Tilley v No 352 Toorak Road Pty Ltd

IN THE SUPREME COURT OF VICTORIA Not Restricted
AT MELBOURNE

COMMON LAW DIVISION

JUDICIAL REVIEW AND APPEALS LIST

S CI 2015 05816

PETER GRAHAM TILLEY	Applicant/Appellant
v
No 352 TOORAK ROAD PTY LTD (ACN 004 569 475)	Respondent

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JUDGE:	Lansdowne AsJ
WHERE HELD:	Melbourne
DATE OF HEARING:	7 March 2016. Further submissions received on 31 March 2016
DATE OF JUDGMENT:	7 October 2016
CASE MAY BE CITED AS:	Tilley v No 352 Toorak Road Pty Ltd
MEDIUM NEUTRAL CITATION:	[2016] VSC 608

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APPEAL – application for leave to appeal and appeal if leave is granted against order of VCAT – neighbourhood dispute concerning parking on residual land – Company Titles (Home Units) Act 2013 (Vic) ss 8, 10– whether VCAT in determining what is a ‘fair’ order pursuant to s 8 is limited to the determination of legal rights – held: not so limited – whether there was evidence to support a finding that there would be considerable inconvenience to persons currently using the car spaces if the respondent was ordered to ensure they did not do so – held: there was such evidence – whether in taking into account that inconvenience given that those persons had no legal right to park there the Tribunal took into account an irrelevant consideration –held: no – principles of legal unreasonableness discussed - Minister for Immigration and Citizenship v Li (2013) 249 CLR 332 and Minister for Immigration and Border Protection v Stretton [2016] FCAFC 11 discussed and applied – leave to appeal granted on one question of law but appeal dismissed.

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APPEARANCES:	Counsel	Solicitors
For the Applicant	Mr J P Snow	Baker Jones Lawyers
For the Respondent	Mr M Symons	Stewart Peters Lawyer

TABLE OF CONTENTS

Introduction......................................................................................................................................... 1

Legislative context.............................................................................................................................. 3

Company Titles (Home Units) Act 2013 (Vic)................................................................................ 3
Victorian Civil and Administrative Tribunal Act 1998 (Vic)......................................................... 6

Proposed appeal................................................................................................................................. 8

Submissions and discussion............................................................................................................ 8

Questions of law........................................................................................................................... 8
Legal principles in relation to unreasonableness and irrelevant considerations............... 8
Application of these principles to this case............................................................................ 11
Applicant’s submissions.................................................................................................. 11
Respondent’s submissions............................................................................................... 12

Purpose and objects of the Act.................................................................................................. 13
‘Fair’ not confined to legal rights.................................................................................... 13
Nature of hearing at VCAT.............................................................................................. 17

Determination of the Questions................................................................................................ 18
Was the decision manifestly unreasonable?................................................................. 18
Was inconvenience to other occupiers irrelevant?....................................................... 21

Conclusion and orders.................................................................................................................... 22

Leave to appeal........................................................................................................................... 22
Appeal.......................................................................................................................................... 23
Orders........................................................................................................................................... 23

HER HONOUR:

Introduction

This proceeding commenced as an application for leave to appeal a decision of the Victorian Civil and Administrative Tribunal (‘VCAT’ or ‘the Tribunal’) constituted by Senior Member A Vassie. By orders made by me on 3 December 2015, the application for leave to appeal was referred to the court that would hear the substantive appeal if leave were granted. Justice J Forrest referred the hearing and determination of the appeal to me by order made on 4 December 2015. I heard the application for leave to appeal and appeal (if leave be granted) on 7 March 2016. Shortly after the hearing, I invited further submissions from the parties on a further relevant decision. The respondent chose to submit further written submissions; the applicant did not.

The proceeding in VCAT concerned a dispute about parking at a set of units erected at 352 Toorak Road, South Yarra. The units are a company title block comprising Plan of Subdivision No 60120. The plan of subdivision describes 16 lots. Lots 1 to 14 are individually owned. Lot 15 consists of three garages, lettered A, B and C on the plan. Lot 16 is the residual land.

The applicant and his wife are the owners of Lots 1 and 2, and part A of Lot 15 i.e. one of the garages. The respondent is the service company in respect of the subdivision, responsible amongst other things for the provision of common services, the maintenance, repair and insurance of the building and control and maintenance of the residual land.[1] The respondent is the owner of the residual land, being Lot 16.
[1]Definition of ‘service company’ in the Company Titles (Home Units) Act 2013 (Vic) which adopts the definition of ‘service company’ in the Transfer of Land Act 1958 (Vic).

There are six car parking spaces on the residual land marked by painted lines. Three of them are on the far side of the driveway onto which the applicant’s garage faces and one of these three is directly opposite the garage entrance. The nub of the applicant’s concern is that parking on these spaces impedes his access to and from his garage.

The dispute is of long standing, and there have been prior proceedings between the parties. On this occasion the dispute came before VCAT pursuant to the Company Titles (Home Units) Act 2013 (Vic) (‘the Act’). The applicant contended that the respondent had allowed cars to be parked in those three spaces, although the persons parking there had no legal right to do so. The applicant sought by his proceeding in the Tribunal to prohibit the parking of cars on any part of the residual land. As no other lot owner was a party to the proceeding, the Tribunal held that ‘at best’ it could order the service company to do all things necessary to be done by it to ensure there was no such parking. [2]
[2]Reasons at [23].

The Tribunal found that the respondent had not proved that any present user of a car parking space on the residual land was using it by virtue of a right granted in accordance with the agreements between the service company and the proprietor of a lot, or pursuant to a lease or a licence.[3] Accordingly, the Tribunal concluded:

(Mr Tilley) has established his main contention: that the users of the six car parking areas cannot show that they have a legal right to use them for car parking.[4]

[3]Reasons at [15].

[4]Reasons at [15].

Nevertheless, the Tribunal concluded that the applicant’s application that the service company ensure that there was no parking on the residual land should be dismissed. The Tribunal did so on the basis of s 8(1) of the Act. The Act provides by s 8(1) that the Tribunal in determining a ‘neighbourhood dispute’ may ‘make any order it considers fair’. The dispute before VCAT was a ‘neighbourhood dispute’ within the meaning of s 8(1). The Tribunal concluded:

By virtue of s 8(1) of the 2013 Act I may, in determining the neighbourhood dispute, make any order I consider fair. The discretion that the section confers also allows me, I consider, not to make any order at all if I consider it fair not to make an order. Weighing up the factors to which I have referred, I consider it fair not to make any order that will disturb the present state of affairs with respect to parking on the residual land.[5]

[5]Reasons at [25].

In reaching its conclusion the Tribunal took into account the following matters:

·     a factual conclusion that the inconvenience or limitation of access of which the applicant complains is ‘potential rather than actual at present’;[6]
·     a factual conclusion that ‘access to and from Mr Tilley’s garage is not quite as easy as (another witness) stated but by no means as difficult as Mr Tilley was stating’;[7]
·     that the making of the order sought would considerably inconvenience persons currently parking their cars in the disputed spaces;[8]
·     none of those persons can establish a legal right to occupy one of the disputed spaces as a car parking area;[9] and
·     none of the other occupiers was a party to the proceeding.[10]

[6]Reasons at [18].

[7]Reasons at [22].

[8]Reasons at [24].

[9]Reasons at [24].

[10]Reasons at [23] and [26].

In this proceeding, the applicant complains particularly that the Tribunal took into account inconvenience to other persons currently parking their cars in the disputed spaces, although it found that they had no legal right to do so.

For the reasons that I now set out in more detail I grant leave to appeal on Question 1 in the proposed notice of appeal, but dismiss the appeal on that Question. I refuse leave to appeal on Question 2.

Legislative context
Company Titles (Home Units) Act 2013 (Vic)

Section 1 of the Act states:

1 Purpose
The main purpose of this Act is to confer jurisdiction on VCAT to hear and determine neighbourhood disputes affecting company title corporations and service companies for building subdivisions.

Section 6 of the Act confers jurisdiction on VCAT to hear and determine a ‘neighbourhood dispute’. A ‘neighbourhood dispute’ is defined by s 5(1) of the Act to be, with some exceptions not here relevant, a dispute that ‘relates only to a neighbourhood matter or matters’ and ‘affects a company title corporation or service company’. ‘Neighbourhood matter’ is defined by s 4 of the Act to be any matter set out in the Schedule to the Act. The Schedule includes in clause 2 under the heading ‘Residual Land’ the following relevant matters:

2.1 Use of residual land.

2.3 Parking on residual land.

2.4 Vehicle access to residual land and units.

Section 8 of the Act confers power on the Tribunal to make orders. It relevantly provides as follows:

8Orders
(1)Subject to subsection (2), in determining a neighbourhood dispute VCAT may make any order it considers fair, including one or more of the following—
(a)an order requiring a party to do or refrain from doing something;
(b)an order requiring a party to comply with this Act, a rule of a company title corporation or service company or a term of a service agreement;

(c) an order for the payment of a sum of money—
(i) found to be owing by one party to another party;
(ii)by way of damages (including exemplary damages and damages in the nature of interest);

(iii) by way of restitution;
(d)an order varying any term of a contract or agreement (other than a rule of a company title corporation or service company);
(e)an order declaring that any term of a contract or agreement (other than a rule of a company title corporation or service company) is, or is not, void;
(f)an order declaring the meaning of a rule of a company title corporation or service company or term of a service agreement that relates to a neighbourhood matter;
(g)an order in relation to damaged or destroyed buildings or improvements;
(h)an order as to the payment of insurance money under any policy taken out by a company title corporation or service company.

(2) An order cannot be made under subsection (1) that—
(a)alters a person's shareholding in a company title corporation or service company; or

(b) winds up a company title corporation or service company; or
(c)alters the composition of the board of directors of a company title corporation or service company.

(3)In awarding damages in the nature of interest, VCAT may base the amount awarded on the interest rate fixed from time to time under section 2 of the Penalty Interest Rates Act 1983 or on any lesser rate it thinks appropriate.
(4)VCAT may make any interim orders and ancillary orders it thinks fit in relation to a neighbourhood dispute.
(5)In this section, party means a party to a neighbourhood dispute being heard and determined by VCAT.

Section 10 of the Act sets out the factors that VCAT must consider in making an order. It provides as follows:

10       Factors that VCAT must consider
VCAT, in making an order, must consider the following—
(a)       the conduct of the parties;
(b)       an act or omission or proposed act or omission by a party;
(c)the impact of a resolution or proposed resolution of a company title corporation or service company on the shareholders as a whole;
(d)whether a resolution or proposed resolution of a company title corporation or service company is oppressive to, unfairly prejudicial to or unfairly discriminates against a shareholder or shareholders;

(e) any other matter VCAT thinks relevant.

The applicant’s complaint in this proceeding is that the Tribunal took into account a matter, the inconvenience to persons who currently park on the residual land, which was irrelevant, or, if relevant, had no proper evidentiary basis.

Victorian Civil and Administrative Tribunal Act 1998 (Vic)

Section 148 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) (‘the VCAT Act’) allows a party to a VCAT proceeding who is aggrieved by an order to seek leave to appeal the order in the Supreme Court. It relevantly provides:

148 Appeals from the Tribunal
(1)A party to a proceeding may appeal on a question of law from an order of the Tribunal in the proceeding—
(a)if the Tribunal was constituted for the purpose of making the order by the President or a Vice President, whether with or without others, to the Court of Appeal with leave of the Court of Appeal; or
(b)in any other case, to the Trial Division of the Supreme Court with leave of the Trial Division.

(2) An application for leave to appeal must be made—
(a)no later than 28 days after the day of the order of the Tribunal; and

(b) in accordance with the rules of the Supreme Court.
(3)If leave to appeal to the Trial Division of the Supreme Court is granted, the appeal must be instituted—
(a)no later than 14 days after the day on which leave is granted; and

(b) in accordance with the rules of the Supreme Court.

(4)       (Not here relevant).
(5)       (Not here relevant).
(6)       A party that institutes an appeal must notify the principal registrar.
(7)The Court of Appeal or the Trial Division, as the case requires, may make any of the following orders on an appeal—
(a)an order affirming, varying or setting aside the order of the Tribunal;

(b) an order that the Tribunal could have made in the proceeding;
(c)an order remitting the proceeding to be heard and decided again, either with or without the hearing of further evidence, by the Tribunal in accordance with the directions of the court;

(d) any other order the court thinks appropriate.
(8)If the court makes an order under subsection (7)(c), it must give directions as to whether or not the Tribunal is to be constituted for the rehearing by the same members who made the original order.

(9) (Not here relevant).

The procedure envisaged by s 148 is a two stage one - leave to appeal, and appeal only if leave is granted - but increasingly the Court utilises the procedure laid down by r 4.14(3) of the Supreme Court (Miscellaneous Civil Proceedings) Rules 2008 which allows the question of leave and the full appeal, if leave is granted, to be heard together. That is what occurred in this case. This procedure avoids the cost and potential delay of two distinct hearings, if leave is granted. It also avoids the duplication that arises from the limited scrutiny of the Tribunal’s reasons and order that may be sufficient at the leave stage, to determine only if there is a real argument that the Tribunal may have made an error of law, and the more detailed scrutiny of the reasons and orders and all the evidence before the Tribunal required to determine at the appeal stage if the argument that there was such error is in fact made out.

Leave to appeal may only be granted on a question of law. In broad terms, that excludes appeals against factual determinations, unless there was no evidence at all for a factual finding made by the Tribunal. Where there is evidence that could support a factual finding made by the Tribunal, there can be no appeal against that finding, even if a differently constituted Tribunal might have reached a different conclusion on the facts.

The test for leave to appeal is as set out in Myers v Medical Practitioners’ Board of Victoria[11] (‘Myers’), which adopted the test as previously determined by Phillips JA in Secretary to the Department of Premier and Cabinet v Hulls (‘Hulls’).[12] I set out below the well-known passage of the judgment of Phillips JA in Hulls, also cited in Myers:

When leave is sought to appeal under s. 148, it will be necessary for the applicant to identify a question of law which is relevant to the granting of the relief sought on appeal. The importance of the question, either generally or to the would-be appellant in the particular case, will probably be relevant. The applicant must show that there is a real or significant argument to be put on that question of law at least to this extent: that there is sufficient doubt about it to justify the grant of leave. Moreover, it may have to be shown that to allow the error to go uncorrected would impose substantial injustice, although, where the order below is final, that injustice will often be more readily discernible.[13]

[11][2007] VSCA 163.

[12][1999] 3 VR 331.

[13]Ibid, at 337.

There is a further aspect to the scope of appeal in this instance that arises because the order sought to be impugned was the exercise of a discretion, the discretion conferred on the Tribunal by s 8 of the Act to make any order it considers ‘fair’. There are well established limits to the extent to which the exercise of a discretion may be challenged on appeal or review.

Proposed appeal

The draft notice of appeal identifies two questions, said to be questions of law (‘the Questions’):

1. Whether the Senior Member’s exercise of his discretion under section 8 of the Company Titles (Home Units) Act 2013 was manifestly unreasonable.

2. Whether in the exercise of his discretion under section 8 of the Company Titles (Home Units) Act 2013, the Senior Member took into account an irrelevant consideration.

Submissions and discussion
Questions of law

There is no dispute that the questions on which the applicant seeks leave to appeal, and, if that leave is granted, seeks that the decision of the Tribunal be set aside, are questions of law. That is plainly so.[14] If a statutory discretion as here conferred on VCAT by s 8 of the Act is not exercised in accordance with the limitations on the exercise of that discretion, that error is an error of law.
[14]Bell Corp Victoria Pty Ltd and ors v Stephenson [2003] VSC 255 at [31] and [36].

Legal principles in relation to unreasonableness and irrelevant considerations

The principles that apply where it is contended on judicial review or appeal that a decision is void for being unreasonable were recently considered at length by the High Court in Minister for Immigration and Citizenship v Li[15] (‘Li’). In that case, the High Court reconciled a number of previous statements of relevant principles, including the principle of ’Wednesbury unreasonableness’ and the principles applying to scrutiny of the exercise of statutory discretions, as established by previous cases including Sharp v Wakefield,[16] and House v R.[17]
[15](2013) 249 CLR 332; [2013] HCA 18.
[16][1991] AC 173.
[17](1936) 55 CLR 499.

The applicant places particular stress on the rationale of Sharp v Wakefield, expressed in the words of Lord Halsbury, the Lord Chancellor as follows (citations omitted):

…’discretion’ means when it is said that something is to be done within the discretion of the authorities that that something is to be done according to the rules of reason and justice, not according to private opinion; according to law, and not humour. It is to be, not arbitrary, vague, and fanciful, but legal and regular. And it must be exercised within the limit, to which an honest man competent to the discharge of his office ought to confine himself.[18]

[18][1991] AC 173, at 179.

In House v R, the plurality of the Court (Dixon, Evatt and McTiernan JJ) held that:

The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.[19]

[19](1936) 55 CLR 499, at 504-505.

Li in turn has been considered and applied by the Full Court of the Federal Court in Minister for Immigration and Border Protection v Stretton[20] (‘Stretton’). The decision in Stretton was handed down only shortly before the hearing, and I gave the parties the opportunity to make further submissions on it after the hearing. Only the respondent chose to do so.
[20][2016] FCAFC 11.

I draw the following principles from Li, in particular from the decision of the plurality, Hayne, Kiefel and Bell JJ, as discussed further in Stretton, in particular in the judgment of Allsop CJ:

(i) The legislature is taken to intend that a discretionary power conferred by statute will be exercised reasonably.[21]
[21]Li per Hayne, Kiefel and Bell JJ at [63]: Stretton per Allsop CJ at [4].

(ii) The limits of what is reasonable are set by the scope, purpose and objects of the statute conferring the discretionary power.[22]
[22]Li per Hayne, Kiefel and Bell JJ at [67]; French CJ at [23]. Stretton per Allsop CJ at [11]-[12] and Griffiths J at [55]-[56].

(iii) The legal standard of unreasonableness is not limited to a decision that is so unreasonable that no reasonable person could have arrived at it – which would be to limit the principle potentially to decisions which are irrational or bizarre – and the formulation by Lord Greene MR of ‘unreasonableness’ in Wednesbury[23] should not be taken to limit the principle in this way.[24]
[23][1948] 1 KB 223 at 230.
[24]Li per Hayne, Kiefel and Bell JJ at [68].

(iv)The reference in Wednesbury to a decision which is so unreasonable that no reasonable person could have arrived at it can be taken to recognise that an inference of unreasonableness may in some cases be objectively drawn even if no specific error in reasoning can be identified.[25]
[25]Ibid.

(v) Specific errors, such as taking into account an irrelevant consideration, can also be seen as within the doctrine of unreasonableness.[26]
[26]Li per Hayne, Kiefel and Bell JJ at [72] and French CJ at [26]-[27].

(vi)The rationale of Sharp v Wakefield is an illustration of these principles.[27]

(vii) In the area within the bounds set by legal unreasonableness, the decision maker has a genuinely free discretion. This is the area of ‘decisional freedom’. Within this area reasonable minds may reach different conclusions about the correct or preferable decision. If the decision is made within this area, it is immune from appeal or review on the ground of unreasonableness.[28]

[27]Li per French CJ at [24]; Hayne, Kiefel and Bell JJ at [65].

[28]Li per French CJ at [28]; Hayne, Kiefel and Bell JJ at [66]. Stretton per Allsop CJ at [8] and Griffiths J at [56].

Application of these principles to this case
Applicant’s submissions

In essence, the applicant objects in respect of both Questions to the Tribunal taking into account what it found to be the comparatively greater inconvenience to other lot owners than to the applicant if an order was made requiring the respondent to restrict the access of lot owners to the residual land for car parking. In particular, the applicant contends that there was no evidence to support the Tribunal’s finding that there would be inconvenience to other lot owners and so in taking that matter into account Senior Member Vassie impermissibly relied on his own ‘private opinion’, to paraphrase Sharp v Wakefield. The applicant contends that the Senior Member’s conclusion was thus, in the legal sense, unreasonable.

Putting this analysis slightly differently, the applicant further contends that inconvenience to other lot owners, or the Tribunal’s opinion as to comparative inconvenience to the applicant and other lot owners, or both, were irrelevant considerations. The applicant contends that the legally relevant consideration was legal entitlement to park on that land.[29]
[29]T 14-15.

Indeed, counsel for the applicant in his oral submissions goes so far as to say that the sole issue was whether the persons currently parking on the residual land had a legal right to do so.[30] The applicant submits that the Tribunal should have stopped at the point of finding that the occupiers parking on the residual land had no legal right to do so. That one matter, in the submission of the applicant, should have been determinative and the relief that the applicant sought granted.
[30]T 5.16- T 6.11; T 7.7-21.

Counsel for the applicant does not submit that the Tribunal should have evaluated competing legal rights. He notes that the applicant, as opposed to the persons parking on the residual land, does have a relevant legal right, being the right to park in his garage, but submits that strictly this does not matter- it was sufficient for the correct disposition of the case by the Tribunal that the persons parking on the residual land have no right to do so, and so they should not be allowed to do so.[31]
[31]T 7.22- T 8.16.

Respondent’s submissions

The respondent in its initial written submissions contended that leave to appeal should be refused because the dispute was not justiciable by the Tribunal i.e. should not have been heard in the first instance, and could not be heard again if the appeal was allowed. The first basis for this submission was the assertion that the claim made in the subject proceeding before the Tribunal had already been determined by an earlier proceeding in the Tribunal, in 2010. The respondent also asserted that the applicant had been guilty of unreasonable delay in seeking to ventilate the dispute, and that the dispute was statute barred. These submissions were fully answered by the applicant’s submissions in reply, and were not pressed at the hearing.[32]
[32]T 18.15- T 20.5.

In relation to the substance of the decision, the respondent contends that inconvenience to other lot owners is not an irrelevant consideration and the decision was not manifestly unreasonable. In particular, the respondent contends that the enquiry the Tribunal is permitted to make is not limited to whether the other residents have a legal right to park on the residual land.[33] The Tribunal is not asked by the Act to make orders enforcing rights, but rather orders that are fair.[34] The respondent submits that the matters listed in paragraphs (a) – (d) of s 10 of the Act, matters that the Tribunal must consider, show that, in deciding what is fair, the Tribunal is not only not limited to consideration of legal rights, but is bound to consider matters other than the existence or absence of legal rights.[35]
[33]T 20.22-24.
[34]T 20.31- T 21.3.
[35]T 21.19- T 22.6.

Neither party in their initial written submissions undertook any detailed analysis of the Act. I identified this as a deficiency at the hearing, given the emphasis placed in Li on statutory construction, and each party made further submissions on the proper construction of the Act at that time. In its further submissions on Stretton, the respondent extended this analysis. The respondent submits that examination of the Act shows that its purpose ‘might be said to be the achievement or preservation of harmony amongst neighbours’.[36] In achieving this purpose, by making an order that is ‘fair’, the respondent submits that the Tribunal should consider not just the interests of the parties to the proceeding, but the interests ‘of all shareholders, occupiers of units and even their invitees onto the land’.[37]
[36]Defendant’s Submissions dated 31 March 2016 at [6].
[37]Ibid, at [7].

In the course of ascertaining the purpose of the Act for these reasons, I considered the Second Reading Speech for the Bill that became the Act.[38] I did so because the purpose section of the Act, s 1 which I set out earlier, merely summarises the effect of the Act i.e. the conferral of jurisdiction on VCAT, without any stated policy reason for that conferral. Section 35 of the Interpretation of Legislation Act 1984 (Vic) permits reference to, amongst other things, a Second Reading Speech, in aid of construction of a statute. I gave the parties the opportunity to make further submissions on the appropriateness or otherwise of doing so in this case, and on what may flow from that consideration. Neither party wished to do so.
[38]As read in the Legislative Assembly on 20 February 2013.

Purpose and objects of the Act
‘Fair’ not confined to legal rights

The principal conclusion that I reach, principally from construction of the Act itself, but further illuminated by the Second Reading Speech, is that while the Act requires the Tribunal to consider legal rights when determining what order is ‘fair, it is not the intention of the Act to limit that which is a ‘fair’ order to an order enforcing or reflecting a legal right. I reach this conclusion by two routes. First, by consideration of the powers of the Tribunal to make orders and consideration of its role as the preferred, but not exclusive, jurisdiction for resolution of neighbourhood disputes. Secondly, by consideration of the factors that the Tribunal must consider when making an order.

The orders that the Tribunal can make pursuant to s 8 include orders declaring or enforcing legal rights, or that may infringe on or vary pre-existing legal rights. All of the orders that are listed in sub-section (1) to s 8 fall into these categories. Further, the Tribunal can punish for failure to comply with a rule of a company title corporation or service company (s 9); can direct as to whether or not, and how, a money order to be paid by a company title corporation or a service company may be levied on shareholders (s 11); and is the preferred, but not exclusive, jurisdiction for resolution of neighbourhood disputes (ss 12 and 15). Section 15 of the Act preserves the jurisdiction of courts under the Corporations Act to hear and determine a dispute relating to a neighbourhood matter, but s 12 of the Act requires a court to stay such a proceeding if it considers that the proceeding would be more appropriately dealt with at VCAT.

All of these matters lead to the conclusion that the Tribunal is required to have regard to legal rights and obligations in determining a neighbourhood dispute. Parliament would not have intended, for example, to require a court to stay its consideration of a neighbourhood dispute in favour of consideration by the Tribunal if the Tribunal was free to disregard legal rights and obligations.

However, the Tribunal does not have power to affect all legal rights and obligations that may be relevant to a particular dispute. Sub-section (2) of s 8 specifically excludes orders that would alter a person’s shareholding, wind up the company, or alter the composition of the board of directors of the company. In the Second Reading Speech these exclusions are described as orders that ‘could affect a person’s interest in the property or change corporate governance arrangements’.[39] These matters, going to the heart of entitlement to property rights and to the composition of the company remain within the realm of a court under the Corporations Act or other relevant enactment or cause of action. Further, as the Second Reading Speech notes,[40] the Supreme Court remains the only Victorian court able to exercise the ‘general oppression jurisdiction’ in Part 2F of the Corporations Act. In my view, the exclusion of certain legal rights and obligations from the powers of the Tribunal supports the view that what is a ‘fair’ order is not necessarily the same as an order that is limited to enforcement of legal rights. The Tribunal is intended to have a different jurisdiction to that of the courts.
[39]Page 419.
[40]Page 418.

A different jurisdiction could, of course, just be a more limited jurisdiction within the same bounds as the jurisdiction of a court i.e. confined to enforcement or declaration of legal rights, but not extending to all legal rights. This interpretation is not, however, consistent with s 10, which sets out the matters that VCAT must consider in making an order. These matters may overlap to some degree with existing legal rights and obligations, but will not do so in every case, yet VCAT is required to consider them in every case.

It is tempting to begin analysis of s 10 with paragraph (e) - ‘any other matter VCAT thinks relevant’. On initial reading, this could suggest that what is relevant is entirely to be determined by the Tribunal itself. This is not the correct construction, however. As set out earlier, even where a discretion is broadly expressed, or not expressly limited by stated considerations, it must only be exercised conformably with the purpose and object of the statute conferring the power. In other words, VCAT may only consider ‘relevant’ what is relevant pursuant to the purpose and object of the Act. This shows that reliance on paragraph (e) would be entirely circular, and so not productive.

I think more guidance is obtained from the specificity of the matters identified in the other paragraphs of s 10. The conduct of the parties - required to be considered by paragraph (a) - may in a particular case be relevant to the existence or otherwise of a legal right, or its enforceability (for example, whether a right can be enforced if the party invoking it has been guilty of delay) but will not always be so. Similarly, acts or omissions of the parties (paragraph (b)) may relate to legal rights, but will not necessarily do so. Whether a resolution or proposed resolution is oppressive (part of paragraph (d)) may overlap with rights in relation to oppression under the Corporations Act, but it is difficult to see how ‘the impact of a resolution or proposed resolution...on the shareholders as a whole’ (paragraph (c)) is confined to legal rights. It speaks to my mind far more broadly.

I do not, however, accept the submission of the respondent in its further submissions on Stretton that examination of the Act reveals a purpose of ‘maintaining healthy, safe and cohesive communities’ or preserving or achieving ‘harmony amongst neighbours’.[41] These articulations of purpose are statements of an ideal, which may be the outcome of determination of a dispute, but cannot be guaranteed to be so. The purpose of the Act is the determination of disputes arising or evidencing disharmony amongst neighbours or lack of cohesion in an informal and cost effective way, that allows factors broader than the existence of legal rights and obligations to be taken into account. It is to be hoped that that determination then achieves or reinstitutes harmony and cohesion, but this is a matter within the sole realm of the neighbours themselves.
[41]Defendant’s Submissions dated 31 March 2016 at [6].

I also think that the respondent goes too far if it intends to submit that in every case VCAT should take into account ‘the interests of all shareholders, occupiers and even their invitees onto the land’. The respondent reaches this conclusion by analysis of paragraphs (c) and (d) of s 10, combined with the categories of matters set out in Schedule 1. Paragraphs (c) and (d) of s 10 apply to resolutions or proposed resolutions. As I have indicated, to my mind they show that the Tribunal is not limited to the enforcement or declaration of legal rights, but I do not think that, even in combination with the categories of matters set out in Schedule 1 to the Act, they lead to a general conclusion that in disputes which do not concern a resolution or proposed resolution, such as the present case, the interests of other shareholders necessarily should be considered. In a particular case consideration of the interests of other shareholders may be relevant in the determination of what is a fair order, even where the dispute does not concern a resolution or proposed resolution. I consider that this is one such case. However, I do not think it can be said that the Act requires this in every case.

Nature of hearing at VCAT

I also consider that examination of the Act, as illuminated by the Second Reading Speech, shows that the reason for the conferral of jurisdiction on VCAT was to provide a cheaper and more informal option than what would otherwise be available to a holder of shares in a company title block of units. The Second Reading Speech notes that while residents in company title blocks of units have similar issues to resolve as do residents in blocks of units established with an owners’ corporation, prior to the Bill such a dispute could only be resolved by action under the Corporations Act in the Supreme Court or other courts. The Second Reading Speech notes that ‘(c)ourts are an expensive option to resolve what are often relatively simple disputes…’[42] and goes on to state that the conferral of jurisdiction on VCAT:

aims to provide a cheaper, faster jurisdiction for the resolution of these disputes, in the same way that members of owners corporations can resolve their neighbourhood disputes…

[42]Ibid, at 418.

The statement in the Second Reading Speech under s 85 of the Constitution Act 1975, which explains the limitation imposed on the jurisdiction of the Supreme Court by s 12 of the Act, reiterates this purpose by stating that the reason for the section is:

it is intended to have an informal, low-cost procedure to deal with such disputes, without, for instance, the expense involved in having legal representation…[43]

[43]Second Reading Speech 20 February 2013 Legislative Assembly at 418 and 419.

In my view, these statements as to the nature of the resolution of disputes in VCAT, as opposed to a court, illuminates an aspect of the first Question in this case.

Determination of the Questions
Was the decision manifestly unreasonable?

The applicant contends that the Senior Member relied on his own ‘private opinion’ that other occupiers would suffer inconvenience if the respondent was required to direct them not to park on the parking sites, because there was no evidence to support a finding of such inconvenience.

The parties did not put into evidence in this proceeding the whole of the evidence before the Tribunal. Only the transcript is in evidence, and the applicant’s application. In particular, the various documents and photographs produced to the Tribunal are not in evidence before me. It does not appear, however, from the transcript or the Reasons that those documents and photographs related to the question of inconvenience to users of the car parks if they were required to cease using them. The material before the Tribunal which relates to this issue comprised only the following:

· The evidence of Dieter Bulach, a director and son of the owners of two other lots, that the directors consider that extinguishing car parking on the residual land would be ‘quite discriminatory to some of the residents’.[44] Mr Bulach gave two examples - that of Mr de Gruchy, and that of a family with two young children who park, in his evidence, in the northernmost of the three spaces along the west side of the property. These are the three car spaces on the driveway leading to and opposite the applicant’s garage.[45]

· The evidence of the applicant in reply that ‘carparking is tight in South Yarra’.[46]

[44]VCAT transcript p 26 ll33-34.

[45]This emerges from the various plans attached to the applicant’s application to VCAT and the VCAT transcript- see CB 35 and 107.

[46]VCAT transcript p 36 l 31.

Mr Bulach gave more details of his concern about the impact on the two residents he mentioned. He implied that his concern about impact on Mr de Gruchy was because of Mr de Gruchy’s age, saying in relation to him:

He’s in his late- well, mid to late 90s, still drives, and it would be, I think quite difficult for him to park in places other than- you know other than an allocated parking space where he knows exactly where he’s going to park.[47]

[47]VCAT transcript p 26, ll 34-39.

Mr de Gruchy himself gave evidence, but did not volunteer and was not asked about any difficulty in parking other than on site on an allocated parking space.

In relation to the resident with children, Mr Bulach said ‘moving children around is quite a - you know, quite a considerable task, and I think that they should be considered as well.’[48] The resident concerned did not personally give any evidence, either oral or in writing.
[48]VCAT transcript p 26 ll 42-43.

The evidence before the Tribunal given by Mr Bulach was not first hand - it was not given directly by the residents who it was said would be adversely affected- and it relates to the convenience of parking on site because of certainty and proximity (due to age or the presence of children) not directly to the difficulty of finding a parking spot other than on site. The evidence of Mr Tilley, on the other hand, does relate directly to the difficulty of finding parking other than on site.

The Tribunal held that the making of an order that the respondent service company do all things necessary to ensure there is no parking on the residual land ‘would considerably inconvenience those persons who park their cars in the disputed spaces.’ The Tribunal continued:

They would have to park instead in a street. It would take very little knowledge of Toorak Road, South Yarra and the roadways nearby No 352 to appreciate the difficulty and limitations of on-street parking.[49]

[49]Reasons [24].

I do not consider that there was any evidence that displaced car parkers would ‘have to park instead in a street’. This finding excludes, for example, the possibility of other forms of parking such as the use of other off street, but not on-site, parking. It is, however, a reasonably fair inference that if on-site parking was not available, then the likely alternative was on-street parking, and as I apprehend it the applicant does not object to this factual finding. The applicant specifically complains that there was no evidence to support the Tribunal’s finding that on-street parking would be difficult or have limitations, going so far as to assert that lot owners are entitled to residential parking permits.[50] This submission goes too far - there was no evidence at all about the availability or effect of a parking permit. However, the way the Tribunal has phrased its finding in the second sentence in the extract quoted above could imply that the Tribunal was operating on the basis of its own knowledge. Further, the Tribunal did not refer to the evidence that I have set out as to the adverse impact on current car park users. For these reasons, I think it is arguable that the Tribunal reached its conclusion that there would be adverse impact on the basis of its ‘private opinion’, and not evidence.
[50]Applicant’s/Appellant’s Outline of Submissions dated 14 December 2015 at [49].

However, there was in fact evidence that supported a finding of adverse impact, if the on-site parking was removed, being the evidence I have set out earlier. Mr Bulach’s evidence did not touch on questions of the availability of off-site parking, rather being focused on the advantages of certainty and proximity, but Mr Tilley’s did. The issue was not explored in any detail in the evidence, but there was evidence on the point. The evidence was not all first hand, but the Tribunal is not bound by the rules of evidence, and is required to be as informal as possible. Section 98(1) of the VCAT Act provides as follows:

98       General procedure
(1)       The Tribunal—
(a)       is bound by the rules of natural justice;
(b)is not bound by the rules of evidence or any practices or procedures applicable to courts of record, except to the extent that it adopts those rules, practices or procedures;

(c) may inform itself on any matter as it sees fit;
(d)must conduct each proceeding with as little formality and technicality, and determine each proceeding with as much speed, as the requirements of this Act and the enabling enactment and a proper consideration of the matters before it permit.

Informality and low cost are also key purposes of the conferral of jurisdiction in relation to neighbourhood disputes on VCAT by the Act, as I have set out earlier. It would appear that the parties themselves sought to utilise this aspect of the jurisdiction, because neither was legally represented at the Tribunal.

Given the purposes of the Act and the powers conferred on VCAT by the VCAT Act, I consider that there was evidence before the Tribunal on the basis of which it could reach its conclusion that there would be ‘considerable inconvenience’ to persons currently parking on the disputed spaces if they had to cease to do so. The applicant does not contend that the decision reached should be set aside for unreasonableness by reason of any matter other than that the Tribunal relied on its own ‘private opinion’. I consider that this Question is arguable, and as I elaborate below, will grant leave to appeal on this Question, but I do not consider that the appeal should be allowed on this Question.

Was inconvenience to other occupiers irrelevant?

The second Question turns on whether inconvenience to the current car park users was a relevant consideration, even if there was evidence that they would suffer that inconvenience. In other words, was the Tribunal permitted to take this inconvenience into account?

The applicant contends that inconvenience to the car park users is irrelevant because the only relevant matter is whether they had a legal right to use the car parking spaces. I have set out my detailed reasons earlier for concluding that the nature of the jurisdiction and powers conferred on the Tribunal by the Act does not require it to halt its consideration of what order is ‘fair’ at a determination of legal rights. Depending on the dispute in question, other matters will be relevant, and s 10 requires certain matters to be considered in every case.

As applied to this case, I do not think that the Tribunal erred in taking into account the inconvenience that the persons currently using the contested spaces would suffer if they were required by the respondent to cease parking there. It emerged in the evidence that those persons are all residents.[51] I consider that the impact a proposed order will have on other residents, who are either other shareholders in the service company or their tenants, is plainly a relevant matter in determining a neighbourhood dispute about parking by those residents, even if they themselves are not parties.
[51]VCAT transcript pp 13-14; 26-27.

In reaching its ultimate conclusion to dismiss the application, the Tribunal weighed competing questions of convenience, having regard to its factual findings as to the level of that inconvenience and the absence of any legal right to park on the contested sites. It may be that a Tribunal differently constituted would or could have reached a different ultimate conclusion, but that is not a proper ground of appeal. Findings of fact as to the level of inconvenience or other factual issues are not challengeable pursuant to s 148 of the VCAT Act, and, properly, the applicant does not seek to challenge them. Provided a decision is not unreasonable, in the legal sense, and is not otherwise affected by legal error, such, as is here contended, taking into account an irrelevant consideration, the decision reached by the Tribunal on the merits is not susceptible to appeal to this Court.

In short, in my view the decision that the Tribunal reached was within the realm of the decisional freedom conferred by s 8 of the Act.

Conclusion and orders
Leave to appeal

I set out earlier the test for the grant of leave to appeal. Both parties made detailed submissions on the various elements of the test. Given the ultimate outcome of the proceeding, it is not necessary to set out my conclusions on these elements in any detail. In short, I will grant leave to appeal on Question 1, but not on Question 2.

In relation to Question 1, I consider that there is a real argument to be put that the Tribunal’s decision not to grant the relief sought and dismiss the application before it was unreasonable because the Tribunal took into account its own ‘private opinion’ as to the inconvenience the current car parkers would experience if they could no longer park on the disputed spaces. The argument arises because of the phrasing utilised by the Tribunal in the Reasons, coupled with the absence of reference to the evidence supporting the finding. Question 1 clearly goes to the heart of whether or not the decision below should be set aside. The impugned order is a final one, and relates to a long standing dispute between the applicant and respondent. I consider that in relation to the grant of leave, the applicant has shown that he would have suffered substantial injustice had that error, if established on appeal, not been corrected.

In relation to Question 2, however, I do not consider that the applicant has shown any real or significant argument, even on the limited basis of enquiry applicable at the leave stage, that the impact on other residents was not a relevant consideration. I consider that the terms of ss 8 and 10 of the Act are so clear that leave on that ground should be refused.

Appeal

I will, however, dismiss the appeal in so far as leave is granted on Question 1. The analysis of the transcript that I have undertaken coupled with the objects and purpose of the Act, and the powers of VCAT under the VCAT Act, lead me to conclude that the ground of unreasonableness, although arguable, is not made out.

Orders

It follows that I will dismiss the proceeding. I will hear the parties as to the form of orders and costs.

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Citations

Tilley v No 352 Toorak Road Pty Ltd [2016] VSC 608

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[2016] VSC 608

7 October 2016