Thomson and Anor v Green Instalments Pty Ltd and Ors (Unit Titles)

[2020] ACAT 96

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

THOMSON & ANOR v GREEN INSTALMENTS PTY LTD & ORS (Unit Titles) [2020] ACAT 96

UT 5/2020

Catchwords:               UNIT TITLES – amendment or repeal of motions following merits review – whether approval of motions regarding signage, bollards and financial statements correct or preferable – scope of orders Tribunal can make

Legislation cited:        ACT Civil and Administrative Tribunal Act 2008 s 48

Unit Titles (Management) Act 2011 ss 16, 19, 22, 129

Cases Cited:Brudenall & Ors v Owners Corporation Unit Plan No. 202[2016] ACAT 101

Cheetham & Ors v The Body Corporate Units Plan 503 & Ors [2019] ACAT 90
CIC Australia Ltd v Australian Capital Territory Planning and Land Authority [2013] ACTSC 96
Clews v The Owners – Units Plan 3069 [2019] ACAT 63
Nash v The Owners – Units Plan No 2413 & Ors [2018] ACAT 54

Tribunal:  Senior Member K Katavic

Date of Orders:  20 November 2020

Date of Reasons for Decision:      20 November 2020

AUSTRALIAN CAPITAL TERRITORY          

CIVIL & ADMINISTRATIVE TRIBUNAL           UT 5/2020

BETWEEN:

PETER THOMSON

First Applicant

ELIZABETH THOMSON

Second Applicant

AND:

GREEN INSTALMENTS PTY LTD

First Respondent

DEAKIN HOLDINGS PTY LTD

Second Respondent

OWNERS CORPORATION UNITS PLAN 491

Third Respondent

TRIBUNAL:Senior Member K Katavic

DATE:20 November 2020

ORDER

The Tribunal orders that:

1.   Motion 3 approved at the Special General Meeting held on 15 May 2019 is repealed.

2.   Motion 2 approved at the Special General Meeting held on 18 September 2019 is repealed.

3.   Motion 3 approved at the Special General Meeting held on 18 September 2019 is repealed.

4.   The Owners Corporation’s accounts for the financial year ending 30 June 2019 are to be audited by the accountant for the Owners Corporation, to determine the amounts payable for electricity, water and sewage and cleaning in respect of the additional ground floor area occupied by Unit 5 and to make any necessary adjustments to the financial statements. The audit should be carried out and completed within two months from the date of these orders.

5.   The Amended Application is otherwise dismissed.

………………………………..

Senior Member K Katavic

REASONS FOR DECISION

Introduction

1.The applicants in this matter, Mr and Mrs Thomson, are the owners of Unit 2 at 10 Geils Court in Deakin the ACT. They operate an accounting business from Unit 2 known as Thomson Accounting. There are five units in the complex which is a two-storey building. The first respondent is the owner of Units 3 and 4, which are occupied by tenants. The second respondent is the owner of Unit 5. It also operates an accounting business from those premises known as Green & Associates. That business operated from Units 3 and 4 until about November 2019. The owner of Unit 1 is not related to any of these parties and is otherwise not involved in the issues raised in this dispute.

2.The applicants sought relief from this Tribunal pursuant to the Unit Titles (Management) Act 2011 (the UTMA) in respect of several motions carried at a series of meetings of the Owners Corporation during 2019 and the conduct of Mr Craig Green, a director of the first and second respondents and Civium Strata Management & Property Group (Civium), the strata manager for the Owners Corporation.

3.Mr Thomson’s primary concern was the removal of a sign for his business which had been located on an exterior common property wall adjacent to an entrance to the building. In its place, a sign for Green & Associates had been erected. The circumstances in which this occurred were the subject of motions which the Tribunal has been asked to repeal or amend based on a merits review.

4.Mr Thomson sought interim orders regarding the restoration of the Thomson Accounting sign until the Tribunal had decided the substantive application in respect of those motions. On 13 August 2020, I made such an order and gave oral reasons for my decision.

The application

5.The applicants commenced proceedings on 12 March 2020 seeking a range of orders against Mr Green and Mr Zezulka. Following a directions hearing, the applicants filed an amended application seeking 17 orders and substituting Mr Green and Mr Zezulka as respondents with the current respondents (the Amended Application). This and the original Application were supported by a document setting out in detail the reasons for the application (Applicants’ Submissions). I have treated this document as the Applicants’ Submissions.

6.The applicants relied upon the witness statements of Mr Thomson dated 5 August 2020[1] and 30 September 2020[2] and annexures 1-71 as referred to in the Applicants’ Submissions.[3]

[1] Exhibit A1

[2] Exhibit A2

[3] Exhibit A3

7.The respondents relied upon the following:

(a)Witness statement of Trina Wood dated 14 September 2020;[4] and

(b)Witness statements of Mr Green dated 29 July 2020,[5] 10 August 2020,[6] 15 September 2020,[7] and 13 October 2020.[8]

[4] Exhibit R1

[5] Exhibit R2

[6] Exhibit R3

[7] Exhibit R4

[8] Exhibit R5

8.All of those witnesses gave oral evidence at the hearing. Mrs Thomson did not participate. The respondents also relied upon written submissions dated 13 October 2020.

9.The Amended Application and the issues in the proceedings evolved during the course of the hearing. There was considerable change to the orders sought by the applicants. I was less concerned as to the form of some orders because the respondents were aware of the essence of the issue related to those orders and was prepared to address them. Those orders, despite their form, were otherwise referrable to the kinds of orders the Tribunal can make under section 129 of the UTMA. I was concerned however as to whether I was able to make other orders sought.

10.Ultimately the applicants did not press some orders and some were varied. I have set out below the orders now sought[9] and some commentary of the associated issue for context:

[9] These orders will be referred to in this decision as Orders (a)-(k)

(a)Motion 3 approved at the Special General Meeting held on 15 May 2019 be repealed.[10] This motion approved the removal of the Thompson Accounting sign.

[10] This is order 1 of the Amended Application

(b)Motion 1 approved at the Special General Meeting held on 18 September 2019 be amended to include the following: “Each unit owner be provided with a key for the bollards.”[11] This motion approved the installation of bollards to an area of common property which had previously been used to park 2-3 cars.

[11] This is a variation of order 3 of the Amended Application

(c)Motion 2 approved at the Special General Meeting held on 18 September 2019 be repealed.[12] This motion approved the removal of all signage relating to Units 2, 3 and 4 located near the bottom floor automatic door at the rear of the building.

[12] This is order 4 of the Amended Application

(d)Motion 3 approved at the Special General Meeting held on 18 September 2019 be repealed.[13] This motion approved the installation of the Green & Associates sign to the common property wall adjacent to the bottom floor automatic door entrance. The applicants submitted that the repeal of this motion was not necessary if the Thomson Accounting sign was restored as Mr Thomson was content for the signs to co-exist. The respondents however submitted that an order repealing this motion was appropriate because the motion was not passed by unopposed resolution.[14]

[13] This is order 5 of the Amended Application

[14] See: section 22(1) of the UTMA; clause 4, Sch 4 of the UTMA

(e)Motion 4 approved at the Annual General Meeting held on 11 November 2019 be repealed.[15] This motion approved 2018-19 Financial Statements. The applicant disputes the correctness of those Financial Statements.

[15] This is order 10 of the Amended Application

(f)An order that the Owners Corporation for Units Plan 491 instruct the manager to amend and reissue the 2018-19 Financial Statements for the recovery of electricity, water and cleaning charges.[16]

[16] This is order 9 of the Amended Application

(g)An order that Mr Green breached section 46 of the UTMA by failing to comply with Schedule 1, Part 1.1 Executive Committee Code of Conduct in respect of Rule Infringement Notices issued to the applicants.[17]

[17] This is order 13 of the Amended Application

(h)An order that the first respondent pay to Thomson Accounting Super Fund $1,000 as a contribution to costs arising from these disputes.[18]

(i)An order that Civium Holdings Pty Ltd breached sections 55 and 56 of the UTMA by contravening Schedule 1, Part 1.2 Managers – code of conduct in respect of its understanding and use of the common property, the Rule Infringement Notices issued to the applicants and paying and not recovering electricity and cleaning costs for part of Unit 5.[19]

(j)An order that the Owners Corporation for Units Plan 491 terminate the management agreement with Civium Holdings Pty Ltd for contravention of sections 54, 55 and 56 of the UTMA.[20]

(k)The respondents pay the applicants costs of these proceedings.[21]

Legal framework

[18] This is order 14 of the Amended Application

[19] This is order 15 of the Amended Application

[20] This is order 16 of the Amended Application

[21] This is order 17 of the Amended Application

11.Section 129 of the UTMA provides a range of orders that may be made the Tribunal. It relevantly states:

129Kinds of ACAT orders

(1)   The ACAT may make the following orders:

(a)    an order requiring a party to do, or refrain from doing, a stated thing;

(b)    an order requiring a party to exercise a function under this Act;

(c)    an order requiring an owners corporation to do a stated thing that is ancillary to a function of the corporation under this Act;

(d)    an order requiring a person to pay to the Territory or someone else an amount of not more than $1 000;

(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—

(A)   because the owners corporation does not have the power to make the rule; or

(B)   under section 108 (3); or

(C)   for irregularity; or

(iv)   for an application made under section 127 (1) (d)—that the rule is invalid on the ground that the method in the resolution used to work out the proportion of fund contributions to be paid by each unit owner is not fair;

(f)    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;

(g)    an order giving effect to an unsuccessful motion for a resolution of a general meeting (either as originally proposed or as amended by the ACAT) if the ACAT is satisfied after a merits review of the motion that opposition to the motion was unreasonable;

(h)    an order requiring stated accounts of an owners corporation to be audited, whether by a stated person or a person of a stated kind;

…

(2)   The ACAT may make any other order it considers reasonably necessary or convenient to resolve a dispute under this part.

…

(5)   This section does not limit the orders the ACAT may make in relation to a dispute under this part.

12.The orders described at (a) to (e) above enliven the power exercisable under section 129(1)(f). It requires the Tribunal to conduct merits review of the motions in order to decide whether or not they should be amended or repealed. This involves a hearing de novo placing the Tribunal in the shoes of the decision-maker to make the correct or preferrable decision.

13.In Brudenall & Ors v Owners Corporation Unit Plan No. 202[22], the tribunal explained the approach as follows:

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 Motion 5.

There are a number of features of merits review which are worth noting.

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.

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.

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.

[22] Brudenall & Ors v Owners Corporation Unit Plan No. 202 [2016] ACAT 101 at [20] to [24]

14.A finding as to correctness involves deciding whether the decision is without legal error or other fundamental problem.[23] Deciding whether a decision is preferable requires considering if it is one that ensures the efficient and effective management of a complex, protects and advances the interests of the owners corporation as a whole, and protects the interests of the individual unit-owners.[24]

[23] Clews v The Owners – Units Plan 3069 [2019] ACAT 63

[24] Nash v The Owners – Units Plan No 2413 & Ors [2018] ACAT 54 at [59]

15.The Amended Application does not identify which order in section 129 of the UTMA applies to order (f). The Tribunal can order pursuant to section 129(1)(h) of the UMTA that the stated accounts for an owners corporation be audited. I note there is also a general power found in section 129(2) of the UTMA which enables the Tribunal to make any other order it considers reasonably necessary or convenient to resolve the dispute.

16.Order (h) may be made pursuant to section 129(1)(d) of the UTMA and order (k) regarding an award for costs is governed by section 48 of the ACT Civil and Administrative Tribunal Act 2008 (ACAT Act).

17.Orders (g), (i) and (j) can be readily dispensed with. Neither Mr Green or Civium are parties to these proceedings and it would not be appropriate to make orders against non-parties. Even if they were, I am not satisfied section 129 enables the Tribunal to make such orders. The applicants submitted they had complained to the Office of Regulatory Services regarding Mr Green and Civium’s conduct and were advised this Tribunal was the appropriate place to pursue the complaint. I am not satisfied it is. Certainly, in the case of Civium, the complaint might be regarded as an occupational disciplinary matter for which the Commissioner for Fair Trading is responsible. That, however, is not within the powers conferred on the Tribunal under section 129 of the UTMA. Regardless, as Mr Green and Civium are not parties I do not make the orders sought. Further, nothing in the evidence before the Tribunal supports a finding that the management agreement should be terminated. Again, I am not persuaded that section 129 confers such a power on the Tribunal. I decline to make that order.

18.Having regard to the respondents’ submission regarding order (d), namely the installation of the Green & Associates sign, I am satisfied it is appropriate to repeal the motion. The statutory requirements are clear in that any approval requires an unopposed resolution. Motion 3 was opposed. It follows that the approval should be repealed. I note Mr Thomson does not oppose Green & Associates installing signage, however the current signage should be removed as it is unauthorised until otherwise approved by unopposed resolution.

19.The remaining issues for determination can be categorised as follows:

(a)The removal and restoration of the Thomson Accounting Sign.

(b)The installation of the bollards to the common property.

(c)The 2018-19 Financial Statements and Unit 5’s contribution to electricity, water and cleaning.

(d)Monetary payment and costs.

The signage

20.At a Special General Meeting held on 5 August 2009, the following motion was resolved and carried unopposed:

…that Corporation consent be granted to the owner of Unit 2, to erect signage at the base of the stairs, at the exterior ground level on the façade of the building and in the garden, in accordance with the attached documentation and plans and to be uniform with the existing signage. Conditions below:…

21.The applicants were therefore permitted to erect the Thomson Accounting sign which is now the subject of dispute. This was regarded as a special privilege in favour of Unit 2 for the use and enjoyment of the common property, being the exterior wall.

22.It is not contended that the applicants failed to comply with this approval, or the conditions imposed.

23.At a Special General Meeting held on 15 May 2019, the following motion, by ordinary resolution, was carried (the First Sign Motion):

That the Owners Corporation grant approval to remove the ‘Thomson Accounting’ signage located near the bottom floor automatic door.

24.At a Special General Meeting held on 18 September 2019, the following motion, by ordinary resolution, was carried (the Second Sign Motion):

That the Owners Corporation grant approval to remove the all [sic] signage relating to Units 2, 3 and 4 located near the bottom floor automatic door at the rear of the building.

25.The applicants seek the repeal of the First and Second Sign Motions.

26.The applicants submitted that neither motion is correct as they were passed as ordinary resolutions contrary to section 22(2) of the UTMA. Section 22(2) of the UTMA requires that a special privilege may be terminated in accordance with a special resolution, by written notice given by the Owners Corporation to the person to whom the grant was made.

27.In general terms, an ordinary resolution and special resolution require a majority vote in favour of the resolution to pass if a poll is undertaken.[25] Nothing significant turns on this issue. At both meetings, there were four votes cast in favour of the motions and one cast against. Even as a special resolution, the motions would have been passed.

[25] UTMA schedule 3, clause 3.15 and 3.16

28.Therefore, strictly speaking the motions may not have been legally correct. However, the merits review process requires the Tribunal to make the correct or preferable decision.

29.The respondents relied upon Mr Green’s evidence in support of the motions being correct or preferable. Mr Green gave evidence at the hearing that signage to the building should be consistent with and reflect the aesthetic of the building. This was consistent with his witness statement in which he stated, inter alia:[26]

(a)Unit 5 has exclusive use of the downstairs area except for the stairwell.

(b)It was impractical for each unit to display a sign in the ground floor entrance.

(c)Each unit owner should be allowed to display signage in a fair and equitable manner, but also so the exterior of the premises is pleasant to look at for clients of owners.

[26] Exhibit R4 at paragraph 24

30.Mr Green also gave evidence that the wall near the ground floor entrance is not large enough to accommodate signage for every unit, should every unit wish to have signage.

31.One preferred solution which the respondents advanced at the hearing was to have a directory at the entrance with the names and location of each business listed. Mr Green’s evidence was that this measure had already been put in place.[27] The Tribunal is not being asked to decide whether this solution is preferrable. The application before the Tribunal seeks to have Unit 2’s signage restored. Whether the directory can or should remain is not for the Tribunal to decide.

[27] Exhibit R5

32.There is no evidence before the Tribunal of a policy or protocol governing signage at the premises. The suitability of any particular sign in the absence of any policy or protocol governing things such as style, size, materials and colour is therefore subjective.

33.If such a policy or protocol existed or was implemented prior to the First and Second Sign Motions were passed then the reason behind the removal of Unit 2’s signage might be clearer. The Tribunal would be in a position to assess whether the Motions were preferable when considered against such a policy or protocol. It cannot do that in this case. The only measure or standard the Tribunal has before it to consider whether the First and Second Sign Motions were preferable (for the reasons advanced by the respondents) is the Green and Associates sign. It is therefore difficult to understand why the Green and Associates’ sign is ‘consistent with and reflects the aesthetic of the building’ and the Thomson Accounting sign is not. It is a matter of opinion.

34.Without a policy or protocol governing signs, the reasons for which Unit 2’s special privilege and sign were removed are not persuasive. Unit 2’s sign was not inconsistent with any policy or protocol that had been introduced since the special privilege was granted, but inconsistent with the views and opinions of other members of the Owners Corporation as to suitability. The Tribunal does not regard that as preferable. Whether more than one sign can be accommodated or not in that location and the style to be adopted only serves to reinforce the utility of a policy or protocol governing signage. It is a matter for the Owners Corporation to consider.

35.For these reasons, the First Sign Motion and the Second Sign Motion are repealed. The effect of the repeal is that the Thomson Accounting sign, which was restored in accordance with orders I made on 13 August 2020, can remain.

The bollards

36.At a Special General Meeting held on 18 September 2019, Motion 1 was approved as follows (the Bollard Motion):

That the Owners Corporation approve the expenditure of up to $3,000.00 for the Supply & Installation of Bollards to the Common Property. These are to be installed just after the bin enclosure as you enter the property from the government road.

37.The applicants’ opposed the Bollard Motion. The bollards were subsequently installed. The history relating to the use of the common property area and the installation of the bollards was explored extensively at the hearing.

38.The area of common property that lies behind the bollards is a paved area of open space boarded by landscaping. Based on the evidence before the Tribunal I make the following findings:

(a)Until November 2019 when the bollards were installed, the area was used as car parking.[28]

(b)Due to the size of the area only 2-3 cars could be accommodated to allow for sufficient access and safe manoeuvrability.[29]

(c)The Owners Corporation has never approved a formal parking arrangement for the area nor have any special privileges been granted permitting an owner to park in that area.[30]

(d)From about November 2016, there was an informal arrangement between the applicants and Unit 5 whereby, Ms Wood would park her car to the left and Mr Thomson would park his car to the right.

(e)From about 2019, problems with the informal arrangement arose due to Unit 5 requiring access during construction, other people parking in the space and more cars than could be safely accommodated parking in the area.

(f)It is apparent there were instances of either Ms Wood’s and/or Mr Thomson’s cars being parked-in. I make no specific findings about the events alleged to have occurred during such occasions, but find that both Ms Wood’s car and Mr Thomson’s car had been blocked in either by each other or a third party.

(g)As a consequence of the bollards being installed the area is inaccessible to cars unless the bollards are removed.

(h)The bollards are secured in place with keys.

(i)The only keys for the bollards are held by Mr Green and ‘the strata’,[31] however what is meant by that is unclear. None of the other unit owners have a key.

[28] Exhibit A3, annexure 15 (emails exchanged between 30 August 2016 and 8 September 2016)

[29] Exhibit R4 paragraph 15(d), Tab 1; Exhibit A1, annexure B

[30] Exhibit A3, annexure 15 (emails exchanged between 30 August 2016 and 8 September 2016)

[31] Exhibit A3, annexure 60A (email dated 28 August 2019)

39.The installation of the bollards has affected Mr Thomson’s ability to park on site. Likewise, for Ms Wood and the other owners. There is car parking in the vicinity of the premises, albeit off street paid-parking. Mr Thomson regarded the previous informal arrangement as adequate without a need to change. He considered things deteriorated when the informal arrangement was no longer being observed or respected.

40.The applicants submit that the restriction placed on access to the common property infringes their rights under 19 of the UTMA. Despite initially seeking the repeal of the Bollard Motion, the applicants requested instead that the Tribunal amend the Motion to also approve each owner being provided with a key to the bollards.

41.The respondents submit that in the absence of any approved parking arrangements the bollards are necessary to regulate access to and use of that area. The respondents submitted that if all owners were given a key, a chaotic and unregulated situation would emerge.

42.There is some force to the respondents’ submission.

43.The Owners Corporation is responsible for the control, management and administration of the common property.[32] Common property is vested in the Owners Corporation as agent for the unit owners as tenants in common in shares proportionate to their unit entitlement.[33] The Owners Corporation is required to give all members of the corporation the opportunity for the reasonable use and enjoyment of the common property. Special privileges may be granted for the enjoyment of the common property if authorised by an unopposed resolution.

[32] Section 16(1)(c) of the UTMA

[33] Section 19(1) of the UTMA

44.The Owners Corporation is required to afford unit owners an opportunity to reasonably use and enjoy common property. How that opportunity is afforded is informed by the Owners Corporation’s responsibilities over the common property. The ability for an owner to use and enjoy common property is not unilateral and not unfettered. A balance is required. It is undesirable for the use of common property to be unregulated or uncontrolled. The Owners Corporation is vested with responsibility to ensure this does not occur. It is particularly illustrated by a case such as the present where the common property is of a finite size and limited potential use. It requires some control and management by the Owners Corporation to ensure its obligations are met and reasonable use and enjoyment can be achieved. To do otherwise leaves open the potential for problems to arise.

45.For instance, the informal parking arrangement that had been in place from 2016 impacted the use and enjoyment of that area by the owners of Units 1, 3 and 4. To restore it would perpetuate that impact.

46.To remove the bollards would leave the area open to potential misuse by owners and/or disagreements. It was correct for the Owners Corporation to seek to regulate the use of the common property. While there may be alternative solutions to the bollards, this solution was not incorrect.

47.The Tribunal has been asked to consider whether it is correct or preferable to amend the Bollard Motion following merits review to permit each unit owner to hold a key to the bollards. In the absence of any framework or policy that manages the use of the common property, again the potential for problems to arise exists. None of the parties proposed any kind of policy and it is not for the Tribunal to decide a policy. Such a matter is for the Owners Corporation to develop for approval at a meeting. Until then I am not satisfied it is preferable for every owner to hold a key. It is however appropriate for the strata manager to possess the key. Should an owner need access to or use of the area, the request can be made to the strata manager.

48.For these reasons, Motion 1 approved at the Special General Meeting on 18 September 2019 is not amended.

The financial statements

49.The Financial Statements for the financial year ending 30 June 2019 were not in evidence. The applicants have asked the Tribunal to repeal the approval of those financial statements on the basis that they are incorrect as they do not reflect the payments for utilities and cleaning that should have been made and were not made.

50.Mr Thomson claims that Unit 5 had not paid a sufficient contribution towards the electricity, water and sewage and cleaning charges. This was because a kitchen and toilet area located on the ground floor was part of Unit 5 and not common property. These charges had been split according to the unit holdings on the assumption the ground floor facilities were common property. It was accepted Unit 5 had paid a 52% contribution towards these charges on this basis. This did not take into account Unit 5’s additional obligation to cover the charges as they related to those ground floor facilities. Essentially, Mr Thomson claimed Unit 5 needed to pay a bit more than it had been paying and that because all the owners had been covering the charges for this ground floor area they should be refunded those amounts. Mr Thomson had attempted to quantify the additional amount payable by Unit 5 for the ground floor facilities.[34] The source documents for Mr Thomson’s calculations are not in evidence.

[34] Exhibit A2, annexure O

51.Mr Green accepted that Unit 5 had an obligation to cover the electricity, water and sewage and cleaning charges for the additional ground floor area that formed part of its entitlement. He also accepted Unit 5 had not done so. He did not know what amount should be charged and could not agree with Mr Thomson’s calculation.

52.The Tribunal is not in a position to calculate what amount Unit 5 should have paid taking into account its obligation to over the charges associated with the ground floor facilities as well as its 52% portion of the charges for the common property. Mr Green did not dispute that Unit 5 had this additional obligation, although he seemed to regard it as unfair as Unit 5 had assumed responsibility for other charges and costs which were properly common property.

53.At a general level it is clear Unit 5 is responsible for the charges associated with the ground floor facilities, but I do not know what that amount is nor can I be satisfied that the financial statements are wrong and if they are what they should be. I doubt even with the relevant documents it would be easy to calculate.

54.The Tribunal is required to undertake merits review of the approval of the financial statements and consider whether the approval was correct or preferable. Given the doubt surrounding the amounts Unit 5 should have paid against what was paid, and the lack of any identifiable error in those financial statements, I am satisfied their approval was preferable. Although Mr Thomson raised his concerns, which are no doubt valid, without more certainty as to what was contained in the financial statements and what amounts should have been paid, there was no basis upon which they should not have been approved.

55.The matter does need to be resolved. The Tribunal is not able to do that. The strata manager and/or an accountant is likely best placed to ascertain an amount Unit 5 should have paid for those facilities and determine what, if any, impact there is on the financial statements. How that is ultimately resolved or corrected is not presently before the Tribunal.

56.Therefore, in order to resolve the dispute, I am satisfied it is necessary to have the financial accounts audited. This will reveal what, if any, amounts have not been properly accounted for or not accounted for at all. Any necessary adjustments will flow from that audit.

57.For these reasons, Order (e) is not made. I order that the Owners Corporation’s accounts for the financial year ending 30 June 2019 are to be audited by the accountant for the Owners Corporation, to determine the amounts payable for electricity, water and sewage and cleaning in respect of the additional ground floor area occupied by Unit 5 and to make any necessary adjustments to the financial statements. The audit should be carried out and completed within two months from the date of these orders.

Payment of money and costs

58.The applicants sought orders seeking payment of $1,000 and costs. The applicants did not identify any reasons for the amount sought. I have taken it to be sought in a compensatory sense.

59.The applicants did not particularise any loss or damage suffered which would attract an award for compensation. I appreciate they may have been inconvenienced by the removal of the sign and installation of the bollards, but that is not enough. I am not satisfied it is appropriate to make any award pursuant to section 129(1)(d) of the UTMA.

60.Costs in the Tribunal are governed by section 48 of the ACAT Act. The applicants have only been partially successful in their application. The power to award costs is a narrow one.[35] In CIC Australia Ltd v Australian Capital Territory Planning and Land Authority,[36] Penfold J identified the four main elements of section 48 as:

(a) the default position is that the parties bear their own costs;

(b) the default position may be varied by provisions of the ACAT Act;

(c) the default position may be varied by an order of ACAT;

(d) in four specified circumstances, ACAT may make particular costs orders.[37]

[35] CIC Australia Ltd v Australian Capital Territory Planning and Land Authority [2013] ACTSC 96 at [82]

[36] [2013] ACTSC 96

[37] CIC Australia Ltd v Australian Capital Territory Planning and Land Authority [2013] ACTSC 96 at [37]

61.I am not satisfied that the circumstances of this case warrant the exercise of the discretion found in section 48.

Conclusion

62.Having regard to the issues raised in the Amended Application and the orders ultimately sought by the applicants, for the reasons above I make the following orders:

(a)The First Sign Motion is repealed;

(b)The Second Sign Motion is repealed;

(c)The Green and Associates sign motion is repealed;

(d)The Owners Corporation’s accounts for the financial year ending 30 June 2019 are to be audited by the accountant for the Owners Corporation, to determine the amounts payable for electricity, water and sewage and cleaning in respect of the additional ground floor area occupied by Unit 5 and to make any necessary adjustments to the financial statements. The audit should be carried out and completed within 2 months from the date of these orders.

63.The Amended Application is otherwise dismissed.

………………………………..

Senior Member K Katavic

Dates of hearing:	14 October 2020
Solicitor for the Applicants:	Mr E Corbitt, Legal Advisory Work
Solicitor for the First, Second and Third Respondent:	Mr H Smith, Chamberlains Lawyers