Dundas Terrace Pty Ltd v Owners Corporation PS5341300K (Owners Corporations) [2019] VCAT 571

1. Under section 75(1) of the Victorian Civil and Administrative Tribunal Act 1998 (VCAT Act), paragraphs 37 to 45 inclusive, and paragraph 55 of Dundas' Points of Claim are struck out.
2. Dundas is given leave to amend paragraphs 48 and 49 of its Points of Claim to identify the expert advice it says is required.
3. Dundas is given leave to amend paragraphs 52, 53 and 54 so that they are limited to the question of maintenance of the common property fire wall between lots 27 and 28.
4. Dundas is given leave to amend the description of the orders sought consequent on paragraphs 1, 2 and 3 of this Order.
5. By 31 May 2019 Dundas must file and serve Amended Points of Claim in accordance with paragraphs 1, 2, 3 and 4 of this Order.
6. Costs reserved. Any application for costs or for compensation under section 75(2) of the VCAT Act shall be filed with the Tribunal and served on the other parties by 28 May 2019.
7. The Principal Registrar is directed to refer any such application to Member L Johnson.
8. This proceeding, as amended by paragraphs 1 to 4 of these Orders, is listed for a Directions Hearing on 17 June 2019 at 2.00 pm at 55 King Street Melbourne, before Member L Johnson.

1. The setting for this proceeding is a complex of residential buildings and grounds, originally developed in the early 1920s, now known as Ardoch. The site is included in the Victorian Heritage Register as a place of Cultural Heritage Significance to the State of Victoria. Some extracts from the Statement of Cultural Heritage Significance help to set the scene:

The former Ardoch Flat complex is a rare innovative and intact example of early flat development in Victoria, based on the garden suburb concept derived from England and North America. ...

The buildings at Ardoch illustrate aspects of flat life in the 1920s and 1930s including the use of sleep-outs or porches facing a garden to provide a sense of space and healthy living; a semi-enclosed stairwell and front and rear access for tenant privacy; maids rooms in some flats; individual designs and layout to enhance the sense of independent living, and rear milk and bread hatches in some buildings. ...

Ardoch represents the only known example of flat development converted for use as a secondary school in Victoria.[1]

1. The parties to this proceeding are Dundas Terrace Pty Ltd (Dundas), which owns, and whose directors, Mr and Ms Warren, reside in one of the apartments; the Owners Corporation; and Mr and Ms Perry, who own the apartment adjacent to that occupied by Mr and Ms Warren. Mr and Ms Warren live in Lot 28 on the plan of subdivision, and Mr and Ms Perry own Lot 27. The proceeding concerns the consent given by the Owners Corporation for renovation works to Lot 27.
2. Ardoch was subdivided in the mid 1990s as part of a residential development project managed by the then Victorian Urban Land Authority. The boundaries of the lots in the subdivision are described by reference to the internal surfaces of the lots. This was a common approach in Melbourne, where, in order to preserve the heritage features of a redeveloped site, subdivisions were designed to ensure that the external features of the building, windows, door openings, balconies and the like, cannot be unilaterally altered by a lot owner. One consequence of this approach is that the upper boundary of the lots in this development do not extend past the internal ceiling surface. This means that renovation work that involves relocation of internal walls may affect the common property, particularly where, as in Mr and Ms Perry's case, works are required in the roof cavity above an upper storey lot.
3. Mr and Ms Perry's apartment is on the upper storey. In early 2015 they decided to renovate their apartment to meet the needs of their family which at the time included two young children, who are no doubt somewhat older now.
4. Their renovation would modernise the kitchen and laundry and remove some internal walls within their lot. The changes also required consequential replacement of 3 supporting beams within the roof cavity, which is common property. Accordingly, they required the consent of the Owners Corporation to enable them to relocate the beams in the common property in the roof space above their Lot.
5. Mr and Ms Warren have lived in the complex since 1995. Mr Warren is an engineer with considerable experience in building and property development. In the past he has been a member, and chair of the Owners Corporation Committee, and of the Committee of the predecessor Body Corporate, for many of the years that he has been a resident in the Ardoch complex. He ceased to be a member of the Owners Corporation Committee in late 2017.
6. Mr and Ms Warren are passionate and very well informed about the heritage controls over the complex. With that background, it has been Mr Warren's practice to provide assistance and advice to lot owners when they were considering renovations, and he provided support of this kind to the Mr and Ms Perry in relation to their proposed renovation during 2015, 2016 and into 2017.
7. Mr and Ms Perry obtained the consent of the Owners Corporation on 1 June 2017. That consent was expressed to be subject to evidence of approval by Heritage Victoria, appropriate insurance, and a building permit. They then obtained approvals and permits under the Building Act and the Heritage Act.[2] A building permit was issued by the relevant building surveyor on 22 August 2017. There was no appeal against the building permit.
8. On 29 October 2018 the Building Appeals Board determined that the insurance and dilapidation report obtained by Mr and Ms Perry were compliant with the Building Act.[3] Mr and Ms Perry had applied to the Building Appeals Board for its determination because Dundas had not agreed to the protections works insurance or the site survey (dilapidation) report required for the Perry's works.[4] Mr and Ms Warren appeared at the Building Appeals Board proceeding.
9. On 16 February 2018 the Heritage Council determined an appeal made by Dundas against the Heritage Permit. The Heritage Council confirmed the Heritage Permit for Mr and Ms Perry's works.[5] Mr and Ms Warren were parties to the Heritage Council proceedings. Each of those approvals and permits are in the Perry's names, and not in the name of the Owners Corporation.
10. Mr Warren says that the consent given by the Owners Corporation was not made in accordance with the requirements of the Owners Corporations Act 2006 (OC Act). Mr Warren asserts that, as a consequence of the consent not being validly given, the approvals and permits given under the Building Act 1998 and the Heritage Act 1995[6] are invalid. Mr Warren says further that the Owners Corporation has breached its obligation to exercise due care and diligence because it has not followed expert advice available to it, and, further it has failed to attend to serious building defects. These are serious allegations. The application prepared by Mr Warren seeks a range of declaratory relief (including declarations that the consent given was not valid) orders directing the Owners Corporation to take certain specified actions, and costs.
11. In separate applications, filed on 30 October 2018 and 31 October 2018 respectively, Mr and Ms Perry, and the Owners Corporation made applications under section 75 of the Victorian Civil and Administrative Tribunal Act 1998 (VCAT Act) for the claims against them to be struck out or dismissed. Mr and Ms Perry have sought orders striking out the whole of application brought by Dundas. The Owners Corporation has sought orders "to strike out and or dismiss the whole of the Applicant's claim or, in the alternative, parts of the Applicant's claim".
12. I heard the summary dismissal applications on 15 February 2019. At the end of the hearing, I reserved my decision.

THE OWNERS CORPORATIONS ACT 2006

1. Section 162 of the OC Act confers jurisdiction on VCAT to hear and determine an "owners corporation dispute". An "owners corporation dispute" is defined, by that section, as a dispute or other matter:
   • arising under the Act, the regulations or the rules;
   • that affects an owners corporation.
2. The definition of "owners corporation dispute" is extended by paragraphs (a), (b) and (c) of section 162 to include a dispute relating to the operation of an owners corporation, a dispute relating to an alleged breach by a lot owner or occupier of an obligation imposed on the owner or occupier by the Act, the regulations or the rules, and a dispute relating to the exercise of a function by a manager in respect of an owners corporation. This proceeding does not concern the operation of the OC, nor does it concern an alleged breach by an owner or occupier or the exercise of a function by a manager.
3. The Tribunal will have jurisdiction under the OC Act to determine a dispute that does not fall within paragraphs (a), (b) or (c) if it is a dispute or other matter arising under the Act, regulations or rules that affects an owners corporation.[7] It is well established that the test of whether a dispute or matter arises under the Act is whether the right or duty sought to be enforced owes its existence to a provision of the Act.[8]
4. The term "owners corporation dispute" is defined as including a dispute or matter relating to the operation of the owners corporation; an alleged breach by a lot owner or occupier of a lot of an obligation imposed on them by the Act, the regulations or the rules; or the exercise of a function by an owner corporation manager in respect of the owners corporation.
5. Section 163 of the OC Act provides that an application may be brought to VCAT to resolve an owners corporation dispute by a range of persons, including a lot owner and the owners corporation.

1. Section 75(1) of the VCAT Act provides that VCAT may summarily dismiss or strike out all or part of a claim that is frivolous, misconceived, lacking in substance or otherwise an abuse of process.
2. It is important to note here the difference in effect between striking out a proceeding and dismissing it. An order dismissing a proceeding brings the proceeding to an end without any possibility of reinstatement. In contrast, an order striking out a proceeding removes the proceeding from the Tribunal's list, but leaves open the possibility of an application for reinstatement.[9]
3. The principles for determining applications under section 75 are well established. It is a very serious matter to dismiss or strike out a proceeding summarily. It has been said that a high threshold must be met before VCAT can summarily dismiss or strike out all or part of a proceeding.[10]
4. The power to dismiss or strike out a proceeding, or a part of a proceeding, summarily should be exercised only where it is obvious that the proceeding cannot possibly succeed or where it is obvious that the proceeding is an abuse of process for other reasons. Otherwise an applicant is entitled to have the case fully heard and adjudicated upon at a final hearing. It must be very clear indeed that the proceeding is absolutely hopeless or so clearly untenable that it cannot possibly succeed.[11] It is accepted that VCAT should not order summary dismissal in circumstances where the outcome of the case might depend on findings of fact based on contested evidence.[12] For this reason, in considering the respondents' applications, I should take Dundas' case at its highest, that is, I should assume that Dundas will be able to prove each of the facts contended in its application.
5. It follows that a strike out, rather than dismissal is to be preferred, unless the case is one which could never succeed.[13] It is well established, however, that a clear case for the application of section 75 is when, even if everything alleged by an applicant were true, the law still would not grant a legal remedy.[14] If this is so, the motives for bringing a proceeding will not be relevant, it will still be dismissed if that is the proper course. As a matter of law, it is frivolous and vexatious to invite a court or a tribunal to exercise a jurisdiction which it does not have even if that invitation is made for the highest and purest of motives.[15] Similarly, an application which involves a re-litigation of issues which have been determined elsewhere will be an abuse of process.[16]
6. The applications made by the Owners Corporation, and by Mr and Ms Perry, require me to determine whether, assuming that Dundas will be able to prove all the facts on which it relies, its claim is nevertheless absolutely hopeless, unsustainable in fact or in law and bound to fail. This is a high bar.

1. The issues raised in the claim brought by Dundas may be summarised under three headings[17]:
   • the consent given for the Perry's works;
   • the legal consequences of that part of the works affecting common property;
   • issues relating to the fire wall between the lot owned by Dundas and the lot owned by the Perrys.

1. Dundas asserts that the consent should not have been given because:
   • the Owners Corporation itself should have been the applicant for the building permit for that part of the works that were required to be carried out on common property;
   • the decision to give consent was not made at a duly constituted meeting of the Owners Corporation or its Committee;
   • the consent was flawed because it was only in relation to works on the Lot owned by Mr and Ms Perry and did not give express consent to the works on common property; and
   • the consent is invalid because it is inconsistent with the Subdivision Act, and further action is required under that Act.

Legal consequences of the works to common property

1. Dundas asserts that the Owners Corporation has failed to obtain expert legal advice about the legal impact of the works proposed by the Perrys to the common property and whether a lease or licence, or other agreements in relation to future liabilities are required.

1. Dundas asserts that the Owners Corporation has failed to "assess and remediate as required the fire wall between lot 27 and lot 28'.

1. the Owners Corporation and Mr and Ms Perry "comply with [the OC Act] and seek and have passed a special resolution for lot owner works to be carried out to common property above, below and adjacent to lot 27"; 2. the Owners Corporation and Mr and Ms Perry "comply with [the OC Act and the Subdivision Act] and seek and have passed a unanimous resolution for the removal, creation and/or variation of covenant rights and restrictions and services contained by implied easements for building works above, below and adjacent to lot 27 before such works affecting those rights, services and implied easements are undertaken.";

1. the Owners Corporation "be the applicant for any building permit for building works to common property and be so identified on any corresponding building permit documentation in accordance with" the [Building Act];

1. declaring that the OC Committee of Management "acted outside of its powers and functions by granting approval" to Mr and Ms Perry's works, that the approval was invalid, and an order that the approval be rescinded; 2. Mr and Ms Perry's planning permit and building permit documentation for the works be resubmitted to comply with the OC Act, the Subdivision Act, the Building Act and the Heritage Act 2017; 3. Mr and Ms Perry comply with the Deed of Covenant and the Heritage Act; 4. the Owners Corporation "obtain independent professional advice including particularly qualified building surveying, engineering and heritage architect consultants, and that the advice received be implemented to ensure compliance with the OC Act, the Subdivision Act, the Building Act and the Heritage Act and associated regulations, codes, and other associated guidelines"; 5. the Owners Corporation "obtain legal advice about the impact of the proposed building works on common property and the consequential risks and liabilities for which the [Owners Corporation] should not be liable and to establish an agreement with [Mr and Ms Perry] regarding lease or licence arrangements, liabilities for future repairs and maintenance, insurance or other costs or matters to ensure all obligations under the [OC Act] are acquitted."; 6. the Owners Corporation "take necessary steps to fully assess and remediate as required the fire wall between lot 27 and lot 28"; 7. the Owners Corporation "reimburse [Dundas] for costs incurred that would otherwise have been the responsibility of the [Owners Corporation] in acquitting their obligations to [Dundas] and all members of the Owners Corporation under [the OC Act]"; and 8. such further or other orders, declarations or relief as the Tribunal deems appropriate."

1. The Owners Corporation submits that the Applicant's claim does not disclose any cause of action that is within the Tribunal's jurisdiction.[18]
2. The Owners Corporation contends that the Applicant is seeking to prevent the works proposed by Mr and Ms Perry from proceeding, and that Mr Warren has previously pursued and failed in appeals against the building permit and the heritage permit granted for the works. The Owners Corporation submits that the remedies sought by the Applicant, in particular, orders by the Tribunal directing the Owners Corporation to obtain building permits, pass resolutions in accordance with the Subdivision Act 1988 and obtain legal and professional advice are based on a misunderstanding of the legislative scheme relevant to those works.[19]
3. Further, the Owners Corporation says that the Building Appeals Board and the Heritage Council have determined the issue of permits for the works in favour of Mr and Ms Perry.

1. Counsel appearing for Mr and Ms Perry put forward the following submissions:
   1. All necessary approvals have been provided for the works as required by the Building Act, the Planning and Environment Act and the Heritage Act.
   2. The works are almost complete, with only finishing of the ceiling required.
2. Ms Perry deposed, by affidavit, that on or around 25 July 2016 she and Mr Perry served Protection Works Notices under the Building Act on the adjoining owners, including Dundas, and on the Owners Corporation in respect of the common property. A Protection Works Determination was issued on 13 April 2017 by the relevant building surveyor approving the proposed protection works. Ms Perry states that Dundas did not appeal the Protection Works Determination.

1. Dundas was represented by Mr and Ms Warren, in person. They did not have legal representation. Understandably, they did not respond to the legal arguments raised by the Owners Corporation and Mr and Ms Perry about the application being an abuse of process, misconceived or frivolous.
2. Mr Warren explained that their concern is that all the permits for the works, planning, building and heritage, are issued for Lot 27 only, and they wish to ensure that the Owners Corporation can protect itself from liability for the works that have been carried out on the common property. Mr Warren expressed his opinion that work has been done that is inconsistent with the obligations set out in the Conservation Management Plan (CMP) appended to the Heritage Permit for the original development in 1995.
3. In the last paragraph of his submission Mr Warren states "I do not seek any personal benefit from what we are seeking to achieve other than the protection of our home according to fair and reasonable expectations."[20]
4. Mr Warren contends that the works are inconsistent with the building permit and the heritage permit. He is of the view that the works ought to be demolished. Mr Warren commented in the hearing that if there were to be removal of load bearing walls or columns without the Owners Corporation consent in, for example, a 30-storey building, this would be a "terrible result".

1. In the hearing, Mr and Ms Warren clarified that:

1. they have brought this proceeding as a "test case" by which they can establish expectations and procedures for future renovation proposals in the Ardoch complex. 2. they are concerned that, because the permits issued for the works refer only to Lot 27, the Owners Corporation will be liable for maintenance of, and any future repair to, the works that have been carried out on the common property.

1. they are not seeking relief against the individual members of the Owners Corporation, nor against Mr and Ms Perry personally, but only against the Owners Corporation itself.
2. In relation to the last point, I note that Mr and Ms Perry were joined to this proceeding on the order of the Tribunal. That order was quite properly made given that the application brought by Dundas seeks to impugn decisions of the Owners Corporation that affect Mr and Ms Perry directly.
3. During the hearing Mr Warren indicated that he has made a separate complaint to the Victorian Building Authority about the building permit and the works.

WHAT IS THE LEGAL BASIS FOR THE CLAIMS MADE BY DUNDAS?

1. As I have indicated above, in determining an application under section 75 of the VCAT Act, the Tribunal must assume that all the facts relied upon by the applicant can be proved. I make that assumption. In considering whether the claims are "doomed to fail", as contended by the Owners Corporation and by Mr and Ms Perry, I must consider whether the claims are open to be made, at law, on the alleged facts. I will now consider each of the legal arguments put forward by Mr Warren for Dundas.

Power to undertake works that affect the common property

1. In the hearing, Mr Warren expanded on his contention that it is only the Owners Corporation that may undertake works affecting the common property. This contention underpins paragraph 40 of the application for orders in the terms set out above, in paragraph 36, items a, c and e.[21]
2. The first ground for this proposition is an assertion that the Owners Corporation is the "owner" of the common property, to the exclusion of the lot owners. This is not correct.
3. Section 27 of the Subdivision Act 1988 provides that an Owners Corporation must be created if a plan of subdivision contains common property. Section 30 of the Subdivision Act 1988 provides that common property "vests in the owners for the time being of the lots affected by the relevant Owners Corporation as tenants in common in shares proportional to their lot entitlement". The owners of common property are the lot owners. The Owners Corporation is created as a vehicle by which the owners can work together to manage the common property. Although the Owners Corporation is the registered proprietor of the common property, the Owners Corporation has only the legal interest in the common property, the beneficial and equitable interest is vested in the owners of the lots.[22]
4. Mr Warren asserted that the Owners Corporation is responsible for all works to the common property that require a building permit. The argument advanced by him in the hearing before me was based on a misunderstanding about the effect of section 53 of the OC Act.
5. The powers and functions of an Owners Corporation are limited to the powers and functions set out in the OC Act_._ These are set out in section 4 of the OC Act. Relevantly, subsection 4(b) states that one of the Owners Corporation's functions is "to repair and maintain the common property".
6. Section 46 of the OC Act requires the Owners Corporation

1. the common property; and
2. the chattels, fixtures, fittings and services related to the common property or its enjoyment.

1. Section 52 of the OC Act confers a wider power on an Owners Corporation in relation to common property, than that set out in section 4, but in limited circumstances.
2. Section 52 of the OC Act states:

An owners corporation must not make a significant alteration to the use or appearance of the common property unless -

1. The alteration is
   1. First approved by a special resolution of the owners corporation; or
   2. Permitted by the maintenance plan; or
   3. Agreed to under section 53; or
2. There are reasonable grounds to believe that an immediate alteration is necessary to ensure safety or to prevent significant loss or damage.

1. As can be seen from the introductory words, "An owners corporation must not make a significant alteration", section 52 has application only where the owners corporation is making an alteration to the use or the appearance of common property.
2. Section 53 of the OC Act is a provision which has effect only in relation to section 52 of the OC Act. Section 53 provides no more than a process for agreeing to works that make a significant alteration to the appearance of the common property alternative to the processes referred to in subparagraphs 52(a)(i) or 52(a)(ii).
3. The relevant provisions of section 53 are subsections 53(1) and 53(2).

(1) An owners corporation may by special resolution approve the carrying out of upgrading works for the common property and the levying of fees on lot owners for that purpose.

(2) In this section upgrading works means building works for the upgrading, renovation or improvement of the common property where

1. The total cost of the works is estimated to be more than twice the total amount of the current annual fees; or
2. The works require a planning permit or a building permit before they can be carried out -

But does not include works that are provided for in an approved maintenance plan or works referred to in section 4(b)"-

1. Subsection 53(2) is not a substantive provision in the sense of conferring powers or specifying procedures. It is an interpretative provision that defines the term "upgrading works" where that term is used in section 53.
2. The effect of sections 4, 46, 52 and 53 of the OC Act is that an Owners Corporation is responsible for repair and maintenance of the common property, and an Owners Corporation may decide to make a significant alteration to the use or appearance of the common property, but it may only do so by following the requirements of section 52, and, if necessary, section 53.
3. It has been long established, since the Tribunal's decision, in 2009, in Martin & Ors v Owners Corporation 431576 (Martin),[23] that section 52 does not apply where it is the lot owner that seeks to carry out works that will impact the common property.
4. Mr Warren asserted, in the hearing, that the present proceeding is unlike the facts in Martin. In Martin, a lot owner wished to remove part of the roof to make an open air terrace within his lot. The works involved removing part of the roof, which was common property, and making good the surrounding area. The Tribunal considered whether those works would amount to "use" of the common property, but concluded that they would not, because the lot owner's use would not extend into the roof area. Presumably, there would, as in this case, have been consequential works required in the roof cavity to ensure the structural integrity of the remaining roof. The Tribunal found that, as the works were carried out by the lot owner, section 52 did not apply.
5. Mr Warren did not elaborate on his reasoning for drawing a distinction between the facts in the present proceeding and those in Martin. The facts in that case, and in this proceeding appear to be similar, in that, in both cases the works were to be carried out by the lot owner. In any event, it seems that at an earlier time, Mr Warren did not dispute the relevance of the decision in Martin. On 7 December 2016 Mr Warren sent an email to the then Chair of the Owners Corporation Committee, in which Mr Warren acknowledged the content of advice that had been provided to the Owners Corporation by counsel on a number of issues, including whether a special resolution was required for the consent. Mr Warren said, in that email, "That a special resolution is not required ... is not surprising, especially in the context of the martin rationale (sic)."[24] I find that the law is as stated in Martin, and section 52 does not apply where works are, as in this proceeding, to be carried out by the lot owner.
6. As sections 52 and 53 have no application when it is the owner of a lot who is carrying out works, I conclude that there is no legal basis for the arguments advanced by Mr Warren that the owners corporation is the only entity which may carry out the works on the common property.[25] Accordingly that part of the Dundas application which seeks orders of the Tribunal in the terms described in paragraphs 36 a, c and e must be struck out as misconceived and an abuse of process.

Failure to follow procedure in Owners Corporations Act

1. Paragraph 39 of the Dundas Points of Claim asserts that the Owners Corporation failed to follow the procedures set out in the OC Act for the conduct of meetings, the conduct of a ballot of committee members, and the adoption of a committee resolution in relation to the consent given to Mr and Ms Perry. This contention is relevant to the application for orders in the terms set out in item d of paragraph 36.
2. Dundas says that there was no call for a meeting of the committee in accordance with section 108 of the OC Act, and further, that there was no notice of meeting as required by section 109 and a failure to follow the processes set out in section 112 of the OC Act.[26]
3. The Tribunal has not been provided with the original documents associated with that decision of the Committee. This is of no consequence in determining an application under section 75 of the VCAT Act as I am required to assume, for the purposes of this determination, that the applicant will be able to prove each fact alleged in the claim in question.[27]
4. Nevertheless, in determining whether a proceeding is frivolous, vexatious, misconceived, lacking in substance, or otherwise an abuse of process, I must have regard to all the material placed before me.[28] In this proceeding I have been provided with copies of the Heritage Council decision granting the Heritage Permit for the works,[29] and the affidavit of Ms Perry dated 28 October 2016 in which she states that a Building Permit was issued on or around 24 August 2017. It is apparent that the relevant building surveyor and the Heritage Council have relied on the consent granted by the Owners Corporation in giving their respective permits.
5. Dundas seeks Tribunal orders that the Owners Corporation rescind the approval given by it on 7 June 2017. In circumstances where other regulatory bodies have acted in reliance on the consent, and, in turn, there has been reliance on the permits granted by those regulatory bodies, it is not at all apparent to me that the Tribunal has power to make such an order. As I have noted above, it is frivolous and vexations to invite the Tribunal to exercise a jurisdiction which it does not have.
6. The question of the validity of the Owners Corporation consent does not appear to have been raised by Mr Warren in his appeal to the Heritage Council. Nor did Mr Warren lodge an appeal in relation to the building permit. To that extent, I am satisfied that the present attack on the consent given by the Owners Corporation amounts to a re-litigation of an issue between the parties, that entities other than VCAT have already determined. It is well established that such a course of action is an abuse of process. [30] The application brought by Dundas is therefore both frivolous and vexatious, and an abuse of process, within the meaning of section 75 of the VCAT Act insofar as it relates to the proposed order that the Owners Corporation rescind its consent. It follows that the related application for declaratory relief, in item d of paragraph 36 must also be struck out.

Allegations of breach of the OC Act by Mr and Ms Perry

1. Paragraph 40 of the Dundas Points of Claim asserts that Mr and Ms Perry are in breach of their obligations under sections 128, 129 and 130 of the OC Act. Section 128 requires a lot owner to comply with the OC Act, regulations and rules. The conduct complained of is that they did not seek a special resolution for the consent to their works. That decision is a decision of the Owners Corporation, and not a decision for which the Perrys can be found liable. Section 129 provides that a lot owner must properly maintain their lot. Section 130 requires a lot owner not to use or neglect the common property in a manner that is likely to cause deterioration of the common property. The conduct complained of is reliance on the approvals and permits which have been granted under the planning, building and heritage legislation. This aspect of the claim is plainly an abuse of process. Permit holders are entitled to rely upon the permits granted to them by statutory decision makers.

Inconsistency of approval with Subdivision Act 1988

1. Paragraph 41 of Dundas' Points of Claim asserts that the OC has acted inconsistently with the Subdivision Act and thereby breached its obligations to the Applicant and to all members of the Owners Corporation under the Subdivision Act. This allegation stems from the approval given by the Owners Corporation.
2. Mr Warren acknowledges that the Owners Corporation has asserted that it gave its written approval for the Perry's works in accordance with Model Rule 3.3(2).
3. Model Rule 3.3(2) says:

An owner or occupier of a lot must not damage or alter a structure that forms part of the common property without the written approval of the owners corporation.

1. Mr Warren says that the Owners Corporation had no power to give "written approval" for Mr and Ms Perry's renovation.
2. Mr Warren contends that Model Rule 3.3(2) cannot be relied upon by the Owners Corporation to "authorise" the alteration to the roof structure above Mr and Ms Perry's apartment. His contention is that such an authorisation would be inconsistent with subsection 32 of the Subdivision Act 1988 (Subdivision Act). That subsection provides that an owners corporation may "create, vary or remove any easement or restriction (including an implied easement)" if there is a unanimous resolution of the members.
3. Mr Warren asserts that the approval given by the Owners Corporation will have the effect of permitting variation to the implied easement of support created under subsection 12(2) of the Subdivision Act.
4. Mr Warren says Model Rule 3.3(2) is therefore inconsistent with the requirement of section 32 of the Subdivision Act that there be a unanimous resolution to vary an implied easement such as the easement of support of the roof over Mr and Ms Perry's lot. Mr Warren argues that because the Model Rule is inconsistent with section 32 of the Subdivision Act, the rule is "of no effect". I take it that Mr Warren means that the model rule can have no application to the extent that it might have been taken to permit authorisation of variation of an implied easement.
5. These contentions underpin the application for orders of the Tribunal in the terms set out in paragraph 36b above.
6. I consider that Mr Warren has misinterpreted the effect of section 32 of the Subdivision Act.
7. The starting point for understanding the relevance of section 32 of the Subdivision Act is section 12 of the Subdivision Act. Subsection 12(1) sets out the easements that must be shown expressly on a plan of subdivision. Subsection 12(2) provides for implied easements to be inferred, without the need to show them on the plan of subdivision. Subsection 12(2) says:

_(2) Subject to subsection (3)[31], there are implied - _

(i) all the land on a plan of subdivision of a building; and

(ii) that part of a subdivision which subdivides a building; and

(iii) any land affected by an owners corporation; and

(iv) any land on a plan if the plan specifies that this subsection applies to the land; and

_(b) for the benefit of each lot and any common property - _

(d) passage or provision of water, sewerage, drainage, gas, electricity, garbage, air or any other service of whatever nature (including telephone, radio, television and data transmission); or

(f) full, free and uninterrupted access to and use of light for windows, doors or other openings; or

if the easement or right is necessary for the reasonable use and enjoyment of the lot or the common property and is consistent with the reasonable use and enjoyment of the other lots and the common property.

1. Implied easements arise where they are reasonably necessary for the reasonable use and enjoyment of a lot or common property, and consistent with the reasonable use and enjoyment of the other lots and common property.
2. Section 32 of the Subdivision Act permits an owners corporation, by unanimous resolution, to effect changes to a subdivision. Paragraph (i) of section 32 gives the owners corporation power to "create, vary or remove any easement or restriction (including an implied easement)".
3. The provision is permissive. An owners corporation is not required to take such action. Further, as an implied easement arises from its necessity for reasonable use and enjoyment, implied easements may arise without the need for any action at all. In the case of lots which are bounded by the internal surfaces of the lot, there are implied easements of shelter in respect of the walls and the roof, which are in common ownership, as well as implied easements of support for the lots on the upper storey from both the lower lots and from the common property.
4. If it were necessary to relocate the water, sewerage, drainage, gas, or electricity services for a lot, it would be the relevant plumber or electrician who would determine the location of the relocated services, because of the regulatory obligations placed on those trades by the legislation under which they work. The implied easements for the supply of those services would arise in respect of the relocated services by virtue of their relocation. The owners corporation would not be required to take action in respect of the implied easements, and indeed would have limited scope to influence them in those cases.
5. The same is true for works to the roof structure which are dictated by the building permit and the heritage permit. The alteration of the roof structure in the common property above the Perry's apartment in itself will create an implied easement of support, shelter or protection in favour of both the lot occupied by Dundas and the lot occupied by the Perrys.
6. The premise on which this aspect of the application by Dundas is founded is erroneous in law. Accordingly, that part of the application that relates to orders in the terms described in paragraph 36b above must be struck out as an abuse of process.

1. The discussion above is focussed on Model Rule 3.3 because that was the focus of the parties' submissions. For completeness, I note that, when it is the owner of the lot who is carrying out the works Model Rules, in particular, sub-rule 4.2, and sub-rule 5.3, are also relevant.
2. Sub-rule 4.3(2) states that an owner or occupier of a lot "must not damage or alter a structure that forms part of the common property without the written approval of the owners corporation.". Sub-rule 4.3(3) states that an approval under sub-rule (2) "may state a period for which the approval is granted, and may specify the works and conditions to which the approval is subject.".
3. Sub-rule 5.3 of the Model Rules for Owners Corporations requires an owner or occupier of a lot "to notify the owners corporation when undertaking any renovations or other works that may affect the common property and/or other lot owners' or occupiers' enjoyment of the common property.".[32]
4. Although the Owners Corporation has asserted that its consent was given in accordance with model Rule 3.3, I do not consider that any issue of substance turns on this. The Owners Corporation had power to give its written approval and did so. Subsequent decision makers have proceeded on the basis that such written consent had been given.

Grant of approvals under the Building and Heritage Acts

1. In paragraphs 42 and 44 of the Dundas Points of Claim it is asserted that the Owners Corporation has breached its obligations to Dundas and the other members of the Owners Corporation by not preventing permits and approvals from being granted to the Perrys under the Building Act and the Heritage Act that relate to works on the common property. In paragraphs 43 and 45 of its Points of Claim Dundas asserts that by obtaining building and heritage permits that relate both to their lot and to common property Mr and Ms Perry are in breach of their obligations to Dundas and the other members of the Owners Corporation. These Points of Claim seek to relitigate matters which have been determined by other decision makers, namely the building surveyor and the Heritage Council, and are an abuse of process.

Scope of the approval given by the Owners Corporation

1. In the course of the hearing, Mr Warren contended that the committee of management acted beyond its authority when it gave approval to the Perrys. His argument was that because the consent given by the owners corporation refers to "your proposed renovations at" [the subject address], the consent does not extend to the common property of the walls and roof surrounding the Lot.
2. It is apparent from the documents submitted by all of the parties that, at the time the Owners Corporation gave its written approval, it had before it architectural and structural engineering documents describing the proposed renovations, including the works to be undertaken to the common property. The Committee also had a building surveyor's determination under the Building Act that the proposed protection works were appropriate. The drawings included in the documents filed by the parties in this proceeding clearly show the boundaries between the lot and the common property and the works to be carried out on the common property in the roof cavity. The purpose of the approval was to authorise alteration of a structure that formed part of the common property. As I have noted above, the Model Rules expressly contemplate that the Owners Corporation may be asked to consent to works to common property that are consequent on renovations to a lot. I consider Mr Warren's contention on this point to be specious, and without legal foundation.

Permits only granted in respect of Lot 27 and not in respect of common property

1. In the course of the hearing, Mr Warren, asserted that the decisions of the Heritage Council, the Relevant Building Surveyor and the Responsible Authority under the Planning and Environment Act, also suffer from the flaw that they have been granted in respect of lot 27 only and not in respect of the common property. I consider that it is likely that those bodies were informed by detailed plans that showed the extent of works proposed. I note that the Acts which govern decision making by the Heritage Council, the building surveyor and the planning authority include provisions dealing with impact on land other than that owned by the registered proprietor of the lot in question. However, this is of no real relevance in these proceedings as the decisions of those entities are not now reviewable by this Tribunal. To the extent that this argument forms part of the application, it must also be struck out as it is both misconceived and an abuse of process.

Continued operation of the Conservation Management Plan

1. Mr Warren has asserted that the Owners Corporation, and potentially the works to Mr and Ms Perry's Lot, are in breach of the Conservation Management Plan that formed part of the original heritage approvals for Ardoch. The approvals granted by the Heritage Council must be taken to have considered all heritage values, including those referred to in the Conservation Management Plan. It is not for this Tribunal, sitting in the Owners Corporations list, to say whether or to what extent the Conservation Management Plan remains relevant to the site following those approvals.
2. In its Points of Claim, Dundas asserts that the CMP is a restriction that applied to the land, that required a unanimous resolution, in accordance with section 32 of the Subdivision Act to vary or remove the CMP. The CMP formed part of the original heritage controls imposed in the 1990s. The Heritage Council has determined the conditions for the Perry's development. There is no requirement on the Owners Corporation to make amendments to the CMP. This aspect of the Dundas claim, and the application for orders in the terms described in paragraph 36f above, must be struck out as an abuse of process.

Applications for orders to comply with the law

1. The orders sought, described in paragraph 36 items g and h are, in essence, orders that the Owners Corporation act in accordance with its statutory obligation, under section 5, to act honestly and in good faith and to exercise due care and diligence. This is an abuse of process. Laws exist in order that they be obeyed. The Owners Corporation is at all times under an obligation to act honestly and in good faith and to exercise due care and diligence. There is no utility in making the orders sought.
2. That aspect of the orders sought (in paragraph 36h) which proposes that the Owners Corporation be directed to obtain legal advice about the "impact" of the building works on the common property, and "to establish lease or licence arrangements" is also misconceived, if the purpose of the order sought is to establish a "precedent" for future action by the Owners Corporation. Orders should not be made for future hypothetical application. However, if limited to the question of the works above Mr and Ms Perry's lot, the issue raised is properly characterised as an owners corporation dispute.
3. As I have noted above, an owners corporation dispute must arise under the Act or Regulations or rules. A matter may be said to arise under the Act or Regulations or rules if, " directly or indirectly, the right claimed or the duty asserted owes its existence to" the Act, Regulations or Rules.[33] The Owners Corporation has a duty to manage and administer the common property,[34] and to take out, maintain and pay premiums on insurance required or permitted by any Act or the OC Act and any other insurance the owners corporation considers appropriate.[35] It is also required to act honestly and in good faith, and exercise due care and diligence.[36]
4. It remains possible that the orders sought may be predicated on the misunderstanding about the application of implied easements arising through the operation of the Subdivision Act I have discussed above. I will give leave to Dundas to amend its Points of Claim to reframe this issue for determination.

1. Paragraphs 46 and 47 of the Points of Claim allege a failure by the Owners Corporation to follow the procedures set out in the OC Act for determining a dispute. The allegations assert that Mr and Ms Warren have suffered loss, damage, stress and humiliation as a result of this failure. The particulars given make no reference to dates, and include an allegation of breach of section 159 of the OC Act. That section relates to annual reporting. Subsection 159(2) of the OC Act states that details of numbers of complaints or breaches set out in an annual report should not identify the person who made the complaint or is alleged to have committed the breach. No orders are sought in relation to this allegation. I will give leave to Dundas to amend its Points of Claim to give proper particulars of the complaint.

1. Paragraphs 52, 53 and 54 of Dundas' Points of Claim allege that the Owners Corporation has "failed to ensure that the fire wall between lots 27 and 28 is adequate and constructed and maintained in a proper and workmanlike manner and has failed to consider the increased risk of failure of the roof structure due to the building works proposed by the [Perrys]". The application seeks orders directing the Owners Corporation to assess and remediate the fire wall between lot 27 and lot 28 (see paragraph 36i above).
2. Dundas asserts, that

"The committee of management has failed to attend to serious defects to building common property (non-compliant fire wall) in breach of the Owners Corporation Act 2006."[37]

1. Dundas asserts that the fire wall between the common property roof spaces above lots 27 and 28 is not compliant with the Building Code of Australia.[38] Dundas asserts that the Owners Corporation is under an obligation to remediate the fire wall to bring it into compliance with the Building Code and that it has failed to do so.
2. The Owners Corporation and Mr and Ms Perry seek to rely on the building approvals which have been given for the works to Lot 27, and say that this aspect of the claim seeks to relitigate an issue which has been determined by the grant of the building permit and the heritage permit.
3. The Owners Corporation says that it relied on expert advice that the Owners Corporation is under no statutory obligation to upgrade the buildings was reached in the context of his discussion of the question of the fire walls in the older buildings in the Ardoch development. Dundas says the Owners Corporation has misinterpreted that advice. This is a difference of opinion between members of the Owners Corporation which remains to be determined.
4. However, to the extent that the complaint raised by Dundas in respect of this issue seeks to relitigate matters which have been determined by other statutory decision makers, that aspect of the Dundas claim must be struck out as an abuse of process.
5. To the extent that the claim relating to the common property fire wall, Dundas will be given leave to amend its Points of Claim to limit it to issues that have not been the subject of determination by other statutory decision makers.

1. Paragraphs 48, 49 and 50 of the Dundas Points of Claim allege that Dundas has incurred costs in obtaining advice that ought to have been obtained by the Owners Corporation. Item 35j requests Tribunal orders for reimbursement of those costs. The Points of Claim give no particulars of the advice obtained, why it was advice that should have been obtained by the Owners Corporation or the cost of that advice. The issue remains to be determined. Leave will be given to Dundas to amend its Points of Claim to give proper particulars.

1. Paragraphs 1 to 36 of Dundas' Points of Claim do not allege breaches by the Owners Corporation or Mr and Ms Perry, but set out the chronology of events on which Dundas relies.
2. The claim in paragraphs 37 of its Points of Claim that the Owners Corporation has "failed to ensure all requisite insurances are adequate for the second and third Respondents undertaking of their proposed building works" has been determined by the Building Appeals Board. Accordingly that claim is struck out as an abuse of process.
3. The claim in paragraphs 38 and 39 of its Points of Claim that the Owners Corporation has breached its duties by giving its consent contrary to section 53 of the of the OC Act, and by relying on Model Rule 3.3 contrary to section 140 of the OC Act is struck out as misconceived.
4. The claim in paragraph 40 of its Points of Claim that the Owners Corporation and Mr and Ms Perry have failed to comply with the OC Act because the consent for the works was not authorised by special resolution is struck out as misconceived.
5. The claim in paragraph 41 of its Points of Claim that the Owners Corporation failed to comply with section 32 of the Subdivision Act and take action in respect of the implied easements or the CMP is struck out as misconceived.
6. The claims in paragraphs 42 and 43 of its Points of Claim that the Owners Corporation and Mr and Ms Perry are in breach of the Building Act is struck out as misconceived and an abuse of process. The Owners Corporation and Mr and Ms Perry are entitled to rely on the permit issued to Mr and Ms Perry under the Building Act.
7. The claims in paragraphs 44 and 45 of its Points of Claim that the Owners Corporation and Mr and Ms Perry are in breach of the Heritage Act is struck out as misconceived and an abuse of process. The Owners Corporation and Mr and Ms Perry are entitled to rely on the permit issued to Mr and Ms Perry under the Heritage Act.
8. The claim in paragraphs 46 and 47 of its Points of Claim that the Owners Corporation failed to act on a Notice of Complaint from Dundas remains to be determined as does the claim that there has been a breach of section 159 in publication of information identifying a complainant remains to be determined. Dundas has leave to amend its Points of Claim in relation to this issue to provide a clear description of the complaint and relief sought.
9. The claim in paragraphs 48, 49 and 50 of its Points of Claim that the Owners Corporation has breached its duty to obtain expert advice and that as a consequence Dundas was caused to seek and obtain such advice on its own behalf and on behalf of all members of the Owners Corporation remains to be determined. Dundas has leave to amend its Points of Claim to give proper particulars of the advice obtained by Dundas which it says is advice that should have been obtained by the Owners Corporation and the relief sought.
10. The claim in paragraphs 52, 53 and 54 of its Points of Claim that the Owners Corporation has failed to ensure that the fire wall between lots 27 and 28 is "adequate and constructed and maintained in a proper and workmanlike manner and that it is safe and compliant with all requisite legislation" is struck out insofar as the relevant building permits have affirmed that the fire wall is compliant with all relevant legislation, but the question of whether it requires maintenance remains to be determined.
11. The claim in paragraph 55 of its Points of Claim that the Owners Corporation has not "satisfied or required others to satisfy the necessary prerequisite conditions for the proposed works to be undertaken at lot 27" is struck out as an abuse of process, these matters having been determined by the entities that have given the relevant building, planning and heritage approvals.

[1] Decision of the Heritage Council Permits Committee, Permit Appeal Number P27637 dated 7 March 2018, paragraph 3, filed as Exhibit SP-3 to the Affidavit of Sarah Rachael Perry dated 28 October 2018.

[2] Exhibit IW7 to the Affidavit of Ian Robert Warren dated 30 November 2018.

[3] Decision of the Building Appeals Board Perry v Dundas Terrace Pty Ltd [2018] VBAB 35.

[4] Affidavit of Sarah Rachel Perry dated 28 October 2018, paragraph 31.

[5] Decision of the Heritage Council dated 16 February 2018, Exhibit AM6 to the Affidavit of Alexander McKellar dated 31 October 2018.

[6] Ibid, the Decision records, in paragraph 16, that the Heritage Council determined that the heritage permit, and the appeal, were under the Heritage Act 1995, and not under the Heritage Act 2017.

[7] Owners Coportation 4 PS539033E v Bensons Property Group Pty Ltd (Owners Corporations) [2018] VCAT 1769, [95]

[8] Re McJannet; ex parte Austrlaian Workers' Union of Employees (Q)[No 2] [1997] HCA 40; (1997) 189 CLR 654 at 656.

[9] Waddingham v Australian Securities Ltd [2010] VCAT 1311 at [9]; Luck v Victoria Police [2015] VCAT 71 at [11].

[10] Towie v Victoria [2008] VSC 177 at [9].

[11] Forrester v AIM Corporation [2004] VSC 506.

[12] Campagnolo v Benalla and District Football League Inc [2009] VSC 228 at [41]

[13] Luo v Reynson Concepts Pty Ltd [2009] VCAT 139;

[14] Zeqaj v Ombudsman Victoria [2010] VCAT 1204 at [7]

[15] Smeaton v WorkSafe Victoria [2010] VCAT 1437 at [17]

[16] Kitson v Dennerstein [2015] VCAT 783 at [27] [30]. Aon Risk Services Australia Limited v Australian National University [2009] HCA 27. at [33]

[17] Dundas is not legally represented, and its case has been brought by its directors, Mr and Ms Warren who prepared a lengthy Points of Claim in 55 paragraphs, with 96 paragraphs of particulars. The first 38 paragraphs are essentially by way of background, and the substance of the Points of Claim is in paragraphs 39 to 55 inclusive. The Tribunal does not expect parties who are not legally represented to prepare documents in the same way that lawyers might do.

[18] Affidavit of Alexander McKellar dated 31 October 2018, paragraphs 46-49

[20] Affidavit of Ian Robert Warren dated 30 November 2018, paragraph 78.

[21] The relevant paragraph in the Points of Claim is paragraph 39d which asserts that the Owners Corporation is in breach of sections 53 of the OC Act.

[22] Body Corporate No 1/PS40911511E St James Apartments v Renaissance Assets Pty Ltd [2004] VSC 438 (09 November 2004) (Mandie J); 11 VR 41 at [30]

[23] [2009] VCAT 2699

[24] Exhibit IW3 to the Affidavit of Ian Robert Warren dated 30 November 2016. Mr Warren goes on in that email to indicate that his primary concerns related to the scope of any building permit.

[25] For completeness, I note that in the Building Act, the term "owner" is defined as "...the person who is registered or entitled to be registered as proprietor, or the persons who are registered or entitled to be registered as proprietors, of an estate in fee simple in the land". This definition refers to the person entitled to be registered as proprietor of an estate in fee simple of the land. Section 30 of the Subdivision Act 1988 does not give either the lot owners or the owners corporation an entitlement to be registered as proprietor of an estate in fee simple in the land. It would seem that the owners corporation can never be an "owner" within the meaning of the Building Act. The provisions in Part 13 of that Act, that deal expressly with an owners corporation wishing to do work on common property, are required for precisely this reason.

[26] The Points of Claim also allege breach of section 113 of the OC Act but this section simply provides that a resolution of a committee is a resolution of the owners corporation. It is not capable of being breached.

[27] Rainsford v Group 4 Corrections Services Pty Ltd [2000] VCAT 2497;

[28] Burrows v Victoria [2002] VCAT 1655 at [40].

[29] Decision of the Heritage Council dated 16 February 2016 exhibited as Exhibit SP3 to the Affidavit of Sarah Perry dated 28 October 2018.

[30]Fernandez v Insulation Solutions Pty Ltd [2004] VCAT 125 at [18]- [19]

[31] Subsection 12(3) is not relevant here as it does not apply to a plan that subdivides a building.

[32] One benefit of such notification could be to place the owners corporation on notice that protection works under the Building Act may be an issue.

[33] Re East; Ex parte Nguyen [1998] HCA 73; (1998) 196 CLR 354 at 385, per Kirby J.

[37] Document headed "Dispute Details", dated 6 July 2018 filed by Dundas, paragraph 19