Applicants v Respondents

Victorian Civil and Administrative Act 1998 (Vic) s 148; Owners Corporations Act 2006 (Vic) ss 24, 25, 173, 174, 176, 177; Competition and Consumer Act 2010 (Cth) sch 2; Concrete Constructions (NSW) Pty Ltd v Nelson [1990] HCA 17; (1990) 169 CLR 594, considered; Kondo v Owners Corporation 33218101 (Owners Corporations) [2016] VCAT 909 and Anthony Horden & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia [1932] HCA 9; (1932) 47 CLR 1, distinguished; SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; (2017) 262 CLR 362 and Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27, applied.

1 This proceeding is brought pursuant to section 148 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) ('VCAT Act') for leave to appeal the orders made by the Victorian Civil and Administrative Tribunal ('the Tribunal') on 30 April 2025[1] and on 1 May 2025[2] ('Tribunal's Orders').

2 This appeal seeks to overturn the Tribunal's Orders by challenging the scope of the powers of an administrator appointed under section 174 of the Owners Corporations Act 2006 (Vic)[3] ('OC Act') and the exercise of those powers in the particular circumstances relevant to the administrator's appointment.

(a) the administrator had the power to raise special levies and to borrow money under sections 24 and 25 of the OC Act;[4]

(b) the administrator had acted honestly, in good faith and with due care and diligence;[5]

(c) the execution of documents by the administrator in the course of his appointment was not acting 'in trade or commerce' for the purposes of sch 2 of the Competition and Consumer Act 2010 (Cth) ('Australian Consumer Law');[6] and

(d) the execution of the loan documents by the administrator were not affected by 'misleading or deceptive' conduct as a matter of fact.[7]

4 For the reasons that follow, I am not satisfied that any of the questions of law or grounds of appeal outlined in the Applicants' notice of appeal filed 23 May 2025 are made out, and therefore the application must fail on all grounds.

5 The factual history of this matter is long, complex, and distressing for the lot owners involved in Owners Corporation 1 Plan No. PS628502Y ('the OC'). The property to which the OC relates is a residential apartment block of 31 residential lots located in Hutton Street, Dandenong which was built in 2011.[8] The lots are largely owned by investors, with a small number of owner occupiers.

6 The First Applicant, E & M Farag Pty Ltd (ACN 065 928 752), is a key moving party in this appeal and is the owner of 12 lots (the 'Farag lot owner'). The Farag lot owner is a related entity to the builder and developer of the building. At the time of the Tribunal proceeding, the value of the lots individually was stated to be worth not more than a modest $350,000 each.

7 The apartment block has been beset with significant building defects including flammable cladding, leaking balconies, fire services defects and other associated works the rectification of which, until the appointment of an administrator, had been languishing.

8 On 6 August 2018, the Tribunal appointed Mr Matthew Twiselton, the First Respondent, as administrator of the OC until 5 August 2019 for the reasons set out in the decision of Edwards v Owners Corporation PS628502Y (Owners Corporations) ('Edwards').[9] The purpose of the appointment of the administrator was to deal with significant building defects, including flammable cladding. Prior to this appointment, the OC had been served with a building notice dated 8 January 2018 issued by the Greater Dandenong City Council. The building notice identified that the building was a danger to the life, safety or health of occupants and the public by reason of combustible cladding and a failure to have an active fire monitoring system.

9 In Edwards, the Tribunal records the allegation that the Farag lot owner was using its lot holdings to prevent action to deal with the defects and flammable cladding on the building.

10 The Tribunal's orders in Edwards which appointed Mr Twiselton as administrator of the OC on 6 August 2018, inter alia, stated:[10]

(a) Pursuant to section 174 of the OC Act, Matthew Twiselton of Excel Strata Managers, Suite 12, 14 Albert Street, Blackburn 3130, is appointed as administrator of the OC, from 6 August 2018 until 5 August 2019.

(b) During the period of his administration, in accordance with this order, the administrator may do anything which the OC can do.

(c) The administrator shall record in writing each decision he makes in the course of his administration. If he makes any decision requiring the expenditure of more than $5,000 he shall not make that expenditure without first giving each lot owner at least 7 days' notice in writing of his decision. The requirement for giving notice before making the expenditure, does not apply to any works the administrator has reasonable grounds to believe are necessary to ensure safety or prevent significant loss or damage.

(d) Any lot owner has liberty to apply for further orders or directions, including any order extending the term of the administration, by giving notice in writing to the principal registrar.

11 Following his appointment, the administrator arranged for installation of a fire indicator panel and occupant warning system in compliance with the 8 January 2018 building notice at a cost of $82,570. In March 2019, lot owners were levied $2,020 per lot to cover the cost of these works. However, the Farag lot owner and four other lot owners refused to pay the special levy, leaving a deficit of more than $30,000.

12 In March 2019, two further building orders and a building notice was served on the OC by the Victorian Building Authority. The building orders and notice required the OC to remove the flammable cladding and rectify other fire safety defects.

13 In June 2019, the administrator entered into a loan agreement with Lannock Capital 2 Pty Ltd (ACN 153 391 283) ('Lannock Capital') for a loan of up to $2.5 million to fund the rectification works. The purpose of the loan was initially to replace the flammable cladding. The administrator determined that the only viable method of funding the required building works was with a loan because it was clear that at the least the Farag lot owner would not pay any special levy raised to remedy the building defects. At the time of entering into the loan, the interest rate was 7.7%.

14 On 28 May 2020, the OC was served with further building orders and a building notice to remove flammable cladding, requiring works to fire detectors, fixing leaking balconies, emergency lighting and other safety matters. The building orders and notice issued on 28 May 2020 substantially replaced and expanded the March 2019 orders and notice.

15 On 24 August 2020, the administrator commenced proceedings in the Tribunal against the builder (a company which is related to the First Applicant) for building defects, claiming in excess of 1 million dollars.[11]

16 From 2019 to 2022, the administrator arranged for rectification works to be carried out in accordance with the building orders and notice. The cost of removal of the combustible cladding and its replacement was $1,344,034 which was covered by Cladding Safety Victoria. The cost to remediate the other works was $1,914,650 and was funded by the loan from Lannock Capital. These works included installing a sprinkler system as an alternative solution to the numerous fire safety defects, and replacing the balcony membranes and tiles as listed in the building orders and notice. The replacement of the balcony membranes was required to be carried out simultaneously with the replacement of cladding, as the removal of the cladding would compromise the water membranes of the balconies. Cladding Safety Victoria would not cover the cost of the works to the balconies.[12]

17 The works were completed by March 2022. The Tribunal commended the administrator, recognising that his task was undoubtedly a challenging one to arrange the substantial and complicated works whilst the building was still occupied during the Covid‑19 epidemic. Further, the administrator had arranged Cladding Safety Victoria to pay for the cladding reinstatement. The Tribunal acknowledged the speed with which the administrator was able to complete the works, all of which 'is a testament to the administrator's diligence.'[13]

18 As is an unfortunate commonplace circumstance, the building claim was delayed. After an unsuccessful compulsory conference in November 2022, the administrator made the decision in the context of unsustainable and rising interest rates to levy the lot owners $70,968 per lot to repay the Lannock Capital loan.

19 In May 2023, the OC commenced fee recovery proceedings to recover the special levy from 11 lot owners and the Farag lot owner (in respect of its 12 lots). Seven lot owners paid the special levy in full. The fee recovery application sought recovery of approximately $1,703,000 in levies from the remaining lot owners.[14]

20 On 20 September 2023, lot owners representing 10 lots commenced the substantive proceeding in the Tribunal, claiming that the administrator should not have taken out the $2.2 million loan because the lot owners could not afford to repay the loan, and repayment of $70,968 per lot was disproportionate to the value of the lots. The Farag lot owner joined the Tribunal proceeding on 13 December 2023 and, by its points of claim, expanded the matter; such expansion was then adopted by the existing Applicants, alleging that:

(a) the administrator acted beyond its power by entering into the Lannock Capital loan and raising special levies because the administrator did not have the power to do anything which requires a special resolution. It was contended that the special levies are invalid and that the lot owners have suffered loss and damage by the administrator entering into the Lannock Capital loan;

(b) the administrator failed in his duties to act honestly and in good faith with due care and diligence in taking out the Lannock Capital loan without regard to the financial circumstances of the lot owners and without regard as to how the loan would be repaid, and that the taking out of the loan was not in the best interests of the lot owners; and

(c) in taking out the Lannock Capital loan, the administrator signed documents purporting that a special resolution was passed by the OC and that conduct was misleading or deceptive contrary to section 18 of the Australian Consumer Law and resulted in loss and damage to the lot owners.

21 On 30 April 2025, the Tribunal made orders in proceeding OC1180/2023 ('the substantive proceeding'). The Tribunal dismissed the application brought on behalf of the 13 Applicants (10 of whom are now the Applicants in this proceeding) who sought damages from the former administrator, Mr Twiselton, for the alleged breach of duty by taking out a loan of $2.2 million to rectify building defects, and for the cancellation of special levies of $70,968 per lot to repay the loan. Costs were fixed respectively against each of the Applicants.

22 The Applicants also sought the termination of the administrator's appointment, but this part of the claim was abandoned following determination by the Tribunal of application OC1321/2018. In that proceeding, the Tribunal substituted the administrator and extended the administration until 2 April 2026. The findings and orders in that proceeding are attached to Moffatt v Twiselton (Owners Corporations) [2025] VCAT 370 ('Tribunal's Reasons'), the substantive proceeding, as 'Attachment A'. In summary, the Tribunal found that it was necessary to continue the administration until the OC's substantial debt of approximately $2.2 million was resolved.[15]

23 In the associated proceedings following the dismissal of the substantive proceeding, the Tribunal made orders on 1 May 2025 against each of the 13 Applicants for recovery of levies, interest and costs ('the recovery proceedings').[16]

The main purposes of this Act are -

(a) to provide for the management, powers and functions of owners corporations; and

(b) to provide for appropriate mechanisms for the resolution of disputes relating to owners corporations; and

(c) to amend the Subdivision Act 1988 in relation to the creation of owners corporations.

25 The functions and powers of owners corporations are set out in div 1 of the OC Act and, relevantly, include the management, administration, repair and maintenance of the common property, the maintenance of insurance premiums and the carrying out of any other functions conferred on the owners corporation by the OC Act or regulations, the _Subdivision Act 1988 (_Vic) or regulations, and any other law or rules of the owners corporation.

26 Administrators and owners corporations must act honestly and in good faith, and must exercise due care and diligence.[17]

27 An owners corporation has all the powers conferred on it by the OC Act or regulations, the Subdivision Act 1988 (Vic) or the regulations, any other law, or the rules of the owners corporation, and all other powers that are necessary for it to perform its functions.[18]

28 The owners corporation may execute documents in its own name or on behalf of the members, 'or do anything necessary or convenient to enable it to carry out its functions, powers, rights or obligations'.[19] An owners corporation is managed by or under the direction of the lot owners but the owners corporation may, by resolution, delegate any power or function to nominated entities (save for the delegation of any power or function which requires a unanimous resolution, special resolution or a resolution at a general meeting).[20]

29 Various powers are to be exercised only by special resolution, or by ordinary resolution.

30 An owners corporation may levy annual fees on lot owners in accordance with section 23 of the OC Act, and may levy extraordinary fees and charges designed to cover extraordinary items of expenditure in accordance with section 24 of the OC Act. A special resolution is required if the extraordinary fees and charges are more than twice the total amount of the current annual fees set under section 23 of the OC Act.[21]

31 The owners corporation may borrow money by ordinary resolution if the amount does not exceed the amount of annual fees set under section 23, and by special resolution in any other case.[22]

32 Part 11 sets out the provisions relating to applications to the Tribunal in respect of owners corporation disputes, including the appointment of an administrator.[23] At the time Mr Twiselton was appointed the OC's administrator, div 4 of pt 11 to the OC Act provided the legislative appointment of an administrator over an owners corporation.

33 Section 173 of the OC Act provides for who could apply to have an administrator appointed over an owners corporation, and did so in the following terms:

1. Application for appointment of administrator

An owners corporation, a lot owner, a creditor of an owners corporation or any person with an interest in land affected by an owners corporation may apply to VCAT for the appointment of an administrator for the owners corporation.

34 Section 174 of the OC Act then provided the Tribunal with power to appoint an administrator further to such application. Section 174 of the OC Act provided that power in the following terms:

On an application under section 173, VCAT may -

(a) appoint an administrator and set down terms and conditions of the appointment; and

(b) make any other order it thinks fit.

35 Section 176 of the OC Act then set out the powers and responsibilities of an administrator, and it did so in the following terms:

1. Powers and responsibilities of administrator

An administrator -

(a) must lodge with the Registrar a copy of the order of appointment without delay;

(b) may proceed to alter a plan relating to land affected by the owners corporation in any of the ways set out in section 32 of the Subdivision Act 1988 only in accordance with an order of VCAT or a court order;

(c) subject to any order of VCAT or court order, may do anything that the owners corporation or the committee can do;

(d) may delegate in writing any power.

36 Finally, section 177 of the OC Act imposed on an administrator duties to act honestly and in good faith, and to exercise due care and diligence. Relevantly, the provision states:

1. Powers and responsibilities of administrator

An administrator in carrying out any functions and powers conferred by or under this Act or the Subdivision Act 1988 -

(a) must act honestly and in good faith; and

(b) must exercise due care and diligence.

37 The notice of appeal filed on 23 May 2025 sets out the following four questions of law and supporting grounds.

38 On a proper construction of sections 24, 25 and 176(c) of the OC Act, is the scope of the powers of an administrator appointed under section 174 of the OC Act limited to anything that an owners corporation or committee can do but only where such thing does not require a special resolution or unanimous resolution to have been passed (unless such special resolution or unanimous resolution has in fact been passed) by the owners corporation such that relevantly:

(a) an administrator does not have power to levy special fees and charges designed to cover extraordinary items of expenditure for an amount that is more than twice the total amount of the current annual fees set under section 23 of the OC Act, unless the owners corporation has passed a special resolution which authorises it to do so; and

(b) an administrator does not have power to borrow money in an amount that exceeds the amount of the current annual fees set under section 23 of the OC Act, unless the owners corporation has passed a special resolution which authorises it to do so?

39 On a proper construction of section 177 of the OC Act, is an administrator appointed under section 174 of the OC Act obliged to consider the financial circumstances of the owners corporation and its lot owners prior to incurring costs and expenses, or borrowing money, on behalf of that owners corporation?

40 Does the purported entry into a commercial loan facility agreement by an administrator appointed under section 174 of the OC Act on behalf of an owners corporation constitute conduct in trade or commerce for the purposes of section 18 of the Australian Consumer Law?

41 To what extent (if any) can surrounding factual circumstances qualify a written representation which is objectively false, such as the making of such a false representation that does not constitute conduct that is:

(a) Misleading or deceptive, or likely to mislead or deceive, for the purposes of section 18 of the Australian Consumer Law?

(b) Not honest, for the purposes of section 177(a) of the OC Act?

(c) Not an exercise of due care and diligence, for the purposes of section 177(b) of the OC Act?

42 The parties filed written submissions which were expanded upon in oral argument at the hearing.

43 The material in support of the application for leave comprised of:

(a) the notice of appeal filed 23 May 2025;[24]

(b) the summons filed 29 May 2025;[25]

(c) the affidavit and exhibits of Anthony Ghabrial filed 29 May 2025;[26]

(d) the Applicants' submissions in relation to stay filed 6 June 2025;[27]

(e) the Respondents' submissions in relation to stay filed 6 June 2025;[28]

(f) the table of evidence filed 22 August 2025;[29]

(g) the affidavit and exhibits of Anthony Ghabrial filed 17 September 2025;[30]

(h) the Applicants' submissions filed 23 September 2025;[31]

(i) the Respondents' submissions filed 7 October 2025;[32] and

(j) the Applicants' submissions in reply filed 15 October 2025.[33]

44 In summary, the questions of law and supporting grounds sought to establish that the Tribunal erred in construing the extent of power of an administrator appointed under section 174 of the OC Act, that the administrator acted in excess of his statutory and appointed powers, and that his actions (in particular, raising the loan) are either outside the bounds of his power or his appointment. Alternatively, the questions of law sought to establish that the administrator's actions were done in breach of his good faith and due diligence duties under the OC Act or involved misleading and deceptive conduct in the raising of the loan.

45 The Applicants allege that the Tribunal, at [30] of the Tribunal's Reasons, incorrectly construed section 176(c) of the OC Act as conferring a power and discretion upon an administrator appointed under section 174 of the Act to do anything that the owners corporation can do, whether or not the owners corporation would ordinarily be required by the OC Act to pass a special resolution or unanimous resolution to do such a thing.

47 The ordinary principles of construction apply to the interpretation of section 176(c) of the OC Act with the provision's meaning being determined by consideration of the text, context and purpose.[34] The principles are well established.

48 The Applicants contend that this well established approach to statutory interpretation is confined by the Anthony Horden principle, which states that 'when the Legislature explicitly gives a power by a particular provision which prescribes ... the conditions and restrictions which must be observed, it excludes the operation of general expressions in the same instrument which might otherwise have been relied upon for the same power'.[35]

49 To interpret the administrator's power in the manner advocated on behalf of the Applicants cannot be justified on the plain reading of the words and would be entirely inconsistent with the purposes of the OC Act, in particular with the scheme of the OC Act in providing for the appointment of an administrator to step into the role of the owners corporation with all of the powers and functions of the owners corporation under the OC Act. To read down the ability of the administrator to do all that is necessary to conduct the affairs of the owners corporation is inconsistent with the plain words of the text and would nullify the dispute resolution provisions of the OC Act.

50 If the interpretation urged on the Court by the Applicants were to be adopted, the dispute resolution provisions of the OC Act would be wrongly limited. The very mischief that the appointment of an administrator was appointed to resolve would be undermined. I reject the contention that the correct interpretation of section 176(c) limits the powers of the administrator in the manner contended by the Applicants. The words of the section are clear, and the text, context and purpose of the section also support the construction which puts the administrator in the shoes of the owners corporation to manage the affairs of the owners corporation, subject to any limitation the Court, or in this case the Tribunal, has imposed. The words of the Tribunal's Orders are also clear. I do not consider the text or the context of the legislation support a construction which falls within the confined type of power as referred to in the Anthony Horden circumstance.

51 There is no inconsistency with the administrator taking action which otherwise, if the management of the affairs of the OC were in the hands of the lot owners, required a specific resolution (ordinary or special) as he replaces the primary form of administration of the OC's affairs by section 173 of the OC Act. On an application under section 173 of the OC Act, the Tribunal may appoint an administrator and set down the terms and conditions of the appointment pursuant to section 174 of the OC Act. The Tribunal did so here (the relevant terms are reproduced at [10]). These terms are to be read with the powers and responsibilities as set out in section 176 and the obligations of the administrator under section 177 of the OC Act. The limits on the powers and functions of an administrator appointed under the dispute resolution provisions of the OC Act are oversighted by the Tribunal's formulation of the powers and functions as it is empowered to do by section 174 of the OC Act.

52 As discussed above, the purpose of the provisions are to safeguard the proper management of property and to protect the interests of lot owners by permitting an independent administrator to assume control under the Tribunal's supervision.

53 I reject the Applicants' argument on this ground.

54 It was argued by the Applicants that the Tribunal erred by finding that an administrator appointed under section 174 of the OC Act does not have a duty to take into account the financial circumstances of the owners corporation or its lot owners when carrying out their obligations under the OC Act.

55 There is a duty to act honestly and in good faith, but the legislation does not explicitly identify personal financial circumstances as a factor to be mandatorily considered.

[t]he administrator was required to comply with the building notices and orders and comply with the statutory duty to repair and maintain the common property. No part of those obligations require the administrator to take into account whether a lot owner can afford essential repair and maintenance. It is a circumstance of property ownership that building orders and building notices must be complied with irrespective of the financial circumstances of the property owner.

58 It is also clear on the evidence that the financial circumstances, the impact of sourcing a loan and the special levy were all in the best interests of the OC and the individual lot owners. If the work was not undertaken, the circumstances would be far worse for the lot owners and the OC, as the Tribunal noted at [34]:

The timely way in which the administrator worked to remediate the building defects most likely saved the lot owners money, as building costs have since escalated. There was simply no option not to remediate the building. The building having now been remediated, it is safe to live in, can be insured and the lot owners are now able to sell their lots. Failure to remediate the building would likely have caused the owners corporation to incur further costs, penalties, and an order to evacuate the building. The cost of more than $70,000 per lot, though substantial in the context of the modest value of the lots, is still preferable to a lot which cannot be lived in and of no value.

59 The Tribunal, and the administrator himself, recognised the dire financial circumstances that confronted the OC. By raising the loan to fund the remediation works, it would address the significant building defects and the requirement to remove the flammable cladding, the subject of the building notices. The communication sent by the administrator on 22 November 2022 recognised the financial burden,[36] thus the allegation that the administrator failed in that duty is not made out on the facts in any event.

60 I note that there is no complaint that the administrator failed to give the requisite notice of expenditure as required by the terms of the Tribunal's order appointing him.

61 The Tribunal refers at [33] of the Tribunal's Reasons to the case of Kondo v Owners Corporation 33218101 (Owners Corporations) ('Kondo').[37] The Applicants dispute that this case is authoritative for the proposition that there is no duty to the individual lot holder's financial circumstances.

62 Mr & Mrs Kondo were the owners of an apartment in Flinders Lane, Melbourne, who sought compensation from their owners corporation for levies imposed to repay a loan for building fire safety works. The owners corporation had obtained member approval by special resolution to borrow $2.8 million and levy owners quarterly to meet repayments; the Kondos objected to paying the high quarterly fees which included GST and interest. They claimed the owners corporation failed to cooperate in allowing them to pay their share as a lump sum, which they believed would have reduced their costs. The Tribunal found that the owners corporation had acted properly and within its powers under the OC Act.

63 The facts here are that an administrator, and not the OC by special resolution, has made the decision on the levy. Whilst this is a different route to the striking of the special levy, I am of the view that the principle is still applicable here, in that in Kondo the particular circumstances of an individual was not the determining factor in making the decision.

64 Consistent with the reasoning in Kondo, there was no statutory obligation or consideration which explicitly required the OC, or in this instance an administrator, to take into account whether a lot owner can afford essential repair and maintenance. Building orders and notices must be complied with regardless of the financial circumstances of the property owners.

65 An owners corporation, or an administrator, must represent the collective interests of all lot owners and not that of the individual. Decisions must be made to benefit and protect the building as a whole; if decisions were made to tailor to each individual's circumstances, it would completely undermine effective governance and the requirement to meet statutory obligations.

66 In my view, there is no explicit duty to take into account the financial circumstances of the lot owners or the owners corporation as a whole, but it may be a relevant factor in a particular circumstance. Put in this context, the reference to Kondo is neither in error nor of assistance to the Applicants' argument.

68 The Applicants submit that the Tribunal should have concluded that the execution of documents by Mr Twiselton, in his capacity as administrator in connection with his purported entry into the loan agreement on behalf of the OC, constituted conduct 'in trade or commerce' for the purposes of section 18 of the Australian Consumer Law.

69 The Applicants argued that the Tribunal erred in its finding at [39] of the Tribunal's Reasons, being that an owners corporation or administrator appointed under section 174 of the OC Act is generally not acting in trade or commerce when carrying out their functions under the OC Act.

70 There is a distinction between action taken by an administrator in the direct administration of an owners corporation, and actions taken in trade or commerce for the purposes of the Australian Consumer Law. There is, of course, some potential for overlap in the characterisation of that action.

71 The parties respectively relied on the leading case of Concrete Constructions (NSW) Pty Ltd v Nelson ('Concrete Constructions')[38] to support their opposing propositions in this regard. In this case, it was held by Mason CJ, Deane, Dawson and Guadron JJ that the concept of conduct being 'in' trade or commerce requires that the relevant conduct must itself be trading or commercial in nature. In that regard, it is insufficient for impugned conduct to have merely occurred in relation, or as an incident, to the carrying on of a commercial or trading activity as the conduct must itself 'be an aspect or element of activities or transactions which, of their nature, bear a trading or commercial character.'[39] The High Court further stated that:[40]

In some areas, the dividing line between what is and what is not conduct 'in trade or commerce' may be less clear and may require the identification of what imports a trading or commercial character to an activity which is not, without more, of that character. The point can be illustrated by reference to the examples mentioned above. The driving of a truck for the delivery of goods to a consumer and the construction of a building for another pursuant to a building contract are, no doubt, trade or commerce in so far as the relationship between supplier and actual or potential customer or between builder and building owner is concerned. That being so, to drive a truck with a competitor's name upon it in order to mislead the customer or to conceal a defect in a building for the purpose of deceiving the building owner may well constitute misleading or deceptive conduct 'in trade or commerce' for the purposes of s. 52. On the other hand, the mere driving of a truck or construction of a building is not, without more, trade or commerce and to engage in conduct in the course of those activities which is divorced from any relevant actual or potential trading or commercial relationship or dealing will not, of itself, constitute conduct 'in trade or commerce' for the purposes of that section. That being so, the giving of a misleading handsignal by the driver of one of its trucks is not, in the relevant sense, conduct by a corporation 'in trade or commerce'. Nor, without more, is a misleading statement by one of a building company's own employees to another employee in the course of their ordinary activities. The position might well be different if the misleading statement was made in the course of, or for the purposes of, some trading or commercial dealing between the corporation and the particular employee.

72 The OC Act empowers an owners corporation to borrow money,[41] and to levy special fees and charges for extraordinary items of expenditure relating to repairs, maintenance or other works.[42] The purpose of the borrowing in this instance was to repay the loan required to be accessed to carry out the necessary repairs and for no other purpose. I consider that this action was undertaken not in its association with a commercial purpose but directly in the execution of the powers, functions, and duties of the administrator under the OC Act. Having considered the High Court's decision in Concrete Constructions, I am of the view that the administrator entered the loan contract on behalf of the OC in the furtherance of his administration of the OC and not in the conduct of trade or commerce.

73 I agree with the Tribunal's analysis as it pertains to the factual circumstances before it. I am of the view that this ground has no merit.

74 Even if I am in error in this regard, I do not accept the proposition that the loan documents were executed in a manner which was misleading or deceptive (which is part of the subject of question of law 4 dealt with below). To be successful in this application, it would be necessary for the Applicants to succeed on both questions of law 3 and 4, as the effect of an error in respect of question 3 would be ineffective and immaterial without success in relation to question 4. It would lack the requisite vitiating character alone to support a successful appeal. In this respect, there is an interdependence on the success of question 3 and question 4 in the overall determination of this appeal.

75 I am not satisfied that there is any action by the administrator in respect of the loan facilitation which can sensibly be characterised as being misleading or deceptive, or likely to mislead or deceive, in the relevant sense because:

(a) the documents were clearly pro forma documents provided by the loan company;

(b) the documents were clearly amended to demonstrate that Mr Twiselton was the administrator of the OC;

(c) a copy of the Tribunal's order appointing him and the terms of the order were provided to the loan company;

(d) there is no evidence at all that the loan company was in any way misled or deceived, or likely to be so misled or deceived, as to the basis of the authority of Mr Twiselton;

(e) the argument put on behalf of the Applicants relies in a circular fashion on the establishment of question 1, that is, that the administrator had no authority to raise the quantum of loan funds, or to do so without a special or extraordinary resolution;

(f) it is without doubt that the administrator could raise the extent of funds required and was not reliant on a special resolution passed by the lot owners; and

(g) the lot owners were informed of the actions proposed by Mr Twiselton.[43]

76 To set the context for question 4, at [37] of the Tribunal's Reasons, the Tribunal identified that Lannock Capital required certification that the OC had passed a special resolution to authorise entry into the loan agreement. There was no evidence that any relevant special resolution had been passed by the OC. Rather, it was clear that the documents were executed by Mr Twiselton in his capacity as administrator.

77 It was argued that the Tribunal erred in ultimately concluding at [38] that, on the basis of such annotations, Mr Twiselton's conduct in connection with the documents was not misleading or deceptive as a matter of fact.

78 In this context, the Applicants set out the issues as follows:

(a) To what extent (if any) can surrounding factual circumstances qualify a written representation which is objectively false, such as the making of such a false representation that does not constitute conduct that is:

(i) Misleading or deceptive, or likely to mislead or deceive, for the purposes of section 18 of the Australian Consumer Law?

(ii) Not honest, for the purposes of section 177(a) of the OC Act?

(iii) Not an exercise of due care and diligence, for the purposes of section 177(b) of the OC Act?

79 In arranging the loan with Lannock Capital, Mr Twiselton executed the following documents which were relied upon by the Applicants to establish this ground:

(a) a letter from the administrator to Lannock Capital dated 19 June 2019;[44]

(b) the certification and execution page of the Facility Agreement between Lannock Capital and the OC signed by the administrator on 27 June 2019;[45] and

(c) a letter from the administrator to the lot owners on 22 November 2022.[46]

80 The Applicants argued that the Tribunal erred in giving undue weight to notations made by Mr Twiselton on the relevant loan documents because the documents themselves state, on their face, that the OC made certain special resolutions which clearly did not occur.

81 It was submitted that, having regard to the evidence and the applicable law, the Tribunal should have concluded that:

(a) the loan documents constituted representations that the OC had made certain special resolutions in connection with the loan agreement;

(b) the OC had not made any relevant special resolutions in connection with the loan agreement; and

(c) the representations contained within the relevant documents were therefore false.

82 It was submitted that, upon making the conclusions referred to above, the Tribunal should have concluded that the conduct executing the relevant documents and delivering them to Lannock Capital constituted conduct that was misleading and deceptive for the purposes of section 18 of the Australian Consumer Law, that the conduct was not honest, the conduct was in breach of his duties under section 177(a) of the OC Act, and the conduct was not aligned with his duty of care and diligence in breach of section 177(b) of the OC Act.

83 For the reasons given above at [75], I am not satisfied that there is any error established by way of misleading or deceptive behaviour or conduct.

84 Similarly, having formed this view of the validity and appropriateness of the administrator's action, I am satisfied that, taking the full factual context into account including all of the documents referred to in [79], the administrator acted in good faith, truthfully and in accordance with his duties under section 177 of the OC Act.

85 On a plain reading of the documents and taking into account the fact that Lannock Capital was given a copy of the Tribunal's orders of 6 August 2018, the lack of factual and legal basis for this ground is clearly demonstrated. Consequently, the Applicants' contentions on this question are without foundation.

86 In order to succeed on an application for leave to appeal orders made by the Tribunal pursuant to section 148 of the VCAT Act, the Applicants must satisfy the Court that there is a question of law which has a real prosect of success.

87 A real prospect of success has been interpreted to be a 'real' as opposed to 'fanciful' chance of success, unless it were hopeless or bound to fail.[47] An appeal pursuant to section 148 of the VCAT Act requires identification of a question of law which is material or vitiating.

88 I am not satisfied that any of the grounds identified meet that test and the appeal has no real prospect of success.

89 For the reasons set out above, I have concluded that there is no real prospect of success in respect of each of the questions raised and on the grounds relied upon.

91 I will provide the parties with an opportunity to make submissions in respect of costs.

92 On 22 August 2025, JR Lorenz made an order staying the Tribunal's Orders in the recovery proceedings. The order stated that Tribunal proceeding numbers OC1180/2023, OC463/2023, OC355/2023, OC356/2023, OC357/2023, OC392/2023, OC456/2023, OC462/2023 and OC512/2023 are stayed until 4pm on 28 October 2025, or until further order.

93 At the trial on 28 October 2025, the Court extended the stay order made by JR Lorenz until delivery of the judgment or until further order.

94 Whilst I cannot discern any good reason for the stay to remain given the terms of my findings above and the failure of the application for leave on all grounds, I will provide the parties an opportunity to address the question of the expiry of the stay.

PUJABISH PROPERTY NOMINEES PTY LTD (ACN 155 801 004)

[1] Order of Member L Rowland in Moffatt v Twiselton (Owners Corporations) (Victorian Civil and Administrative Tribunal, OC1180/2023, 30 April 2025).

[2] Order of Member L Rowland in Owners Corporation 1 Plan No. PS628502Y v E & M Farag Pty Ltd (ACN 065 928 752) (Victorian Civil and Administrative Tribunal, OC463/2023, 1 May 2025); Order of Member L Rowland in Owners Corporation 1 Plan No. PS628502Y v Pujabish Property Nominees Pty Ltd (ACN 155 801 004) (Victorian Civil and Administrative Tribunal, OC355/2023, 1 May 2025); Order of Member L Rowland in Owners Corporation 1 Plan No. PS628502Y v Mastaneh (Victorian Civil and Administrative Tribunal, OC356/2023, 1 May 2025); Order of Member L Rowland in Owners Corporation 1 Plan No. PS628502Y v Garic (Victorian Civil and Administrative Tribunal, OC357/2023, 1 May 2025); Order of Member L Rowland in Owners Corporation 1 Plan No. PS628502Y v Xu (Victorian Civil and Administrative Tribunal, OC392/2023, 1 May 2025); Order of Member L Rowland in Owners Corporation 1 Plan No. PS628502Y v Moffatt (Victorian Civil and Administrative Tribunal, OC456/2023, 1 May 2025); Order of Member L Rowland in Owners Corporation 1 Plan No. PS628502Y v Farah (Victorian Civil and Administrative Tribunal, OC462/2023, 1 May 2025); Order of Member L Rowland in Owners Corporation 1 Plan No. PS628502Y v Miranda (Victorian Civil and Administrative Tribunal, OC512/2023, 1 May 2025).

[3] At the time Mr Twiselton was appointed, the authorised version of the OC Act was Authorised Version No. 15 incorporating amendments as at 22 April 2015. Since then, there have been further amendments to the OC Act, but none are presently relevant to the issues raised in this appeal.

[4] Moffatt v Twiselton (Owners Corporations) [2025] VCAT 370, [20]-[31] ('Tribunal's Reasons').

[8] The associated common property was created upon the registration of plan of subdivision PS628502Y on 3 May 2011.

[9] [2018] VCAT 1232.

[10] Order of Member K Campana in Edwards v Owners Corporation PS628502Y (Victorian Civil and Administrative Tribunal, OC1321/2018, 6 August 2018).

[11] See Owners Corporation PS628502Y v 4S Constructions Pty Ltd (Building and Property) [2024] VCAT 795. This matter was heard before Deputy President I Lulham in proceeding B1289/2020.

[12] It was intended by the administrator that the proceeds from the building defects claim would substantially reduce the Lannock Capital Loan, Tribunal's Reasons [12]-[14].

[14] The Tribunal heard the fee recovery claims on 1 May 2025 and made orders consistent with the 30 April 2025 Tribunal decision and orders. It is in respect of these fee recovery claims that the Tribunal's Orders of 1 May 2025 are also the subject of this appeal.

[16] These were VCAT proceedings OC355/2023, OC356/2023, OC357/2023, OC392/2023, OC456/2023, OC462/2023, OC463/2023 and OC512/2023.

[17] Owners Corporations Act 2006 (Vic) s 5.

[18] Ibid s 6.

[19] Ibid s 10.

[20] Ibid s 11.

[21] Ibid s 24(4).

[22] Ibid s 25.

[23] Ibid ss 173-177.

[24] Court Book (filed in S ECI 2025 02900, Supreme Court of Victoria) 4-16 ('CB').

[34] SZTAL v Minister for Immigration and Border Protection [2017] HCA 34; (2017) 262 CLR 362, [14] (Kiefel CJ, Nettle and Gordon JJ); Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue [2009] HCA 41; (2009) 239 CLR 27, [47] (Hayne, Heydon, Crennan and Kiefel JJ).

[35] Anthony Horden & Sons Ltd v Amalgamated Clothing and Allied Trades Union of Australia [1932] HCA 9; (1932) 47 CLR 1, 7 (Gavan Duffy CJ and Dixon J). Reliance was also placed on the observations of the High Court of Australia in Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom [2006] HCA 50; (2006) 228 CLR 566, [59] (Gummow and Hayne JJ).

[37] [2016] VCAT 909.

[38] [1990] HCA 17; (1990) 169 CLR 594.

[41] Owners Corporations Act 2006 (Vic) s 25.

[42] Ibid s 24.

[47] Lysaght Building Solutions Pty Ltd (t/as Highline Commercial Construction) v Blanalko Pty Ltd [2013] VSCA 158; (2013) 42 VR 27, [23]-[26].