Wade v The Owners - Units Plan No 1758 (Unit Titles) - [2018] ACAT 87

ACT CIVIL & ADMINISTRATIVE TRIBUNAL

WADE v THE OWNERS – UNITS PLAN NO 1754 (Unit Titles) [2018] ACAT 87

UT 15/2018
Catchwords: UNIT TITLES - two stage process in making a Tribunal order under section 129 of the Unit Titles (Management) Act 2011 – merits review of proposal

Legislation cited: Unit Titles (Management) Act 2011 s 22, 129

Cases cited: Ainsworth v Albrecht [2016] HCA 40

Floro v Owners – Unit Plan No 630 [2017] ACAT 4
Meaney v The Owners Corporation Units Plan 40 [2013] ACAT 72
Owners Units Plan 768 v Lokusooriya [2013] ACAT 80
Uren & Anor v The Owners – Units Plan No 396 [2017] ACAT 51

Tribunal: Member D Mulligan

Date of Orders:  11 September 2018
Date of Reasons for Decision:         11 September 2018
AUSTRALIAN CAPITAL TERRITORY )
CIVIL & ADMINISTRATIVE TRIBUNAL       )          UT 15/2018

BETWEEN:
JILLIAN ROSEMARY WADE
Applicant

AND:
THE OWNERS – UNITS PLAN NO 1758
Respondent

SANDRA MACARTHUR-ONSLOW
First Party Joined

PETER CAMERON
Second Party Joined
ISABELLE CAMERON
Third Party Joined
SUZANNE ROBERTS
Fourth Party Joined

TRIBUNAL: Member D Mulligan
DATE:11 September 2018
ORDER

The Tribunal orders that:

The application made in accordance with 129(1)(g) of the Unit Titles (Management) Act 2011 is dismissed.

………………………………..
Member D Mulligan

REASONS FOR DECISION

This is an application made on 8 May 2018 by Ms Jillian Wade of unit 6 in Units Plan No 1758 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 1758 held on 29 November 2017 and at an annual general meeting of Units Plan 1758 on 23 April 2018.
The motions stated:
That the corporation of the Owners – Units Plan No. 1758, grant a special privilege to Unit 6 for the fence erected by Unit 6, and the area of common property enclosed by the fence as shown by the 4 July 2017 surveyor's report at Paper five, on the following conditions:
1.That Unit 6 is responsible for the cost of repairing and maintaining the fence and the cost of replacing the offence; and
2.That Unit 6 indemnifies in writing the Corporation for any damage to the common property; and
3.That Unit 6 indemnifies in writing the corporation for any liability for any incident that occurs in relation to the fence and the area of common property which encloses; and
4.That Unit 6 bears the costs for registering the special privilege and the indemnities On the Corporation’s common property title and the unit title for Unit 6 with the land title authorities.[1]
[1] Exhibit 1, Annexure B, Document entitled ‘Minutes of the Annual General Meeting of the Owners – Units Plan 1758
In preparing this matter for hearing Ms Wade filed a further statement[2] in the hope of placating those who objected to the proposal articulated in the special privilege applications, she expanded the scope of the restrictions and obligations she would undertake in order to be granted the special privilege. In that statement she said:
I confirm that in order to address any potential concerns held by other unit holders I am willing to:
i.Increase my body corporate payments and rates to reflect the additional area of land the special privilege would allow me to occupy.
ii.Accept exclusive responsibility for the cost of maintaining the existing fence.
iii.Indemnify, in writing, the body corporate for liability for any incident or injury that occurs in relation to the fence and/or the area of common property which encloses.
iv.Accept exclusive responsibility for registering the special privilege and the indemnities on the common property title and unit title for Unit 6 with the relevant authorities and/or ensuring that any person who in the future acquires Unit 6 is aware of the special privilege, the higher rates payments and the indemnities.
[2] Exhibit 4
The applicant was represented by Mr Hassall, of Counsel. Mr Hassall was instructed by Ms C Jafri of Badgery & Rafferty.
The respondents to the application are: the Owners Corporation for Units Plan No 1758 represented by Ms Wilde of Tisher Liner FC Law, Ms Sandra MacArthur-Onslow, of unit 9 who appeared on her own behalf during the course of the hearing, Mr & Mrs Cameron of unit 8 who did not appear at the hearing but filed a response and Mrs Suzanne Roberts of unit 5 who appeared on her own behalf at the hearing.
The ACT Civil and Administrative Tribunal (the ACAT) conducted a directions hearing on 11 July 2018 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 1 August 2018.
The parties all either filed an application, response or statements which set out their respective positions.
The hearing proceeded on 1 August 2018 and was concluded on the same day. The decision was reserved.
In these reasons for decision, the Tribunal is referred to as ‘the ACAT’ and Member Mulligan as ‘the Tribunal’.

Background to the complaint

Units Plan No 1758 is located in Nicholls. The development comprises 11 separate units.
The dispute in this case relates to a portion of the backyard associated with unit 6, which abuts McClelland Avenue. McClelland Avenue is a busy and noisy street.
In 2000, the owner of unit 6 at that time, built a fence which enclosed not only the land legally associated with the property, but also an area of approximately 32m² of common property.[3]
[3] Transcript of proceedings, 1 August 2018, page 7 and exhibit 1 annexure A
According to the title of unit 6, the legal boundary of the backyard extended no more than about 1.1m from the eaves of the property. The backyard as legally configured would be approximately 12m² and would give the occupant of the property a very small outdoor area which would not allow for much more than the placement of a washing line. There would be no area for seating or other recreation.[4]
[4] Transcript of proceedings, 1 August 2018, page 27
By building the fence and extending the property contained within the fence line the owner of the unit, in 2000, increased the size of the unit’s backyard by 32m² to approximately 44m². This transformed the backyard from being an area of limited utility into being an area in which the owner could enjoy being outdoors and able to have a seating area and enjoy other recreations.
In the Tribunal's view the additional 32m² gained by enclosing that area of common property was a benefit to the owner of unit 6.
On 24 August 2000, the then owner of unit 6 tried to regularise the position relating to the common property land that his newly constructed fence enclosed by seeking a special privilege relating to that land. An extraordinary general meeting was held on that day to consider the special privilege. The application for the special privilege failed “as there were insufficient votes in favour of the Motions.”[5]
[5] Exhibit 12
Between August 2000 and November 2017 there were no further attempts by owners of the property to seek a special privilege relating to the 32m² of common property enclosed by the incorrect fence line. Likewise, during that same period there were no steps taken by the owners of the other 10 properties to have the owner of unit 6 remove the incorrectly placed fence and have it correctly aligned so that it would no longer enclose any common property.
Ms Wade purchased unit 6 on 26 October 2010.[6] When she purchased the property the fence was in the same position as it was in August 2000, when the then owner sought the special privilege to enclose the 32m² of common property.
[6] Transcript of proceedings 1 August 2018, page 7
Prior to purchasing the property, Ms Wade inspected it. She wrongly concluded that all of the backyard belonged to unit 6 and none of it was common property.
In early 2016, Ms Wade undertook some landscaping in her backyard which included paving over portions of the common property enclosed by the incorrectly located fence. The landscaping work cost Ms Wade about $6,000.[7]
[7] Transcript of proceedings 1 August 2018, page 16
In late 2017 Ms Wade and Ms MacArthur-Onslow were having a cup of tea at Ms Wade's property when Ms MacArthur-Onslow informed her that not all of the property contained within her fence line belonged to her and that some of it was common property.
On becoming aware that her fence line enclosed common property Ms Wade took steps to try and regularise the position. She sought a special privilege in relation to that land at a special general meeting of Units Plan 1758 held on 29 November 2017 and at an annual general meeting of Units Plan 1758 on 23 April 2018.
In order for a special privilege to be granted at either the special general meeting or the annual general meeting there needed to be a vote in favour of the motion and no votes against the motion.[8]
[8] Section 22 (1) of the UTM Act and also see exhibit 1, agenda item 6
The motion of 29 November 2017 received four votes in favour and three votes against and it consequently failed. The motion of 23 April 2018 received six votes in favour and two votes against. Consequently the motion failed.
The minutes of neither general meeting recorded the reasons given (if any) by those voting against the motion.
Ms Wade subsequently made application to the ACAT under section 129(1)(g) of the UTM Act to regularise the situation and to be granted the special privilege.

The evidence adduced at the hearing

The Tribunal heard from the owners of three witnesses supporting Ms Wade (Mr Powell, Mr and Mrs Smith and Ms Roberts) and from the owners of two units opposing the granting of the special privilege (Ms MacArthur-Onslow and Mr and Mrs Cameron). The remaining five unit owners did not apply to be joined as parties nor did they provide letters of support in favour, or against, the granting of the special privilege to Ms Wade.

Ms Wade

Ms Wade read both her application of 4 July 2018[9] and her supplementary statement of 24 July 2018[10] the effect of which was that she purchased the property in 2010 in the mistaken belief that the fence containing her backyard was in the correct position and that all the land it enclosed was hers.
[9] Exhibit 1
[10] Exhibit 4
Ms Wade gave evidence that she leased out the property until 2015, when she took up residence in her unit. In 2016 she hired a landscaper to improve her back yard at a cost of approximately $6,000, a job done for cash, which explains the absence of a receipt for the work.
She confirmed that upon discovering the true position relating to the alignment of the fence, she sought to regularise the situation by seeking a special privilege at two general meetings and then through the ACAT.
Significantly, Ms Wade highlighted the fact that there would be a benefit to the other unit owners if the special privilege were to be granted. She would increase her body corporate payments and rates to reflect the additional 32m² of common property contained within the existing fence. An increase on her payments would necessarily result in marginally lower body corporate fees and rates for the other owners.
Ms Wade also highlighted her view that returning the common property to its intended state would serve no purpose and would in effect penalise her. In this regard she said Ms Wade gave evidence to the effect that[11]:
a)    The current position of the fence does not adversely affect other owners’ material enjoyment of their property rights. The common property enclosed by the fence is on the periphery of the complex which fronts a pedestrian footpath and busy road (McClelland Avenue). That part of the common property is neither easily accessible to, nor utilised by other owners. Furthermore, the fence does not obstruct any walkways, interrupt any drainage, views or physical structures…
She went on to say:
b)    The current position of the fence provides the same boundary alignment as unit 4 and unit 5…
c)    The current position of the fence provides privacy and safety as that side of my property backs onto a busy road. If the fence were moved closer to the house this would more readily expose my bedroom windows to passers-by.
[11] Exhibit 1 – ‘Reasons for my application continued’, paragraphs 5 (a) (b) & (c)
Ms Wade also provided letters of support from Mr Powell,[12] the owner of unit 3, who noted the history of Ms Wade's fence and went on to say that he believes:
…that for the Owners Corporation to now turn around after all these years of “passive approval” and require Ms Wade to move her fence and undo the improvements she has made, is totally unfair and unreasonable. We are in this sorry mess because of the lack of action by the Owners Corporation and the Executive Committee back in 2000 and that the current Owners Corporation has at least a moral obligation to write a wrong of bygone years. Ms Wade played no part in the enclosure of the Common Property adjacent to her unit and should have been granted the Special Privilege she sought.
[12] Exhibit 6
Likewise, Mr and Mrs Smith, the owners of unit 7 and Ms Wade's immediate neighbours, provided a letter of support and expressed a similar sentiment[13] to Mr Powell. They said:
…if Jill was required to move her fence, the land would be of no use to anyone else (the land is located next to a footpath and a major road). Nobody is currently disadvantaged by the location of Jill's fence, and nobody would be advantaged by Jill moving her fence. There is simply no need to move the fence. If the Tribunal rules in favour of Jill, there would be no negative effect for any other owners in UP1758.
[13] Exhibit 5
Under cross-examination by Ms Wilde, Ms Wade conceded that the extra 32m² enclosed in her backyard had a financial value and by implication added to the value of her property.
She also conceded that the common property belonged to all 11 unit owners as tenants in common and that by virtue of the fact that her fence enclosing common property she was appropriating something of value which belonged to all unit owners, not just herself.
MS WILDE: Would you agree - you would agree, wouldn't you, that to appropriate part of the common property away from the other unit owners would be akin to appropriating valuable land away from the other unit owners?---Most of the other unit owners don't have an issue with this.
That's not the question I asked?---But, yes, I guess enclosing common property is taking land away from the tenants - the other owners.
And that land is valuable?---I guess so.
Ms Wade also conceded that a proper perusal of the title, at the time of inspecting the property, or during the course of the purchase process would have alerted her to the fact that boundaries in the backyard were not as they were fenced upon inspection. Ms Wilde highlighted the fact that a perusal of the unit plan would have shown to a reader that the boundary only extended 1.1m from the eaves of the building. Moreover, the fence line as set out in the unit plan diagram was in effect a ‘U’ shape when seen against the neighbouring properties, whereas the fence line she inspected ran in a straight line between the neighbouring properties:[14]
[14] Transcript of proceedings, 1 August 2018, page 27-onwards
MS WILDE: So did you go and inspect Unit 6 before you purchased it as an investment property?---Yes, I did.
And how many times did you go and inspect Unit 6?---Once.
Once? And did you go into the backyard?---Yes, I did.
And did they have a copy of the units plan onsite when you went to inspect?---I'm not sure. Potentially, but - - -
When did you - did they have a copy of the proposed contract of sale onsite when you went to go and inspect?---Probably. I can't remember and I don't have any of the documentation.
But you did sign a contract for sale to purchase Unit 6, but you have not got a 15 copy of it. Is that correct?---That's correct.
But you would accept that a copy of the units plan, an extract of which I've just shown you, would have been included in that contract of sale?---Yes, probably.
And you had an opportunity, because it was in that agreement, to have a look at the boundaries of Unit 6 didn't you?---I guess I had an opportunity.
And when you went to the backyard of Unit 6, which faces onto the street, you saw that the fence line was in a roundish shape?---I saw the backyard as it is today with the fence line, correct.
And you'd agree that if you had looked at - if I can ask you to look at the boundaries of Unit 6 again there?---Mm’hm.
You can see that the boundary of Unit 6 is in fact straight line across, isn't it?---I can see that now, that's correct.
And it's only approximately 1.1 metres out from the eaves of your building, correct?:---Yes, I can see that now.
Under cross-examination Ms Wade conceded that had she known of the correct position of the backyard fence line she may not have purchased the property[15]:
MS WILDE: And if you had known in 2010 that you were only purchasing a 12 square metre backyard as opposed to a 44 - hold on, I'd better do some maths again.
Sorry, sir.
HIS HONOUR: That's all right. Take your time.
[15] Transcript of proceedings, 1 August 2018, page 28
MS WILDE: As opposed to a 44 metre square yard, would that have affected the purchase price that you offered for Unit 6?---Well, if I was aware I would have asked more questions about what was going on and potentially not bought the property.
In contrast to Ms Wade's evidence in chief, Ms Wilde highlighted the fact that Ms Wade really didn't know whether or not any services ran under the 32m² of common property enclosed by the fence line:
MS WILDE: And you would agree that the boundaries of your unit have been set in 1999 when the Units Plan was registered, correct?---I guess so.
And have you investigated whether there are any services or other conduits located in or about the common property facing onto the street that may need to be accessed by public authorities?---Not really, no.[16]

The other evidence

[16] Transcript of proceedings, 1 August 2018, page 36

Ms Wilde, on behalf of the first respondent, the Owners Corporation of Units Plan No 1758, elected to call no evidence.
Ms MacArthur-Onslow, the owner of unit 9, did give evidence on her own account. She read from her statement[17] which was supplied as part of her application for an interim order in which she sought to be joined as a party to the proceedings.
[17] Exhibit 9
In essence Ms MacArthur-Onslow had four reasons for objecting to the granting of the special privilege to Ms Wade. Those reasons, briefly stated, are:
(a)Ms MacArthur-Onslow believes that common property should remain common property and should not be taken to the use of individual unit owners.
(b)The common property enclosed by the existing fence has financial value. By closing the 32m² of common property Ms Wade has increased the value of her property at the expense of the other individual unit owners.
(c)Ms MacArthur-Onslow believes that were the fence line in its correct position then a small garden could be placed on the road side of the fence, as has been done at other points along the external fence line of the units. Ms MacArthur-Onslow believes that having small gardens along the fence line beautifies the whole of the property adding not only an enhanced visual pleasure but also adding to the financial value to the complex as a whole and to each of the individual units.
(d)Ms MacArthur-Onslow had unpleasant experiences with others who had been granted special privileges and as a matter of principle she is opposed to the granting of special privileges.
Under careful cross-examination by Mr Hassall, Ms MacArthur-Onslow conceded that she was mistaken in the assertion, made in her statement, that she had told Ms Wade that part of her backyard contained common property before Ms Wade undertook the expensive step of landscaping the backyard. Ms MacArthur-Onslow very fairly conceded, that having heard Ms Wade's evidence on the point she could not maintain her initial statement.

The final witness to give evidence was Ms Suzanne Roberts, the owner of unit 5. Ms Roberts read her statement, which was supportive of Ms Wade being granted the special privilege. She additionally suggested that Ms Wade was the victim of those who undertook her conveyancing in not identifying the true fence line of the property before she purchased it.
Ms Roberts highlighted her belief that:
I feel to as part of a small body corporate community-style living complex it is imperative that we maintain neighbourly and respectful attitudes towards one another. Yes, Jill will benefit from the use of the body corporate land in her backyard but she has agreed to financially compensate for that privilege by increasing her levy payments.[18]
[18] Transcript of proceedings, 1 August 2018, page 83
Two other owners Mr Peter Cameron and his wife Mrs Isabelle Cameron, the owners of unit 8, were granted leave to be joined as parties to the proceeding. They did not appear at the hearing of the application. As part of the application to be joined they provided the reasons upon which they objected to the granting of special privilege. In essence they objected to the granting of the special privilege on four grounds:
(a)They believe that Ms Wade should have been aware at the time of purchase that the enclosed area of the backyard contained common property. They believe that common property has a value and it should be retained as common property.
(b)That:
When a relatively large group of people live together in medium density housing many things can strain tensions. An important part of mitigating disputes in the circumstances is to have clearly delineated rules and practices. Unit Plan 1758 as these rules which are enshrined in ACT law. Having rules and laws (in this case regarding boundary fences) is only of value if they are adhered to and respected.[19]
(c)If one party is allowed to arbitrarily fence common property for their own purposes then what is to stop others doing precisely the same.
(d)That:
Whilst we appreciate the disappointment the owner of Unit 6 might feel at the prospect of moving her fence to the original allocated boundary line with the reduced amenity and financial implications – other owners who have moved their infringing fences or hedges might feel justified in wanting to reinstate their self-imposed boundary changes if Unit 6 is granted permission to do so on a permanent basis. It seems like common sense the boundary lines are respected. After all, we all purchased our properties knowing what the correct boundaries were.[20]

Legislation and legal issues

[19] See Mr and Mrs Cameron’s application to be party joined, dated 1 July 2018
[20] See Mr and Mrs Cameron’s application to be party joined, dated 1 July 2018

Section 22 of the UTM Act provides that:
(1) An owners corporation for a units plan may, if authorised by an unopposed resolution, grant a special privilege, other than a sublease, for the enjoyment of the common property, or any part of the common property, to –
(a) a unit owner; or
(b) someone else with an interest in a unit.
(2) A grant under subsection (1) 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.
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 provides:
(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 decision of Senior Member P Sutherland in Uren & Anor v The Owners – Units Plan No 396 [2017] ACAT 51 is most helpful and I have respectfully adopted the approach of Senior Member Sutherland in my reasons below.
Section 129 (1) of the UTM Act 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 (Ainsworth) at [54]-[62].
The High Court stated at [55] that it:
…is no light thing to conclude that opposition by a lot owner to a resolution where adoption of the resolution will have the effect of appropriating part of the common property to the exclusive use of the owner of another lot, for no return to the body corporate or other lot owners;… And potentially creating a risk of interference with the tranquillity or privacy of an objecting lot owner.
The High Court continued at [57] noting that nothing in the legislative scheme suggested that an opponent of a proposal acts unreasonably in failing to act sympathetically or altruistically towards a person who seeks to diminish the property rights of the opponent.
At [59] the High Court held that:
The adjudicator was being asked to override rights attached to the property of the lot owners with respect to the common property. The requirement of a resolution without dissent is itself an acknowledgment that the by-laws function as terms of the charter of rights and duties which bind those who acquire lots in a community titles scheme under the BCCM Act. Other provisions of the BCCM Act which also require a resolution without dissent of a body corporate can be seen to be variations on the theme that the charter of rights and duties established between lot owners in relation to the use and enjoyment of their community title under the community management statement should, generally speaking, not be altered save with the consent of all parties to the compact [47]. Just as parties to a contract cannot, generally speaking, be obliged to give up contractual rights without their consent, so lot owners cannot be required to give up their property rights without consent to another lot owner save pursuant to Item 10 of Sched 5.
The High Court continued at [63] by stating that “… Opposition to a proposal that could not, on any rational view, adversely affect the material enjoyment of an opponent’s property rights may be seen to be unreasonable.”
Section 129 (1) of the UTM Act has been considered in depth by the ACAT in several decisions:
(a)Meaney v The Owners Corporation Units Plan 40 [2013] ACAT 72 (Meaney) where (now) Presidential Member 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 (Lokusooriya) where (now) Presidential Member M-T Daniel, 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 and the judgment of the High Court in Ainsworth, 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. This enables the Tribunal to consider the additional obligations and restrictions proposed by Ms Wade, as set out in paragraph 3 above as well as Ms MacArthur-Onslow and Mr and Mrs Cameron’s reasons for opposing the special privilege.
(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)The requirement under section 22(1) of the UTM Act that a special privilege must be passed without opposition reflects the law’s reluctance to interfere with the property rights of those in a units plan. To paraphrase the High Court: just as parties to a contract cannot, generally speaking, be obliged to give up contractual rights without their consent, so unit owners cannot be required to give up their property rights without consent to another unit owner save pursuant to the granting of special privilege following an unopposed motion.
(h)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.

The merits test

The merits test requires the Tribunal to undertake an objective analysis of the evidence and submissions of both Mr Hassall and Ms Wilde and make a determination as to whether or not a special privilege should be granted in the terms of the unsuccessful motions made at the two general meetings, or in the amended scope set out in Ms Wade's second statement,[21] or on terms as amended by the Tribunal.
[21] Exhibit 4
It should be remembered that the applicant bears the onus of proof in this regard and must prove, on the balance of the probabilities, that the merits test has been satisfied.
Mr Hassall, in his submissions, very carefully and ably traversed the evidence and set out the basis upon which he believed the applicant had satisfied the merits test.
In essence Mr Hassall made the submission that a combination of factors should draw the Tribunal to the inexorable conclusion that the applicant has satisfied the merits test. Those factors being that:
(a)when Ms Wade purchased unit 6 in late 2010, she made an honest and reasonable mistake that the fence line enclosing the rear backyard of the property was correctly located and contained only the property and no common property;
(b)the fence was incorrectly erected 10 years before she purchased the property and during that period the owners of the other units in the complex had done nothing to require the owner of unit 6 to remedy the incorrectly located fence line;
(c)following the purchase of the property in 2010, the other unit owners allowed the mistaken location of the fence line to remain in place and took no action to require her to relocate it;
(d)in 2016, Ms Wade made a substantial investment of approximately $6,000 to have her backyard landscaped and paved. Had she known of the true position relating to the enclosed common property within a backyard, she would not have made that investment;
(e)the status quo relating to the position of the fence line gives Ms Wade significant benefits in terms of the quality of life afforded to her by having the extended backyard, at no real cost to the owners of the other units (the Tribunal notes that the benefits include providing Ms Wade with a large backyard and providing the applicant with greater privacy from passers-by); and
(f)Ms Wade is prepared to compensate the other owners of the complex by paying additional body corporate levies and rates costs relating to the common land contained within her fence line. Additionally she has agreed to maintain and repair the fence and provide appropriate indemnities. Likewise, she has agreed to register the special privilege with the relevant authorities and/or ensuring that any person who in the future acquires unit 6 is aware of the special privilege, the higher rates payments and indemnities.
In response, Ms Wilde made a very simple, but compelling, argument. In effect she submitted that all of the problems Ms Wade is now trying to ameliorate through the special privilege process and through the ACAT, flow from the error she made when she purchased the property wrongly believing that the fence line, as she inspected it and purchased it, was in the correct place.
Ms Wilde posed the question as to why either the respondent, the Owners Corporation, or the individual unit owners, should be required to compensate Ms Wade for an error she made at the time she purchased the property.
Ms Wilde's submission has particular force given her cross-examination of Ms Wade[22] which demonstrated that a proper perusal of the title, at the time of inspecting the property or during the purchase process would have alerted her to the fact that the boundaries in the backyard were not as they were fenced upon inspection. The rear boundary as described on the title documents was only approximately 1.1m from the eaves of the building. Moreover, the unit plan diagram depicted the backyard being a ‘U’ shape when seen against the neighbouring properties, whereas the fence line she inspected ran in a straight line between the neighbouring properties.
[22] Transcript of proceedings, 1 August 2018, page 27- onwards
Under the proposal made by the applicant, not only would she gain the use of the common land in her back yard but that benefit would be passed to any subsequent purchaser of the property.
Ms Wade expressed the view in cross examination that had she known the true extent of her backyard at the time of purchase, she may not have purchased the property. It seems apparent that the additional 32m² of common property enclosed within the existing fence may not only makes the property more likely saleable, it makes it more valuable.
Ms Wade has not had her property valued for the purpose of this application and the Tribunal does not know the anticipated value based on the boundary set-out in the title documents or the anticipated value of the property based on including the additional 32m² of common property enclosed within the existing fence.
Under the applicant’s proposal (see paragraph 3 above) The other unit owners only get a benefit in terms of unit 6 paying additional levies and rates, they would not get any benefit from the increased value of unit 6 would derive from being granted the ongoing exclusive use of the 32m² of common property enclosed within the existing fence.
In summary, whilst I have significant sympathy for the position Ms Wade finds herself in, she should have satisfied herself, at the time of purchase, as to what she was in fact purchasing. It seems unreasonable to me for her to:
(a)in effect ask the other unit owners to compensate her for the mistake she made when purchasing the property and provide her with the boundaries she mistakenly thought she had purchased;
(b)seek to have the special privilege pass to any subsequent purchaser; and
(c)have value (and saleability) added to her property by virtue of the special privilege increasing the size of her backyard from 12m² to 44m², without the other unit owners receiving a capital benefit (not just an increase in the rates and levies Ms Wade is prepared to contribute).
As a consequence, I find that the applicant has not satisfied the merits test and I dismiss the application.
As I have dismissed the application on the basis of the merits test, it is not necessary for me to consider the second limb of the test, the issue of unreasonableness; a term which has its normal dictionary meaning.
In my view the Tribunal would have arrived at the same result under the unreasonableness test. I believe that the second and third reasons given by Ms MacArthur-Onslow,[23] are reasonable and would justify the Tribunal in dismissing the application. I also have sympathy for a number of the views expressed by Mr and Mrs Cameron.

Conclusion

[23] At paragraph 42 above

For the reasons set out above, the Tribunal dismisses the application.

………………………………..
Member D Mulligan

HEARING DETAILS

FILE NUMBER:	UT 15/2018
PARTIES, APPLICANT:	Jillian Rosemary Wade
PARTIES, RESPONDENT:	The Owners – Units Plan No 1758
PARTIES JOINED	Sandra MacArthur-Onslow Peter Cameron Isabelle Cameron Suzanne Roberts
COUNSEL APPEARING, APPLICANT	Mr Hassall
COUNSEL APPEARING, RESPONDENT	N/A
SOLICITORS FOR APPLICANT	Badgery & Rafferty
SOLICITORS FOR RESPONDENT	Tisher Liner FC Law
TRIBUNAL MEMBERS:	Member D Mulligan
DATES OF HEARING:	1 August 2018