RVG Victoria Retirement Villages Pty Ltd (ACN: 004 938 381)

Sackville Grange Management Services Pty Ltd (ACN: 115 721 652)

Dallimore v Cotham Road Pty Ltd (Owners Corporations) [2013] VCAT 1740

1. The Tribunal finds that before 1 July 2010 owners corporation fees payable by the second applicant were not based upon lot liability as by law they were required to be.

1. Sackville Grange Retirement Village ('the village') is situated at 378 Cotham Road, Kew. It consists of 96 lots, an additional lot numbered 100, and common property, all shown in Plan of Subdivision 543357C ('the plan of subdivision'). Owners Corporation 1 Plan No PS543357C ('the owners corporation') affects the common property.
2. The applicants Roy Leslie Dallimore and Margaret Yvonne Dallimore occupy 'Penthouse 21' on Lot 21 on the plan of subdivision. Mrs Dallimore is the registered proprietor of Lot 21. The table of lot entitlements and lot liabilities that forms part of the plan of subdivision shows that the lot entitlement and lot liability of Lot 21 are each 110 units out of 9911 total units.
3. This proceeding reflects disputes that the Dallimores have with the village's developers and the village's manager.
4. The major dispute is about the fees that the Dallimores have been paying for management services. They claim that the fees have been arrived at on an incorrect basis. In particular, they allege that for two years the manager was ignoring the requirement in the Owners Corporations Act 2006 ('the OC Act') that an owners corporation must set fees in accordance with lot liability. They also allege that a provision about fees in the relevant contract - a Management Agreement - is void because it conflicts with the OC Act. They are asking the Tribunal to vary that provision so that it accords with the OC Act and more accurately specifies the fees that they are required to pay.
5. There are secondary disputes. One concerns the manager's alleged failure to require the developers to pay sums which the Dallimores maintain that the developers are liable to pay. The other secondary disputes all involve, in one way or another, entries in the village's financial statements and balance sheets. The Dallimores claim that a proper accounting would show that there are sums which ought to be credited to them. They are asking the Tribunal to make orders that would require a proper accounting.

1. The first two respondents, Cotham Road Pty Ltd and RVG Victoria Retirement Villages Pty Ltd, are the developers of the village. They registered the plan of subdivision on 23 April 2008. Upon registration of the plan of subdivision they became the registered proprietors of all of the lots shown on it. Although some of the documents to which I shall be referring described those two companies as 'the owners', I refer to them in these reasons as 'the developers' so as not to confuse them with persons who became owners of the lots by purchase from the developers.
2. On 24 April 2008, the day after the registration of the plan of subdivision, the developers appointed the third respondent Sackville Grange Management Services Pty Ltd ('SGMS') as manager of the owners corporation. Ever since that date SGMS has been responsible for management of the village generally[1] as well as acting as manager of the owners corporation.
3. Before the plan of subdivision was registered, Mrs Dallimore had purchased 'Penthouse 21' - the construction of which had been completed - by a contract of sale dated 30 November 2007. The contract was expressed to be conditional upon the registration of the plan of subdivision. The Dallimores took possession of 'Penthouse 21' on 26 January 2008 under a licence from the developers in anticipation of the registration. Upon the registration, the land which Mrs Dallimore had purchased became Lot 21 on the plan of subdivision. She settled the purchase, and took a transfer of Lot 21, shortly after registration had occurred.

1. On the same day, 30 November 2007, as Mrs Dallimore had signed the contract of sale, the Dallimores entered into a written Management Agreement with SGMS. It described the Dallimores as 'the Occupants', Mrs Dallimore as 'the Registered Proprietor', and SGMS as 'the Management Company'.
2. The Management Agreement recited that SGMS had agreed to manage and administer the village, the village's communal facilities (part of Lot 100 on the plan of subdivision), the owners corporation[2] and the common property. Although the Management Agreement specified that SGMS would 'employ' a manager, as in a sense it did,[3] for convenience I describe SGMS as having been a manager in two capacities: as manager of the village in accordance with the Management Agreement, and as the person appointed to be the manager of the owners corporation.
3. By clause 2 of the Management Agreement, SGMS agreed to 'employ' a manager to provide 'Management Services' to the Dallimores and to insure, maintain and repair the communal facilities in the village. The 'Management Services' were those set out in Annexure C to the Management Agreement, headed 'Village Management Services'.
4. By clause 3 of the Management Agreement, SGMS agreed to provide 'Body Corporate Services' to the Dallimores and to insure, maintain and repair the common property. The 'Body Corporate Services' were those set out in Annexure B to the Management Agreement.
5. By clause 4 of the Management Agreement, the Dallimores agreed (amongst other things) as follows:
   • 4.1 Service Fee

To duly and punctually pay (or cause to be paid) to the Management Company the Service Fee at the address specified in this Agreement (or as it may direct in writing from time to time) on the days and in the manner notified by the Management Company to the Registered Proprietor or the Occupant in writing from time to time.

The Management Agreement defined 'Service Fee' as follows:

Service Fee means the aggregate of the Body Corporate Services Fee and Management Services Fee being the Registered Proprietor's proportion of the total expenses and outgoings of the Management Company as set out in Item 4 of the Schedule for the period commencing on the date of this Agreement and terminating on the next succeeding 30th day of June and thereafter for each succeeding 12 month period commencing on the 1st day of July in each year during the currency of this Agreement save where this Agreement is terminated on a date other than the 30th day of June then the relevant period shall commence on the immediately preceding 1st day of July and cease on the date of termination of this Agreement.

So, to calculate the 'Service Fee' for any period, one needed to ascertain and take into account:

(a) the proportion set out in Item 4 of the Schedule to the Management Agreement;

(b) 'the Body Corporate Services Fee' and

(c) 'the Management Services Fee'.

1. Item 4 of the Schedule to the Management Agreement was as follows:

"Service Fee" 10/1000 (of which 50% comprises the Body Corporate Services Fee and 50% comprises the Management Services Fee).

That brief wording has created difficulties and has led to the major dispute in this proceeding.

1. The Body Corporate Services Fee was described in Annexure B to the Management Agreement, paragraph 2, as follows:

Is the Registered Proprietor's proportion of the estimated weekly total expenses and outgoings of the provision of the Body Corporate Services for the period commencing on the date of this Agreement and terminating on the next succeeding 30th day of June and thereafter for each succeeding 12 months period commencing on the 1st day of July in each year during the currency of this Agreement which expenses and outgoings include, without limitation the estimated total amount payable in respect of all or any of the following items:

2.1 [rates, taxes, etc, for the common property];

2.2 [insurance for the common property];

2.3 cleaning and lighting of the Common Property;

2.4 gardening, lawn mowing and landscaping in respect of the Common Property;

2.5 maintenance repairs replacements and renovations of and to the Common Property;

2.6 garbage and waste disposal in respect of the Common Property;

2.7 all charges for gas electricity water and all other utilities and services used in or assessed or charged on or in respect of the Common Property;

2.8 caretaking expenses and/or the cost of maintaining the security of the Common Property;

2.9 the salary or fee of the Manager and the staff to manage the Body Corporate and the Common Property;

2.10 the cost of administration and general management of the Common Property; and

2.11 an annual sum (not exceeding 10% of the estimated Body Corporate Service Fee for the current year) which in the reasonable opinion of the Management Company is necessary to transfer to a repair and maintenance fund to cover the costs of repair, renovations, replacements and maintenance of a substantial but infrequent and irregular nature to the Common Property.

1. The Management Services Fee was described in Annexure C to the Management Agreement, paragraph 2, as follows:

Is the Registered Proprietor's proportion of the estimated total weekly expenses and outgoings of the provision of the Village Management Services for the period commencing on the date of this Agreement and terminating on the next succeeding 30th day of June and thereafter for each succeeding 12 months period commencing on the 1st day of July in each year during the currency of this agreement which expenses and outgoings include, without limitation the estimated total amount payable in respect of all or any of the following items:

2.1 [rates, taxes, etc. for 'the Communal Facilities' and 'the Manager's Apartment'[4]];

2.2 [insurance for 'the Communal Facilities' and 'the Manager's Apartment'];

2.3 cleaning and lighting of the Communal Facilities and the Manager's Apartment;

2.4 maintenance repairs replacements and renovation of and to the Communal Facilities (including fixtures, plant and equipment) and all external surfaces of any buildings or structures at the Retirement Village;

2.5 garbage and waste disposal of the Communal Facilities;

2.6 all charges for gas electricity water and all other utilities and services used in or assessed or charged on or in respect of the Communal Facilities;

2.7 caretaking expenses and/or the cost of maintaining the security of the Communal Facilities including the cost of operation and maintaining the emergency call system;

2.8 the salary or fee of the Manager and any support staff appointed by the Management Company to manage the Retirement Village;

2.9 the cost of administration and general management of the Retirement Village and any other expenditure reasonably and properly incurred by the Management Company in the operation of the Retirement Village; and

2.10 an annual sum (not exceeding 10% of the estimate Management Service Fee for the current year) which in the reasonable opinion of the Management Company is necessary to transfer to a repair and maintenance fund to cover the costs of repair, renovations, replacements and maintenance of a substantial but infrequent and irregular nature to the Communal Facilities.

1. By the time that the Dallimores had entered into the Management Agreement the expression 'Body Corporate' used in it had become outmoded. The OC Act had commenced operation on 31 December 2007. It used the expression 'owners corporation' instead. But by virtue of a transitional provision[5] in the OC Act, a reference in a document to a body corporate must be read as a reference to an owners corporation.

1. The hearing commenced on 7 August 2013 and took three days. Mr Dallimore conducted the applicants' case and gave evidence. He called one other witness, Stephen Smith, a solicitor who was acting for the respondents. Mr Smith's evidence was only about the background to the preparation of the contractual documents and there is no need for me to mention any of it. Mr Jones of Counsel appeared for the respondents, who called two witnesses. One was Valetta Johnston. She is a management accountant employed by Aveo Live Well,[6] which SGMS has engaged to perform management tasks for the village. The other was Geoffrey Knorr, the chairman both of the village residents' committee and of the owners corporation committee.
2. Mr Dallimore is a retired accountant. The material that he has filed from time to time in the proceeding, and the material that he presented by way of evidence at the hearing, is the product of a detailed and painstaking examination of the village's accounting records and an equally detailed and painstaking calculation of adjustments that he claims ought to be made to those records.
3. The initiating application filed to commence this proceeding had attached to it a large amount of material and a lengthy list of orders that Mr Dallimore was asking the Tribunal to make. When he gave his evidence in chief Mr Dallimore spoke to and verified a written statement. On the last two pages of the statement he had set out nine specific orders or declarations that he was asking the Tribunal to make. The first dealt with what I have called the major dispute - about how fees have been calculated - and the others dealt with what I have called secondary disputes. The hearing proceeded on the footing that the applicants were seeking those nine specific orders or declarations and nothing else, and that his written statement fully expressed the facts on which their case was based.
4. While giving his evidence Mr Dallimore tendered, and I received as an exhibit,[7] a volume of documents. It commenced with Mr Dallimore's written statement. It included some common documents. It also included a lot of material that was not directly referred to during the hearing, some of which consisted of calculations which Mr Dallimore had made but which became superseded by an aide-memoire he prepared during the hearing.

The Owners Corporations Act

1. Section 23, and s 24(1), (2) and (3), of the OC Act provide:
   1. Owners corporation may levy fees
      • (1) An owners corporation may set annual fees to cover -
        • (a) general administration; and
        • (b) maintenance and repairs; and
        • (c) insurance; and
          • (d) other recurrent obligations of the owners corporation.
      • (2) If the owners corporation has an approved maintenance plan, the annual fees must include fees that are -
        • (a) designated for the purpose of the maintenance plain; and
        • (b) sufficient to allow the maintenance plan to be implemented.
      • (3) The fees set must be based on lot liability.
      • (4) The owners corporation may determine the times for payment of fees.
   2. Extraordinary fees
      • (1) An owners corporation may levy special fees and charges designed to cover extraordinary items of expenditure.
      • (2) The fees set must be based on lot liability.
      • (3) The owners corporation may determine the times for payment of the special fees and charges.
2. Section 31(1) of the OC Act provides:
   1. Fee notice
      • (1) The owners corporation must give notice to a lot owner in the approved form of any fees and charges due and payable by the lot owner to the owners corporation (the fee notice).
3. From those sections it is apparent that annual fees, and special fees, set by an owners corporation:
   • (a) must, as a general rule,[8] be based on lot liability;
   • (b) are payable by the lot owners; and
   • (c) are payable to the owners corporation.
4. By clause 4 of the Management Agreement (set out in paragraph 13 above), however, the 'Service Fee' - which contained a 'Body Corporate Services Fee' component - was payable by the Dallimores to SGMS.
5. Section 202 of the OC Act provides:
   1. Certain provisions of contracts void

A provision of a contract is void to the extent that it purports to exclude, modify or restrict the operation of this Act.

The relevance of this section is that the Dallimores maintain that because the Management Agreement, by item 4 of the Schedule, has the effect of purporting to make them liable for a 'Body Corporate Services Fee' calculated otherwise than on lot liability, it is, to that extent, void because it purports to modify the operation of the OC Act.

1. The first of the nine declarations or orders that Mr Dallimore asked the Tribunal to make is:

1. Declare that Service Fees for each Accounting period are based on Lot Liability and that Item 4 of the Schedule to the management Agreement is modified accordingly and fees be reallocated from the existing non Lot Liability basis so that the intended contractual proportional basis between Occupants is retained as if the Agency Agreement had been executed. This particularly affects Management Services Fees from 2011 forwards.

1. The 'Agency Agreement' referred to was a draft 'Agency Agreement' in a form set out in Annexure A to the Management Agreement. It was a proposed agreement between the developers and SGMS as the owners corporation manager for delegation of all owners corporation powers to SGMS. The draft contained a promise by SGMS to comply with all statutory obligations of the owners corporation so far as the delegation permitted.
2. According to Mr Dallimore's uncontradicted evidence, the draft 'Agency Agreement' was never executed.
3. Although the first of the nine proposed declarations or orders reads as if Mr Dallimore had been contending that the terms of the Agency Agreement, if executed, would have made a material difference to the interpretation of the Management Agreement insofar as it affected fees, I do not think that Mr Dallimore was really making that contention at all. I understood his real complaint about the absence of an executed Agency Agreement to be as follows.
4. Not all lot-owning residents in the village have a Management Agreement that is the same as the Dallimores'. In fact most of them do not. For the purpose of a Management Agreement with a resident, the developers and SGMS have ranked the lots into four groups or tiers, according to the number of rooms (especially bedrooms) in the home built on the lot. Item 4 in the Schedule to each Management Agreement varies according to each group. For group 1, the fraction specified in item 4 in the Schedule is 8/1000; for group 2, 10/1000; for group 3, 12/1000; for group 4, 14/1000. Owners who purchased their lots from late 2008 onwards did not (according to Mr Dallimore's uncontradicted evidence) have any draft Agency Agreement annexed to their Management Agreements, nor was there any reference in those Management Agreements to a proposed Agency Agreement. Had there been an executed Agency Agreement, and a copy of it annexed to every Management Agreement, the developers and SGMS (so Mr Dallimore contended) would not have been able to rank the lots into different groups and set different fees for each.
5. I have not been able to tell whether Mr Dallimore's contention is correct, but even if it is, it is irrelevant to any issue which he has raised or is entitled to raise in this proceeding. Whether other lot owners have any legitimate complaint about their Management Agreements not being the same as the Dallimores' is neither here nor there. No other lot owner has brought any proceeding asking me to consider such a complaint. My attention has to be on the Dallimores' Management Agreement only, in the form that it took when they executed it, regardless of whether it might have taken a different form in different circumstances.
6. But if I have not properly understood Mr Dallimore's complaint and if he has indeed been contending that an executed Agency Agreement would have made a material difference to the proper interpretation of the Management Agreement, I would not accept the contention. I cannot see how an executed Agency Agreement in the form of the annexed draft would have affected in any way the incidence of fees for which the Dallimores were liable under the Management Agreement.
7. Mr Dallimore also pointed to a clause in the contract of sale from the developers to Mrs Dallimore: clause 14.2. He submitted that clause 14.2 supported his argument as to how fees under the Management Agreement were to be calculated. In my opinion it did not support his argument at all.
8. Clause 14 in the contract of sale was headed 'Outgoings'. Clause 14.1 provided, in effect, that outgoings included owners corporation fees. Clauses 14.2 and 14.3 provided:
   • 14.2 In the event that the Lot is not separately assessed in respect of any rates, taxes, assessments, fire insurance premiums or other outgoings, then for the purposes of apportioning such outgoings the Lot shall bear such proportion to the total monies paid to or on behalf of the Body Corporate or in respect of the Property and the parcel as the lot liability of the Lot sold bears to the total lot liability of all of the lots in the Plan of Subdivision.
   • 14.3 Adjustments of rates, charges and like outgoings on the Settlement Date shall be made on the basis that the Purchaser accepts responsibility for all such unpaid rates, charges and like outgoings accruing following the Settlement Date.

Those two clauses related only to how outgoings (including owners corporation fees), paid or unpaid at the time of settlement of the contract, were to adjust the balance of purchase money payable at settlement. They had nothing whatever to do with how owners corporation fees after the settlement date were to be calculated or charged. Only the provisions of the Management Agreement and of the OC Act to which I have referred above affected those matters.

1. I again set out those parts of the Management Agreement upon which the Dallimores have based their submission about the major dispute: how the 'Service Fee' has been calculated. Relevantly, those parts are:

Service Fee means the aggregate of the Body Corporate Services Fee and Management Services Fee being the Registered Proprietor's proportion of the total expenses and outgoings of the Management Company as set out in Item 4 of the Schedule ...

"Service Fee" 10/1000 (of which 50% comprises the Body Corporate Services Fee and 50% comprises the Management Services Fee)

1. The Dallimores' contention proceeds as follows. The Service Fee, properly calculated in accordance with Item 4 in the Schedule, is a fee which is twice Mrs Dallimore's 'Body Corporate Services Fee'. In turn, the 'Body Corporate Services Fee' is properly calculated in accordance with the lot liability of Lot 21, ie., 110/9911. That is to say, one should take whatever is the proper figure for expenses and outgoings for 'the Body Corporate Services' for one year, divide it by 110/9911 to reach the 'Body Corporate Services Fee' and then multiply the result by two, to reach the 'Service Fee'. That is the proper method of calculation because the words in brackets (parenthesis) in Item 4 require a 50%-50% division of the Service Fee between the Body Corporate Services Fee and the Management Services Fee.
2. Their contention has the words in brackets in Item 4 predominating over the figure 10/1000 in Item 4. For two reasons, their contention is wrong, in my opinion.
3. First, their contention focuses exclusively upon Item 4 in the Schedule and not upon the context, which is the 'Service Fee' provisions as a whole: clause 4.1, the description of 'Body Corporate Services Fee', the description of 'Management Services Fee', and the definition of 'Service Fee'.
4. Each description of 'Body Corporate Services Fee' and of 'Management Services Fee' directs attention to 'estimated weekly total expenses and outgoings', over a period of 12 months, for Body Corporate Services and for Management Services respectively, and to 'the Registered Proprietor's proportion'. By the application of that proportion to the respective expenses and outgoings the amount of each fee is arrived at. 'Service Fee' is defined in terms of an aggregation of the two fees. Item 4 in the Schedule is nothing more than a point of reference, identified in the definition of 'Service Fee', for what is 'the Registered Proprietor's proportion'. The proportion specified in Item 4 is 10/1000, ie., 1%. Neither the description of 'Body Corporate Services Fee' nor the description of 'Management Services Fee' makes any reference to a 50%-50% division. Nor does the definition of 'Service Fee'. They refer only to a proportion and to an aggregation. The words in parenthesis in Item 4 have no necessary part to play in the calculation of the Service Fee.
5. Secondly, the very fact that the words in Item 4 about 50%-50% division are in parenthesis, but the fraction 10/1000 is not, suggests as a matter of grammatical logic that the words in parenthesis are subordinate and that the figure outside the parenthesis has primacy, so that one should have regard more to the figure than to the contents of the parenthesis when interpreting Item 4.
6. What effect, then, do the words in parenthesis have? In my opinion, they do nothing more than reflect an ambition, shared by the parties to the Management Agreement, that money should be spent equally on Body Corporate Services and on Management Services and that therefore the Body Corporate Services Fee and the Management Services Fee should be the same amount. They do not impose any obligation to make them the same amount.
7. The problem of how to interpret the provisions does not end there. The Dallimores correctly submit that when setting an owners corporation fee (or a Body Corporate Services Fee, as the Management Agreement describes it) the owners corporation, and thus SGMS, must base the fee on lot liability, so as to comply with the OC Act.[9] To do that, the owners corporation and SGMS must apply the proportion 110/9911 (ie., 1.11% approximately) to the cost of providing what the Management Agreement describes as Body Corporate Services. Yet the description of 'Body Corporate Services Fee' and the definition of 'Service Fee' in the Management Agreement have the effect of purporting to require the Dallimores to pay a Service Fee calculated in accordance with a different and smaller proportion, 10/1000 (ie., 1%). The Management Agreement, operating consistently with the OC Act, cannot require Mrs Dallimore to pay an owners corporation fee based upon that smaller proportion. It may require the Dallimores to pay a Management Services Fee based upon that smaller proportion because there is no legislative provision that affects its right to do so.[10]
8. I do not think that it is necessary to go so far as to say that provisions about the Body Corporate Services Fee or the Service Fee in the Management Agreement are void by virtue of s 202 of the OC Act to the extent that they purport to exclude, modify or restrict the operation of the OC Act. I prefer to say that the provisions of the Management Agreement should be interpreted in a way that is consistent with the operation of the OC Act.
9. My conclusion is that the proper interpretation of the 'Service Fee' provisions in the Management Agreement requires the Service Fee to be calculated in the following manner:
   • (a) For the purpose of a calculation of the Management Services Fee, 'the Registered Proprietor's proportion' of 10/1000 must be applied to the total weekly expenses and outgoings for Management Services.
   • (b) For the purpose of a calculation of the Body Corporate Services Fee, however, the proportion based on lot liability, 110/9911 (not 'the Registered Proprietor's proportion'), must be applied to the total weekly expenses and outgoings for Body Corporate Services.
   • (c) The two fees must then be aggregated.
   • (d) But, because the definition of Service Fee refers to the aggregate as 'being the Registered Proprietor's portion' - albeit a proportion of 'total expense and outgoings' - it has the effect of capping the aggregate at a figure which is 10/1000 of the total of the weekly expenses and outgoings, even though the true aggregate is a higher figure.
   • (e) The Service Fee thus becomes the aggregate of the two fees, but limited or capped at an amount which corresponds to the 10/1000 proportion.

1. From 26 January 2008, when the Dallimores commenced to occupy Lot 21, SGMS rendered to them invoices each quarter year. All invoices rendered for the financial part-year to 30 June 2008 and for the financial years 2008-2009 and 2009-2010 were for sums calculated at a rate of $195.00 per week plus goods and services tax ('GST').[11] The invoices identified that rate of $195.00 per week plus GST and described the fees as 'Service and Sinking Fund Fee'. They did not distinguish between owners corporation fees and other fees.
2. The rate of $195.00 per week plus GST was a standard rate charged to all occupants of lots that the developers and SGMS had classed as group 4 dwellings. For each of those occupants their Management Agreement identified a proportion of 14/1000 in item 4 of the Schedule. The Dallimores' Management Agreement identified the proportion as 10/1000. According to Ms Johnston's evidence, the developers' original plan for the village had shown Penthouse 21 as a group 4 dwelling but by mistake the Dallimores' Management Agreement had been prepared as if it were a group 2 dwelling. For a group 2 dwelling the standard rate charged for fees until 30 June 2010 was $175.00 including GST. Once SGMS became aware of the mistake it reimbursed the Dallimores so that they ended up by having paid at a lower rate, and thereafter charged service fees that were applicable to a group 2 dwelling.
3. Ms Johnston's evidence was that the commencing rate of fees charged to all occupants, including the Dallimores, was in accordance with an initial budget prepared 'on the basis of industry experience'. I accept that for the financial part-year ending on 30 June 2008 and for the financial year 2008-2009 SGMS and the owners corporation had no practical alternative to calculating fees in that way. There had not been a previous full financial year's history of actual expenses and outgoings that could have been used as a basis for a budget for the following year. But for the next financial year 2009-2010 there was such a history.
4. Whatever basis was available for the purpose of budgeting for and calculating fees, the owners corporation, and SGMS as its manager, ought to have had regard to lot liability when calculating so much of the fees as were owners corporation fees.
5. Ms Johnston asserted that the owners-corporation-fee component of the fees that the Dallimores were charged until 30 June 2010 was calculated in accordance with lot liability, even though the invoices did not demonstrate the calculation. She was not in a position to make that assertion, in my opinion. Another manageress, Marcelle Wilson, was more involved than was Ms Johnston in the financial affairs of the village in those early years. The documents do not bear out Ms Johnston's assertion. The village's financial statements for all accounting periods up to 30 June 2010 identified one single fund and did not (as later financial statements did) distinguish between an owners corporation fund and a village management fund. Minutes of annual general meetings held before 30 June 2010 approved a single budget for overall expenditure and did not (as they did in later years) distinguish between owners corporation expenses and other expenses. The invoices themselves did not purport to distinguish between owners corporation fees and other fees.
6. While I accept Ms Johnston's evidence in most other respects, I do not accept her evidence that before 30 June 2010 owners corporation fees for the Dallimores were calculated in accordance with the lot liability for Lot 21. I find that they were not.
7. After 1 July 2010, however, invoices rendered to the Dallimores followed a different format. They were headed 'Owners Corporation Fee Notice'. They referred to s 31 of the Oct Act[12] and accorded with the approved form referred to in s 31.[13] They distinguished between owners corporation fees and other fees. For example the invoice dated 1 October 2010, for one quarter-year, set out the fees as follows:

1. At the annual general meeting of members of the owners corporation held on 14 September 2010, as the minutes of that meeting showed, the members considered and passed a resolution approving three separate annual budgets for the financial year 2010-2011: for an 'Owners Corporation Administration Fund', for a 'Management Agreement Fund' and for a 'Capital Maintenance Fund'. The budgets for the Owners Corporation Administration Fund and for the Capital Maintenance Fund related to things that were described in the Management Agreement as Body Corporate Services.[14] Subsequent annual general meetings have similarly considered and approved three separate budgets of the same kind.
2. For the financial year 2011-2012 two separate sets of financial statements were published: one by the owners corporation, and the other by SGMS in relation to Management Services under the Management Agreement. Inturn the owners corporation's financial statements were divided into two: one for an 'Administration Fund' and the other for a 'Capital Maintenance Fund'.
3. Ms Johnston's evidence was that since 1 July 2010 the 'Owners Corporation Administration Fee' that the Dallimores had been charged had been calculated in accordance with their lot liability, not in accordance with the proportion 10/1000. She produced, and I eventually received as evidence, a table[15] which set out the weekly amounts of fees that were payable and the total figure (called in the table the 'contribution') to which the lot-liability proportion of 110/9911 was applied to arrive at the weekly figure. In the table, the owners corporation element was described as 'OC Admin' the capital maintenance fund element was described as 'OC CMF', and the other village administration element was described as 'MA Admin'. The table was:

1. The point of the last two lines in the table was this. According to Ms Johnston, the Dallimores had never actually been charged fees which, each week, were equivalent to 10/1000 of the total weekly expenses and outgoings for the village. The fees were always slightly less than that. If the contractual obligation of the Dallimores was to pay in accordance with the proportion 10/1000 when applied to the total weekly expenses and outgoings (although I have said that is was not: that the proper interpretation of the Service Fee provisions was that their liability could not be more than the amount that would be reached by application of the 10/1000 proportion) then they had been paying less than the owners corporation and SGMS had been entitled to charge them.
2. Mr Dallimore told me that he agreed with Ms Johnston's calculations as set out in the table. The figure given in the table for an owners corporation fee for the 2010-2011 year, $66.60 per week, is the correct arithmetical outcome when the lot-liability proportion 110/9911 is applied to the 'contribution' figure of $312,073.00. In view of Mr Dallimore's indication of agreement with the figures in the table I am satisfied that all figures given for 'OC Admin' (owners corporation fee) are the result of the correct application of the lot-liability proportion 110/9911. Accordingly I find that since 1 July 2010 the owners corporation and SGMS have acted in accordance with the OC Act when setting and charging Mrs Dallimore's owners corporation fees. Moreover, because the figures in the table establish that the cap or limit on the Service Fee overall (the 10/1000 proportion) has never been exceeded, I also find that since 1 July 2010 the owners corporation and SGMS, when setting and charging the Dallimores' Service Fees, have not exceeded what they have been entitled to set and charge under the Management Agreement.

1. The Dallimores have made out their claim that before July 2010 their owners corporation fees were not calculated in accordance with the lot liability for Lot 21, as they should have been. They have not made out any claim of that kind in relation to any period from 1 July 2010 onwards.
2. I repeat the first of the nine declarations or orders, set out at the end of Mr Dallimore's written statement, that he was asking the Tribunal to make:

1. Declare that Service Fees for each Accounting period are based on Lot Liability and that Item 4 of the Schedule to the management Agreement is modified accordingly and fees be reallocated from the existing non Lot Liability basis so that the intended contractual proportional basis between Occupants is retained as if the Agency Agreement had been executed. This particularly affects Management Services Fees from 2011 forwards.

1. By asking for an order that the Management Agreement is 'modified', the Dallimores are in substance asking for an order that varies a term of a contract. The Tribunal has the power to make such an order. The major dispute between the Dallimores and the respondents arise out of the Management Agreement, under which SGMS agreed to provide services to the Dallimores. It is a 'consumer and trader dispute' as defined in s 182 of the Australian Consumer Law and Fair Trading Act 2012. By virtue of s 184(1) of that Act, the Tribunal may hear and determine a consumer and trader dispute, and in doing so may, by virtue of s 184(2)(c), vary any term of the contract.
2. Despite the power's existence, the Tribunal rarely exercises it. Exercise of the power in the circumstances of the present case is not warranted. Although it did not do so before 1 July 2010, SGMS since that date has acted in accordance with the provisions of the OC Act and has not sought payment of any more than it was entitled to seek under the provisions of the Management Agreement (properly interpreted). There is no reason to suppose that it will act differently in future. No useful purpose would be served in making an order that purports to vary any term of the Management Agreement.
3. The Dallimores ask for a declaration that 'Service Fees' are, and ought to be, based upon lot liability. So far as Body Corporate Services Fees (owners corporation fees) are concerned, there is no point in making such a declaration. The law as set out in the OC Act, with which SGMS is now complying and has been complying since 1 July 2012, requires that those fees be based on lot liability. There is no point in making a declaration that simply states what the law is. So far as Management Services fees are concerned, the declaration would be quite inappropriate. The way in which, under the Management Agreement, they are to be arrived at has nothing to do with lot liability.
4. On the other hand I think that, because the Dallimores' case in relation to the major dispute has been made out at least in part, I ought to spell out, in my order that determines the proceeding, a finding which reflects the extent to which the Dallimores have been vindicated.
5. Finally the Dallimores ask that 'fees be reallocated'. Although the request refers specifically to 'Management Services Fees' from 2011 onwards', I have interpreted it as one for an order that adjusts and requires repayment or crediting of all fees that have been set and charged wrongly. I do not propose to make any such order, for reasons that I shall give when I have dealt with what I have termed the ancillary disputes between the parties.

1. The first of the secondary disputes concerns 41 lots in the plan of subdivision that the parties have called the Ennis lots. The Dallimores claim that SGMS ought to have required the developers to pay fees in respect of those lots between 21 January 2008 and 26 March 2008.
2. By 21 January 2008 the communal facilities in the village were ready, open and staffed, and the dwellings in the village were ready for occupation. That was Mr Dallimore's uncontradicted evidence. Soon after that date persons, including Mrs Dallimore, who had entered into contracts to purchase lots, took possession of them and signed Management Agreements. The Ennis lots, however, remained unsold. No occupancy permit had issued for them. The developers remained the registered proprietors of the Ennis lots.
3. Each lot owner's Management Agreement required the occupants of the lot to pay a Service Fee from the date of the agreement, which was the same as the day on which the lot owner had taken possession. In the Dallimores' case that day was 26 January 2008. From that day they became entitled to use the village's communal facilities: a quid pro quo for the fees.
4. On 27 March 2008 a building inspector issued an occupancy permit for certain buildings in the village including the buildings on the Ennis lots. From that date the developers paid to SGMS amounts for each of the Ennis lots that would have been equivalent to Service Fees had there been a Management Agreement in place for each of the Ennis lots. But SGMS did not require the developers to pay any amount in respect of the period between 21 January 2008 and 26 March 2008.
5. The Dallimores maintain that, because from 21 January 2008 to 26 March 2008 the communal facilities were just as available to the owners of the Ennis lots (the developers) as they were to other lot owners who had entered into a Management Agreement, the burden of fees in respect of that period should have fallen on the owners of the Ennis lots, to the same extent that it fell upon the other lot owners.
6. While the developers did pay after 27 March 2008, the payments were not made until the second half of 2009. The Dallimores maintain that the developers ought to be required to pay interest from the date that each fee was due until the date that each was paid, as well as interest on those fees which ought to have been demanded and paid but were not.
7. Amongst the nine orders or declarations set out at the end of Mr Dallimore's written statement, the three that covered this dispute about the Ennis lots were as follows:

2. Order the First two Respondents to make a contribution of $38,717 as expenses for the 41 Ennis Units for the period from 22 January to 26 March 2008 to be credited to the Service Fee contribution of the contributors to June 2009.

6. Order the Owner to pay a rate of Interest to date on the unpaid Ennis costs of 2008 to be credited pro rata to the contributors to June 2009.

7. Order the Owner to pay a rate of Interest in respect of the Unpaid fees as appear in the Accounts at June each year, for its unsold Units. Such interest amounts to be credited pro rata to contributors for the respective years.

1. In my view the Dallimores do not have the legal standing to seek the orders numbered 2 and 6. But before I explain the reason for this view I propose to treat the matter on its merits.
2. The short answer to the claim for payment for the period between 22 January 2008 and 26 March 2008 is that was nothing that imposed any legal obligation upon the developers to make a payment to SGMS or to anyone else. Residents who were in occupation of lots during that period were obliged to pay fees only because they had signed management agreements that required them to pay fees. The developers had not signed any agreement that required them to pay fees in relation to the Ennis units. Any obligation under the OC Act to pay owners corporation fees could have arisen only after the owners corporation came into existence, on 22 April 2008 when the plan of subdivision was registered. There having been no legal obligation upon the developers to pay any fees for the period between 22 January 2008 and 26 March 2008, there was no legal obligation upon the developers to pay interest on those fees.
3. As for the claim that the developers should have been required to pay interest on moneys paid late, there is nothing that imposed any legal obligation upon the developers to pay interest. From time to time the members of an owners corporation may resolve to authorise the owners corporation to charge interest on outstanding amounts due to it,[16] but there was no evidence that the village's owners corporation had ever been so authorised to charge interest, and without that authorisation it could not require the developers, as lot owners, to pay interest.
4. I explain the reason why I consider that the Dallimores have no legal standing to seek the orders numbered 2 and 6. If the developers were liable to pay anything at all in relation to the period before 26 March 2008 they were liable to pay it to SGMS. They could not have been liable to pay anything to the owners corporation because the owners corporation did not exist at the time. What the Dallimores were really asking the Tribunal to do was to make an order requiring the developers to pay money to SGMS. If there was any legal obligation upon the developers to pay, it was a legal obligation to SGMS and only SGMS had the right to enforce that obligation. Nothing in the Management Agreement conferred upon the Dallimores any right to compel SGMS to enforce an obligation owed to it or to bring a proceeding on behalf of SGMS to enforce the obligation.
5. The owners corporation could have brought a claim for interest on late payments if it had been authorised to charge interest on owners corporation fees and had done so. Mr Jones submitted that the Dallimores had no standing either to bring such a claim and that only the owners corporation could have brought it. Mrs Dallimore, however, could have made an application about this matter on behalf of the owners corporation and could have sought an order authorising her to prosecute the proceeding on behalf of the owners corporation.[17] She has not attempted to do that, but because she could have done it it is not right to say that she has no standing to seek the order numbered 7. The issue of standing is academic only, because the legal basis for the owners corporation or anyone on its behalf to make a claim for interest on late payments has never existed.
6. For the above reasons I shall not make any of the orders sought concerning the Ennis lots.

1. The owners corporation has money which is held in what its books of account call a Capital Maintenance Fund. The fund has originated from a provision, in the description of the Body Corporate Services Fee, for the estimated expenses and outgoings of the owners corporation to include:

2.11 an annual sum (not exceeding 10% of the estimated Body Corporate Service Fee for the current year) which in the reasonable opinion of the Management Company is necessary to transfer to a repair and maintenance fund to cover the costs of repair, renovations, replacements and maintenance of a substantial but infrequent and irregular nature to the Common Property.

1. The Dallimores have two complaints about how the Capital Maintenance Fund has been administered. Again, I propose to deal with those two complaints first on the merits, before dealing with the legal reason why in this proceeding I would not be able to do anything about them.
2. The first complaint is that in making provision, in the estimated expenses and outgoings for the year in prospect, SGMS as manager of the owners corporation has had regard to the amount of the Body Corporate Services Fee for the current year and not to the actual expenses and outgoings of the owners corporation for the current year. The consequence, the Dallimores say, is that the provision is unnecessarily large. They contend that SGMS ought to be ordered to confine itself to attending to the actual expenses and outgoings of the current year when making a provision for what is necessary to transfer to the Capital Maintenance Fund.
3. The contention seems to me to fly in the face of the clear words of paragraph 2.11 in the description of the Body Corporate Services Fee. The words in brackets in that paragraph clearly express the ceiling for the proposed annual sum to be 10% of 'the estimated Body Corporate Service [sic] Fee' for the current year. The ceiling is not expressed in terms of the actual expenses and outgoings for the current year and there would be no contractual justification for SGMS or the owners corporation to act as if it had been expressed in those terms. Whether it would be more sensibly conservative of them to act in that way is beside the point.
4. The second complaint is that SGMS failed to arrange for an appropriate refund of money to lot owners out of the Capital Management Fund even though it had arranged for an appropriate refund otherwise from money collected for Service Fees. The background to this complaint is the setting of fees for the period that ended on 30 June 2009. There was an estimate of expenses and outgoings which turned out to be an over-estimate. SGMS collected Services Fees that totalled $946,909.00. Once it had been decided that those Service Fees had been based upon an over-estimate SGMS arranged for refunds to lot owners that totalled $142,000.00. According to Mr Dallimore, when SGMS calculated the refund it left out of the calculation so much of the $946,909.00 collected as represented the provision of capital maintenance: 10%, being $94,961.00. (How Mr Dallimore knew of the details of the calculation did not become apparent, but his evidence in that regard was not contradicted.) That omission from the calculation ought not to have occurred. There ought to have been a further refund out of the provision for capital maintenance. Mr Dallimore maintained that the additional refund should have been $35,770.00.[18]
5. Whether there should be a refund to members of an owners corporation of owners corporation fees that have turned out to have been excessive, or out of a fund that might have become unnecessarily large, is entirely a matter for the members to decide. Mr Jones for the respondents correctly submitted that nothing in the OC Act requires an owners corporation to make a refund in the circumstances under discussion. The evidence of the chairman Mr Knorr satisfied me that the members do not support the proposition that there should be a further refund. There is nothing legally improper about the members taking that stance and hence there is no reason for the Tribunal to interfere, if it could.
6. But the Tribunal cannot interfere. The making of an order that money be refunded out of owners corporation funds to lot owners would affect the owners corporation. Indeed only the owners corporation, not SGMS, could be ordered to make the refund. The owners corporation is not a party to the proceeding. No such order could be made without it being a party.
7. When this proceeding was commenced Mr Dallimore alone was the applicant. He named the owners corporation as a respondent. It remained as a respondent until 8 April 2013 when there was a compulsory conference. At the conclusion of the compulsory conference the presiding Member made an order that joined Mrs Dallimore as a second applicant and stated that as against the owners corporation the proceeding was withdrawn. The order followed a decision on Mr Dallimore's part not to involve the owners corporation any further.
8. On the second day of the hearing I raised the potential difficulty caused by the absence of the owners corporation as a party and asked Mr Dallimore whether he wanted to apply to have the owners corporation joined again as a respondent. Mr Jones informed me that if such an application was made and granted his clients would have to apply for an adjournment of the hearing because there would be a conflict of interests if he and his instructing solicitors attempted to represent the owners corporation as well as the developers and SGMS; it would be necessary for the owners corporation to arrange for separate representation. Mr Dallimore decided not to risk an adjournment and not to make an application for re-joinder of the owners corporation. That was a wise decision. It will be apparent from these reasons for decision that the re-joinder of the owners corporation would not have made any difference to the outcome of this proceeding.
9. The two complaints about the Capital Maintenance Fund lay behind the third and fourth of the nine declarations or orders that the Dallimores were seeking. I shall not make any orders with regard to those two matters.

1. The fifth of the nine orders or declarations that the Dallimores sought also arose out of the collection of Service Fees of $946,909.00, for the period that ended on 30 June 2009, following what turned out to have been an over-estimate of expenses and outgoings.
2. The village's financial operating statement for the year ending on 30 June 2009, prepared by SGMS showed that, after total expenditure was deducted from total income from Service Fees and other income, there was a surplus of $327,051.00. The financial operating statement then set out details of transfer of the surplus, in the following way:

1. In paragraph 82 above I have related how the decision to distribute $142,000.00 to the residents occurred. Another issue that the Dallimores have raised, however, concerns the entry 'Service Fees Undistributed - $50,000'.
2. At an annual general meeting of members of the owners corporation held on 8 October 2009, as the minutes of the meeting showed, the members discussed and resolved to approve the retention of $50,000.00 'from the monies returned to residents ... for use as the need arises within the village'. Ms Johnston and Mr Knorr both gave evidence that much, if not all, of the $50,000.00 was spent on improvements to the village: balustrading, shelving in the library, glass panels in the community centre, light sensors in passages, and three other improvements. Mr Knorr gave evidence that those were improvements that the developers had refused to pay for when asked to pay for them but which the residents had wanted.
3. Mr Dallimore did not dispute that the $50,000.00,[19] or most of it, had been spent in that fashion. He had three complaints, however, about how the owners corporation and SGMS have treated the matter.
4. The first complaint was that after 30 June 2009 the village's financial statements did not show the retained $50,000.00 or any asset that was the result of it or any of it having been spent. There was merely a line in the financial operating statement for the year ending on 30 June 2010 - dealing with transfers of surplus in the same way as the 2009 statement had - that read 'Service Fees Undistributed - $0'.
5. The second complaint was that the money was spent on what were really capital improvements from which the developers derived a benefit and so the developers ought to be required to reimburse the owners corporation in an amount which could in turn be credited to the residents pro-rata.
6. Mr Knorr's evidence satisfied me that a large majority of the village's residents have not been willing, and would not now be willing if asked, to get into dispute with the developers about this matter by demanding reimbursement of money that had been spent out of the $50,000.00 on capital improvements. He explained that recently the developers had contributed more than they may strictly have been required to contribute towards the village's advancement and so the residents did not want to jeopardise the relationship. That attitude is understandable and does not reveal any legal error that would justify the Tribunal's interference with a majority decision. For there to be a competent applicant for an order seeking such interference Mrs Dallimore would need to obtain an order authorising her to pursue, on behalf of the owners corporation, a claim by the owners corporation against the developers for reimbursement,[20] for such a claim is one that only the owners corporation is entitled to make. Because Mr Dallimore's view of the matter is so out of accord with other members' views I would not have been prepared to make such an authorising order if I had been asked to make it.
7. The third complaint is that the spending of $50,000.00 from funds that had accumulated since 2008, and to which residents like the Dallimores had been making contributions since 2008 and so had contributed more than had more recent residents, had had the effect of unfairly benefiting the newer residents; there should be adjustments in the village's accounts by way of a credit to the longer-standing residents. I accept three submissions that Mr Jones made about this third complaint. The first was that the OC Act does not impose any obligation upon an owners corporation to repay to members any amount that it had collected and retained or to credit members in the way that Mr Dallimore was urging. The second was that it would be difficult to the point of near impossibility to work out such credits; one would need to consider when each new resident arrived and when each particular item of expenditure or improvements occurred. The third was that any order requiring adjustment of accounts would affect the owners corporation and that, in the absence of the owners corporation as a respondent in this proceeding, the Tribunal could not properly make such an order.
8. That leaves only the first complaint: that any further reference to the $50,000.00 or to its equivalent in expenditure went missing from the accounts. Mr Dallimore may well have a valid point about this. Ms Johnston asserted that there was no 'missing' $50,000.00 and that the balance sheets showed it as a reducing liability. I have not been able to locate anything in the balance sheets in that regard. But if Mr Dallimore does have a valid point it is an accountancy point only. I doubt that it has any practical significance. There has never been any secrecy or doubt about the retention and then the disbursement of the $50,000.00. It would be possible to make an order directing SGMS to amend the accounts to make a continuing reference to those things in some appropriate accounting fashion, even though the owners corporation is not a party to the proceeding, because the amendment would not have any financial consequence for the owners corporation. I see no need to do that, however.
9. I shall not make the fifth order sought.

1. Money collected and paid into the Capital Maintenance Fund is held in an interest-earning bank account. The owners corporation is obliged to pay income tax on the interest earned. The income tax, however, is not paid out of the Capital Maintenance Fund. Instead, it is paid out of the owners corporation's Administration Fund, and so becomes an expense for the purpose of calculation of the Body Corporate Services Fee and hence for the purpose of calculation of the Service Fee. The Dallimores contend that this is improper and has resulted in their Service Fee being larger than it should have been.
2. The eighth of the nine orders or declarations that the Dallimores have sought is one requiring that income tax on interest earned in the Capital Maintenance Fund be debited against the Capital Maintenance Fund. In the expression of that eighth order sought they had also made an additional point about the interest which I did not really follow but which, if I understood the parties' final addresses correctly, Mr Dallimore finally did not pursue.
3. The argument that the Dallimores make is largely an accountancy argument. Its financial consequence for the village's residents is minimal. One can see the logic of the argument but it is one with which, according to the evidence I heard, the majority of the residents are unlikely to agree. Prominent on their committee is another very experienced retired accountant, a Mr Phillips. There was no evidence of his having disapproved of the way in which the payment of income tax is treated in the accounts, and no evidence that the way it is treated is inconsistent with any accountancy standard or generally accepted practice. There is really only Mr Dallimore's opinion about the matter. That the opinion appears to be logical is not enough, however, to justify the making of an order requiring alteration to accounting methods, even if the Tribunal could make such an order.
4. Again, the absence of the owners corporation as a party to the proceeding means that I could not properly make an order of the kind sought, for it would affect the owners corporation by having financial consequences for it.
5. So I refuse to make the order sought.

1. Residents of the village pay a Service Fee and GST thereon. The village's annual financial statements prepared by SGMS record the total income received by way of Service Fees but, until recently, have made no reference to GST. The Dallimores' complaint about this was reflected in the ninth and last of the orders or declarations that they were asking the Tribunal to make. It was:

9. Order the Management Company to produce Accounts in which the Income and Expenditure Statement includes GST, to conform with Section 6 of the Management Agreement, plus the ability for Occupants to compare their actual Fee payments against the actual outgoings. Also no repetition of a 2012 Account presentation of 23 pages, with future years to be a revised into a simplified and meaningful format suitable for Occupants to easily comprehend being the only users.

1. Clause 6 of the Management Agreement, referred to in the expression of the order sought, was:
   • 6.1 Accounts

The Management Company will maintain and cause to be maintained true and proper books of account with respect to all costs, expenses and expenditure incurred by it in carrying out all or any of the purposes or functions and in respect to all service fees and contributions received by it from the Residents at the Retirement Village.

As soon as practicable after the end of each financial year, the Management Company will provide the Registered Proprietor and / or the Occupant with a statement in reasonable detail of the actual expenses and outgoings of the Retirement Village paid or incurred by the Management Company during the financial year.

1. Clause 6 does not mention GST. It requires SGMS to maintain true and proper books of account 'with respect to all costs, expenses and expenditure ... and contributions received' and to provide to the Dallimores a statement 'of actual expenses and outgoings'.
2. Ms Johnston maintained that the practice of not showing GST in the financial statements was correct because the GST on Service Fees was not income. It was paid to the Australian Taxation Office. Likewise the GST paid was not an expense. Input tax credits were involved but they did not affect what was income and what were expenses. At all events, for the year 2012-13 SGMS did prepare supplementary notes to the accounts that set out the GST collected and paid. It had done that after Mr Dallimore had expressed his concern that the financial statements did not include GST.
3. Ms Johnston's evidence about this matter seemed plausible to me. I conclude that SGMS did not breach clause 6 by preparing financial statements that did not refer to GST. There was no evidence that SGMS's preparation of financial statements in that way was in breach of any accountancy good practice or standard. I therefore do not propose to make any order that would require SGMS to produce accounts that do refer to GST. Nevertheless, I recommend that SGMS should continue to do what is did for the 2012-13 year when it produced supplementary notes that did explain what GST was collected and paid.
4. Mr Dallimore did not elaborate upon his complaint that the '2012 account' was too lengthy. In view of the requirement in clause 6.2 that there should be a 'statement in reasonable detail' of expenses and outgoings, I think that SGMS would be more likely to be open to criticism if it gave too little information.
5. For those reasons I shall not be making the ninth of the orders and declarations sought.

1. I have now dealt with all the disputes that I have called secondary disputes. I return to the major dispute, about the calculation of the Service Fee each year.
2. The first of the declarations or orders that the Dallimores had sought was an order that item 4 of the Schedule to the Management Agreement be 'modified' and that 'fees be reallocated' to reflect how the Management Agreement required them to be set. I have already said that I shall not be making any order that varies any part of the Management Agreement. But I have found that before 1 July 2010 Mrs Dallimore's owners corporation fees were not based upon liability, as by law they should have been. So the Dallimores are entitled to ask me now to consider whether, for that reason or any other reason, an order should be made that requires the adjustment of fees.
3. During the hearing I invited Mr Dallimore to prepare a document setting out his calculations of the adjustments that he was seeking. He did prepare and endeavour to explain such a document. I describe it in paragraph 21 above as an aide-memoire. He asked me to receive it as an exhibit. I declined to do that because my understanding was that it was only a simplified version of calculations that were contained in the large volume of documents that earlier he had tendered and I had received as an exhibit. Having reflected upon the aide-memoire since reserving my decision I now think that I ought to have received it as an exhibit, in the same way that I received Ms Johnston's table of calculations. I do not think that it will disadvantage the respondents in any way if I receive the aide-memoire as an exhibit now, which I shall do.[21]
4. In his aide-memoire document Mr Dallimore drew upon the village's financial statements for each year and came up with four alternative calculations of a weekly Service Fee, according to whichever basis of the calculation was adopted. In describing them and setting out the results of his calculations I employ a different order from the order that appears in Mr Dallimore's document. The four different bases of calculation were:
   • 'Group 2', reflecting the weekly rate at which the Dallimores' service fee has actually been set and charged, for whatever reason (and the reason never became clear from the evidence);
   • the proportion 110/9911, ie., the lot-liability proportion;
   • the proportion 10/1000, ie., the proportion specified in item 4 in the Schedule to the Management Agreement;
   • a proportion 100/9911 (the relevance of which to the Dallimores' circumstances I did not understand, and so when I set out Mr Dallimore's calculations in the next paragraph I shall put square brackets around the calculation based upon this proportion, to indicate that I disregard it.)
5. A summary of Mr Dallimore's four alternative calculations of a weekly Service Fee is as follows:

(a) Mr Dallimore's calculations on the 'Group 2' basis are almost identical to Ms Johnston's figures, given in paragraph 55 above.

(b) Mr Dallimore's calculations on the 10/1000 basis are somewhat different from Ms Johnston's figures.

(c) Ms Johnston did not give any overall figure calculated on a 110/9911 basis. She did give figures, calculated on that 110/9911 basis, for the weekly owners corporation-fee component of the weekly Service Fee.

(d) Mr Dallimore did not provide any calculation for the period before 1 July 2009, other than on the 'Group 2' basis.

(e) Neither Mr Dallimore nor Ms Johnston has provided any calculation that accords with what, in paragraph 45 above, I have concluded is the method of calculation of the 'Service Fee' provisions in the Management Agreement. In particular, neither has provided any calculation based upon the application of the proportion 10/1000 to the total weekly expenses and outgoings for Management Services alone.

1. Because since July 2010 the owners corporation and SGMS have observed and applied the lot-liability basis for setting owners corporation fees, and because since the same date SGMS has not charged any higher Service Fee than it had been entitled to charge under the Management Agreement, there is no reason to adjust any fee that the Dallimores have been charged since 1 July 2010. So I shall not attempt any adjustment.
2. The way in which the Service Fee was set before 1 July 2010 was erroneous because the owners corporation and SGMS did not observe and apply the lot-liability basis for setting the owners-corporation-fee component of the Service Fee. But it is impossible for me to make any order that effects and adjustment of the Service Fee before 1 July 2010, and it would be wrong for me to make such an order even if it were possible.
3. It is impossible because I have no information about the total expenses and outgoings for Body Corporate Services for the periods that ended on 30 June 2009 and 30 June 2010 respectively. Neither Ms Johnston's table nor Mr Dallimore's document provided that information. Mr Dallimore's document gave only the overall total expenses and outgoings for the village. No doubt the reason was that the village's financial statements themselves for those two periods did not isolate what was expended on Body Corporate Services. So one cannot say to what amount the lot-liability proportion of 110/991 must be applied in order to arrive at the correct owners corporation fee for those two periods.
4. It would be wrong because the making of such an order would have financial consequences for the owners corporation but it is not a party to the proceeding. As has been the case with other issues for the resolution of which the owners corporation would have been a necessary party, the absence of the owners corporation as a party has not been the only reason why the Dallimores have not succeeded on the issue.
5. The Dallimores sought other financial adjustments that assumed the success of their case on the ancillary issues. They did not succeed and so the question of adjustments does not arise for consideration.

1. The Dallimores have successfully aired the grievance which has led to the major issue raised in this proceeding. I have made a finding about it in their favour, but no declaration or order. I think, however, that I should give them the benefit of spelling out, in the order that I make determining this proceeding, the finding that I have made in their favour.
2. But because they have not made out the case for requiring any of the orders or declarations that they had asked the Tribunal to make, the appropriate disposition of the proceeding is to order that it is dismissed.

[1] At a time earlier than 30 November 2007 a formal 'Agency Agreement' between the developers and SGMS was prepared but was never executed. See paragraphs 23 and 24 below.

[2] The Management Agreement identified Body Corporate Plan No 543357C, the correct description of which is now the owners corporation. The OC Act, whereby what had been called bodies corporate became owners corporations (see paragraph 17 below), did not come into force until 31 December 2007, 32 days after the date of the Management Agreement.

[3] SGMS actually engaged as 'manager' another company, presumably as a sub-contractor. The company presently so engaged is FKP Limited which carries on business under the name 'Aveo Live Well'.

[4] Not very helpfully, the Management Agreement defined 'Manager's Apartment' as meaning 'the apartment in which the Manager resides'.

[7] Mr Jones, for the respondents, objected to the tender of the volume. Some of the material in it was not properly verified but I decided to receive the volume as evidence. It became Exhibit A. As matters turned out, the only parts of the volume that had a bearing upon my decision were Mr Dallimore's written statement and the common documents.

[8] There are exceptions to the general rule. Mashane Pty Ltd v Owners Corporation RN 328577 [2013] VSC 417 was decided on 14 August 2013, after the hearing of this proceeding had concluded. That case decided that, so far as the setting of fees for repair and maintenance are concerned, an owners corporation must have regard to whether one lot or some lots will be benefiting from the repairs and maintenance more than others. The exceptions do not apply to this proceeding. The Dallimores did not contend that they did.

[9] However, one must have regard to the exceptions to this general rule: see footnote 8 above.

[10] The Retirement Villages Act 1986 applies to the village. Its provisions, and those in the Retirement Villages (Contractual Arrangements) Regulations 2006, deal with how a maintenance charge may be adjusted each financial year. They do not deal with how a maintenance charge may be imposed initially. No party submitted that that Act or those Regulations were relevant to any issue in this proceeding. In my opinion neither is.

[11] Clause 19 of that Management Agreement provided that if the Service Fee attracted GST the Dallimores were liable to pay the GST in addition to the Service Fee.

[12] Section 31(1) is set out in paragraph 23 above.

[13] The form is one approved by the Director of Consumer Affairs Victoria in accordance with s 200 of the OC Act.

[14] The Capital Maintenance Fund was for each annual sum described in paragraph 2.11 of Annexure B and in paragraph 2.10 of Annexure C to the Management Agreement. Those paragraphs in the annexures were set out in paragraphs 15 and 16 above.

[18] Mr Dallimore's evidence about his calculation of $35,770.00 showed that he was assuming the correctness of his first complaint, which I have found to be incorrect. So the calculation is wrong in any event. But in view of my other conclusions it is not worthwhile to investigate what would be a correct calculation.

[19] Mr Dallimore consistently referred to the amount in question as being $55,000.00, not $50,000.00. Presumably he had added GST to the amount of $50,000.00. I did not understand why.

[20] See paragraph 76 and footnote 17 above.

[21] The aide-memoire document becomes Exhibit E. A few days after the hearing concluded Mr Dallimore wrote to the Tribunal and enclosed with his letter an amended version of the document. The amendments affected figures for the 2013 year but only slightly. He was not entitled to submit any further material to the Tribunal after the hearing had concluded. I have disregarded the letter and the amended version of the document. I mean no criticism. I realise that Mr Dallimore was merely anxious to ensure that I was not misled by any inaccurate information.