1. In relation to the First AGM, the OC denied that a vote was not taken and maintained that Mr Schembri was present and refused to vote, despite being invited to.
2. In relation to the Second AGM, the OC maintained that Mr Schembri was in attendance, did not say any word to the effect that the minutes of the First AGM were incorrect, did not say any word to the effect that he voted against the resolutions at the First AGM and was invited on multiple occasions throughout the Second AGM to vote and voice his opinion, but he elected not to.
3. The OC maintained that the minutes of the Second AGM stated the following:
   1. Gates: The quote from Rosebud Engineering for the two gates was discussed. The cost is $5,911.40. The meeting was advised that the footings for the gates are installed. Electrification of the gates will be done after the common power supply issues have been finalised. The quote was accepted, and Chris Hart will arrange for the works to commence.
   2. Line Marking: The quote from Cotewell for the line marking, as per the accepted Banyule council plan, was discussed and accepted. The parking spaces will be numbered 1-8 and the allocation of the spaces will be determined.
   3. Concrete at Rear of Property: the quote from DR Concrete Services for concreting at the rear of the property was discussed. The cost is $7,568.00. The quote was accepted.
4. The OC asserts that all lots benefit substantially from the works. Specifically, they maintain that:
   1. The "gate works" consist of the installation of new gates to replace old, damaged and unsafe gates that are unfit for purpose. The OC maintains that the new gates are necessary to ensure that they comply with their obligations under the Occupational Health and Safety Act 2004, they improve the capital value of the property and improve the visual appeal of the property.
   2. The "concreting works" consist of the pouring of concrete to an area which was previously overgrown, required maintenance, and prevented safe entry and exit from the property, particularly in case of an emergency. The OC maintains that the concreting works provide a path for safe entry and exit from the property, particularly in case of an emergency. The OC further maintains that the concreting works are necessary to ensure that they comply with their obligations under the Occupational Health and Safety Act 2004, improve the capital value of the property and improve the visual appeal of the property.
   3. The "line markings" define parking bays at the property in circumstances where previously there were not defined parking bays. The OC asserts that they discourage parking in a manner which obstructs the lawful use and enjoyment of common property, they fairly allocate and delineate parking spaces at the property, they improve the capital value of the property, and they improve the visual appeal of the property.
5. Furthermore, the OC maintains that there is no basis to allege that there is any plan to convert any part of any lot into a caretaker's residence as the preliminary plans where wholly abandoned in or around April 2022.
6. The OC contends that, irrespective of whether the OC turned its collective mind to the question of whether all lots benefit substantially from the works, or whether some lots substantially benefit more than others, the Tribunal should not interfere with the decision of the OC to levy special fees in accordance with lot liability where in reality all of the lots benefit substantially from the works.

1. Mr Schembri gave evidence for the applicant. He stated that he is a French polisher and has operated his business from Unit 2 since 2010. He said that he first met Noel Hart (Dr Hart) in 2013 and his dealings with him were mainly about the payment of the insurance premium.
2. However, Mr Schembri maintained that Dr Hart became someone who contested everything Mr Schembri wanted to do. Mr Schembri alleged that Dr Hart behaved like a schoolyard bully, took a "stance of authority" and treated Mr Schembri like the "new guy".
3. He stated that he purchased Unit 2 in 2009, on the same day that the Harts purchased Unit 1. He gave evidence that both Units 1 and 2 were auctioned on the same day, that the Harts unsuccessfully bid on Unit 2 (which Mr Schembri purchased), but they bid successfully on Unit 1.
4. Mr Schembri stated that Unit 1 was subject to a three-year lease when the Harts purchased it in 2009. When the lease expired and the tenant moved out, Chris Hart (the owner of Unit 1) started to convert the unit into a factory. It was at this point, in or around 2013, that Mr Schembri met Chris Hart. The conversion of Unit 1 into a factory that makes dental prosthetics took a couple of years to finalise, but it has been operating as such since around 2015.
5. Mr Schembri stated that he still believes that the Harts intend to build a caretaker's residence in Unit 4. He maintained that he believes this because he sees tradies working there, that building materials are still being delivered, that it needs a lot of work to build bathrooms up to code, and that things in crates are being delivered.
6. Mr Schembri gave evidence that, when he first moved into the premises, he was confronted by Dr Hart who pushed his way into Mr Schembri's unit to access a telecommunications panel that was located in the unit. Mr Schembri stated that Dr Hart did not ask politely to come in but rather just pushed his way into the premises. Mr Schembri stated that he just stepped aside and let him through.
7. Other instances Mr Schembri gave of Dr Hart behaving in a controlling and bullying manner was a time in 2013 when he asked to store a compressor tank on common property and Dr Hart objected, even though Dr Hart himself was storing two garden sheds housing compressors on the common property. Mr Schembri stated that Dr Hart's two garden sheds are still located on common property and even encroach onto the adjoining neighbour's property when the doors are open. Mr Schembri stated that the Harts also store empty drums and gas bottles on common property.
8. Further, in 2021, Dr Hart objected to Mr Schembri storing a metal rack on common property. The rack had been chained to Mr Schembri's unit and, when the Harts tried to remove it, Mr Schembri called the police.
9. Mr Schembri stated that the OC repeatedly demanded that he remove the metal rack from the common property, however, never once did the OC demand that the Harts remove their sheds and other chattels from the common property.
10. In relation to the First AGM, Mr Schembri stated that, when he received the Agenda for the AGM, he noted that many of the "General Maintenance" issues related to complaints about Mr Schembri's unit and the storing of his belongings on common property. No mention was made on the Agenda of the Harts' sheds or other chattels situated on common property. Mr Schembri stated that before this, he had received no complaints about any issue other than the metal rack.
11. He gave evidence that he attended the First AGM via Zoom and that there was some discussion regarding wheelchair access at the rear of Unit 4. Mr Schembri stated that the OC manager, Mr Hyams, said that this would only benefit Unit 4 and therefore it was not something the OC should do.
12. Mr Schembri stated that no vote was taken at the First AGM, only discussion. He recalls a discussion regarding whether any concreting of common property at the rear of Unit 4 would interfere with the easement running along the common property.
13. In relation to the car park allocation, Mr Schembri stated that there was no discussion regarding the allocation of parking spaces, and there has been no allocation of parking spaces to date. He stated that he parks on common property in front of his roller door and that his customers park in the driveway or other spaces.
14. Mr Schembri was referred to a drawing with allocations for car parking spaces marked 1 to 8.[1] On that drawing, the two spaces proposed to be allocated to his unit were the two directly in front of his front door and roller door, on the street-facing side of the property. He stated that he saw the drawing after the First AGM and maybe before the Second AGM.
15. In relation to the gates, Mr Schembri recalls that the proposal was discussed at the First AGM, and they were going to obtain quotes. He recalls that he objected to the replacement of the gates because they didn't need to be changed. He stated that he does not use the gates, and he never parks behind the gates.
16. After the First AGM, Mr Schembri stated, the next time the gates, concreting and car park allocation were raised were when the quotes came through in mid-2023. Mr Schembri gave evidence that, after the quotes came through, he asked the OC Manager Mr Hyams about concreting over the easement at the rear of Unit 4. Mr Schembri stated that, in or about 31 July 2024, he received an email from Mr Hyams informing him that the concreting was endorsed on the plans for the caretaker's residence in Unit 4.
17. Mr Schembri maintained that in the 15 years that he's occupied his unit, he has been at the rear of the property a handful of times to inspect it only.
18. He gave evidence that the Harts had a history of concreting common property without consent. In 2013, he stated, the Harts partially concreted the northern part of the property. He stated that he was not notified that they were planning to do so and that he found out about it on the day the concrete trucks attended to pour the concrete. He stated that the Harts paid for that concreting and Mr Schembri was not asked to contribute.
19. Mr Schembri gave evidence that he attended the Second AGM on 15 August 2023. He recalled that the electricity supply was discussed in the context of electrifying the gates. Mr Schembri explained that there were discussions regarding the old cables and fluctuations in power to the common property. He stated that his unit does not experience any fluctuations because it has its own separate power line. He maintained that, at the Second AGM, he was not taking an active part in these discussions because, having his own separate power line, the electricity issue did not affect him. He stated that the other three units were the only ones affected by the issues with the electricity supply.
20. Mr Schembri maintained that he would receive no benefit from either the replacement of the gates or the proposed electrification of the gates.
21. In relation to the line marking for car parking spaces, Mr Schembri gave evidence that he did take an active part in the discussions at the Second AGM and put in a request for the two spaces in front of his unit. He stated that he has no objection if he were to be allocated the two spaces that have been drawn in front of his front door and roller door.
22. Mr Schembri gave evidence that Dr Hart complained about hazardous paint and material in Unit 2 and, shortly after the Second AGM, both WorkSafe and the Environmental Protection Authority ("the EPA") attended his unit. Mr Schembri stated that he was advised that, in both instances, Noel Hart was the informant. He stated that both the EPA and WorkSafe took no further action and maintained that both claims were effectively dismissed.
23. According to Mr Schembri, the concreting at the rear of the property adjacent to Unit 4 was discussed and he gave evidence that, because it was of no benefit to him, he said no. He stated that he does not use that area. Mr Schembri stated that, when he raised his objection to the concreting at the Second AGM, the OC Manager Mr Hyams did not stop he meeting to consider and discuss his objection in the context of the benefit principle. He maintained that his concerns were listened to but not discussed, and he was outvoted.
24. Mr Schembri stated that, after the Second AGM, he engaged a solicitor. Despite his concerns regarding the resolutions, he nonetheless paid his share of the $16,000.00 ($4,000.00) and he seeks a refund of these fees in this application.
25. Under cross-examination, Mr Schembri stated that:
    1. He participated in the First AGM and, in particular, he addressed all the complaints made against him and stated that he was compliant.
    2. No vote was taken regarding the Budget.
    3. There was discussion regarding the step at the rear of Unit 4 and they did discuss the benefit principle. The OC Manager stated at the meeting that the step at the rear door of Unit 4 only benefits that lot, and the OC will not carry out that work.
    4. He participated in the First AGM by listening and responding to questions. When it was put to him that Dr Hart will say that he refused to participate actively in the meeting, Mr Schembri denied it.
    5. He participated in the Second AGM and was invited to vote on the resolution for the one-off levy of $16,000.00. He stated that he voted against the motion and that it was recorded incorrectly in the minutes as a unanimous vote in favour.
    6. He tried to keep conversation to a minimum because of the "schoolyard bullying" and because Chris and Noel Hart were critical of Mr Schembri. He stated that Chris Hart questioned whether Mr Schembri has smoke detectors and Dr Hart commented about the storing of his metal rack on common property.
    7. He accepted that nothing should be stored on common property.
    8. He agreed that the entire southern border of his unit, his side door and two windows sit behind the gates and that they open up behind the gates. However, Mr Schembri stated that the windows have bars and tamper-proof screens across them. He stated that he secured the windows and did what was needed to protect his building.
    9. Regarding the side door, Mr Schembri confirmed that the door is always locked because he doesn't want a draught blowing dust into his workshop.
    10. He repeated that he does not use the gates and denied that he asked Dr Hart for the gates to be locked. He stated that the tenant in Unit 3 never wanted the gates locked.
    11. He denied that the old gates were not fit for purpose because they had a big hole in them. He stated that they could be closed and locked and served their purpose. He did not agree that the new gates improved the visual appeal of the property and stated that it just looks like a new gate.
    12. He still believes that the Harts want the new gates because they still plan to convert Unit 4 into a caretaker's residence. He does not accept that a caretaker's residence is not being constructed currently and that he still believes that it is.
    13. He denied that each lot owner benefits from the new gates.
    14. He denied that he derives any benefit from the concreting at the rear of Unit 4. He stated that he has only ever been to that part of the property to have a look and make sure it was safe. He stated the area was very rarely maintained and that it was full of weeds and overgrown vegetation and bushes. He conceded that, now that the area has been concreted, there will be fewer weeds and overgrown vegetation, and it will be easier and safer to move around the perimeter of the property.

1. Two witnesses were called for the respondent: Jonathon Hart (Mr Hart) and Noel Hart (Dr Hart).

1. Mr Hart is the owner of Unit 4, which is situated at the rear of the property. He provided a witness outline dated 14 February 2025 and gave oral evidence at the hearing. He stated that he is the son of Dr Noel Hart (whose family trust is the owner of Unit 3) and the brother of Chris Hart (the owner of Unit 1). Mr Hart stated that he is a gymnastics coach who is heavily involved in the coaching of elite level gymnastics. He has coached gymnasts to represent Australia at the last five consecutive Olympics, eleven World Championships and numerous Commonwealth Games.
2. Due to his coaching commitments, Mr Hart travels extensively and frequently finds himself living overseas for long periods of time. For this reason, he has given his father a standing power of attorney to attend to his financial affairs while he is away.
3. He stated that his frequent absences mean that the management of the unit is left to the OC manager and to his father Dr Hart, who does the books, the BAS statements, and everything that is needed while he is away.
4. Mr Hart purchased his unit in 2006 as an investment property and it has been let out since 2006. The current tenant of Unit 4 is Partmaker, a company controlled by his brother Chris.
5. Mr Hart maintained that, historically, there were plans to construct a caretaker's residence in part of Unit 4, but those plans were abandoned. He stated that currently there are no plans to do so.
6. He stated that he does not use the concrete at the front (street side) of the property, but he does use the concrete driveway on the south side of the property. He also stated that the emergency exit for Unit 4 is at the rear of the property.
7. He stated that he has never had any objection to maintaining common property adjacent to Units 1 and 2 because its "give and take".
8. Under cross-examination, Mr Hart stated that:
   1. He is not sure if he paid for the concreting of the common property at the northern side of the property. He stated that he just does what is necessary to keep his tenants happy.
   2. He keeps his tenants happy by relying on others to inform him about any problems and dealing with the problems. If the body corporate manager, the tenant or the real estate agent managing the tenancy came to him with any problem he would address it.
   3. He relies on his father and brother to keep him informed of OC matters and the leasing agent to keep him informed about matters regarding the tenancy.
   4. Concreting was done at the property in bits and pieces over the years to make it safe. Concreting on the south side common property in front of Unit 4 was done before he bought the property. The concreting at the front (street side) was probably done in 1958. He was not sure when the remainder of the south side common property was done.
   5. He conceded that he was not actively involved in the property, he does not go every year and relies on his father, brother, "body corporate", and the real estate agent to advise him about what is needed.
   6. He can't remember who arranged for the concreting of the northern common property. He travels a lot and is frequently not involved, which is why he has given his father power of attorney to manage his affairs.
   7. "Lots of different concreting" was done over the years and he can't remember when the various works were done or what they cost. He believes that, historically, "Chris and dad" paid for the concreting.
   8. He does recall that "Chris and dad" paid for the concreting of the south side common property, and he believes that they also paid for the north side concreting.
   9. He does not recall the exact date he leased Unit 4 to his brother Chris. He knows that it is a 3 x 3 x 3-year lease. He does not recall if he had to sign anything when his brother put in the planning application to construct the caretaker's residence. He stated that he is happy for Chris to do what he wants as long as it is legal.
   10. He recalls that the plans for a caretaker's residence were scrapped when they realised that there would not be enough space for what the business needed. The plans were scrapped more than 12 months ago, maybe in 2023 or even a whole year before that.
   11. He was not asked to pay for any concreting before August 2023, when he was required to pay his share of the $16,000.00 for the works.

1. The respondent's second witness, Dr Noel Hart, stated that, through their family trust, he and his wife are the owners of Unit 3, which they purchased in or around 2006. Dr Hart gave evidence that he is a research scientist who retired after many years at the CSIRO and is now involved in Partmaker, a company which manufactures dental implants and prosthetics owned and operated by his son Chris (the business).
2. He stated that the business started operating in Unit 1 but then expanded into Unit 3, which is used to house lathes, and eventually into Unit 4, where milling machines to make prosthetics are located.
3. Dr Hart stated that the roof was replaced in 2010, when Mr Schembri replaced his roof and then each of the other three owners did the same. He stated that, because the machinery used in the business is precision machinery, they need a constant temperature.
4. Dr Hart gave evidence that he attended the First AGM on 6 December 2021. He attended as representative of his own lot and as a proxy for his son Jonathon. Dr Hart stated that both his son Chris and Mr Schembri also attended the First AGM as did the OC manager Jeff.
5. The first item discussed at the First AGM was the allocation of car parking, which was placed on the agenda in accordance with a previous Magistrates' Court order, which required them to implement the allocation of car parking spaces. The repair of the gates and other maintenance items were also discussed at the First AGM.
6. Dr Hart stated that the fumes coming from Unit 2 were very bad and many Partmaker employees who were working from Unit 1 left because of the fumes. He also stated that the owner of Unit 2 installed audio/visual cameras without the permission of the OC.
7. Dr Hart stated that, before the appointment of a professional OC manager, he used to look after the OC insurance. When he would receive the insurance renewal, he would ask each lot owner to pay their share directly to the insurance company because the OC did not have a bank account. Every lot owner paid their share every time.
8. At one point, he said, the insurance company requested an asbestos report, which Dr Hart obtained and paid for himself. He stated that Mr Schembri asked for a copy of the asbestos report, but he did not provide it to him because Mr Schembri did not pay for it and didn't offer to pay his share.
9. Dr Hart stated that he did not receive any payment for the time he spent looking after OC issues.
10. In relation to the First AGM, which was conducted by Zoom, Dr Hart recalled that Mr Schembri was present and did participate but that he had pointed his camera away from him and they did not see his face. Dr Hart stated that Mr Schembri did speak and that he had quite a bit to say.
11. At that meeting, under "General maintenance" they discussed installing a step at the rear of Unit 4. Dr Hart gave evidence that Chris wanted a ramp at the back of Unit 4 because, before the common property was concreted, there was a two-foot drop from the doorway to the common property path. Dr Hart stated that they had concerns that, in an emergency, any person in a wheelchair would not be able to get out of Unit 4 because of the drop.
12. Dr Hart stated that the levels at the exits of each unit varied. Unit 3 has its exit at ground level and Units 1 and 2 have small steps down into the common property. He stated that, when he concreted the driveway in front of Unit 3, he reduced the height of the step to both Units 2 and 3.
13. In relation to discussions at the First AGM regarding the car parking allocation, Dr Hart recalled that there were no real objections to allocating car spaces because they were required by a court order.
14. Dr Hart gave evidence that the gates were discussed at the First AGM. He recalls that "Chris was going for electric gates". Dr Hart explained that Chris frequently attended the Unit with a trailer, and that it was difficult for him to exit with his trailer when he had to stop to close the manual gates. He stated that, if the gates were not replaced and electrified, Chris would have to park across the front of Unit 2, close the gates manually and then manoeuvre out of the property with some difficulty.
15. Dr Hart recalled that Chris voted in favour of the gates, as did he. Dr Hart stated that he voted for himself and by proxy for Jonathon in favour of the gates, however, Mr Schembri did not vote on the motion.
16. Dr Hart did not recall if Mr Schembri was specifically asked to vote at the First AGM, however, he did recall that Mr Schembri voted against the Budget at that meeting.
17. The Second AGM was also conducted by Zoom and Dr Hart gave evidence that he, Chris and Mr Schembri attended. Dr Hart stated that Mr Schembri was not visible during the meeting and that the only time he spoke was to ask about the asbestos report. Dr Hart recalls that Mr Schembri was asked about his smoke detectors, but Mr Schembri did not answer. Dr Hart recalled saying at the time that "[Mr Schembri] is probably playing games again".
18. Dr Hart gave evidence that, during the second AGM, Mr Schembri was not visible on the screen and frequently did not respond verbally. Dr Hart recalled that Jeff Hyams had to ask, on a number of occasions during the course of the meeting, "Are you there, Brad?" because Mr Schembri was not responding. Dr Hart also recalled that when votes were called, Mr Schembri did not respond.
19. In relation to the gates, Dr Hart stated that the emergency exit of Unit 2 was located behind the gates and that all four lot owners have the key and access to the gates. He gave evidence that the old cyclone gate had a "huge gaping" hole in it and that, years ago, Dr Hart tried to fix it by pulling it together with wire. He further stated that the old gates were approximately 50 to 60 years old and were twisted, listing and bent.
20. Dr Hart stated that the new gates were selected and installed for the purpose of replacing the old gates with something more secure and with something suitable for electrification.
21. According to Dr Hart, the plans to build a caretaker's cottage were abandoned in early 2022. He stated that, in December 2021, they received a delivery of new machinery, and they realised that they needed the space for that machinery. For this reason, by April 2022, they decided not to proceed with the caretaker's cottage plan, did not apply for a building permit and allowed the planning permit to lapse.
22. In relation to the concreting, Dr Hart stated that the works for the concreting at the rear of Unit 4 weas voted on at the Second AGM.
23. Dr Hart stated that, over the course of a number of years, concreting of common property had been arranged by himself and Chris. Chris arranged and paid for the contracting on the northern side of the property. Dr Hart did not know how much that cost because Chris paid for it.
24. Dr Hart recalled that in 2020 Chris also arranged for the concreting at the southern (driveway) side of the property. That was paid for by Chris and Dr Hart equally. He recalled that the concreting of the southern side cost approximately $10,000.00.
25. In 2006 or 2007, Dr Hart arranged for concreting on common property in front of Unit 3 and paid for that himself. He stated that Mr Schembri was not there in 2006/2007. Dr Hart recalled that this concreting cost around $6,000.00.
26. The concreting that is the subject of this proceeding is located on the western boundary of the property and, according to Dr Hart, everyone has access to it. According to Dr Hart, that part of the property was used by Mr Schembri's brother, who was a previous tenant of Unit 4, to dump saw dust and empty drums. Chris arranged and paid $1,300.00 for a bobcat and a skip to clean up the mess that had been dumped there.
27. Furthermore, Dr Hart stated, this section of common property had to be cleaned up at least twice a year to clear it of weeds and overgrown blackberry bushes. Dr Hart said that, since it has been concreted, the area has become a clear and safe path around the building and the OC has complied with its obligations to ensure that common property is safe to access.
28. Dr Hart stated that parking on the property had become a problem, and it was thought that line markings might encourage proper parking on site. Dr Hart expressed the view that all lot owners benefitted from the line markings.
29. Under cross-examination, Dr Hart stated that:
    1. Chris concreted the northern part of the property because he wanted to put sheds on it.
    2. He had been asked to be a pseudo-manager to assist with the payment of the OC insurance premium. He was not handling any OC money, which is why he would ask Brad to pay his portion of the insurance premium directly to the broker. This is how it worked until the OC manager was appointed.
    3. He and Chris did not discuss the concreting of common property with anybody else. They just did it and paid for it themselves.
    4. He concreted the common property in front of Unit 3 because his tenant at the time complained about excessive dust coming into his unit.
    5. They did not ask Mr Schembri to remove the rack from common property but rather they asked him to move his metal rack from the driveway because it was blocking access to the driveway. Specifically, the metal rack prevented their forklifts from moving wide panels along the driveway. Dr Hart stated that they offered Mr Schembri an alternative, to move the metal rack onto common property sitting behind a second fence at the back of the property.
    6. There was no resolution to store private property on common property, but maintained that, even though he and Chris did use common property to store private items, they never obstructed anybody.
    7. Dr Hart stated that Brad Schembri had also stored items on common property, such as the metal rack and a large skip on the common property in front of his unit.
    8. Mr Hyams was appointed OC manager in November 2021 and the OC had their first meeting on 6 December 2021. Mr Hyams asked him to put things on the agenda. Dr Hart stated that Chris created a list of issues that needed to be addressed and gave it to Mr Hyams.
    9. Nothing was on the agenda regarding the licencing of common property to accommodate their sheds.
    10. The minutes of the First AGM were not accurate, and that Mr Schembri did not vote. Dr Hart stated that Mr Schembri did not say anything, he did not object and he did not vote "No". Dr Hart stated that, when Jeff Hyams asked "For" and "Against", Mr Schembri said nothing. However, Dr Hart recalled that Mr Schembri did agree to move the metal rack.
    11. Partmaker is a company that makes medical devices. That there is an internationally recognised standard for medical devices - ISO13485- which requires TGA approval and ISO certification. Partmaker sought TGA approval and ISO certified certification. This involved an inspection of the factory, where cleanliness was examined. Dr Hart stated that they needed to keep the environment clean and dust free, which is why Chris concreted the property. Dr Hart stated that they obtained TGA certification in 2023.
    12. In relation to the gates, Dr Hart stated that the gates had a hole in them and were not secure. He conceded that Chris was the catalyst to change the gates because he wanted remote gates.

1. The OC Act confers on the Tribunal broad and discretionary powers to resolve owners corporations disputes. Section 165 of the OC Act relevantly provides:
   1. What orders can VCAT make?

(1) In determining an owners corporation dispute, VCAT may make any order it considers fair including one or more of the following -

(a) An order requiring a party to do or refrain from doing something;

(b) An order requiring a party to comply with this Act of the regulations or the rules of the owners corporation.

1. Section 167 of the OC Act outlines what VCAT must consider when making an order. It provides that:
   1. What must VCAT consider?

VCAT in making an order must consider the following:

1. The conduct of the parties;
2. An act or omission or proposed act or omission by a party;
3. The impact of a resolution or proposed resolution on the lot owners as a whole;
4. Whether a resolution or proposed resolution is oppressive to, unfairly prejudicial to or unfairly discriminates against, a lot owner or lot owners;
5. Any other matter VCAT thinks relevant.

1. Read together, these provisions give the Tribunal the discretion under section 165 to make any order it considers fair but, in doing so, must consider the factors outlined in section 167. The discretion to make any order the Tribunal considers fair includes a discretion not to make any order at all if the Tribunal considers it fair not to make any order.
2. The parties in this proceeding raised section 5 of the OC Act (the OCs overarching obligation to act honestly and in good faith) and section 24 (the obligation to apply the benefit principle when levying special fees and charges). Sections 5 and 24 of the OC Act relevantly provide:
   1. Owners corporation must act in good faith

An owners corporation in carrying out its functions and powers -

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

(b) must exercise due care and diligence.

(1) An owners corporation may levy special fees and charges designed to cover extraordinary items of expenditure.

(2) Subject to subsection (2A), the fees and charges must be based on lot liability.

(2A) Fees and charges for extraordinary items of expenditure relating to repairs, maintenance or other works that are carried out wholly or substantially for the benefit of some or one, but not all, of the lots affected by the owners corporation must be levied on the basis that the lot owner of the lot that benefits more pays more.

(2B) The owners corporation may levy special fees and charges on a lot owner relating to repairs, maintenance and other works arising from the particular use of a lot by the lot owner.

(3) The owners corporation may determine the times for payment of the special fees and charges.

(4) A special resolution is required when exercising a power under subsection (1) if the amount involved is more than twice the total amount of the current annual fees set under section 23.

(5) Subsection (4) does not apply if the fees and charges are levied to pay for or recoup the cost of repairs or maintenance carried out to any part of the property for which the owners corporation is responsible where immediate expenditure is or was necessary to ensure safety or to prevent significant loss or damage to persons or property.

1. Both parties also relied on Owners Corporation PS407621Y v Grundl,[2] which discussed the application and operation of the benefit principle. In Grundl, Senior Member Vassie set out the manner in which an OC may set special fees in the context of the benefit principle as follows:

In my view, in the light of the Mashane decision on appeal and of s. 24 as it now is, the law requires an owners corporation to act as follows when it sets special fees to cover extraordinary items of expenditure relating to repairs, maintenance or other works.

1. It must first turn its collective mind to the question of whether all lots benefit substantially from the works or whether some lots substantially benefit more than others.
2. If, acting in good faith and exercising due care and diligence, as s. 5 of the Act obliges it to do, it decides that all lots substantially benefit, it must set fees in accordance with lot liability. There will be no legal error in the decision, and the Tribunal will not interfere with it on the application of an aggrieved lot owner, unless the decision was one which no members of an owners corporation, acting honestly and reasonably, could have made.
3. Failure to turn the collective mind to the question is a legal error. The error is unlikely to lead the Tribunal to interfere, on the application of an aggrieved lot owner, with a decision to set fees in accordance with lot liability if in reality all the lots benefit substantially from the works. Otherwise the legal error exposes the owners corporation to the risk that the Tribunal will declare the resolution invalid.
4. If the owners corporation decides that the works are substantially for the benefit of some, but not all, of the lots, it must set fees not in accordance with lot liability but in accordance with the benefit principle, so that the owner of the lot that benefits more pays more.
5. The owners corporation must decide the extent to which the various lots benefit and apportion the fees accordingly. In making the decision it must act in good faith and with due care and diligence. If it does, there will be no legal error in the decision, and the Tribunal will not interfere with it on the application of an aggrieved lot owner, unless the decision was outside the range of reasonableness so that it was one which no members of an owners corporation, acting honestly and reasonably, could have made, or unless there has been some other legal error.
6. However, if the lot owners cannot decide which principle to adopt or cannot decide upon the proper apportionment, and ask the Tribunal to decide, the Tribunal may do so.
7. Except in a case of urgency, there must be a special resolution for levying the amount of the extraordinary expenditure if it is more than twice the amount of the current annual fees.[3]

1. The applicant submitted that it has been recognised in the Tribunal that the doctrine of fraud on a power, or fraud on the minority, applies to owners' corporations[4] and that, in considering whether there has been a fraud on the minority, the Tribunal must examine the manner in which the Hart Family have used their superior numbers to use the processes under the OC Act to advance their own purposes.[5]
2. The applicant relied on Mote v Owners Corporation RP011346,[6] where the relevant principles were stated as follows:

Notwithstanding that the OC Act permits the lot owners to vote in their own self- interest, equitable principles in common law do not permit lot owners who have a majority vote to use the voting power as a means of securing some personal or particular gain rather than using it in good faith in the interest of the OC. To utilise a majority vote as a means of securing some personal or particular gain is commonly referred to as a fraud on the power or a fraud on the minority.

The Court of Appeal in New South Wales in the case of Houghton & Anor v Immer (No. 155) Pty Ltd ('Houghton's case') upheld the trial judge's finding of fraud on the minority in the following scenario: two lot owners who held 80% of total lot entitlements erected buildings on common property (penthouses on the common property roof of the apartment building) that increased the value of the common property by $600,000. Those majority lot owners then voted in favour of a special resolution that the owners corporation should transfer the common property to them for $1.00. The trial judge found that it was an "irresistible inference" from those facts that the resolution was only for the benefit of the majority of lot owners and was a fraud on the minority. The Court of Appeal found that although the special resolution was formally valid because the majority lot owners had the voting power to pass it, the exercise of that power amounted to equitable fraud. The Court of Appeal upheld the trial judge's award to the minority lot owner of equitable compensation of $120,000 to be paid before the transfer could be effected. The High Court of Australia refused an application for special leave.

The NSW Court of Appeal in Houghton's case cited the authority of Lord Parker in Vatcher v Paull [1915] AC372 at 378 to explain fraud on a power as follows:

The term fraud in connection with fraud on a power does not necessarily denote any conduct on the part of the appointor amounting to fraud in the common law meaning of the term or any conduct which could be properly termed dishonest or immoral. It merely means that the power has been exercised for a purpose, or with an intention, beyond the scope of or not justified by the instrument creating the power.

1. The OC relied on Houghton's case to reject the applicant's contention that the OC and the Hart Family engaged in a fraud on the minority and to support their position that the conduct of the OC and the Hart Family fell far short of the type of conduct that "could be characterised as bad faith or against the interests of the [OC] as a whole".[7]
2. The OC also relied on Ford v Owners Corporation SP24717 (Owners Corporations)[8] where Member Buchanan stated, at paragraphs [48]-[52]:

The doctrine of fraud on the power does not impose on a lot owner an obligation to vote in any fashion. A lot owner is free to vote as it wishes, be that to express its genuine view about the subject matter of the vote or tactically, in order to achieve a result which it deems desirable.

Referring to comments made by Senior Member Vassie in Stokes v Alexander (Owners Corporations)[9] the power to vote may be exercised by a lot owner without restraint, subject to the proviso that "a lot owner's exercise of his voting power is capable of being a fraud upon the power if used improperly in order to achieve some personal fain rather than in good faith in the interests of the owners corporation".

1. The applicant sought orders pursuant to section 165 of the OC Act that the purported resolution was void and of no effect. In addition to section 165, the applicant also sought a declaration in the same terms pursuant to section 124 of the Victorian Civil and Administrative Tribunal Act 1998 (the VCAT Act). Section 124 relevantly provides:

(1) The Tribunal may make a declaration concerning any matter in a proceeding instead of any orders it could make, or in addition to any orders it makes, in the proceeding.

(2) The Tribunal's power to make a declaration under subsection (1) is exercisable by a presidential member or a member who is an Australian lawyer.

(3) The Tribunal's power under this section is in addition to, and does not limit, any power of the Tribunal under an enabling enactment to make a declaration.

The benefit principle and the OC's duty to act in good faith

1. The applicant maintained that the works were solely for the benefit of the Hart Family.[10]
2. In relation to the gates, the applicant submitted that the evidence clearly suggests that they were installed at the instigation of Chris Hart and for his convenience, that the parts of the property that sat behind the gates were used almost exclusively by the occupants of Units 3 and 4, and that there was no credible evidence to suggest that there were any real security concerns to require replacement of the old gates.
3. The applicant further maintained that there was no evidence adduced which could support a finding that the new gates increased the value of the property or any individual lot. The only concession made by the applicant in their submissions was that the new gates provided an improved aesthetic to the complex.
4. In relation to the concreting, the applicant submitted, inter alia, that the Hart Family was "determined to replace all gravel areas of the Common Property... to obtain hard-won certifications the Hart Family had achieved in order to establish Partmaker as a successful business".[11] The applicant maintained that the "concreting works performed to the Driveway in 2020 were done solely to limit the exposure to dust and other debris interfering with the manufacturing of the delicate medical equipment the Hart Family engaged in."[12]
5. It was further submitted that the attempt by the Hart Family "to categorise the works as an OH&S issue...is somewhat convenient, given the years of neglect to the Rear Area during a time when none of the Hart Family occupied Unit 4."[13]
6. Finally, in relation the concreting, the applicant maintained that the Tribunal ought not take into account the historical concreting works done at the complex on the grounds that the concreting works done by the Hart Family over the years were done in breach of the OC Act, without the consent of the OC, and "entirely for their own commercial purposes, and the "good" of the respondent or the wider Complex was never even considered when the Hart Family just decided to do whatever they desired to and with the Common Property."[14] The applicant maintained that the Harts "ought not be permitted to take advantage of their own wrongdoing."[15]
7. In relation to the line marking, the applicant submitted that the line marking was "only done so that each of the Hart Units could claim the car parks they wanted."[16] They maintained that the applicant "did not require the Line Marking, did not vote on a resolution granting a licence for car parking to any unit and should not be required to pay any amount for line marking in the absence of any licence or lease being granted in respect of car parks."[17]

Fraud on the minority and the conduct of the parties

1. The applicant submitted that "what is necessary to establish a fraud on the minority is to show that there has been some level of collusion by a majority of owners to limit or otherwise impeded upon the rights of the minority, for the purposes of gaining a benefit to the majority".[18]
2. The applicant maintained that for nearly two decades the Hart Family has been treating the complex as their own and that they bullied and harassed Mr Schembri to the point where he "felt unable to voice his concerns or prevent the Hart Family from taking whatever action they wanted".[19]
3. According to the applicant, "the complete exclusion of [Mr Schembri] from any consideration which related to common property comprises a fraud and is grounds enough for the resolution at the Second AGM raising the special levy to be declared void."[20]
4. For these reasons, the applicant contends, the resolution that each lot pay the total $16,000.00 cost of the works in accordance with lot liability should be declared void and the Tribunal should order the respondent to refund to the applicant the amount of $4,000.00.

The benefit principle and the OC's duty to act in good faith

1. The respondent submitted that "in reality, all lot owners benefit substantially from the works"[21] and that "a holistic approach must be taken when applying the benefit principle."[22]
2. The applicant relied on the decision of Mashane Pty Ltd v Owners Corporation RN328577L,[23] where Macaulay J "did not interfere with the Tribunal's finding that the applicant's lot would derive a benefit from the works, in that the risk of personal injury claims against the owners corporation would be reduced and the appearance of the building would be improved".[24]
3. The respondent submitted that Mashane illustrates that the reduced risk of personal injury claims against the owners corporation and the improved appearance of the building is of benefit to all lot owners and further, that "lot owners can still receive a benefit if the works are carried out to common property that they do not use or even have access to."[25]
4. In relation to the gates, the respondent maintained that the replacement of the old gates with new gates substantially benefits all lots because the old gates were damaged and not fit for purpose, the new gates improve the visual appeal and capital value of the property, they provide greater security and remove the "small risk of someone being injured by the old gates" which had some loose wires.[26] The respondent further maintained that the works to the gates were carried out in accordance with the OC's statutory obligation to repair and maintain common property.
5. In relation to the concreting works the respondent submitted that works provide a path for safe entry and exit from the property, particularly in case of an emergency. They further maintained that the concreting works are necessary to ensure that they comply with their statutory health and safety obligations and reduce the potential exposure to liability, especially in the case of a fire or other such emergency.
6. Finally, in relation to the line marking, the respondent maintained that all lot owners benefitted equally from the work and their purpose was to ensure or at least encourage drivers to park their vehicles within defined spaces on common property.[27]

Fraud on the minority and the conduct of the parties

1. The respondent rejects the applicant's contention that the OC has engaged in a fraud on the minority and maintains that the evidence illustrates that Noel Hart and Jonathan Hart "have each acted with a proper purpose" and "have not engaged in any conduct which could be characterised as bad faith or against the interests of the Respondent as a whole."[28]
2. The respondent submitted that, for the applicant to prove that the OC has engaged in a fraud on the minority, they must establish that the votes in favour of the works were cast to achieve an improper purpose that is also contrary to the OC's interest.[29]
3. The OC maintains that "this is not one of those rare cases where fraud is made out."[30]

The benefit principle and the OC's duty to act in good faith

1. Having considered the totality of evidence, I find that the OC did not apply the benefit principle when they discussed the works at both the First AGM and the Second AGM. While there were conflicting accounts about the level of participation and the engagement of Mr Schembri at these meetings, and whether or not he was invited to vote or whether he actually voted, none of the evidence suggested that the benefit principle had been considered or discussed.
2. There appeared to be no dispute that the only time the benefit principle was ever raised or considered by the OC was at the First AGM, when they were discussing the construction of a step or a ramp at the emergency (rear) door of Unit 4. It was not disputed by any witness at the hearing that the OC manager, Mr Hyams, stated that only Unit 4 would benefit from the construction of the step and accordingly the resolution for the OC to undertake this work and pay for it was not passed.
3. I am therefore comfortably satisfied that the OC did not turn its collective mind to whether all lots benefitted substantially from the works or whether some lots substantially benefitted more than others.
4. As a consequence of this failure, I find that the OC fell into legal error. However, as Senior Member Vassie in Grundl states, "the error is unlikely to lead the Tribunal...to interfere with a decision to set fees in accordance with lot liability if in reality all the lots benefit substantially from the works".
5. Grundl makes it clear that, when the OC has not done so, the Tribunal may examine the relevant facts and assess the benefit of the works to each lot. The failure of the OC to turn its collective mind to benefit means that the Tribunal has the power to consider whether all lots benefitted substantially from the works, whether some lots substantially benefitted more than others and, if so, the extent to which each lot benefitted. The Tribunal is also empowered to decide upon the proper apportionment of any special fees or charges.

1. In evidence, Dr Hart stated that the replacement of the gates was instigated by Chris Hart, who frequently used a trailer to transport items to and from Units 3 and 4 along the southern side driveway. He also stated that they selected the type and style of gates that they did because they were suitable for electrification in the future.
2. It is clear from the evidence that the main entrances and the proposed car spaces of Units 3 and 4, and the rear door and two windows of Unit 2 are located behind the gates, and that all unit holders have keys to the gates. The main entrances to Units 1 and 2 are at the front of the property and do not sit behind the gates.
3. Having considered the totality of the evidence, I am satisfied that the units that substantially benefit from the replacement of the old gates and the installation of the new gates are Units 3 and 4. However, I am not satisfied that Unit 2 receives no benefit at all.
4. I find that the original gates were very old and in serious disrepair. The photographic evidence corroborates the evidence of Dr Hart who stated that the old cyclone gates had a "huge gaping" hole in them, that they were approximately 50 to 60 years old and that they were "twisted, listing and bent". The photos also show that some attempts had been made to repair the hole, which further corroborates the evidence of Dr Hart that he tried to fix it by pulling it together with wire.
5. The OC has a statutory obligation to repair and maintain common property. While Chris Hart may have been the instigator of the new gates and he was more likely to receive the greater benefit from the replacement gates, I am satisfied that the old gates were in need of repair.
6. I reject the assessment of Mr Schembri that the old gates were fit for purpose. I find that, while the old gates may have been capable of opening and closing and could be locked with a chain and padlock, they were, insofar as gates were concerned, the bare minimum.
7. I also reject the assessment of Mr Schembri that the new gates do not improve the visual appeal of the property. The photos show that the new gates are solid and very well made. They significantly elevate the appearance and visual appeal of the complex, and I am satisfied that all lot owners benefit to some extent from the new gates.
8. The question for the Tribunal is the degree to which each unit benefits from the replacement of the gates. In applying the benefit principle, I accept the respondent's submission that the Tribunal must take a holistic approach.
9. I find that the more substantial benefit is to Units 3 and 4. Their front entrances and proposed car parks are all situated behind the gates and these units benefit substantially from any added security that the new gates may provide. The benefit to Unit 2 lies in the improvement to the appearance and visual appeal of the complex, and in the OC complying with its statutory obligation to repair and maintain common property.
10. The total cost of the gates was $5,911.00. Each lot owner was required to pay equally, which means that each lot owner paid $1,477.75. Taking into account that Units 3 and 4 benefit substantially more than the other two units, I apportion 70% of the total cost to Units 3 and 4 (a total of $4,137.00) and 30% to Units 1 and 2 (a total of $1,773.00). Mr Schembri's liability is therefore reduced to $886.85, and he should be refunded $590.90 for this component of the special levy.
11. The applicant further seeks a permanent injunction to restrain the respondent from seeking to recover from the applicant any fees, charges or other amounts in respect of the works, including any further works for the electrification of the gates.
12. At the commencement of the proceeding, through its Counsel, the respondent maintained that the electrification of the gates is now off the table and that the OC has no intention of proceeding with this proposal. I am therefore satisfied that this work is no longer proposed, and that the OC does not intend to undertake it.
13. In the circumstances, I find that that to make orders to restrain a party from doing something it has no intention of doing is not appropriate. However, I do consider it appropriate to make relevant findings on the evidence given in this proceeding.
14. Dr Hart stated very frankly that Chris Hart was pushing for the electrification of the gates because it was convenient to him when entering and exiting the driveway, especially with the trailer. No other lot owner appeared to have any need for the electrification. Unlike the replacement of the old gates with new gates, which I have characterised as repair and maintenance of common property, the electrification of the gates introduces an element of betterment or improvement that does not fall within the definition of repair and maintenance. The OC does not have any obligation to undertake this work.
15. However, if the electrification of the gates does find itself on any future agenda, the OC has an obligation to apply the benefit principle when considering who benefits substantially from that work.
16. Unless any other or more compelling evidence presents itself in the future, I find that the person who currently benefits more than any other from the electrification of the gates is Chris Hart. Should the electrification of the gates present as an agenda item in the future, the OC must act in good faith and take into account the substantial benefit to Chris Hart.

1. I am satisfied that the plans to construct a caretaker's residence in Unit 4 were abandoned in April 2022. I find that both Mr Hart and Dr Hart gave frank and forthcoming evidence about Chris Hart's plans to construct a caretaker's residence, and both stated very categorically that those plans were abandoned when Chris realised that there was simply not enough space to accommodate the residence and the new machinery that was delivered in December 2021.
2. Mr Schembri stated that he still believes that the Harts intend to build the caretaker's residence in Unit 4. I reject this position as untenable and without basis. The evidence overwhelmingly suggests that the plans were abandoned in April 2022, that the Harts did not apply for a building permit and allowed the planning permit to lapse. The photographs produced in evidence corroborate the evidence of Mr Hart and Dr Hart that Unit 4 is now used to house very large machines for Partmaker.
3. For this reason, I reject the applicant's contention that the concreting was done in 2023 solely for the benefit of Unit 4 and their plans to construct a caretaker's residence.
4. I am however satisfied that Unit 4 does derive a more substantial benefit than the other units because the emergency rear exit of that unit directly opens onto the newly concreted common property. There is no dispute that, at the First AGM, the parties discussed the construction of a step or ramp at the rear emergency door of Unit 4 to make it accessible in the event of an emergency. It is also not disputed that, having applied the benefit principle and concluded that Unit 4 is the only beneficiary of such work, the OC rejected the proposed resolution to undertake and pay for the step or ramp.
5. I find that the concreting works ultimately undertaken ameliorate some of the issues with the level of the step at the rear door of Unit 4. Dr Hart gave evidence that the levels have become higher because of the concreting and the height of the step at the rear door of Unit 4 is now reduced. The benefit of the concreting to Unit 4 is a direct and tangible benefit and goes some way to addressing the concerns regarding the height of the step at the rear door of Unit 4.
6. That said, and taking a holistic approach in applying the benefit principal, I cannot however conclude that the other units do not benefit from the concreting at the western boundary.
7. The photos tendered in evidence show the before and after condition of the of the western boundary. The 'before' photos show a strip of muddy land overgrown with weeds and blackberry bushes, and steel drums or barrels dumped on it. Dr Hart gave evidence that over the years he and Chris cleared that section and kept it relatively tidy. He stated that neither he nor Chris ever received any payment for this nor sought contribution from the other lot owners, even when Chris paid $1,300.00 for bobcat and skip to clear the area and remove the rubbish. The 'after' photo of the newly concreted section shows a clean and clear path, professionally constructed and with proper drainage. I find that it is a substantial improvement to the common property overall.
8. The respondent contended that the state of the western boundary prior to the concreting posed a risk to any person accessing that section of land. Having seen the 'before' photos, I am comfortably satisfied that there is merit to such a contention and that the concreting of that section of common property does reduce the risk of injury to occupiers of the complex and any visitors.
9. Overall, however, I find that the more substantial benefit of the concreting is to Unit 4. The new concrete path is directly accessible from the rear door of Unit 4, it makes access through that door safer and the unit benefits substantially from the new levels that the new concreting provides. The benefit to Unit 2 lies in the reduced risk of injury to occupiers and visitors to the complex, in the improved visual appeal and in the OC complying with its statutory obligation to maintain common property.
10. The total cost of the concreting was $7,568.00. Each lot owner was required to pay equally, which means that each lot owner paid $1,892.00. Taking into account that Unit 4 benefits substantially more than the other three units, I apportion 60% of the cost of the concreting to Unit 4 (a total of $4,540.80) and 40% to Units 1, 2 and 3 (a total of $3,027.20). Mr Schembri's liability is therefore reduced to $1,009.06, and he should be refunded $882.94 for the concreting component of the special levy.

1. There is no dispute that the allocation of car spaces would be of benefit to all lot owners. There is also no dispute that the allocation of car spaces was precipitated by the Magistrates' Court order which resulted in the appointment of the OC manager in 2021 and the discussions surrounding car parking at the complex.
2. Mr Schembri submitted that the line marking was only done so that each of the Hart Units could claim the car parks they wanted. This submission is not supported by the evidence, and I reject it.
3. The evidence clearly shows that the plan of the proposed allocation of car spaces assigns two car spaces to each unit and each spot is in closest proximity to the relevant unit. Mr Schembri's proposed car spaces are drawn directly in front of his roller door and front entrance. In cross-examination, Mr Schembri conceded that he was happy with the proposed allocation and that he benefits from the line marking.
4. Mr Schembri also submitted that he did not want the line marking and should not have to pay for it in the absence of any licence or lease being granted in respect of car parks.
5. While the optimal outcome may be to regularise the proposed allocation of car spaces with the granting of licences or leases for each car space, I nonetheless consider that the simple act of marking the spaces where cars should be parked goes some way to encouraging proper parking on the site. I find Mr Schembri's submission untenable in circumstances where he himself conceded that he benefits from the line marking.
6. I am therefore comfortably satisfied that each lot owner benefits equally from the line marking and that the cost of this work should be borne in accordance with lot liability.
7. I find that the cost of the line marking was $1,740.00, and that each lot owner is liable to pay one quarter of that amount, being $435.00.

Fraud on the minority and the conduct of the parties

1. I reject the applicant's contention that, in passing the resolution that each lot owner pays for the works in accordance with lot liability, the OC has engaged in a fraud on the minority.
2. Having considered the totality of evidence in this proceeding, I am satisfied that, while over many years the Hart Family acted in a manner that may have been in breach of the OC Act, I am not satisfied that their conduct in passing the resolution at the Second AGM was done with any improper or ulterior purpose or in bad faith, primarily because I cannot ignore the context in which the resolution was passed.
3. It is not disputed that there was no active OC until 2021, and that an OC Manager was appointed in 2021 in accordance with directions made in the Magistrates' Court on a separate matter. As a consequence of orders made in a Magistrates' Court proceeding involving Chris Hart and Mr Schembri, the OC became active, and an OC manager was appointed.
4. The acrimonious relationship that had developed between the two lot owners forced what was essentially an informal group of owners to become a formal and active OC, with a professional manager, AGMs, votes and resolutions. In 2021, the manner in which the affairs of the complex were conducted changed dramatically and the lot owners were faced with a new reality.
5. Over the years, the Hart Family proactively attended to whatever was necessary to accommodate their needs and the needs of their tenants. The evidence clearly suggests that Dr Hart responded to the request of his tenant in Unit 3 to reduce the dust coming into the unit by concreting the southern side driveway. While from 2007 to 2022 the Harts may have made improvements to the common property that benefitted their commercial interests, they did not ask any other lot owner to pay for or contribute to the cost of those improvements. They simply did what needed to be done in the context of an informal and inactive OC. The total cost over the years of this unauthorised concreting work on the common property was in the tens of thousands of dollars, which was entirely borne by the Hart Family.
6. In contrast, I consider Mr Schembri to have been, and to a considerable extent to still be, a passive and inactive lot owner. Mr Schembri gave evidence that he was never consulted when the Hart Family undertook concreting work to the southern boundary in 2017 or to the northern boundary in 2020. However, Mr Schembri did not say that he did anything about it, nor did he take any steps to assert his rights as a lot owner. The only time Mr Schembri complained about the Hart Family undertaking works to the common property was in 2023, and in circumstances where he was asked to contribute to them.
7. I find that, while works may have been performed by the Hart Family to meet their own commercial interests, the works cannot be considered anything but beneficial to the OC as a whole. The fact that the Hart Family did not request any payment from any other lot owner strongly suggests that they were not colluding or using their power to achieve some personal gain. If anything, the historical works came at considerable financial cost to the Hart Family, and I am satisfied that they performed these works in good faith and for reasons that did not have any improper purpose.
8. It was submitted on behalf of Mr Schembri that the Tribunal should not take the historical works into consideration because the Hart Family should not benefit from their own wrongdoing. While I accept that a party should not benefit from their own wrongdoing, I consider it appropriate to examine the historical context in this case to assess the intentions of the Hart Family at the Second AGM and to assess whether they acted in good faith and for a proper purpose.
9. Having examined the conduct of the Hart Family in this historical context, I am not satisfied that they were motivated by personal gain when voting in favour of the resolution at the Second AGM. I consider that they were simply trying to comply with their obligations as lot owners in the context of a more formal, active OC.
10. For these reasons, I reject the applicant's contention that the Hart Family engaged in a fraud on the minority.

1. I am satisfied that the OC fell into legal error when it failed to consider the benefit principle at the Second AGM and that the resolution made at that meeting should be declared void and of no effect.
2. I find that the proper apportionment of the special fees to cover the works should be:
   1. For the gates: 70% of the total cost to Units 3 and 4 (a total of $4,137.00) and 30% to Units 1 and 2 (a total of $1,773.00),
   2. For the concreting: 60% of the cost to Unit 4 (a total of $4,540.80) and 40% to Units 1, 2 and 3 (a total of $3,027.20), and
   3. For the line marking: Units 1, 2, 3 and 4 each pay the sum of $435.00, being 25% of the total $1,740.00 cost of the line marking.
3. I conclude that Mr Schembri's liability must therefore be reduced to $886.85 for the gates and $1,009.06 for the concreting. His liability for the line marking shall remain the same at $435.00.
4. Mr Schembri's total liability for the works amounts to $2,330.91. He has paid the sum of $4,000.00. Accordingly, I find that Mr Schembri should receive a refund of $1,669.09 and I will make orders to that effect.
5. Accordingly, I make the following orders:
   1. Pursuant to section 165(1) of the Owners Corporations Act 2006 and section 124 of the Victorian Civil and Administrative Tribunal Act 1998, the Tribunal orders and declares that the purported resolution made at the Second AGM is void and of no effect.
   2. The respondent must pay to the applicant the sum of $1669.09.
   3. The applicant has leave to make an application for a costs hearing no later than 23 May 2025.
   4. The principal registrar is directed to refer any application for a costs hearing to Senior Member S Moraitis, to consider the further conduct of the application and the timetabling of procedural directions.

[1] Bundle of common documents at page 70.

[2] [2017] VCAT 1550

[4] Applicant's Submissions dated 14 March 2025 at [31].

[6] [2023] VCAT 1191.

[7] Respondent's submissions dated 14 March 2025 at [45].

[8] [2024] VCAT 837.

[9] [2017] VCAT 514 at [105].

[10] Applicant's submissions dated 14 March 2025 at [34].

[21] Respondent's Submissions at [8].

[24] Respondent's Submissions at [10].

[29] Respondents Submissions at [15].