‘look behind’ an administrative decision by a government agency when considering whether to make a declaration or order under the Unit Titles (Management) Act 2011 – whether the relevant motions are void for irregularity due to an oversight or mistake about the need for development approval – merits review of executive committee resolution to approve construction of storage enclosures
Legislation cited: Building Act 2004 ss 28, 69
Planning and Development Act 2007
Unit Titles Act ss 12A, 166
Unit Titles (Management) Act 2011 ss 33, 111, 129
Cases cited:Gindy & Chief Minister & ACT Government and Ors [2011] ACAT 67
National Trust of Australia v ACT Heritage Council [2015] ACAT 52
R v Balfour; ex parte Parkes Rural Distributions Pty Ltd (1987) 17 FCR 26
Re Conciliation and Arbitration Act, 1904 v Re An Application By Robert Mccoll Adamson of An Inquiry Into An Election of An Office In the Amalgamated Metals Foundry and Shipwrights Union NSW [1984] FCA 380
R v Gray; Ex parte Marsh (1985) 157 CLR 351
Sara, in the matter of an inquiry into the election for offices in the Australian Salaried Medical Officers Federation [2018] FCA 844
Thornthwaite and Commissioner for Social Housing [2012] ACAT 11
Tribunal: Senior Member H Robinson
Date of Orders: 8 December 2017
Date of Reasons for Decision: 5 September 2018
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL ) UT 4/2017
BETWEEN:
JILL MITCHELL
First Applicant
TOM MITCHELL
Second Applicant
KATE MITCHELL
Third Applicant
AND:
THE OWNERS – UNITS PLAN NO 3940
Respondent
TRIBUNAL: Senior Member H Robinson
DATE:8 December 2017
ORDER
The Tribunal orders that:
1.The application is dismissed.
2.Reasons will be published.
…………Signed…………..
Senior Member H Robinson
REASONS FOR DECISION
1.This is an application brought by Jill Mitchell, Tom Mitchell, and Kate Mitchell (the applicants) against the Owners of Unit Plan 3940 (the Corporation). The Corporation is the strata corporation for a mixed-used building in Kingston. The applicants are owners of a residential unit in the building and, hence, members of the Corporation.
2.By way of this application the applicants seek to have various owners and actions by the Corporation and its executive committee (the EC) declared void under section 129(1)(e), or reviewed and overturned under section 129(1)(f) of the Unit Titles (Management) Act 2011 (UTM Act). A key issue is when, if ever, it is appropriate for the Tribunal to ‘look behind’ an administrative decision by a government agency when considering whether to make a declaration or order under these provisions.
The Orders sought
3.The Orders sought by the applicants, edited slightly for clarity, were as follows:
(a)Order 1:
Under clause 129(1)(e)(ii) of the UTMA that two resolutions of the Respondent’s Executive Committee (EC) (namely motion 1 and motion 2 of the meeting held on 13 August 2014) are void for irregularity given that the committee had no authority to give the approvals.
(b)Order 1A:
Under clause 129(1)(3) of the UTMA, that the resolution taken at the executive committee meeting held on 13.8.2014 to sponsor the various applications leading to the issue of a certificate of occupancy and use to Dockside Units 127&127 … is void for irregularity given that 1) The [executive committee] had no authority under territory law, nor approval from the owners corporation members, to make the applications and 2) some of the information offered within the applications is either incomplete, incorrect or misleading.
(c)Order 2:
Under clause 129(1)(c)(iii) of the UTMA that a rule of the owners corporation (Commercial House Rule 14(4): car spaces are not to be used as storage unless approved by the EC) is invalid for irregularity given that the EC has no authority to deal with matters which require approval by the ACT Planning and Land Authority (ACTPLA)
(d)Order 3:
Under clause 129(1)(f) of the UTMA that the resolution of the EC to approve the construction of the storage enclosed for the Dock and the Brasserie be repealed based on a merits review by the ACAT.
(e)Order 4:
Under clause 129(2) of the UTMA that the EC advise the two parties who sought ‘approvals’ from the committee that it had no authority to determine the applications and that the approvals are therefore void … that the owner of the Dock be further advised to either remove the storage enclosures and disconnect the wired and piped services OR submit a development application so that there can be a proper and open assessment of the applications and of the broader town planning and Territory lease requirements. Whichever option is chosen it is to be completed within four weeks of the date of notification.
(f)Order 5:
Under clause 129(2) of the UTMA that the EC advise the occupants of the other nine repurposed carparks that their use of the spaces is illegal and that they have two options: either remove the enclosures and/or the stored items and disconnect the wired and piped services OR submit a development application so that there can be a proper and open assessment of the applications and of the broader town planning and Territory lease requirements. Whichever option is chosen it is to be completed within four weeks of the date of notification.
(g)Order 6:
Under clause 129(2) of the UTMA that the EC immediately advise the Insurer that the Respondent is in breach of clause 2 of the General Conditions of the policy and seek directions on how the cover can be put in order.
The hearing process
4.Throughout these proceedings the applicants were represented by their advocate, Mr John Mitchell. The respondent was represented by its authorised representative, Ms Moiya Ford, with some assistance from Mr William Lyristakis and Mr Pascal Deschanel.
5.Mr Mitchell filed a significant amount of documentation, including several versions of his submissions, and (late in the process) an amended application seeking an alternate or additional order.[1] He relied upon the witness statements of Mr Green and Mr Petteridge, both of which were admitted into evidence without objection. A third witness, Mr Moore, gave oral evidence and was cross examined.
[1] ‘Additional Order’, filed 15 November 2017
6.The respondent filed submissions and a similarly substantial amount of material in reply. The respondent called evidence from Ms Collins, a director of the company trading as the Dock (the Dock) that leased the units in issue, being units 127 and 128. Ms Ford also gave evidence. Both were cross examined. Mr Lyristakis also assisted the Tribunal by giving answering questions based on his professional experience.
7.Both parties were well prepared. I wish to thank all the participants in this proceeding for the comprehensive documentation and submissions and the amount of work undertaken to prepare this matter for hearing. It was not an easy matter, particularly for self-represented parties, and the advocates on both sides worked diligently to present it in a comprehensive and professional manner.
8.I delivered my decision in this matter on 8 December 2017. These are my reasons for that decision.
Background
9.The full history to this matter is complicated. There was a substantial amount of documentation and there is no means, short of dozens of pages of reasons, that I can adequately summarise everything that has happened to date. Instead I will focus on facts that are relevant to the primary legal questions in issue.
10.Essentially, while the applicants sought a variety or orders, each of these orders was based on the primary contention that there had been:
Serious breaches of the conditions of the development consent, and the Crown lease, for the Dockside mixed-use development at 25 to 35 East Lake Parade Kingston.[2]
[2] Transcript of proceedings page 8, lines 14-15
11.These alleged serious breaches came about because of alleged “repurposing of mandated parking” in the basement carpark. The applicants contended that such actions “require development approval from ACTPLA.”
12.The main ‘repurposing’ that was at issue in this proceeding was the installation by a commercial tenant operating as ‘the Dock’ of a drinks storage shed (the storage shed) on two of its allocated carpark spaces. Another unit, the Brasserie, had undertaken similar works at some time, but only the Dock’s works were still in existence as at the date of the hearing. Other units apparently may do likewise in the future, depending on the outcome of this proceeding.
13.That the EC purported to authorise the construction of the storage structure by the Dock was not seriously in dispute. What was in dispute was whether the EC was able to do this.
14.On 21 August 2013 the Corporation held its inaugural meeting. This meeting took place during the developer control period. At this meeting a number of motions were passed by unopposed resolution, including motions that provided:
A unit owner shall not except in accordance with the written permission given by the Executive Committee and in accordance with the provisions of any law in force in the Territory applicable in the circumstances erect or alter any structure in or on his unit.
In relation to a commercial unit, any structural erection or alteration will be permitted as long as the erection or alteration is within the boundary of the unit and is in accordance with any law in force in the Territory applicable to the circumstances… (the inaugural resolutions)
15.The minutes also noted that the fitouts for units 127 and 128, amongst others, “…are approved…in accordance with Appendices B”. These are units were leased by the Dock.
16.These inaugural resolutions supplemented the default rules, adopted from the UTM Act, which otherwise applied. Rule 4(1) of these rules provides that:
4 Erections and alterations
(1) A unit owner may erect or alter any structure in or on the unit or the common property only—
(a) in accordance with the express permission of the owners corporation by unopposed resolution; and
(b) in accordance with the requirements of any applicable territory law (for example, a law requiring development approval to be obtained for the erection or alteration).
17.The interaction between the default rules and the inaugural resolutions is not entirely clear. No argument was put that to the Tribunal that the inaugural resolutions were contrary to 33(1)(b) of the UTM Act, which provides that an owners corporation must not, during the developer control period, change the rules of the corporation. The inaugural resolutions appear to be a practical way of dealing with the practical reality that commercial units (unlike residential units) are sold as empty shells. All commercial units must be ‘fitted out’, and many fitouts may require the erection of a ‘structure’, assuming one takes a broad view of the meaning of that word in default rule 4. The assignment of approval to the EC appears to be an efficient means of dealing with this issue. Given the circumstances, I do not need to examine the issue further.
18.It is not clear when the developer control period ended. However, at a meeting of the EC on 13 August 2014, the minutes record that the following motion was also approved by the then-members of the EC:
Mr S Suryadi and Mr C Farrington were invited to the meeting to discuss a proposal regarding installation of a refrigeration condenser and storage facilities to the basement.
…
…the storage facilities require installation of a colorbond shed that will be installed across two parking spaces in the basement, namely units 127 and 128.
Those present granted approval for the proposed storage facility.
(the shed approval resolution)
19.The meeting did not approve the installation of a refrigerator condenser and this was not installed. The shed, however, was erected consistent with the approval resolution. The shed covers two of the five parking spaces allocated to units 127 and 128. It does not contain plumbing or refrigeration and is not used to store food. It is not affixed to the building, although a hole was drilled in the concrete slab to allow tubes to connect the storage tubs to the drink dispensers upstairs.
20.The owners of the Dock sought, and received, building approval[3] for the shed on 3 September 2014. A certificate of occupancy[4] was issued by the ACT Government (Environment and Planning Directorate) (EPD) on 19 December 2014.
[3] Pursuant to section 28 of the Building Act 2004
[4] In accordance with section 69(2) of the Building Act 2004
21.I note in passing here that there appear to have been some deficiencies in the information provided to EPD as part of the building approval process. The applicants contend that the respondent “sponsored” this applications, and that this action should be void for irregularity (order 1A). I will address this issue, separately, below.
22.The Dock did not seek development approval from the ACT Planning and Land Authority (ACTPLA) pursuant to the Planning and Development Act 2007 (Planning Act) for the erection of the shed in the carpark. The applicants contend that it should have. I will come back to this shortly.
23.Meanwhile, the second AGM was held in October 2014. At this AGM new rules were adopted, replacing both the inaugural resolutions and the default rules. Although it is not entirely clear, it appears that this was the meeting at which Commercial House Rule 12(4) was adopted, which provides:
Car spaces must not be used as storage areas unless approved by the Executive Committee (car parking resolution).
24.Returning to the issue of development approval, to explain the relevance of this process, it is necessary to understand, in very broad terms, the framework for planning law in the Territory.
25.A succinct explanation of what development approval is found on the ACTPLA website, which says that:
Development approval is about the design of the development. It ensures the development is appropriate to an area and conforms with any lease requirements, Territory Plan codes, regulations or specific development conditions that may apply to a particular piece of land.
26.The key issue in this case is ‘lease requirements’. As with any development, the initial development approval for this unit plan contains certain ‘lease conditions’ that are attached to the development approval – see ‘Schedule of Provisions Covenants and Condition subject to which leases of unit are held’[5], and ‘Schedule of Provisions, Covenants and Conditions subject to which the lease of the common property is held’.[6] It appears that these are commonly referred to as the ‘crown lease’ (the crown lease).
[5] Sheets 34 to 51
[6] Sheets 53 to 58
27.These crown lease conditions provide, amongst other things, that a lessee has the right to “use the unit for one or more” stated purposes. The relevant purposes for units 126 and 127 (as with other commercial units in the complex) include a restaurant, a drink establishment and carpark[7], as well as a number of other purposes.
[7] clause 4(c)
28.Under the Unit Titles Act 2001 (UT Act), a ‘unit’ in the unit plan includes any unit subsidiary “shown on the unit plan as annexed to the unit”[8]. ‘Annexed’ is defined in section 12A of the UT Act as “taken to be appurtenant to the unit”. ‘Appurtenant’ is a technical legal term that which is more clearly defined in the subsequent ‘note’ to mean something “that is, at law…transferred with that estate.” This includes the unit subsidiaries assigned to each unit on the units plan.
[8] Section 9(2)
29.On the unit plan, units 127 and 128 are assigned, in total, five unit subsidiary ‘car spaces’.[9] Neither unit is assigned any subsidiary for storage space. The majority of other units are given a store room subsidiary, but these units appear to be primarily residential. Mr Lyristakis confirmed, when questioned by the Tribunal, that none or very few of the commercial units had storage lockers[10], and this was an unusual and somewhat frustrating aspect of this complex’s design.[11]
[9] See sheet number 12 of 28
[10] Transcript of proceedings pages 44 and 27
[11] Transcript of proceedings pages 44-45
30.This lack of storage in turn raises the question of what a carpark subsidiary may be used for.
31.The definition of ‘carpark’ in the crown lease is:
“carpark” means the use of the parcel of land specifically allocated for the parking or (sic) motor vehicles.[12]
[12] Clause 7(h)
32.The applicants contended that, having regard to the definition of ‘carpark’, the use of the carpark for storage is a breach of the purpose clause, and therefore a breach of the crown lease, and that such use may only be authorised by an amendment to the crown lease. This means, in the applicants’ submission, that the executive committee cannot ‘authorise’, through a resolution or otherwise, the construction of the sheds on the carparks, because it is beyond their power to authorise an action that would breach the development approval/crown lease.
33.The purpose clause for a unit can be amended. However, an amendment to the crown lease requires development approval under the Land Act. Under section 166 of the UT Act, an application to vary or amend a crown lease (whether unit or common property) may only be made following an unopposed resolution of the owners corporation authorising it to be made. It was generally agreed by all parties that, first, no resolution seeking authorisation for a lease variation had ever been put to the corporation members; and second, any motion to that effect would likely fail, as it requires unopposed approval, and the applicants (if not other owners) would oppose it.
34.For their part, the applicants (through Mr Mitchell) have advised regulatory authorities of the alleged breaches of the crown lease, and have on several occasions asked those authorities to take compliance action. A number of investigations have been undertaken, including by Access Canberra. At one stage, a controlled activity order was issued to the Dock by a senior building inspector at Access Canberra, requiring that it seek development approval for a change in use. A series of inspections took place, and the matter was elevated within Access Canberra.
35.On 6 September 2016, Mr Gary Rake, Deputy Director-General, EPD, sent an email to Mr Mitchell in which he advised, amongst other things, that:
As part of preparing for my discussion with The Dock, I had a good look through our files.
…I found a written record of the Dockside Executive Committee meeting where approval was granted for the car park storage structure…
I hadn’t fully appreciated just how clearly the committee had considered the proposal, including drawings/plans, and how clearly the committee had expressed its agreement.
Given:
There is still some legal uncertainty about whether the structure, in fact, requires a DA (based on advice coming to me);
The executive committee has clearly considered and approved it; and
I don’t have a clear sense of the risk or harm that the structure itself presents for any person in the building;
I have decided to change my approach and I will NOT be asking the Dock to submit a DA at this stage (the Access Canberra advice).
36.Meanwhile, the EC sought advice from regulatory authorities as to whether a DA was required. On 6 September 2016, Mr Dave Pfeffer, Deputy Director-General, ACT Chief Minister, Treasury and Economic Development Directorate, sent an email to the EC that stated, in part:
There are two schools of thought on this. But the outcome has remained the same. Collectively we’ve decided that irrespective of whether it’s a technical breach, it remains a practical solution that supports jobs and vibrancy in that development and has no associated harms or risks. Therefore no further action will be taken and not DA will be required.
37.As such, it appears that is the position of Access Canberra that: (a) it is unclear whether there is a breach of the lease; but (b) even if there is such a breach, it is technical, and no compliance action will be taken.
38.The applicants do not accept Access Canberra’s position. They allege that a DA should have been sought, as the cage amounts to a clear change in use. They say that, as a DA was not sought, the executive committee had no authority to give approval to a decision to approve a storage cage on subsidiary units identified on the units planned as exclusively for parking. The applicants seek to have the relevant resolutions determined void for irregularity, or alternatively overturned on a merit review.
Orders 1, 2 and 4 - the difficulty with the applications under section 129(1)(e)
39.The applicants’ proposed orders 1 and 2 require consideration of whether the Dock actually required development approval to use the garage spaces for storage. The fact that the regulatory authority has declined to take a position on this issue, and has indicated that no compliance action will be taken, presents a practical problem for this Tribunal in the determination of this issue.
40.To set out why this is a problem, it is necessary to start by considering what kinds of matters may be the subject of a declaration under section 129(1)(e) of the UTM Act.
41.Section 129(1)(e) gives the Tribunal has the power to make certain declarations in certain circumstances, including:
(e) a declaration—
(i)that a general meeting or executive committee meeting is void for irregularity; or
(ii)that a resolution of a general meeting or executive committee meeting is void for irregularity; or
(iii)that a rule of the owners corporation is invalid for irregularity;
42.As I understand the applicants’ case, they seek have the shed approval (order 1) and the car parking rule declared void for irregularity under section 129(1)(e). The alleged ‘irregularity’ in both cases is that they purported, through their actions, to authorise a change in use – something which goes beyond their power and is therefore, on their argument, void. The alternative argument, as I understand it, in relation to the shed approval, is that any approval is conditional upon the shed complying with ‘all territory laws’, which it does not do, and that the resolution is therefore void.
43.The first question is: can these kinds of error – mistakes by the owners corporation as to the need for a development application – be ‘irregularities’ of the kind contemplated by section 129(1)(e)?
44.Unfortunately, the term ‘irregularity’ is not defined in the UTM Act, nor in the Legislation Act 2001. I could find no previous decisions under the UTM Act that consider its meaning. However, the word ‘irregularity’ is used in other legal contexts, which provide some guidance.
45.Most of the case law in relation to the word ‘irregularity’ arises in the context of reviews of elections in an industrial contest. The question before the Courts in those cases is usually what kind of external action will render the election ‘irregular’ and hence void. For example, in the High Court case of R v Gray; Ex parte Marsh (1985) 157 CLR 351, a case concerning former section 159(1) of the Conciliation and Arbitration Act 1904 (Cth), Gibbs CJ said at 367 - 368:
According to the Oxford English Dictionary “irregularity”, in its relevant sense, means “want of conformity to rule; deviation from or violation of a rule, law, or principle... deviation from what is usual or normal”. The notion of an irregularity, in relation to an election, involves the idea of some departure from some rule, established practice or generally accepted principle governing the conduct of the election.
46.Gibbs CJ was considering the term in the context of a statutory definition. The common law meaning may be somewhat broader. As was observed more recently by Stewart J in Sara, in the matter of an inquiry into the election for offices in the Australian Salaried Medical Officers Federation [2018] FCA 844:
…the ordinary meaning of the word can also refer to that which is anomalous or abnormal. As Northrop J said in Re Federated Liquor and Allied Industries Employees’ Union of Australia; Ex parte Huxtable [1979] FCA 17; 40 FLR 418 at 424:
The word “irregularity” is defined in the Shorter Oxford Dictionary (23rd ed. 1972 reprint) as “the quality or state of being irregular; something that is irregular”. In the same dictionary, the word “irregular” is defined in relation to things as “not in conformity with rule or principle, contrary to rule; disorderly in action or conduct, anomalous, abnormal”
47.An analogy, if only a broad one, can be drawn between an industrial election and the voting or resolution process at an owners’ corporation. Both involve a process to reach democratic agreement on an outcome. In both, there is a prescribed process for the reaching that agreement. On the authorities above, in considering whether there is an ‘irregularity’, is it the integrity or normality of that process that is considered - was it defective or abnormal, or so tainted by some flaw as to be invalidated? It is not apparent that this concept of ‘irregularity’ extends to more substantive issues, such as an examination of whether the information that was considered by the members in making a decision, or indeed the decision itself, was wrong.
48.This narrower view of ‘irregularity’ is consistent with the nature of the power in section 129(1)(e) – it is a power to declare a motion void. The effect of declaring a decision void is that it is as if they were never made at all, by reason of not being made properly. This is quite different to determining that a decision is not correct or preferable.[13] A decision that is not correct, or preferable, is not void. It is still a valid decision, but it may be overturned or amended on with merit review, under section 129(1)(g).
[13] I do note that in Re Conciliation and Arbitration Act, 1904 v Re An Application By Robert Mccoll Adamson of An Inquiry Into An Election of An Office In the Amalgamated Metals Foundry and Shipwrights Union NSW [1984] FCA 380 that an ‘irregularity’ in an election could include propaganda deliberately intended to mislead voters. However, this decision was made in the context of a broad definition of the term in the relevant legislation, and the broader industrial context
49.This distinction between a decision that is irregular, and a decision that is incorrect, is crucial here. What the applicants are asking the Tribunal to do is not to declare that there has been some irregularity in the process adopted by the executive committee, per se, but rather to say that the irregularity arose because of some misunderstanding of an the application of an underlying law or a legal position (whether it be the original certificate of occupancy, or the assumption that development approval was not required). This is, in my view, asking the Tribunal to take a broader view of the meaning of ‘irregularity’ than is contemplated by section 129(1)(e) of the UTM Act. This is more a matter for merits review.
50.But even if I am wrong on my interpretation of ‘irregularity’, and the Tribunal can ‘look behind’ the motion in the way suggested by the applicants, there are reasons why the Tribunal should not, and indeed likely cannot, do so in this case.
51.To declare the motions void, the Tribunal would need to be satisfied that the relevant motions were in some way deficient. This would require that the Tribunal actually make a determination as to whether there was, at law, a requirement for the Dock to seek development approval. This kind of review of the lawfulness or correctness of an underlying decision is called a ‘collateral review’.
52.The Tribunal’s power to engage in such reviews is limited. The Tribunal is a “creature of statute.”[14] It has no inherent jurisdiction, and may only exercise the powers conferred upon it by legislation. The Tribunal may do things that are, by implication, necessary to give effect to an express power, but the Tribunal must be able to ground its actions on an express power.[15]
[14] See Thornthwaite and Commissioner for Social Housing [2012] ACAT 11 at [9]; National Trust of Australia v ACT Heritage Council [2015] ACT 52 at [33]; Gindy & Chief Minister & ACT Government and Ors [2011] ACAT 67 at [13]
[15] Gindy at [13]
53.Generally that power comes from an applicant making an application, in the relevant jurisdiction. In this matter, the Tribunal is sitting in its unit titles jurisdiction. That jurisdiction determined by Part 8 of the UTM Act and also by the ACAT Act. The kinds of orders ACAT may make, while sitting in the unit titles jurisdiction, are set out in section 129 of the UTM Act. Those powers are only exercisable in relation to the kind of disputes set out in sections 125 to 128 of the UTM Act. Those kinds of disputes include, relevantly, disputes between:
(a)the corporation and an owner or occupier of a unit in the units plan (section 125(1)(a));
(b)the corporation and its manager (if any) (section 125(1)(b)) or former manager (section 126(b)[16]);
(c)the corporation and a service contractor (section 125(1)(c));
(d)the corporation and an executive member (section 125(1)(d));
(e)the executive committee of the corporation and an executive member (section 127); and
(f)a dispute between two or more members of the corporation (section 128(1)).
[16] If involving the return by the former managers of the owners corporations property
54.There is no power to review disputes involving a non-party, such as Access Canberra or the Territory, under the UTM Act. This is not the correct forum for the agitation of issues around the performance by the Government of its regulatory agencies. No relevant decision maker, nor the Territory, was a party to these proceedings. The Tribunal cannot make orders that bind a non-party. It cannot compel a non-party to take compliance action. It cannot, in any legally binding sense, determine that Access Canberra’s decision was wrong.
55.That said, I do not understand the applicants to be asking that I make a decision that binds the regulatory authority, but only that I make a declaration or finding that a development application should be sought by the Dock as a precondition to the corporation approving any use of the carpark area. The difficulty is, on either view, what the Tribunal is being asked to do is a collateral review of an administrative decision, in the absence of the decision maker, in a jurisdiction in which it has no apparent authority to do so.
56.To the extent that there is a breach of the crown lease by a lessor or tenant, that is a matter for the relevant regulatory authorities. The regulatory authority has indicated that no enforcement action needs be taken. That is currently a valid administrative decision. As Justice Wilcox stated most forcefully in R v Balfour; ex parte Parkes Rural Distributions Pty Ltd[17]:
It is now accepted that, however apparent the defect may be, an administrative decision remains good in law unless and until it is declared to be invalid by a court of competent jurisdiction.
[17] (1987) 17 FCR 26
57.The Tribunal is not a court of competent jurisdiction. That means that the most that the Tribunal could do, in these circumstances, is make a determination that that the motions were invalid because the Dock did not make a development application and the EC did not consider whether one was required, in August 2014. However, whatever the situation then, the relevant authorities have now indicated that they do not require a DA, and will take no enforcement action. The Tribunal cannot compel the authority to consider an application, or to make a different decision to the one they have already made. If the Tribunal made the order sought, the resulting situation has the potential to become absurd. Even setting aside the issue of jurisdiction, this practical reality is a reason why this Tribunal generally declines to undertake collateral reviews.
58.There is one final observation that I make: even if I am wrong on all of the above – and the Tribunal in fact can undertake the collateral review contended for – then I am not satisfied that I need to.
59.Having regard to the language of the motions and the shed approval, the car parking resolution, and the powers of the owners corporation and the executive committee under the UTM Act and UT Act, I am not satisfied that the validity of any relevant motions or approvals was in any case premised on the Dock getting development approval.
60.The role of the executive committee, and the body corporate, is set out under the UTM Act. The role of both bodies is to ensure compliance with the legislative framework (the UTM Act and the UT Act), and the Corporation’s rules. Nowhere in either Act is the executive committee or the owners corporation given any power in relation to planning law. When an owners corporation grants permission for the erection of a structure, or for the use of some park of the unit for storage, it is simply granting consent for the purposes of the UTM Act. That consent does not, and indeed cannot, obviate any requirement to seek planning approval – any more than simply getting development approval would satisfy the requirements of the UTM Act. They are separate processes.
61.The practical consequence is as follows: in a case were permission to erect a structure or the use of a unit subsidiary for storage is contingent upon the gaining of relevant approvals[18], a failure by the owner to obtain those approvals, or the later overturning of a granted approval, would not make the granting of permission void. However, where the rules contain an obligation to comply with relevant laws, the failure by an owner to obtain or maintain the relevant approvals may breach of the rules of the corporation, or a breach of the approval, from which other remedies may flow.
[18] As required, for example, by the wording of default rule 4(1)(b)
62.In summary, I am not satisfied that the relevant motions are void for irregularity due to an oversight or mistake about the need for development approval. I make no finding as to whether the sheds actually require a development approval.
63.That leaves the Tribunal with the question as to whether the motion if ‘void’ for some irregularity pertaining to processes for the making of the motion under the UTM Act. None of the evidence submitted substantiates, on the balance of the probabilities, any such irregularity. Accordingly, I decline to declare either of the resolutions void, or to take any of the actions sought in the applicant’s orders 1 or 2.
Applicant’s order 1A
64.By way of a further application filed 15 November 2017, the applicants sought to amend their application to include an application for order 1A. The respondent objected to the Tribunal considering this application, quite reasonably given the late notice, but its representatives were nonetheless able to respond. There is no prejudice to the respondent in dealing with the application for order 1A.
65.First, I note that order 1A is worded in a way that makes it very difficult for the Tribunal to decide what is in issue. It is not clear what the applicants meant when they alleged that the respondents “sponsored” the applications. It is also not clear how the Tribunal can review the alleged sponsorship, given that no actual motion or resolution was identified. The first part of the application is dismissed.
66.The second part warrants more in depth consideration. The applicants alleged that some of the information in the documentation lodged with relevant authorities in relation to the application for an occupancy certificate is incomplete, incorrect or misleading. On any view, it does appear that the information provided to the authorities in relation to the building approval process for the storage sheds was incomplete. A charitable view of the evidence presented at the hearing is that there were clerical errors in the documentation submitted. Mr Mitchell suggested that some degree of deliberate deception was involved, but no evidence was put in support of such a contention, and in any case the allegation was not clearly particularised. The relevant parties were not called as witnesses.
67.The Tribunal has no jurisdiction to review this documentation. I accept that the paperwork – at least that part of it before the Tribunal – appears defective. Nonetheless, a certificate of occupancy was issued. The EC was entitled to rely upon it. For the reasons set out above, it is not the role of the Tribunal, in this jurisdiction, to look behind the certificate of occupancy. If the applicants remain concerned, they may have other remedies.
Applicants’ order 3 - The merits review
68.Mr Mitchell sought a merits review of “the resolution of the [executive committee] to approve the construction of the storage enclosures for the Dock and the Brasserie…”.
69.Section 129(1)(f) of the UTM Act provides that the tribunal may make:
(a) an order repealing or amending a resolution of a general meeting or executive committee based on a merits review of the resolution by the ACAT;
70.The principles are well established, and was summarised by Member Daniel (as she then was) in Brudenall & Ors v Owners Corporation Unit Plan No 202 [2016] ACAT 101:
20. In previous matters involving the UTM Act, the tribunal has outlined what merits review in this context involves. The approach is often summarised as requiring the tribunal to stand in the shoes of the decision maker and make the correct or preferable decision. In this case, the decision-maker is the owners corporation and the Tribunal after conducting merits review is empowered to repeal or amend [the motion under review].
21. There are a number of features of merits review which are worth noting.
22. First, the review is essentially de novo, that is, the tribunal is able to consider issues of both fact and law anew. The tribunal does not simply review the reasons for decision or the process followed by the original decision-maker. Secondly, the tribunal considers and determines the issues as at the date of the hearing, not as at the time of the original decision, and is usually able to have regard to the most up to date information.
23. The concept of the ‘correct or preferable decision’ is significant. The term recognises that in the exercise of a discretionary power there may be more than one possible decision which is correct at law, and the task for the decision-maker in such a case is to decide which of the available decisions is to be preferred.
24. When conducting merits review the tribunal is not obliged to choose either the position adopted by the applicant, or that of respondent. Instead, subject to ensuring that the requirements of natural justice are met in the hearing process, the tribunal is required to make the correct or preferable decision on the merits of the case. In some rare cases, this may involve the tribunal making a decision which was not advocated for by any party.
71.There appears to be no time limit on such reviews, other than perhaps the usual statute of limitations. However, in considering the correct and preferable decision, the time lapse and implementation of the decision would need to be considered, given the merits review considers the merits of the resolution as at the date of review (not the date it was passed).
72.The applicants sought review of the decisions in relation to both the Brasserie and the Dock. However, the structures on the Brasserie are gone, so there is no purpose to be served by a merits review, and likely no capacity to undertake one anyway, given the merits review is undertaken as at the time of the review, not the time of the decision. This merits review therefore focuses on the approval of the structures on 127 and 128.
73.Which resolution was under review was not clearly articulated by Mr Mitchell, but I take it to be the approval resolution.
74.One of the difficulties confronting the Tribunal is that there is little in the way of records of the reasons for the executive committee to approve the motion. This is not an unusual circumstance.
75.The best evidence of the circumstances leading to the approval was given by Ms Collins, on behalf of the Dock. She said that the negotiations occurred during the developer control period, and that approval was granted during that period. She said that:
A major selling point of the tenancies from the first on-site meeting was the ability to convert the five basement carparks into storage…We would not have entered into the lease and subsequently purchased two units without this approval as the business is not viable without access to adequate storage.[19]
[19] Statement, page 1
76.The evidence indicates that the developers were keen to attract certain businesses to the development. As such, the Dock’s application was not subject to the kind of scrutiny that they may have been at a later time, after the conclusion of the developer control period. The clear intention of the negotiations was to establish a vibrant commercial hub at the unit plan by securing commercial tenants that would draw customers. The Dock, at least, was seen by the developers to contribute to the achievement of that goal, and they were keen to assist it.
77.The applicants’ objections to the structure include noise, visual amenity, parking issues within Kingston and a concern about the broader implications of planning laws being avoided or overlooked. The evidence indicates that the Dock has paid for measures to minimise noise[20], but the other issues are more difficult to address.
[20] Submission, page 9
78.On the basis of the photographs tendered at the hearing, I can understand the applicants’ concern about the structures effect on ‘visual amenity’. They are undoubtedly something of an eyesore. It is understandable that the applicants’ would also be concerned about even more such structures being erected in the future.
79.The location of the structure removes two car parking spaces from Kingston, in circumstances where the evidence indicates car parking is already an issue in the area. The evidence was somewhat ambiguous as to how difficult it was to park on the Kingston Foreshore at certain times of the day, but I accept the applicants’ submissions that further reductions in car parking are unhelpful. This potentially presents an even more significant planning issue if other businesses convert their car parking areas to storage in the future.
80.I also acknowledge the applicants’ feeling of disgruntlement at the respondents’ having, in effect, extended the operating area of their business into the basement car parking area, where the applicants must observe it. It was quite apparent in these proceedings that there are tensions enough between the residential and commercial owners and tenants, and the applicants’ desire to ensure commercial units comply with the rules and minimise disruption to residents is understandable.
81.There are, however, countervailing considerations.
82.The process and decisions relating to the storage cage have been the subject of a building approval. They have been reviewed by inspectors from Worksafe, and by ACT Emergency Services in relation to the fire risk. Access Canberra has no concerns about it. There is no evidence that the cage poses any significant health or safety risk to any person. There was no serious suggestion that it impairs line or sight in the garage or otherwise causes a traffic hazard.
83.Moreover, the sheds are already in place and have been for some time. They are, on the evidence of Ms Collins, essential to the operation of the Dock. Ms Collins has stated that the Dock will close if the cages are removed. Even allowing for some self-interested exaggeration in that evidence, it apparent from the evidence of all the witnesses that there is a serious shortage of storage space in this complex generally, and that the cages represent a pragmatic, if unattractive, solution to that problem. In any case, I have no reason to doubt Ms Collins’ evidence that the Dock would not be viable without the storage space.
84.Perhaps some other business would take over the units if the Dock had to close? Perhaps, also, any successor may be, from the applicants’ perspective, a more suitable business than the Dock? There are many possibilities. But it was not in dispute that the Dock is a successful business, that it contributes to the ambiance of the Dockside area, and that that very ambiance is one of the reasons why people choose to live on the Kingston Foreshore.
85.The Dock was devised as a mixed-use development, with commercial and residential units. It is in the interests of everyone – residents and commercial tenants alike – that the businesses there be successful and vibrant. All the evidence is that the Dock meets that requirement. On balance, I do not believe it is in the interests of the Corporation, or its members, that the Dock close.
86.While the ‘floodgates’ arguments are valid, Ms Ford said that the approach taken to the Dock was unusual and is not likely to be repeated for subsequent commercial tenants. The resolutions make it clear the approvals were exceptions and not precedents.
87.Accordingly, I am satisfied that correct and preferable decision to approve the shed and I decline to overturn the approval resolution.
Orders 5 – other units
88.The applicants did not clearly identify what resolution they sought to review. Moreover, there is little evidence before the Tribunal as to the nature of structure in issue. The same problems, as set out above, arise in relation to the request that the Tribunal determine a breach of the Planning Act. In any case, the Tribunal does not have a general power to order that the EC ‘advise’ an occupant to do something. If the applicants believe that the occupants of any of the other units are in breach of the rules of the corporation, then they have options open to them, as members of the corporation. Amongst other options, the applicants may request that the owners corporation give the relevant owners a rules infringement notice.[21]
Order 6 - Insurance
[21] Section 111 of the UTM Act
89.The final order sought by the applicant was, in effect, an order that the insurer has been advised of the existence of the structure. I am satisfied, on the basis of the assurances provided by Ms Ford, that this has been done. If the applicant wishes to put further information to the insurer, he is of course entitled to do so. No further order is necessary.
………………………………..
Senior Member H Robinson
HEARING DETAILS
FILE NUMBER:
UT 4/2017
PARTIES, APPLICANT:
Jill Mitchell, Tom Mitchell, Kate Mitchell
PARTIES, RESPONDENT:
The Owners – Units Plan No 3940
COUNSEL APPEARING, APPLICANT
N/A
COUNSEL APPEARING, RESPONDENT
N/A
SOLICITORS FOR APPLICANT
N/A
SOLICITORS FOR RESPONDENT
N/A
TRIBUNAL MEMBERS:
Senior Member H Robinson
DATES OF HEARING:
28 June 2017, 7 December 2017
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