Uren & Anor v The Owners - Units Plan No 396 - [2017] ACAT 51

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

UREN & ANOR v THE OWNERS – UNITS PLAN NO 396 (Unit Titles) [2017] ACAT 51

UT 2/2017
Catchwords: UNIT TITLES - works for which approval was refused by owners corporation: proposed construction of an extension to dwelling – unsuccessful motion at the meeting of owners corporation – two stage process in making a tribunal order under section 129 of the Unit Titles (Management) Act 2011: merits review of proposal and deciding whether opposition to the motion was unreasonable – requirement for merits review – characteristics of ‘unreasonableness’ – consideration of opposition to motion

Legislation cited: Unit Titles (Management) Act 2011 s 129

Cases cited: Ainsworth v Albrecht [2016] HCA 40

Meaney v The Owners Corporation Units Plan 40 [2013] ACAT 72
Owners Units Plan 768 v Lokusooriya [2013] ACAT 80
Floro v Owners – Unit Plan No 630 [2017] ACAT 4

Tribunal: Senior Member P Sutherland

Date of Orders:  6 July 2017
Date of Reasons for Decision:         6 July 2017
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL       )  UT 2/2017
BETWEEN:
CHRISTOPHER DAVID UREN
First Applicant
REBECCA VIVIENNE BLUNDELL
Second Applicant

AND:
THE OWNERS – UNITS PLAN NO 396
Respondent

TRIBUNAL: Senior Member P Sutherland

DATE:6 July 2017
ORDER

The Tribunal orders that:

Pursuant to section 129(1)(g) of the Unit Titles (Management) Act 2011, the Tribunal makes an order giving effect to the unsuccessful motion at the Special General Meeting of Units Plan 396 held on 26 June 2016. The terms of the motion, as amended by the Tribunal, are:
“We, the members of Units Plan 396, approve the proposed extension to Unit 3 as approved by ACTPLA in response to DA 201528514, on condition that:
(a)The design of the new window in Bedroom 3 must be provided to the body corporate for approval by the owners of Unit 4. This approval must be given within two weeks after provision of the design.
(b)The applicants must ensure that, during the period of construction of the extension, all of their vehicles and vehicles of their invitees must be parked on the applicants’ property, in the designated visitor parking spaces, or outside the common areas of Units Plan No 396. These vehicles must not be parked in the common areas of the access road and the turning circle, or so as to impede vehicle access to Unit 4.
The parties and the owners of Unit 4 have liberty to apply in respect of conditions (a) and (b) in Order 1.
There is no order as to costs.
………………………………..
Senior Member P Sutherland

REASONS FOR DECISION

This is an application made on 31 January 2017 by the joint owners of Unit 3 in Units Plan No 396 for an order under section 129(1)(g) of the Unit Titles (Management) Act 2011 (the UTM Act) giving effect to an unsuccessful motion for a resolution of a Special General Meeting of Units Plan 396 held on 26 June 2016. The motion stated that “the proposed extension to Unit 3 as previously shown to the body corporate and since approved by ACTPLA in response to DA201528514 be approved”.
The respondent to the application is the owners corporation for Units Plan No 396, represented by its Secretary, Mr Leon Smith, who is a joint owner of Unit 1. The applicant was represented by Ms Peta Rogers, Solicitor, Howes Kaye Halpin.
The ACT Civil and Administrative Tribunal conducted a directions hearing on 15 February 2016 and listed the application for mediation on 10 March 2017, commencing with the parties on site and resuming at the ACAT. The mediation did not result in a settlement and Senior Member Robinson issued directions for the filing of documents and witness statements by both parties in preparation for a hearing at the ACAT on 6 June 2017.
The applicants, the Secretary of the owners corporation, and the various owners of units in Units Plan 396 all prepared witness statements and attended the hearing on 6 June 2017. Mr Darren Jenkins of Counsel appeared for the applicants at the hearing, having been engaged only days earlier. The applicants called one expert witness, Ms Giselle Ravarian, an urban designer and town planner.
The hearing commenced with a view onsite at the property in Belconnen and resumed at 11.30am in ACAT Hearing Room 5. The hearing concluded at 6.10pm and the decision was reserved.
In these reasons for decision, the tribunal is referred to as ‘the ACAT’ and Senior Member Sutherland as ‘the Tribunal’.

Background to the Complaint

Units Plan No 396 is located in Belconnen and comprises six well separated units, each with substantial access to dense native vegetation on public land on the slope of a major hill. Unit 1 is to the left of the site near the entrance and above the common area access road through the site. Unit 2 is north of Unit 1 and is above and to the left of the access road. Unit 3 is north of Unit 2 and is above and to the left of the access road and a turning circle at the end of the access road. Unit 4 is at the end of the access road below and to the east of Unit 3. Unit 5 is opposite and below Unit 2 and Unit 6 is near the entrance of the site and below the access road.
Units Plan No 396 was established more than 27 years ago and has a mix of original residents and residents who have lived there for five years or more. A document setting out the “Ethos” of the Units Plan was tendered in evidence. This was dated 1996 with revisions in 2003, 2004 and 2011, and sets out some rules for owners about parking, waste management, etc along with aspirational statements about the ethos of the owners corporation and its emphasis on native vegetation and community spirit. At the hearing, Mr Jenkins pointed out that the document was not registered and therefore had no validity as rules of Units Plan 396.
In 2015, the applicants sought approval from the owners corporation for construction of an extension to their premises. This motion was not passed at a Special General Meeting on 19 November 2014, with the vote being two in favour, three against and one abstaining.
The applicants proceeded to obtain approval of the extension by the ACT Planning and Land Authority (ACTPLA) of DA 201528514. ACTPLA approved the DA subject to the consent of the owners corporation.
At a Special General Meeting on 26 June 2016, the owners corporation again failed to pass the motion with a similar vote: two in favour (Units 3 and 6); three opposed (Units 2, 4 and 5) and one abstaining (Unit 1, on the basis that he was Secretary of the owners corporation).
The applicant did not accept this outcome and made an application to the ACAT to have the unsuccessful motion given effect under section 129(1)(g) of the UTM Act.
The development proposed by the applicants and approved by ACTPLA was an extension to the southern corner of their house, adding 3.6 metres to the eastern wall of the house to create a fourth bedroom and a new entry porch. The proposed bedroom extension is symmetrical with a garage on the western corner of the house.

Legislation and legal issues

Section 129(1) of the UTM Act lists a number of orders which the ACAT may make in relation to a unit titles dispute.; It states:
(1) The ACAT may make the following orders:
…
(g) an order giving effect to an unsuccessful motion for a resolution of a general meeting (either as originally proposed or as amended by the ACAT) if the ACAT is satisfied after merits review of the motion that opposition to the motion was unreasonable;
The provision is unusual in that it marries two legal concepts, that of merits review and that of unreasonableness. The issue of ‘unreasonableness’ in a similar context in the Queensland unit titles legislation has been recently considered by the High Court in Ainsworth v Albrecht [2016] HCA 40 at [54]-[62].
The ACT provision has been considered in depth by the ACAT in several decisions:
(a)Meaney v The Owners Corporation Units Plan 40 [2013] ACAT 72 where (now) Presidential Member, Ms M-T Daniel, held that opposition to a motion for the installation of four air conditioning units was unreasonable and that an opposed motion for alteration of carport gates be given effect, with amendments.
(b)Owners Units Plan 768 v Lokusooriya [2013] ACAT 80 where (now) Presidential Member, Ms M-T Daniels, expanded on her observations in Meaney; and
(c)Floro v Owners – Unit Plan No 630 [2017] ACAT 4 where Senior Member H Robinson followed the observations in Lokusooria and gave effect to a motion for erection of a carport partially on common property, where no contradictor appeared at the hearing of the matter.
From these decisions, I draw the following conclusions about how section 129(1)(g) is to be applied:
(a)The provision involves a two-step process, firstly to undertake a merits review to determine which is the correct and/or preferable decision, and then to determine whether opposition to the motion was ‘unreasonable’.
(b)The review is de novo and the Tribunal is able to consider issues of both fact and law.
(c)The ACAT considers and determines issues as at the date of the hearing and is able to consider evidence not available to, or not considered by, the owners corporation at the time of their decision.
(d)When conducting the merits review, there is no threshold question of reasonableness or unreasonableness of the original decision to be determined before the ACAT may proceed to make an order. However, before an order giving effect to an unsuccessful motion is made, the ACAT must be satisfied that opposition to the motion was unreasonable.
(e)The test to determine if the opposition to the motion was unreasonable is not a subjective test of the intentions of the unit owners who opposed the motion. Rather, it is an objective test taking into account all relevant circumstances.
(f)An opponent to the motion is not required to act with altruism or sympathy for the interests of the proponent, at the expense of the opponent’s reasonably held view of their own interests.
(g)Whether or not there is evidence of other pending applications, it may be reasonable to consider the cumulative effect of multiple identical improvements generating an adverse impact in deciding whether to oppose a motion.
To the matters above concerning unreasonableness, the Tribunal would add that opposition to a motion may be unreasonable where the opposition is based on discriminatory grounds that are unlawful in other contexts or where the grounds for opposition are essentially de minimis, that is they are so minimal as to be immaterial or subjective in their essential character.
In this case, a merits review of the proposal had been conducted by ACTPLA and the parties were agreeable to the Tribunal accepting the ACTPLA approval as its merit review process. Where the proposal has not previously been tested in a merits review process conducted by a relevant government agency, the merits review to be undertaken by the ACAT under section 129(1)(g) may need to be more thorough, and canvass comparative issues in a detailed manner.
Mr Jenkins for the applicants submitted that the discussion of the High Court in Ainsworth v Albrecht concerning the meaning of ‘reasonableness’ should be read down as applying only to legitimate property rights established under common law, contract or statute. The relevant property rights are the well-recognised ‘bundle of rights’ that accrue to a holder of an interest in land, in this case the owner of a unit title property.
The applicant submitted that:
...absent an easement or other contractual right, the general law does not recognise the right of any landholder to:
(a)     An aspect or a view: Shepperd v Municipality of Ryde (1952) 85 CLR 1;
(b)     Privacy, or freedom from overlooking or observation: Victoria Park Racing and Recreation Grounds Co Ltd v Taylor (1937) 58 CLR 479; and
(c)     Light or solar access: Dalton v Angus (1881) 6 App Case 740 at 794-795; Ray v Hazeldine [1904] 2 Ch 1, Conveyancing Act 1919 (NSW), s179 applicable in the ACT by reason of the Ancient Lights Declaratory Act 1904.
It was submitted that the grounds for objections in this case were based on such impermissible considerations. In the alternative, the applicants submitted that the opposition to the resolution was unreasonable.
The Tribunal agrees that the High Court in Ainsworth vAlbrecht was discussing property rights, however this does not restrict the applicability of its discussion of ‘unreasonable’ opposition in the specific context of the UTM Act. In context, and considering the primary role of the ACAT in unit title dispute resolution, in my opinion the ACAT can have regard to the real issues in dispute between unit title holders in an owners corporation, including privacy, visual amenity, noise and other disturbances.

The hearing process

The hearing process for this matter presented some difficulties, including:
(a)the applicants were represented by counsel while the respondent owners corporation was not legally represented;
(b)the applicants did not file relevant documents on time, leading to the Tribunal and the respondent not having adequate time to prepare responses and for the hearing;
(c)counsel for the applicants constantly drew the Tribunal’s attention to procedural problems in the conduct of the respondent’s case, raising points of law in relation to procedural fairness;
(d)the respondent owners corporation was represented by its Secretary with the written authority of five of the six owners of units in the corporation. This included the owner of Unit 6 who voted in support of the opposed resolution and the Secretary who was a joint owner of Unit 1 and abstained from the owners corporation vote, but was clearly opposed to the motion on a personal basis;
(e)the representative of the owners corporation had difficulties in conducting cross-examination in the face of frequent objections by counsel for the applicants about what was permissible and relevant in cross-examination, including in relation to the presentation of expert evidence; and
(f)the owners of Unit 5 initially were not available for cross-examination and the arrangements for their evidence to be given by telephone were less than satisfactory.
In drawing attention to these difficulties, the Tribunal is not criticising the conduct of counsel for the applicants. Mr Jenkins explained to the Tribunal that he was bound to represent the interests of his clients, however, within this constraint, he assisted the Tribunal to make the hearing workable, particularly by making constructive suggestions about how procedural difficulties raised by him could be resolved on a practical basis.
In a situation such as this where the various owners are in significant conflict about the appropriate outcome of the litigation, the Tribunal suggests that it would be preferable for the owners corporation to make a submitting appearance and to make the opponents to the motion parties to the matter, either individually or in concert.
However, where the members of the owners corporation are in general agreement and the opposition to the motion is from a single individual owner or a small minority of owners, it may be appropriate for the owners corporation to be the respondent, with the arrangements for, and the costs of representation, authorised by the owners corporation by resolution of the committee.
In this case, the view undertaken by the Tribunal at the commencement of the hearing was extremely useful and the desirability of a view should be considered at the directions hearing for matters of this type.
While the respondent’s representative, Mr Smith, had difficulty in prosecuting his case in cross-examination, any potential disadvantage was compensated by the excellent quality of the written documentation prepared by the respondent. The case for the respondent was made very clear by the respondent’s documentation (including the witness statements, statements of facts and contentions, and responses) and by the final oral submissions, which were based on a pre-prepared written document. The Tribunal expresses its appreciation for the work undertaken by Mr Smith in presentation of the corporation’s case.

Consideration and findings

In relation to the issue of reasonable or unreasonable opposition to the motion, the Tribunal identified the following grounds of opposition from the material before it:
(a)An adverse effect on property values of units in the body corporate.
(b)Potential increase in traffic flows, parking pressures and noise in the body corporate.
(c)An effect on the privacy of Unit 2.
(d)Overlooking and an effect on the privacy of Unit 4.
(e)Loss of a sunlight amenity for Unit 4.
(f)Obstruction of access to Unit 4 by vehicles associated with the building work.
(g)Overlooking and an adverse effect on the privacy of Unit 5.
In the consideration that follows, the residents of the various units who gave witness statements, and who were cross-examined, are described collectively by their Unit number.
(a) Property values
In written material prepared for the hearing, several witnesses for the respondent raised the possibility that the value of units in the body corporate may be reduced because of the increased number of bedrooms in Unit 3 and its possible rental to a group seeking four bedroom accommodation. The applicants had prepared counter evidence by an expert witness that unit values may be enhanced by the approval of the extension.
At the hearing, the parties agreed that property values were not a matter of pressing concern and that the Tribunal need not consider this issue. The witness statement of an expert witness for the applicants was not admitted into evidence.
(b) Traffic, parking and noise
In written material prepared for the hearing, several respondents raised their concern that the additional bedroom in Unit 3 may, at some time in the future, lead to rental of the premises to a large group share with a consequent potential for traffic and parking problems, noise, etc. Unit 1 (a four bedroom property) had been rented to a group some years earlier and these problems had arisen on that occasion.
All of the witnesses understood that the applicants were seeking to build a fourth bedroom to provide a separate bedroom for each of their three children and all were generally understanding of the desirability of this outcome for the applicants. However, they submitted that this concern was outweighed by their other, reasonable concerns about the extension.
The Tribunal considers that this concern is highly speculative and, on an objective basis, is not a reasonable ground for objection to the resolution.
(c) Unit 2 - Privacy
Unit 2, supported by other Units, submitted that the extension would bring the large window of the new bedroom closer to Unit 2 and would adversely impact on Unit 2’s privacy because of the angle of view and the placement of the rooms in Unit 2.
Ms Ravarian’s response to this submission was unhelpful as she merely reiterated that the extension complied with the DA. She did not respond to the particular points made by Unit 2 and other witnesses.
In the Tribunal’s opinion, Unit 2 and Unit 3 are a substantial distance apart and, objectively, there is no reasonable basis for this objection to the resolution.
(d) Unit 4 – Overlooking and privacy
Unit 4, supported by other witnesses, submitted that the extension would significantly affect the amenity of Unit 4 through overlooking and reduced privacy in their external living area. This concern appeared to the Tribunal to be main concern of the other residents – probably more significant than the impacts on their own properties.
In the evidence, there was considerable discussion about screening vegetation, including what shrubbery would be removed or damaged during the construction phase. There were also varying opinions about the visual impact of the new eastern wall of the extension and the line of sight to the new works from Unit 4.

The Tribunal was greatly assisted by the view and formed the opinion that the actual visual and privacy impacts on Unit 4 of the extension itself will be minimal. In the Tribunal’s opinion, objectively there is no reasonable basis for this objection to the resolution.
In the ‘Documents as evidence to support the statements of the respondent’ (at page 120), a design diagram shows installation of a new window in Bedroom 3 and notes “Demolish external wall as reqd to install new timber bed 3 window as noted. Make good”. There does not appear to be any further information on the size and design of this new window which overlooks the external living area of Unit 4 and will be cut into the existing blank, painted external wall at the southern end of the house on Unit 3.
At the view, Mr Smith pointed out the location of the proposed new window and drew the Tribunal’s attention to some floor to ceiling windows in the same wall at the northern end of the house. In her report dated 2 May 2017, Ms Ravarian stated: “The proposed extension entails a blank wall facing Unit 4 and therefore no overlooking or breach of privacy may be caused as the result of this extension.” The Tribunal asked Ms Ravarian about the new window and received the rather disingenuous reply that the extension does not have a window facing Unit 4. When pressed, she agreed that a new window for Bedroom 3 was part of the DA.
The Tribunal agrees that the new window will have an effect on the privacy of Unit 4, but also notes that it is reasonable for Bedroom 3 to have a modest window for amenity. On an objective basis, it would not be reasonable for Unit 4 to object to a modest window of appropriate design in Bedroom 3, given the distance between their external living area and the bedroom wall, and the substantial vegetation in place, mostly on the property of Unit 4. Accordingly, the Tribunal finds that this is not a reasonable basis for objection to the Motion, providing the new window is modest in size. The Tribunal will impose a condition on approval, requiring the applicants to provide a copy of the proposed design of the new window for consideration and approval by Unit 4. The Tribunal notes that the window design must be compatible with the look of the eastern wall of the property, must not be floor to ceiling, and must be modest in size compared with the size of the external wall of Bedroom 3. If the applicants wish to have more light in Bedroom 3, they could consider installation of a skylight (with ACTPLA and owners corporation approval).
The process for obtaining approval by Unit 4 should involve:
(a)provision of the proposed design to the owners corporation for on forwarding to Unit 4;
(b)consideration of the design by Unit 4 for a period of up to two weeks; and
(c)advice of approval or recommendations for modifications by Unit 4 in writing to the owners corporation and Unit 3 at or before the end of the two week period.
The parties and Unit 4 have liberty to apply to the Tribunal if agreement is not reached.
(e) Unit 4 – Loss of a sunlight amenity
Unit 4 submits that the extension will reduce the filtered warm orange light from the setting sun which they enjoy during the afternoon at times of the year around the two equinoxes. Mr Smith sought to give technical evidence about this effect, but this was opposed by Mr Jenkins on the basis that Mr Smith was not a technical expert. The Tribunal did not permit Mr Smith to give technical evidence about the angles of the sun at the equinoxes and how the extension would affect Unit 4. The Tribunal did, however, accept evidence about the nature of the sunlight amenity and the possible effect of the extension on Unit 4’s access to the amenity.
Ms Ravarian’s report was originally prepared for the consideration of the DA by ACTPLA and discussed shadowing effects only at the Winter solstice. The report had no bearing on Unit 4’s actual submission about an effect on amenity at the two equinoxes. In cross-examination, Ms Ravarian agreed that her study was of the Winter solstice and that she was unable to give a technical opinion about shadowing or sunlight during the equinoxes.
While the Tribunal accepts that the owners of Unit 4 enjoy a particular amenity of afternoon sunlight during the equinoxes, it considers that this is a very subjective consideration. After considering the line of sight from Unit 4 to the proposed new extension, and the location of the existing garage on the property, the Tribunal is not satisfied about the likelihood or extent of any loss of amenity. In the Tribunal’s opinion, objectively there is no reasonable basis for this objection to the resolution.
(f) Unit 4 – Obstruction of access
Unit 4 gave cogent evidence of the disruption caused by previous renovations to Unit 3, particularly through parking in the common areas of the access road and turning circle between Units 3 and 4. Unit 4 pointed to serious obstruction to access to their property, particularly when reversing out from Unit 4. The Tribunal considers that this is a substantive objection, however it should not be seen as a permanent blockage to the development when its impact will be felt only during the construction phase (primarily because of parking in the common area by construction workers who are invitees of Unit 4).
On an objective basis, it would not be reasonable for Unit 4 to object to the development if on-street parking is strictly controlled by the applicants. The driveway to Unit 3 is fairly large and could house several vehicles with no adverse impact on Unit 4. If Unit 3 fails to comply with the Tribunal’s order and condition, Unit 4 has liberty to apply to the Tribunal for enforcement action under the ACAT Act.
(g) Unit 5 – Overlooking and privacy
Unit 5 and other units submitted that the extension would adversely affect the amenity of Unit 5 through overlooking and reduced privacy. There is a considerable distance between Unit 5 and Unit 3, and the view from Unit 5 to Unit 3 is densely screened by vegetation and a wall. Ms Ravarian noted that the extension would only have minimal impact on Unit 5. The Tribunal considers that the extension will have no material impact on the privacy of Unit 5 and that there would be impact only if Unit 5 were to remove the screening which is on their land.
In the Tribunal’s opinion, objectively there is no reasonable basis for this objection to the resolution.

Conclusion

For the reasons set out above, the Tribunal concludes that the unsuccessful motion at the Special General Meeting of Units Plan 396 held on 26 June 2016 should be given effect as amended by the order set out above.

………………………………..
Senior Member P Sutherland
HEARING DETAILS

FILE NUMBER:	UT 2/2017
PARTIES, FIRST APPLICANT:	Christopher David Uren
PARTIES, SECOND APPLICANT:	Rebecca Vivienne Blundell
PARTIES, RESPONDENT:	The Owners – Units Plan No 396
COUNSEL APPEARING, APPLICANT	Darren Jenkins
COUNSEL APPEARING, RESPONDENT	N/A
SOLICITORS FOR APPLICANT	Peta Rogers, Howes Kaye Halpin
ADVOCATE FOR RESPONDENT	Leon Smith, Secretary
TRIBUNAL MEMBERS:	Senior Member Peter Sutherland
DATE OF HEARING:	6 June 2017