1. Dysfunctional does not begin to describe Owners Corporation PS628502Y (the OC). The builder and majority lot owner have too much self-interest, some lot owners are being kept in the dark, while others take little interest in affairs, and the building is plagued by defects and extreme safety issues. It is hard to imagine an owners corporation more incapable of functioning in the best interests of its members.
2. Lot owner, Graeme Edwards (the Applicant), wants the Tribunal to appoint an administrator to manage the OC at 2-4 Hutton Street, Dandenong (the building).
3. Mr Edwards complains that the OC is dysfunctional and says the builder and owner of 14 lots is preventing the pursuit of action to deal with the defects or flammable cladding on the building.
4. Emad Farag (the Builder), the sole director of E & M Farag Pty Ltd (the Respondent Lot Owner), denies the OC is dysfunctional and says that as voluntary manager of the OC he is acting in good faith to look after the interests of the lot owners.
5. For the reasons that follow, the appointment of an administrator is the only way I can have any confidence that the OC will comply with its obligations under the Owners Corporations Act 2006 (the OCAct), and that the safety and interests of occupiers and lot owners are protected.

1. This application was filed on 22 June 2018. As the applicant was overseas at the time, a request was made for a hearing date in late July.
2. The matter came before me on 24 July 2018, at which time there was no appearance by the respondents. I was not satisfied that all lot owners were aware of the proceeding and made directions for service of an order detailing the nature of the application. The proceeding was adjourned to 1 August 2018.
3. At the return of the matter, a preliminary issue arose about who barrister, Tim Greenway, was representing - whether it was the OC or the Builder. After some debate, it was agreed that the Builder's company would be named as a second respondent in the proceeding and that was who Mr Greenway would be appearing for. The order I have made includes that joinder.
4. There was no appearance for the OC.
5. The hearing was adjourned part-heard to 3 August 2018. There was a change of barrister for the Builder's company and after an extensive and long day, I reserved my decision. The parties were advised that given the urgency of the matter I would have a decision to them within a few days.
6. Prior to the hearing concluding, I indicated that I was greatly concerned about the safety of occupiers in the building and was considering making orders requiring they be notified about the cladding issues. Ultimately, such an order was not necessary, with the Builder giving an undertaking to the Tribunal on behalf of the Respondent Lot Owner that he would use all reasonable endeavours to deliver a copy of the building notice and fire safety reports related to the cladding to each of the occupiers no later than 5pm on 4 August 2018. I thank him for giving that undertaking.

1. A lot owner can make application to the Tribunal for the appointment of an administrator to run the owners corporation.[1] While there is no criteria set out in the OCAct for the appointment of an administrator, the Supreme Court considers that the owners corporation must be affected by some incapacity, or be acting so dysfunctionally, that services to lot owners are being affected.[2] There must be some deficiency in the owners corporation's operational capacity sufficient to justify the Tribunal intervening, so that the interests of lot owners can be protected.[3]
2. While the Supreme Court was referring to the Subdivision Act, that Act is in similar terms to those related to the appointment of an administrator in the OCAct.
3. When considering whether to appoint an existing manager as administrator, the Supreme Court also considered that a fresh start was the best option, as it was important that the administrator be independent of all lot owners. [4]
4. I was referred to a number of Tribunal decisions where the appointment of an administrator has been considered.[5] Whether an owners corporation is acting dysfunctionally or affected by incapacity is a question of fact, and each case must be determined according to its own set of circumstances.
5. If, after considering those facts, the Tribunal is satisfied that the discretion to appoint an administrator should be exercised, it may also set down the terms and conditions of appointment and make any other order it thinks fit.[6]
6. The effect of the appointment of an administrator is that control of the owners corporation is placed in the hands of the administrator. Subject to the actual order made by the Tribunal, the appointment may mean that there is no consultation with lot owners about how the owners corporation operates.[7] An administrator must act honestly and in good faith and must exercise due care and diligence.[8]
7. To determine if an owners corporation is dysfunctional, or is being managed inefficiently or incompetently, consideration must be given to the duties and obligations of not only the OC, but those in control.
8. An owners corporation must carry out its functions honestly and in good faith and must exercise due care and diligence.[9] It must appoint a committee at each annual general meeting of at least 3 members and there must be a chairperson and secretary amongst those committee members. [10] In addition to the duties to act honestly and in good faith and to exercise due care and diligence, a member of a committee must also not make improper use of their position to gain an advantage for themselves or any other person, whether directly or indirectly.[11] A committee member also has a fiduciary duty under the general law.[12]
9. An owners corporation may appoint a manager to assist it to carry out its functions.[13] This manager has the same duties as a committee member. Only a registered manager that holds professional indemnity insurance, may receive a fee or reward for their management services.[14]
10. An owners corporation must repair and maintain the common property and the chattels, fixtures, fittings and services related to the common property or its enjoyment.[15] If there are reasonable grounds to believe that an immediate alteration to the common property is necessary to ensure safety or to prevent significant loss or damage, then the owners corporation does not require a special resolution before carrying out significant work.[16]
11. However, a lot owner must give notice to the owners corporation of any application they make for a building or planning permit.[17]

Is the OC dysfunctional or affected by incapacity?

1. The Applicant says that there are numerous examples establishing that the OC is plagued by incapacity and dysfunction affecting the interests of lot owners. He refers to a history of change in management, the Builder's self-interest in managing the OC, a litany of building defects impacted by delays, emergency fire safety issues and a manager with a questionable history and a lack of understanding about how to run an owners corporation.
2. In considering each of these claims, I have taken into account the evidence at the hearing from the Applicant, Lot Owner Lai Lin Lam, the Builder, the affidavits of Rebecca Danne and John Prendergast, and each of the documents tendered.

1. One of a number of companies owned by the Builder, 4S Constructions Pty Ltd (the Building Company), completed construction of the building in March 2011. The building has 31 lots, with only one lot owner actually residing there. The Respondent Lot Owner currently owns fourteen lots.
2. The Applicant has the support of five other lot owners for the appointment of an administrator. The Builder, in addition to the 14 lots owned by the Respondent Lot Owner, also has 6 lot owners who have sent emails expressing their opposition to an administrator being appointed.
3. The OC has had three changes to management over the last 18 months. OCV management resigned at the 2017 AGM, then 12 months later Strata Management Victoria resigned, again at the AGM. While the minutes of those meetings do not disclose the reasons behind the resignations, I infer from the evidence that the Builder blocking approval to address building defects, was the driving factor.[18] At the 2017 AGM the Builder blocked a special resolution to take legal action against him for the defects. Ms Lam says the Builder attended the 2018 AGM with a lawyer and the whole meeting was taken up with argument about the budget.
4. A committee was then appointed on 22 June 2018 - Anthony Moffatt, Adrienne Palmer and Mohamed Farah. Mr Moffatt was elected chairperson, but there was no appointment of a secretary as required by the OCAct.[19] The Applicant takes issue with the committee appointed and says that Ms Palmer and Mr Farah were both ineligible to be elected due to being in arrears with their owners corporation fees.[20] The Builder, who took the minutes, says these committee members were paid up to date at that meeting and the minutes are incorrect.
5. While the Builder was not officially placed in the role of OC manager until a special meeting in late June 2018, he had effectively taken over the role from the 14 May 2018 AGM.[21]
6. The Builder continues to hold the position of manager of the OC.

1. The Applicant complains that the Builder is not acting in good faith and is receiving a benefit by having the OC pay the Builder's companies to carry out work.
2. One of the Builder's companies is paid $700 a month to clean the building. This has been occurring since May 2017.[22] The cleaning of the building has come under criticism from even the Builder's own supporters, with lot owners seemingly unaware that the Builder subcontracts out the work to a firm who charges him $650 per month. In evidence, the Builder claimed the figure of $700 was not only for cleaning but was also for maintenance. I reject that claim as it does not support his earlier email to the committee that the $700 was to be for cleaning or his evidence that a further amount of $5,000 has been allocated this year for maintenance. Even the Builder himself criticised the state of the building when he took over management in May saying he had others come in and fix it. That was until he was reminded that it was his own cleaners who were responsible for its poor state.[23]
3. At the time that the Builder's company was engaged to carry out the cleaning in 2017, he was a member of the OC committee.[24]
4. At the 2018 AGM, the Builder proposed a new budget. This budget resulted in significant cuts to the cost of waste collection and repairs and maintenance and the removal of any allocation for legal fees. This budget was ultimately accepted by the OC. The budget provides no contingency for the cost to address building defect and safety problems and has done away with legal costs to address these issues. The Builder says all matters can be resolved by sitting down and talking about them.
5. The Applicant says the removal of legal fees is another example of the Builder looking after his own interests and avoiding litigation to the detriment of the lot owners.
6. The Applicant says he is supportive of any budget that has a saving, but if shortcuts are being taken he is not in favour of it.
7. The proposed budget also included an amount for sundries in the amount of $2,000 and management fees of $5,000. These management fees were later referred to as administration fees and totalled $4,000.[25] The Builder says this fee will be paid to one of his companies for the costs of an employee carrying out administration tasks related to the management of the OC. The name of this employee is Samir Ghobrial, the author of many of the Builder's emails and correspondence.
8. The Builder has appointed himself responsible for maintenance on the building, and says that because he has the trades around he can keep the cost capped.
9. After appointing himself as manager of the OC at the 2018 AGM, the Builder sought to use his position to obtain copies of the legal advice received by the OC related to action against him. He did not seek information related to any investigation into the cladding issue.
10. On 25 July 2018, the Builder sent an email out to 13 lot owners advising them of this proceeding -

Mr Graeme Edwards (of Lot 10 /2-4 Hutton St) applied to VCAT to appoint an administrator for some hidden reason, The appointment of an administrator would result in that administrator not needing to have approval or consent to carry out all the duties (see attached VCAT Tribunal's Order). We don't want to go back to the old days which result the following:

* High owner Corporation Fees (We manage to drop the OC Fees from $1,080.64 per quarter under Dr Strata Management to $574.20 per quarter), We did manage to avoid a lot of unnecessary cost and keeping the site in a good condition.

* Payment of unnecessary invoices for maintenance work which we do now for a minimal charge.

* We are the best party to deal with any council Notices regarding the Cladding without any impact on the lot owners.

* As our office is not far from the building, we keeping an eye on the site for security and any maintenance issues with exaggeration cost.

Your immediate response by Emails is highly recommended to be ready for the hearing. To help preventing Mr Edwards from taking this step and incur a lot of extra cost for each lot owner, Please Email us your refusal at accounts@4sconst.com to present it during the hearing which is adjourned to 09:30am on 01 August 2018 or by your attendance if you are available.[26]

1. Six lot owners wrote back to the Builder, opposing the appointment of an administrator.

1. The Applicant complains that the building is plagued by building defects and that the OC is being prohibited from pursuing the Builder, who has done nothing to address these issues.
2. The Builder says he has responded to any repair issue promptly but says most of the issues complained of are maintenance issues arising from a failure by the OC to regularly maintain the building.
3. In October 2013, Municipal Building Surveyor, John Prendergast, issued a Building Order to the OC and the Respondent Lot Owner (Building Order).[27] It required the maintenance of the Essential Safety Measures for the building on a regular basis and an assurance that they had been maintained. The Building Order also demanded the demolition and removal of timber verandahs over the balconies on the western side of the building. It is understood that Mr Prendergast commenced legal proceedings against the Builder in relation to the verandahs, but the matter resolved without the need for a judicial determination.[28] The Builder says he resolved this issue by applying for a planning permit for the verandahs. He says he did not need a building permit.
4. In February 2015, the OC was issued with a building notice from Greater Dandenong (the Building Notice).[29] This notice referred again to the timber verandahs constructed on the balconies of three apartments and highlighted concern with sixteen safety issues. Included in the Building Notice was a reference to a timber floor in the carpark. The Builder says this is not part of the building and so not his responsibility, even though he constructed it.
5. In the latter half of 2016, Roscon was engaged to complete a Building Defects Report (the Roscon Report). It refers to some 51 items and says -

Overall the buildings condition is very poor and the builder's workmanship is to blame in most cases. Given the building is only 5 years old, the condition of the building suggests it is much older. Safety is the biggest concern, with the lack of proper fire rated materials being utilised throughout the building as the most notable issue.

1. The Roscon report identifies some issues previously identified in building notices and many of the issues raised later by a fire safety engineer to look into flammable cladding. The accompanying costings report says that $598,647.30 is required to fix the defects.
2. The Builder says he is of the view that the items in the Building Notice and the Roscon Report are maintenance items. While he acknowledges that he has only gone through the Roscon Report "vaguely and not thoroughly", the Builder says most of the items identified are cosmetic of a building that is five or six years old. The Builder concedes he has not attended to rectification of any of the items.
3. After resigning at the 2017 AGM, the OC manager, Rebecca Danne from OCVM Group, highlighted the risk to the OC of not disclosing the Roscon Report and Building Notice to any future insurer.[30] Ms Danne says she was in constant communication with the Builder about building defects over the years, in the hope that he would attend to them. She says he often did not respond, or when he did, the Builder did not address the defects in any meaningful way.[31]
4. The Builder says he was going to provide the Roscon Report to the surveyor who issued the occupancy certificate, for "an accurate legal document, as the Roscon report was just an opinion".[32] Any response from this surveyor was never passed on to the OC. The Builder also told the other members of the OC committee that suing him would be a waste of time and money.[33]
5. In 2017, the Applicant raised issue with leaks in his apartment. An email from the Builder states that work was completed to 3 apartments at that time, including flashing, plastering, electrical, painting and cleaning.[34]
6. In March this year, the OC lodged a resolution application against the Building Company. The application to Domestic Building Dispute Resolution Victoria (DBDRV) refers to lot owners also wanting to join the action and asking for a certificate to be issued to enable the matter to proceed to VCAT. This matter is on hold. The Applicant says it can't proceed without an administrator being appointed. The Builder says the matter should not proceed as the best way to sort anything out is to sit down and talk it through. In any event, he once again claims the issues are all maintenance related and that he is not liable.
7. The Builder has effectively conceded that he will not support any legal action related to the defects, and says he doesn't consider that approach to be a conflict of interest. He says as a majority lot owner he has the most benefit in seeing this matter resolved, without paying huge amounts for legal fees.
8. The Applicant says he has no faith in the Builder carrying out any of the defect rectification works. He says given the history of opportunities presented to the Builder to repair things, and the lack of satisfactory repairs (citing a reoccurrence of leaks to his apartment two weeks ago), he would prefer to engage an independent contractor.

1. Recent high rise building fires, such as the Lacrosse building fire in November 2014 and the Grenfell tower tragedy in June 2017, resulted in an audit into the use of combustible cladding on buildings in Victoria. Following on from the Victorian Cladding Taskforce findings, the Victorian Building Authority and Municipal Building Surveyors have this year started issuing emergency orders, to ensure safety measures are put in place.
2. The OC received a "show cause" notice, after the Municipal Building Surveyor determined that it was likely that expanded polystyrene cladding (EPS) formed part of the building (the EPS Notice).[35] A response to the EPS Notice was to be provided within 45 days, with the Surveyor requiring the OC to establish why the building should not be evacuated and its occupation and use prohibited.[36]
3. On 8 March 2018, Red Fire Engineers provided a draft Fire Risk Assessment (the Red Fire report) to respond to the EPS Notice. In considering the level of risk to life safety, Red Fire determined that the risk assessment of a fire starting in one of the apartments, and spreading and igniting the combustible EPS cladding, was "extreme".[37]
4. Red Fire recommended 12 issues be addressed within a thirty-day period (Stage 1), including notification to all residents that they should not use or store flammables on the balconies.[38] There is no evidence that any of these recommendations have been carried out. The Red Fire report states that if Stage 1 and Stage 2 works are done, then that will keep the building in a reasonably safe condition to occupy, and it will not need to be evacuated.[39]
5. The Builder takes issue with the Red Fire report being in draft form and says it should hold little weight. The Applicant disagrees and says the report has been carried out by one of Australia's leading experts on EPS cladding, Jonathan Barnett. I assume the Red Fire report is in draft form as it makes note that it requires further information from an Essential Safety Measures (ESM) audit, before responding fully to the EPS Notice.
6. Despite the Builder repeatedly saying at the hearing that the Red Fire report was not "viable", he advised the OC in late April that he had been in contact with Mr Barnett to get a quote to "get the job done".[40]
7. Given the extensive considerations within the report, the expertise of the author and the obvious need for an ESM audit, I am not persuaded that I should disregard or undervalue the risk assessment or recommendations contained within the Red Fire report.
8. An ESM audit was carried out by Basic Engineering, with a report issued in April 2018 (the Basic Engineering report) insisting, that unless otherwise stated by a Fire Safety engineer, "the building be evacuated".[41]
9. The Basic Engineering report says -

It was obvious during the audit, that the design and installation of many Essential Safety Measures were of such poor quality, that in those cases analysis wasn't required to conclude the results. Compounding the issue is documentary evidence of the severe neglect to maintain the property and its systems, in some instances resorting to bolting exit doors closed to avoid the cost of maintenance.

The ESM defects are so numerous and serious in nature that we believe this building is unsafe and cannot be made safe without major and costly works.[42]

1. It is unclear whether or not the OC has obtained a final version of the Red Fire report.
2. In May 2018, the OC held its annual general meeting. In the agenda that was sent by the then manager, it made no mention of any fire safety or cladding issues. It simply referred to the "consideration of other matters affecting the common property as allowed by the meeting chairperson" in general business. The Applicant and Ms Lam say they were sent copies of the Red Fire report and Basic Engineering report by the manager by email and were encouraged to attend the AGM.
3. At the hearing, the Applicant, Ms Lam and the Builder all said they had "scanned" the Red Fire report and Basic Engineering report. None have read them properly - which I find astonishing given the serious risks raised in these reports.
4. On 13 June 2018, the Builder made contact with the surveyor who signed off on the construction of the building, Gavin Casey. He was seeking a response to the EPS notice. Mr Casey responded advising that he was retrieving documentation from archives. By 14 July 2018, the Builder was still pursuing a response from Mr Casey.
5. In early July 2018, the Builder engaged Link Fire to carry out an audit of the fire system. The Builder says the audit was undertaken to meet permit requirements and Link Fire was not made aware of any reports or issues with the cladding. An invoice from Link Fire was provided at the hearing.[43] No report or document detailing the findings of the audit was presented.
6. The Municipal Building Surveyor says he has been provided with the Red Fire report and Basic Engineering report, and in light of the seriousness of the defects and risk to occupiers, has referred the matter to the VBA.[44] He says he has been advised that the VBA will be taking action in relation to the building imminently.[45]
7. The Builder says he has now engaged Dobbs Doherty, fire safety engineer, to carry out a Fire Engineering Brief. The fee proposal, sent on 2 August 2018, refers to drawings and background information received that day. The Builder says he accepted the proposal the next day and paid for it himself. When asked why it had taken him so long to engage Dobbs Doherty, the Builder replied - "I can't really find a real answer to that apart from it just stepped off my mind until such a time that I got this issue with the Body Corp". This issue being the application for the appointment of an administrator. The Builder further says that "the material (the cladding) is not that bad as everyone is imagining", but says that he "still has to comply". At another stage during the hearing he said he had done nothing about the reports due to his relationship with the OC and the dynamics of the situation. He says he has promised lot owners now that he will work efficiently and effectively.
8. The Builder has asked the Tribunal to delay any consideration of the application for the appointment of an administrator until after he receives the Dobbs Doherty report, which he expects to be within the next three weeks.

A manager with a questionable history and a lack of understanding on running an owners corporation

1. The Applicant says that the Builder has a history of action against him related to building defects and that he lacks an understanding of his duties in managing an owners corporation.
2. The Builder says he has been in Australia since 1991, is a civil engineer by trade and is very capable of "looking after my building". He says the building is three minutes from his office and he has looked after many other developments as well. While the Builder says he has not been a manager before, he rang Consumer Affairs when he was appointed and got some advice.
3. In October 1998, the Office of Fair Trading fined the Builder for contraventions related to insurance cover in a contract of sale. At the hearing the Builder said he could not remember the circumstances of the contravention.
4. In December 2010, the Builders building company was ordered to reimburse an insurer on a building defects claim in the value of $263,706.40. In those proceedings the Builder also claimed that the defects arose as a result of a failure to maintain the property. This claim was rejected by the Tribunal.
5. In September 2012, the Building Practitioners Board suspended the Builder's building licence for 12 months for over excavating two multi storey developments in Dandenong. After a series of appeals, the Tribunal, in the Review and Regulation List, quashed that suspension and issued a reprimand.
6. When asked whether he had advised lot owners about the legal action against him, he responded that he hadn't as he had over 27 years of building and only a couple of cases over hundreds is a credit to him and not something to shy from.
7. The Builder was also asked about the payment to Mr Ghobrial for work undertaken related to management of the OC. The Builder was referred to the OCAct and the offence related to payment as a manager if not registered or holding professional indemnity insurance. He did not respond.
8. The Builder was further surprised to learn that his appointment as manager did not mean he was a member of the committee, and that he hadn't been elected to the committee according to the minutes of the June 2018 meeting. The Builder says "My understanding is that a manager is part of the committee".

1. The Applicant submits that this case is abundantly clear - if orders aren't made appointing an administrator, then the OC will continue to have a manager who doesn't take his role and obligations seriously. He submits that the losers in all of this are the residents and the lot owners.
2. The Applicant further submits that the OC is being run by a manager who has an overwhelming self interest in how it is managed and a clear conflict of interest. That compared to the cases referred to, this is an obvious example of dysfunction with greater and more significant consequences.
3. The Applicant submits that the Builder does not understand the role of manager and that of an OC committee, and doesn't have the professional experience to manage an owners corporation, let alone one that has significant defects and one that is facing serious safety issues and an evacuation order.
4. The Builder submits that he accepts that there are very serious matters facing the OC. However he says while a lot of attention has been paid to his actions in the six to eight weeks since he became manager, very little has been said about the delays by the previous OC manager between January and May 2018.
5. The Builder submits that the previous manager resigned and the OC was left "rudderless". He says the manager was not displaced - she chose to leave.
6. The Builder submits that "no-one in this saga looks good", that it's a serious thing and it's unfortunate. He submits that on one view he could have acted more quickly but says a reasonable response is to get a finalised and signed off report to respond to the fire safety issues - and he is doing that with the engagement of Dobbs Doherty.
7. It is obvious from the historical account of the Builders involvement in the OC, the numerous defects that have plagued the building and the current emergency situation facing residents, that the OC has been operating at a significantly reduced capacity for many years.
8. I do not accept however that the OC is now on track, and that the Builder is now suddenly able to put his own self-interest to one side and run the OC for the benefit of lot owners.
9. I make this assessment based on my observations of the Builder and the manner in which he conducted himself at the hearing and from the evidence presented. When confronted with inconsistencies or accusations about his actions, the Builder defaults to a position of not being able to remember and then quickly changes the subject to one he considers to be more favourable. He is more inclined to lay blame on others for events, refusing to acknowledge any responsibility for his actions.
10. While the majority of lot owners do not support the appointment of an administrator, it is not clear that the Builder's supporters have been informed about the true nature of the defects plaguing the building and the way the OC has been managed. Had they had more information, their attitude may well be different. In any event, while the view of lot owners is a consideration, I must make my determination based on what is in the lot owners best interests.
11. The OC has now been through two AGM's where financial reports could not be approved, budgets were blocked and resolutions to fix the building defects were voted down. All arose due to the actions of the Builder. The operating budget of the OC has been significantly reduced in the current financial year, in circumstances where it is facing more expenses than ever to fix the defects, cladding and safety issues.
12. The evidence overwhelmingly confirms that the OC is so dysfunctional that services to lot owners are being significantly affected. In these circumstances it is appropriate that I exercise my discretion and appoint an administrator to ensure that the interests of lot owners are protected.
13. The Builder submits that I should delay any decision to appoint an administrator until after he receives the Dobbs Doherty report, or alternatively I should make directions about management of the OC under section 165 of the OCAct, instead of taking the drastic step of appointing an administrator.
14. Given the urgency of this matter and the lack of insight that the Builder still has about his role in the OC's incapacity to operate, I reject those suggestions. I am of the view that the only way the OC can get back on track is through the appointment of an administrator.

1. The Applicant has proposed the appointment of Matt Twiselton from Excel Strata Managers as administrator.
2. Mr Twiselton provided a letter of acceptance setting out his rate to act as administrator, being $198 per hour, and a Contract of Appointment for any actions taken as manager.
3. Mr Twiselton attended the hearing and gave evidence about his role as a manager and his experience in dealing with building issues. While he acknowledges he has not been an administrator before, Mr Twistleton displayed an extensive knowledge of the OCAct and his duties and obligations as an administrator. He said that his role would be to get the OC functioning as quickly as possible - "to get it back on line".
4. I am satisfied that Mr Twiselton is an appropriate choice as administrator and that he provides the independence that the OC has been lacking.
5. Both the Applicant and the Builder seek some restrictions on the appointment.
6. The Applicant wants the term of appointment to be twelve months while the Builder seeks a reduced term of no more than six months. Given the work that is facing this administrator, with safety issues a main priority and a scope of works that is expected to take some time, I am of the view that a twelve month minimum is appropriate. The parties will be given liberty to apply should there be evidence that the OC is operating effectively or if the term needs to be extended.
7. Both the Applicant and Builder submit that the administrator should notify lot owners if and when he needs to make a decision requiring the expenditure of over $1,000. I am of the view that this amount fails to take into account the need to act quickly or the costs involved in rectifying safety issues. The administrator has an obligation to keep a record of all transactions and to act openly at all times. In my view lot owners should be notified if a decision requires expenditure of over $5,000, and that is the order I shall make. This requirement does not apply to any works the administrator has reasonable grounds to believe are necessary to ensure safety or prevent significant loss or damage, similar to the OC's ability to carry out significant works without a special resolution.[46]
8. I shall also make orders about the making and keeping of records related to the administration.

1. The Applicant submits that this matter should be referred to Consumer Affairs. I consider that appropriate in circumstances where serious questions have to be raised about the part played by a number of people in the management of the OC - not just the Builder.
2. An order will be made directing the principal registrar to send a copy of these reasons to the Director of Consumer Affairs and for the file to be made available for inspection if requested.

1. Some submissions were made on costs by the Applicant. The Builder submitted that he would like to be heard on the issue of costs following an assessment of the decision.
2. The course proposed by the Builder is appropriate and the costs (including the application and hearing fee) of the Applicant will be reserved.
3. I have included in the order some directions about the filing of submissions related to costs.

[2] McKinnon v Adams [2003] VSC 116, Justice Bongiorno @ paragraph 20.

[5] Owners Corporation 1 Plan No. PS440878V & Ors v Dual Homes Victoria Pty Ltd (Owners Corporation) [2011] VCAT 211, Gleeson and Ors v Adams and Anor (Owners Corporation) [2011] VCAT 2012, Lubransky v Owners Corporation No 1 PS519798G (Owners Corporations) [2014] VCAT 1301, Cooper v Owners Corporation PS544274B (Owners Corporations) [2018] VCAT 799 and Webb v Owners Corporation PS621796Q (24 February 2016 - unreported).

[10] Sections 100, 103(1), 105 and 107 of the OCAct.

[12] See commentary @ paragraph 117.02 of the Anstat annotated OCAct.

[14] Subsections 119(2) and 119(5) of the OCAct.

[18] Minutes of Annual General Meeting held on 14 May 2018, Minutes of Annual General Meeting held on 31 January 2017 and Affidavit of Rebecca Jane Danne, sworn on 31 July 2018, at paragraph 8.

[20] Minutes of 22 June 2018 Committee Meeting, item 3.

[21] Minutes of 22 June 2018 committee meeting and evidence of various emails from the Builder requesting documentation from the manager and the OC lawyers related to building defects action against him, including one from his lawyer dated 23 May 2018 which referred to his client now controlling the OC.

[22] Email from Emad Farag to Timsy Lam dated 25 April 2017. It's unclear which one of the Builders companies is paid for the building contract.

[23] Evidence of the builder - "As I mentioned before when took over the job, the job was very very filthy, very dirty - we engaged someone to do a thorough clean on the property."

[24] Committee meeting minutes dated 18 February 2017 and 3 April 2017.

[25] Budget table at item 9 of the minutes of committee meeting held on 22 June 2018.

[26] Email from Emad Farag dated 25 July 2018, sent at 6.22pm to various recipients from the email address of accounts@4sconst.com. The email has been transcribed exactly as written, save for spacing.

[27] Building Order dated 8 October 2013 from Greater Dandenong City Council.

[28] Affidavit of John Lennon Prendergast dated 31 July 2018, paragraph 7.

[29] Building Notice dated 9 February 2015 from John Prendergast, Municipal Building Surveyor.

[30] Email from Bec Danne to the OC committee dated 10 February 2017.

[31] Affidavit of Rebecca Jane Danne, sworn 31 July 2018, at paragraphs 1 to 3.

[32] Email from Emad Farag to various OC committee members dated 12 February 2017.

[34] Email from Emad Farag to Timsy Lam dated 25 April 2017.

[35] Building Notice from Greater Dandenong City Council dated 8 January 2018.

[39] Clause 6.24 of the Red Fire report at page 17.

[40] Email from sent from Samir Ghobrial, accounts@4sconst.com to Mark Lipshutz dated 27 April 2018.

[41] Page 3, Executive Summary, Results - the Basic Engineering report dated 12 April 2018.

[43] Link Fire invoice 176335 dated 6 July 2018.

[44] Affidavit of John Lennon Prendergast sworn 31 July 2018 at paragraphs 3 and 4.