1. That the manager be directed to ensure that all owners corporations for which it provides management services, now and in the future are correctly advised of the need for committees to obtain specific powers and authority by delegation, given in accordance with Section 11 of the Act.

1. That the management contract between the owners corporation and the manager be terminated.

1. As Mr Lewino is not legally represented, I take it that the first order, sought is a declaration and I stated this in the hearing. The power to make a declaration is contained in Section 124 of the Victorian Civil and Administrative Tribunal Act 1998.
2. Pizer's Annotated VCAT Act[1] states at paragraph 4420 that the Tribunal is influenced by the principles governing the making of declarations at common law when determining whether to make a declaration under Section 124. The proposition was endorsed by the Tribunal in Moira SC v Demaio[2] and in the course of the decision it was observed that the basic requirements for the exercise of the power to make a declaration include:
   • There must be a dispute in existence.
   • The jurisdiction is not available if the issue is purely theoretical.
   • The dispute must not only be in existence but must be attached to facts.
   • The dispute must be real, not hypothetical.
   • The dispute must be of practical importance.
   • The making of a declaration must e of practical use.
3. In considering the question of whether to make a declaration in relation to the first order, I take the declaration sought to be only in relation to the first respondent. Having regard to the above requirements, it is not possible to make a declaration wider than one concerning the dispute between the parties.

1. Mr Lewino was self-represented. The owners corporation and the Director were legally represented. The manager was represented by a director of its parent company.
2. No evidence as such was given at the hearing. However, all parties agreed to the factual maters set out in the application and to the minutes of a special general meeting of the owners corporation held on 10 September 2009.
3. Written submissions were received from the owners corporation, the manager and the Director. Mr Lewino did not make submissions of his own but adopted the submissions made by the Director.

THE OWNERS CORPORATIONS ACT 2006

1. The Owners Corporations Act 2006 (the Act) came into operation on 31 December 2007. The main purposes of the Act, set out in Section 1, are

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

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

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

An owners corporation has the following functions -

(ii) the chattels, fixtures, fittings and services related to the common property or its enjoyment;

(iii) equipment and services for which an easement or right exists for the benefit of the land affected by the owners corporation or which are otherwise for the benefit of all or some of the land affected by the owners corporation;

(c) to take out, maintain and pay premiums on insurance required or permitted by any Act or by Part 3 and any other insurance the owners corporation considers appropriate;

(e) to provide an owners corporation certificate in accordance with Division 3 of Part 9 when requested;

(f) to carry out any other functions conferred on the owners corporation by -

(ii) the Subdivision Act 1988 or the regulations under that Act; (iii) any other law; or

Note: An owners corporation is a body corporate which is incorporated by registration of a plan of subdivision or a plan of strata or cluster subdivision. An owners corporation has perpetual succession and a common seal and is capable of suing and being sued in its own name. See section 28 of the Subdivision Act 1988.

1. Section 6 Powers of owners corporation

(a) all the powers conferred on the owners corporation by -

(ii) the Subdivision Act 1988 or the regulations under that Act;

(b) all other powers that are necessary to enable it to perform its functions.

An owners corporation may in its own name and on behalf of its members execute any document or do anything necessary or convenient to enable it to carry out its functions, powers, rights and obligations, and the document or thing has effect as if executed or done by the members.

Note: An owners corporation executes a document by the use of its common seal.

An owners corporation may by instrument delegate any power or function of the owners corporation (other than a power or function that requires a unanimous resolution or a special resolution or this power of delegation) to -

1. Section 101 Functions and powers of committee

(1) Subject to this section and the rules of the owners corporation, a committee has all the powers and functions that may be delegated by the owners corporation under section 11.

Note: Powers and functions that require a unanimous resolution or a special resolution of the owners corporation cannot be delegated under section 11.

(2) Subsection (1) does not apply to a matter or type of matter that the owners corporation has determined may be determined only by ordinary resolution of the owners corporation at a general meeting.

1. Section 82 Owners corporation may require certain matters to be dealt with at general meeting

An owners corporation may, by ordinary resolution at a general meeting, determine that a matter or type of matter that may be determined by ordinary resolution may be determined only by ordinary resolution of the owners corporation at a general meeting.

1. What follows is my distillation of what I consider to be the relevant matters extracted from the dispute history annexed to Mr Lewino's application and from minutes of a special general meeting of the owners corporation held on 10 September 2009.
   • There are 19 units on Plan No. 505169T.
   • Mr Lewino and his wife jointly purchased one of the units in mid 2007. At that time the body corporate was managed by a committee of owners.
   • On 17 December 2007 at a special general meeting of the body corporate it was resolved to engage the services of a professional manager.
   • (On 31 December 2007, the Act came into operation.)
   • On 12 March 2008 at the Annual General Meeting of the owners corporation it was resolved to engage R.E. Appleby Pty Ltd as manager and Mr Lewino was elected to the committee of the owners corporation.
   • On 16 April 2008 the first committee meeting following Mr Lewino's election to the committee took place. At the meeting Mr Lewino opined that for the committee to exercise any of the powers or functions of the owners corporation it was necessary for such powers or functions to be delegated to the committee by instrument pursuant to Section 11 of the Act. A representative of the manager disagreed with Mr Lewino and opined that no action was necessary, as in accordance with Section 101(1) of the Act the committee automatically gained all of the powers of the owners corporation other than those requiring a special or unanimous resolution. The matter was not resolved.
   • Various opinions were obtained.
   • On 2 July 2008 Mr Lewino was advised by the secretary of the committee that other members of the committee considered that powers to the committee were automatic.
   • On 3 July 2008 Mr Lewino resigned from the committee.
   • On 24 October 2008 notice of an annual general meeting to be held on 13 November 2008 was given. The subject of delegation was listed as an agenda item and the notice was accompanied by a letter written by Mr Neville Saunders, the General Manager of R.E. Appleby Pty Ltd, stating that under Section 101(1) of the Act, the committee has all the powers that may be delegated under Section 11. The ultimate paragraph of the letter states:

It is my experience that most committees are not delegated any specific powers and therefore by default have all the powers that may be delegated.

• By a letter dated 29 October 2008, owners of units were advised that the management contract with R.E. Appleby Pty Ltd was to be assigned to the second respondent with effect from 1 December 2008. The letter was signed by Mr Neville Saunders. (It is noted that Mr Saunders represented the second respondent at the hearing, describing himself as a director of the second respondent's parent company.)
• On 13 November 2008 the Annual General Meeting was chaired by Mr Saunders at the request of the chairman. Again, the automatic delegation position was put forward. No information was given to the Tribunal as to the position adopted by the Annual General Meeting.
• By letters dated 25 February 2009, the manager advised unit owners that the committee had resolved to conduct a postal ballot on the operation of authorising delegation of certain powers to the committee. The letters contained ballot papers and copies of the proposed instrument of delegation.
• By a letter dated 30 March 2009, unit owners were advised by the manager that a quorum was achieved and that the majority of owners voted in favour of the delegation.
• By letters dated 1 April 2009, the manager advised the unit owners that the contents of the letter dated 30 March 2009 were incorrect due to an administrative error and that a quorum was not achieved and that consequently the ballot failed and the motion lost.
• By a letter dated 20 May 2009 addressed to the manager Mr Lewino requested a special general meeting be held.
• By a letter to unit owners dated 9 June 2009, the chairman of the owners corporation advised, inter alia, of his resignation and that of four other members of the committee. This is stated by Mr Lewino to be the resignation of all members of the committee.
• On 11 June 2009 a special general meeting of the owners corporation took place. Eleven lot owners attended with a twelfth giving a proxy to another. Mr Lewino was elected to chair the meeting. When nominations for a new committee were called for, Mr Lewino was the only nomination. As the Act requires a minimum of three persons on a committee, the matter was deferred, as was the question of delegation of powers to the committee.
• On 10 September 2009 a special general meeting of the owners corporation was held. Several motions concerned the conduct of the matter now before the Tribunal on behalf of the owners corporation. An invitation was placed before the meeting to offer a motion to terminate the services of the manager. No motion was forthcoming and it was resolved that the services of the manager be continued. Nominations were called for membership of the committee. No nominations were received. As there was no committee, no action could be taken on the issue of delegation of powers to the committee. The minutes record that Mr Lewino was present at the meeting.

DOES THE COMMITTEE OF THE OWNERS CORPORATION AUTOMATICALLY HAVE POWERS AND FUNCTIONS OR MUST THEY BE DELEGATED TO IT BY THE OWNERS CORPORATION?

1. Section 11 confers upon an owners corporation the power to delegate any power or function of owners corporation (other than a power or function that requires a unanimous resolution or a special resolution) to various listed persons and to the committee of the owners corporation.
2. Section 45(1) of the Interpretation of Legislation Act 1984 provides:

(1) Where in this Act or any Act passed or subordinate instrument made on or after the commencement of this Act the word "may" is used in conferring a power, that word shall be construed as meaning that the power so conferred may be exercised, or not, at discretion.

1. Reading Section 11 of the Owners Corporations Act 2006 together with Section 45(1) of the Interpretation of Legislation Act 1984 leaves no uncertainty that the power of an owners corporation to delegate powers or functions to its committee is discretionary. In other words, it is a decision of the owners corporation as to whether or not it delegates powers or functions to its committee, and if it does, what those powers or functions will be.
2. Then one reads Section 101(1) of the Owners Corporations Act 2006 which states:

Subject to this section and the rules of the owners corporation, a committee has all the powers and functions that may be delegated by the owners corporation under Section 11.

(a) The committee has all the powers, and functions that the owners corporation decides to delegate to it.

(b) The committee has all the powers and functions that it is possible for the owners corporation to delegate to it.

1. Mr Lewino and the Director argue the first meaning. The owners corporation and the manager argue the second meaning.
2. The Director's submissions contained the following extract from the decision of Kaye J in Director of Consumer Affairs v Glenville Pty Ltd[3]

18 The starting point for construing the statute is the principle that, ordinarily, the words of a statutory provision are to be construed according to their plain and grammatical meaning. It is not the role of the Court to re-write, or amend, a statutory provision. Essentially, the words of an Act of Parliament are assumed to mean what they say.[7]

19 Fundamentally, a statutory provision is construed according to its ordinary English terms, so as to give effect to the intention of the legislature, as revealed in the terms of the statute.[8] However, the principle that the words be accorded their plain and ordinary meaning is not applied inflexibly, so as to arrive at a construction which might be contrary to the manifest intention and purpose of the Act, as revealed by the terms of the statute or by a source recognised by law. In Project Blue Sky v Australian Broadcasting Authority,[9] McHugh, Gummow, Kirby and Hayne JJ stated:

... The duty of a court is to give the words of a statutory provision the meaning that the Legislature has taken to intend them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning.

20 Accordingly, it may be necessary to modify, or depart from, the literal grammatical meaning of the words of a statutory provision where such a construction will yield a capricious or absurd result, where it would lead to an inconsistency within the statute in which the provision occurs, or where it would render another part of the statute nugatory or ineffective. In such a case, the Court is justified in departing from, or modifying, the literal meaning of the words chosen by Parliament, but only to the extent necessary to avoid such a result. The principle is clearly stated in the speech of Lord Wensleydale in Grey v Pearson,[10] to which Mr Caleo referred. There his Lordship stated:

I have been long and deeply impressed with the wisdom of the rule, now, I believe, universally adopted, at least in the Courts of Law ... , that in construing rules and indeed statutes, and all written instruments, the grammatical and ordinary sense of the words is to be adhered to, unless that would lead to some absurdity or inconsistency with the rest of the instrument, in which case the grammatical and ordinary sense of the words may be modified, so as to avoid that absurdity or inconsistency, but no farther.[11]

21 Thus, where the literal construction of the words of a statutory provision might undermine or nullify the statute, the Court will adopt a construction of those words which renders them workable. That approach is described in the authorities by reference to the Latin maxim ut res valeat quam pereat ("it is better for a thing to have effect than to be made void"). One example of such a proposition occurs where a statutory provision assumes the existence of a power or obligation, for which no express provision is made. In such a case, the courts will construe the statute, so as to contain that implied power or obligation.[12] In an appropriate case, the Court will treat particular words as surplusage, in order to give effect to the balance of the statutory provision.[13] Where necessary, a court will avoid an absurd or extraordinary result by "amending" a phrase in a statutory provision. Thus in Adler v George,[14] the Court of Queen's Bench, in a penal provision, construed the phrase "in the vicinity" to mean "in or in the vicinity". In an extreme case, a court may construe a word or phrase of a statute contrary to its literal meaning, if it is manifest that the particular word or phrase was selected by mistake by the draftsman. A classic example of that proposition is the decision of the majority of the High Court in Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation.[15]

22 Another example of the approach to construction, to which I have just referred, has closer application to the present case. Where necessary, a court will construe a statutory provision to be subject to a qualification, so that the provision can be made workable and given sensible meaning. In Hinton v Lower (No. 2),[16] the appellant was convicted for an offence against the Road Maintenance (Contribution) Act 1963, which required the owner of a vehicle to keep an accurate daily record of all journeys of the vehicle along public roads in South Australia. The appellant submitted that it was impossible to keep an accurate daily record of journeys on public roads in South Australia, and accordingly no-one could be convicted of failing to keep or deliver such a record or pay charges dependent upon it. That submission was rejected by the Court of Appeal. Wells J responded to it in the following terms:

The answer to these contentions, in my opinion, is that an Act of Parliament must be construed ut res valeat quam pereat, and that no legislation should be read as imposing a duty impossible of performance - more especially if non-performance vitiates the entire operation of the Act - unless the language cannot be given any other meaning. It seems to me that the Act must be read as if controlled, where necessary, by the phrase 'so far as is reasonably practicable'. It is only in that way that the Act can take effect at all, and it is not to be supposed that the Legislature intended to enact a brutum fulmen.[17]

[7] See, for example, Amalgamated Society of Engineers v Adelaide Steamship Co Limited (1920) 20 CLR 128, 161-2 (Higgins J); Pye v Minister for Lands (NSW) [1954] UKPCHCA 3; (1954) 90 CLR 635, 648-9.

[8] Wear Commissioners v Adamson (1877) 2 App Cas 743, 763 (Lord Blackburn); Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation [1981] HCA 26; (1981) 147 CLR 297, 320 (Mason and Wilson JJ).

[9] [1998] HCA 28; (1998) 194 CLR 355, 384).

[10] [1857] EngR 335; (1857) 6 HLC 61, 106[1857] EngR 335; ; [1857] EngR 335; 10 ER 1216, 1234.

[11] See also, for example, Cooper Brookes (Wollongong) Pty Ltd v Commissioner of Taxation [1981] HCA 26; (1981) 147 CLR 297, 321 (Mason and Wilson JJ); Nokes v Doncaster Amalgamated Collieries Limited [1940] AC 1014, 1022 (Lord Salmon); Blue Sky Inc v Australian Broadcasting Authority [1998] HCA 28; (1998) 194 CLR 355, 381-2 [70] (McHugh, Gummow, Kirby and Hayne JJ); Footscray City College v Ruzicka (2007) 16 VR 498; [2007] VSCA 136, [16] (Chernov JA).

[12] Norton v Long [1968] VicRp 23; [1968] VR 221, 223 (Winneke CJ); Herald and Weekly Times v Victorian Civil and Administrative Tribunal [2006] VSCA 7 [24] (Maxwell P).

[13] Stone v Yeoval Corporation (1876) 1 CPD 691, 701 (Brett J); McMonagle v Westminster City Council [1990] 2 AC 716, 726-7 (Lord Bridge).

[14] [1964] 2 QB 7; Saraswati v R [1991] HCA 21; (1991) 172 CLR 1, 23 (McHugh J).

[15] [1981] HCA 26; (1981) 147 CLR 297, 305-6 (Gibbs CJ), 310-13 (Steven J), 321 (Mason and Wilson JJ).

[16] [1971] 1 SASR 512.

[17] Ibid, 528; see also 519-20 (Bray CJ, with whom Mitchell J agreed).

1. Section 35 of the Interpretation of Legislation act 1984 permits consideration to be given to any matter or document that is relevant including, but not limited to (inter alia) reports of proceedings in any House of the Parliament and explanatory memoranda or other documents laid before or otherwise presented to any House of the Parliament.
2. The Owners Corporations Bill was read for a second time on 20 July 2006. In the second reading speech the Honourable Attorney General stated:

This Bill will clarify that the committee may do all the things that the owners corporation can do by ordinary resolution, except those that the owners corporation itself resolves can only be decided at a general meeting.

1. This does not advance the interpretation of Section 101(1).
2. An amendment to Section 101(1) is presently before the Parliament as part of the Consumer Affairs Legislation Amendment Bill. During the second reading speech on 24 November 2009 the Minister for Consumer Affairs stated:

The bill will make clarifying amendments to the ... Owners Corporations Act 2006 to make these Acts easier to understand for the users of the legislation, such as residents in owners corporations who mostly lack legal training.

Clause 33 amends section 101(1) of the Owners Corporations Act 2006 to clarify that a committee has only the powers and functions that are delegated to it.

1. Is it possible to take into account the wording of a second reading speech and explanatory memorandum of an amending Bill when interpreting a provision of an Act? Section 35 of the Interpretation of Legislation Act 1984 contains no limitation of reports of proceedings and explanatory memoranda or other documents to those relating specifically to any bill or piece of legislation. I therefore conclude that it is open to consider the second reading speech and explanatory memorandum to the Consumer Affairs Legislation Amendment Bill when interpreting Section 101(1) of the Act.
2. The owners corporation and the manager argue that the amendment constitutes a clear change of direction by the Parliament in relation to Section 101(1). Mr Lewino and the Director argue that the wording of the second reading speech and the explanatory memorandum indicate that the amendment is a clarification of the existing situation made for ease of understanding by users of the legislation such as residents in owners corporations who mostly lack legal training.
3. I agree with the position argued by Mr Lewino and the Director. Reading the second reading speech and the explanatory memorandum together clearly indicates parliament's intention that the provision of the amending bill relating to Section 101(1) is nothing more than a clarification of Parliament's original intention.
4. Returning to the decision of McHugh, Gummow , King and Hayne JJ in the Project Blue Sky case quoted by Kaye J, above

The duty of the court is to give the words of a statutory provision the meaning that the Legislature has taken to intend them to have.

1. By enunciating the clarification, Parliament's original intention is made manifest - a committee has only the powers and functions that are delegated to it.
2. This construction is reinforced by Section 35(a) of the Interpretation of Legislation Act 1984:

In the interpretation of a provision of an Act or subordinate instrument -

(a) a construction that would promote the purpose or object underlying the Act or subordinate instrument (whether or not that purpose or object is expressly stated in the Act or subordinate instrument) shall be preferred to a construction that would not promote that purpose or object.

1. The first of the main purposes of the Act set out in Section 1 is

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

1. Section 11 furthers the purpose of specifically permitting delegation of any power or function to (inter alia) the committee. The power to delegate must be seen in the light of promoting the purpose or object underlaying the Act. As already stated, this power is discretionary. It follows, then that the interpretation of Section 101(1) is that the committee has all the powers and functions that the owners corporation decided to delegate to it.

1. The owners corporation is already under an obligation to comply with all requirements of the Act. Section 100(1) mandates that an owners corporation affecting 13 or more lots must elect a committee at each general meeting. From the material before the Tribunal, I am satisfied that the owners corporation affects 19 lots and that it does not at present have an elected committee. An order does no more than the present statutory obligation. However, it is appropriate to declare that the owners corporation is under a statutory obligation to elect a committee.

1. This does not relate to an actual matter in dispute. It is not within the jurisdiction of the Tribunal to make such an order.

1. No material before the Tribunal satisfies me that it would be appropriate to terminate the management contract between the owners corporation and the manager.

[1] Pizer, Jason. Annotated VCAT Act, 3rd edition, Melbourne 2007

[2] Unreported, VCAT, Bruce DP, 7 September 1999

[3] (2009) VSC 76