Owners Corporation 1 PS723350Q v Owners Corporation 2 PS723350Q (Owners Corporations) [2025] VCAT 592

1. The proceeding is adjourned to an administrative mention on 12 January 2026. The parties are not required to attend VCAT on this day.
2. By 12 January 2026, the parties must advise VCAT in writing of the status of the dispute, and whether any further orders or directions are sought. If the parties are in agreement a Proposed Minute of Consent should be sent to VCAT.
3. If the applicant does not respond to the administrative mention by 12 January 2026, the application may be struck out with a right to apply for reinstatement.

1. This proceeding was commenced by Owners Corporation 1 PS723350Q ('OC1') under the Owners Corporation Act 2006 (Vic) ('OC Act') and sought an 'order appointing an administrator' and an 'order regarding the meaning and effect of the information statements lodged with the plan of subdivision' PS7235550Q ('plan of subdivision').[1]

1. OC1 is the registered proprietor of common property within the subdivision at 888 Collins Street, Docklands ('land') described in certificate of title volume 11655 folio 294.
2. The plan of subdivision was registered on 7 June 2016 and established four owners corporation including:

(a) OC1;

(b) Owners Corporation 2 ('OC2');

(c) Owners Corporation 3 ('OC3'): and

(d) Owners Corporation 4 ('OC4').

1. OC1 is an unlimited owners corporation and OC2, OC3 and OC4 are limited owners corporations.
2. At the time of registration of the plan of subdivision, additional information statements ('statements') were lodged in respect of the limited owners corporations. OC1 alleges that items within these statements have and will continue to generate uncertainty.
3. OC1 sought the following relief:[2]

(a) A declaration from the Tribunal to the effect that the reference to "management and administration of common property", as it appears within the statements, embraces the obligation to repair and maintain common property as well as any other obligations under the OC Act, and

(b) An order -

(i) amending or directing the amendment of, or

(ii) appointing an administrator under s 173 of the OC Act to amend,

the statements accordingly, such that they are expressed to refer the function of "management and administration of common property, including maintenance and repair of the common property and performing any other obligations under the OC Act" to the Applicant.

1. The proceeding was listed for a directions hearing on 3 December 2024, which proceeded without the appearance of any respondent. The remarks to my order following that directions hearing advised that there had been an error regarding the link for the videoconference and consequently, the proceeding was listed for another direction hearing on 14 February 2025. In addition, I allowed the applicant to amend its application to remove reference to s 41 of the Subdivision Act 1988 (Vic) ('SD Act') and to make any further amendments.
2. The amended application still includes relief in the form of a declaration, but I understand that declaration is no longer sought under s 41 of the SD Act.
3. In submissions dated 31 January 2025, OC3 raised issues regarding the alleged failure of OC1 to comply with s 18 of the OC Act. OC1 sought to respond to that matter and more generally in relation to s 18 of the OC Act.
4. My orders following the directions hearing allowed OC1 and OC3 to provide written submissions with respect to s 18 of the OC Act.

1. The primary issue for determination is whether OC1 has complied with s 18 of the OC Act.
2. For convenience, I now set out s 18 of the OC Act:

Power to commence legal proceeding

(1) Subject to subsection (2), an owners corporation must not commence any legal proceeding unless it is authorised by special resolution to do so.

(2) If a matter is within the civil jurisdictional limit of the Magistrates' Court and an owners corporation is authorised to do so by ordinary resolution, the owners corporation may commence any legal proceeding in -

(a) the Magistrates' Court; or

(b) VCAT or any other tribunal; or

(c) a court of another State or a Territory that corresponds to the Magistrates' Court.

1. OC1 highlights that it does not seek monetary relief in its application and that its proceeding falls within the description in s 18(2) of the OC Act for the following three reasons:

(a) 'civil jurisdiction limit' does not mean 'civil jurisdiction';

(b) Section 18(2) is not limited to proceedings in which monetary relief is sought; and

(c) Section 18(1) is intended to capture matters which would need to be commenced in superior courts.

1. Lastly, OC1 says there is a reason to doubt whether OC3 can raise concern about compliance with s 18 of the OC Act as that has not been put into issue by OC1 in its application and OC3 is not a member of OC1.

Civil jurisdiction limit does not mean civil jurisdiction

1. OC1 says that the reference to 'civil jurisdiction limit' in s 18(2) of the OC Act refers to the ceiling to which relief in the Magistrates' Court of Victoria ('MCV') is subject as confirmed in the decision in Owners Corporation 1 Plan No RP 2044 v Finch[3] (Finch). For completeness, I note that in Finch, VCAT was dealing with various applications including an application to restrain lawyers from acting, an application to strike out the proceeding under s 77 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic) ('VCAT Act') on the basis that the Supreme Court of Victoria ('SCV') was the appropriate forum.
2. OC1 says 'the upshot is that jurisdictional limit and jurisdiction are two different concepts'. In relation to s 18(2) of the OC Act, OC1 says the question is whether any amount claimed is within or exceeds the jurisdiction of the MCV. If so, a special resolution is required.
3. Put simply, OC1 says that it does not seek any monetary relief thus, the relief claimed is within the jurisdictional limits of s 18(2) of the OC Act.

Section 18(2) is not limited to proceedings in which monetary relief is sought

1. OC1 says that by referring to 'matter' in s 18(2) of the OC Act, the legislature intended that a proceeding in which no monetary relief is sought is capable of falling within the provision.
2. It relies on the decision of VCAT in Owners Corporation PS341151A v Gilmore[4] and I now extract the relevant paragraphs of that decision:
   1. Section 18 of the current version of the OC Act, which incorporates amendments as at 1 December 2021, states:

18 Power to commence legal proceeding

(1) Subject to subsection (2), an owners corporation must not commence any legal proceeding unless it is authorised by special resolution to do so.

(2) If a matter is within the civil jurisdictional limit of the Magistrates' Court and an owners corporation is authorised to do so by ordinary resolution, the owners corporation may commence any legal proceeding in -

(a) the Magistrates' Court; or

(b) VCAT or any other tribunal; or

(c) a court of another State or a Territory that corresponds to the Magistrates' Court.

1. The following is observed about the current s 18 of the OC Act:
   1. Section 18(1) has not been amended. It is still couched in general terms in that an owners corporation must not commence any legal proceeding unless a special resolution authorising it do to so. However, that subsection is subject to the operation of s 18(2).
   2. Section 18(2) has been amended significantly such that the new subsection has replaced the old subsection and what is now stated is that an owners corporation does not need a special resolution to issue any legal proceedings (whether or not they relate to the recovery of fees and other money) if the amount that is sought is within the jurisdictional limit of the Magistrates' Court (being $100,000.00) and an ordinary resolution has been passed authorising the owners corporations to do so.
2. As noted, the OC commenced proceeding OC696/2022 in May 2022, well after s 18 of the OC Act was amended.
3. Relevantly, Mr Gimore submits that:
   1. Under s 18(1) of the OC Act, the OC was required to pass a special resolution to issue the two proceedings against him.
   2. Alternatively, Mr Gilmore submits once s 18 of the OC Act was amended, by reason of the operation of s 2 of the OC Act, the amendment to s 18 had retrospective effect in that the OC was required to comply with the amended s 18 of the OC Act in order to be able to continue with proceeding OC1970/2020 and OC696/2022. That is, even if at the time the OC had commenced proceeding OC1970/2020 it was permitted to do so under the Old s 18, once that section was amended, the OC could not continue with the proceeding as it needed to have complied with the new requirements.
   3. Further, as the amounts claimed against him by the OC in each of the two proceedings are below the jurisdictional limit of the Magistrates' Court, under s 18(2) (which according to Mr Gilmore has retrospective effect) the OC was required to obtain authorisation by way of an ordinary resolution (if it was not required to obtain a special resolution) to have issued the two proceedings.
   4. The OC had not obtained the necessary ordinary resolution to have issued the two proceedings and accordingly, the OC's claims ought to be dismissed.
4. Turning first to Mr Gilmore's submission that s 18 required the OC to obtain a special resolution to issue the two proceedings, I reject his submission. The language of s 18(1) of the OC Act, which has not changed, is unambiguous. That subsection is subservient to s 18(2), which limits the scope of operation of s 18(1). Whether one considers the OC's claims under the Old s 18 or the current s 18, it is clear that the OC did not need to have a special resolution passed to have issued the two proceedings, which are fee recovery in nature. The central issue is whether the OC has complied with the requirements under s 18(2) of the OC Act.

20 Relying on the above, OC1 says that it seeks declaratory relief as to the meaning of the additional information statements and an order effecting the amendment of the statements.

1. Lastly, OC1 contends OC3 cannot raise compliance with s 18(2) of the OC Act because it is not a member of the OC1.

1. OC3 says this proceeding should be stayed to allow OC1 to cure its non-compliance with s 18 of the OC Act because OC1 required a special resolution to commence this proceeding.
2. OC3 contends the default position is that a special resolution is required for an owners corporation to commence any legal proceeding except for confined circumstances in s 18(2) of the OC Act which permits proceedings to be commenced by ordinary resolution.
3. OC3 says that OC1 has reversed the reading of the various subsections in s 18 of the OC Act. The proper reading is that s 18(1) provides the rule that is, all legal proceeding require a special resolution for their commencement, except for proceedings where relief is sought within the civil jurisdiction limit of the Magistrates' Court. In confined circumstances, the exception contained in s 18(2) to the rule provides for an ordinary resolution.
4. OC3 says that OC1 seeks to draw a distinction between the civil jurisdictional limit of $100,000 and the civil jurisdiction of the Magistrates' Court. However, references in the Magistrates' Court Act 1989 (Vic) ('MC Act') that use 'jurisdictional limit' are contained in s 100 of the MC Act in the context of civil jurisdiction. Furthermore, it is said that the use of the term jurisdictional limit is referable to monetary claims for damages, debt, liquidated demands or in equity of not more than $100,000.
5. OC3 says that the outcome outlined above regarding the MC Act is 'logical' because there is no sense in speaking of a matter being within $100,000 that is 'divorced' from the nature of the claim to which it relates.
6. Further, OC3 says that OC1's contention means there are no 'guardrails on how consequential or expansive that relief may be provided that a claimant did not ascribe a dollar value in making the claim that was more than $100,000'.[5]
7. OC3 says that its submissions are not that civil jurisdictional limit is synonymous with 'civil jurisdiction of the Magistrates' Court'. Rather, for the purposes of ascribing the value of claims that could be brought without a special resolution, the legislature has tied this concept to the limit of monetary claims that be brought in the Magistrates' Court.
8. OC3 says that its interpretation is sensible because there is recognition by the legislature that owners corporations should not be hindered from seeking to recover debts of $100,000 or less. But, a special resolution would be required for relief that does not involve money such as the appointment of an administrator, or sums that exceed could be awarded in the Magistrates' Court.
9. In summary, with respect to s 18 of the OC Act, OC3 submits:[6]

(a) properly construed, a claim can only be "within" $100,000 if it is a claim for money in one form or another not exceeding that amount;

(b) to read the provision as broadly as OC1 contends is to read that provision as though the general rule in subsection (1) instead provided that a special resolution is only required where an amount was sought in excess of the civil jurisdictional limit of the Magistrates' Court and/or was sought in an intermediate or superior court; and

(c) the purported distinction between "matter" and "dispute" set out in OC1's submissions is a red herring, that submission raises a highly academic and tortured point where it is readily apparent that a dispute is just one of the things that can fall within the definition of a matter.

1. OC3 also says that one can appreciate the legislature providing a more accommodating (or less onerous) regime for actions involving debt, equitable or damages where the amount is limited to $100,000 or less.
2. OC3 highlights the process in the OC Act for actions where the owners corporation requires a special resolution but has been unable to obtain that resolution.
3. OC3 also notes that even if OC1 is correct, it has not provided any evidence of compliance with s 18(2) of the OC Act.

1. OC3 notes the issue of non-compliance with s 18 of the OC Act was raised by VCAT. And in any event, OC3 says:

(a) it was named as a respondent by OC1 and it is resisting the relief sought. Thus, it is curious to say it cannot raise or pursue matters pertaining to procedural irregularities;

(b) that OC1 does not say what should occur. For example, should the issue be ignored?

(c) given that OC1 says that no special resolution is required, it is reasonable to assume that such has not been passed.

1. I must determine whether OC1 complied with s 18 of the OC Act and to do so, I must ascertain the meaning of that provision. I refer to the decision of the Supreme Court of Victoria, Court of Appeal ('COA') in Mason v Head, Transport for Victoria[7] (Mason) where the relevant principles of statutory construction were summarised through the leading cases. The principles of statutory construction relying on Mason can be summarised as:
   • the task of statutory construction must begin with the text itself;
   • historical considerations and extrinsic materials cannot be used to displace the clear meaning of the text;
   • the meaning of the text may require some consideration of the context, including the general purpose and policy of a provision, particularly the mischief it is seeking to remedy;
   • considerations of context and purpose recognise that another meaning may be suggested from its ordinary meaning, and if so, the ordinary meaning must be rejected; and
   • the primary object is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute.
2. With the principles in Mason in mind I approach the statutory interpretation task as follows:
   • What does s 18 of the OC Act mean?
   • What is the purpose of s 18 of the OC Act?
3. Section 18 of the OC Act provides the power to an owners corporation to commence legal proceedings. Its purpose can be ascertained from s 1 of the OC Act itself which provides:

Purposes

The main purposes of this Act 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.

1. The purpose of s 18 of the OC Act is to provide a mechanism for the resolution of disputes relating to owners corporations. Such disputes can arise from the varied the functions of an owners corporation including fees, asset management and enforcing rules.
2. Each subsection of s 18 then has separate work to perform. Whether s 18(1) of the OC Act is subservient to s 18(2) because its operation is limited[8] or s 18(1) provides the rule and s 18(2) provides for the exception is an interesting legal debate. However, in practical terms the outcome is the same that is:

To commence of legal proceedings a special resolution of the owners corporation is required except for matters where the relief sought is within civil jurisdiction limit of the Magistrates' Court. If the exception applies, then the legal proceeding can be commenced if an ordinary resolution of the owners corporation has been authorised the proceeding being commenced.

1. Next, I am required to interpret what is meant by 'civil jurisdiction limit of the Magistrates' Court' within s 18(2) of the OC Act in circumstances where s 3 of the OC Act does not provide any definition. Sensibly, I must turn to the MC Act itself in these circumstances. Section 100 of the MC Act provides the extent of the jurisdiction of the Magistrates Court for causes of action for damages or a debt or a liquidated demand or equitable relief, if the amount claimed or value is within its jurisdictional limit.[9] The phrase 'jurisdictional limit' is defined at s 3 of the MC Act as:

"jurisdictional limit" in a civil proceeding means $100,000;

1. It follows that the 'civil jurisdictional limit' referred to in s 18(2) of the MC Act must mean the 'jurisdictional limit' and thus, is limited to $100,000. If s 18(2) of the OC Act was meant to include any matter in which the civil jurisdiction may be invoked, it would not include the phrase 'jurisdictional limit' it would have simply referred to the 'civil jurisdiction'. By specifically including 'jurisdictional limit', a phrase that is defined at s 3 of the MC Act, the legislature intended to capture disputes or matters relating to money including damages and debts.
2. This interpretation is consistent with the purpose of the OC Act to provide for appropriate mechanisms for the resolution of disputes. That is, there are different levels of authorisation required depending on the nature of the dispute and if the dispute or matter relates to money. Fee recovery and debts up to $100,000 can be dealt with by an ordinary resolution of the owners corporation which is achieved by a simple majority. But legal proceedings that do not relate to money or debt recovery can only be commenced after a special resolution which requires approval by a 75% majority.
3. Therefore, I agree with the submissions of OC3 that:
   • The legislature has provided a less onerous regime on owners corporations for actions involving debt, damages or equitable relief where the amount is $100,000 or less; and
   • The legislature has required a more onerous regime for relief that is not related to money or for a sum that exceeds the threshold that could be awarded in the Magistrates' Court.
4. On that basis, I reject the submission of OC1 and add the interpretation that it urges is not consistent with the rules of statutory interpretation including that all provisions must be interpreted to ensure they have work to do.
5. On the basis that this proceeding does not seek relief relating to money and having regard to the analysis above, it follows that OC1 requires a special resolution to commence this proceeding.
6. Further, the decisions of the Burbank Australia Pty Ltd v Owners Corporation[10] and Deak v Estate of the Late Carolina Nacinovich and Ermanno Giurina[11] stand for the proposition that a non-compliance with s 18 of the OC Act gives rise to a procedural irregularity. In such circumstances VCAT can either summarily dismiss the proceeding, or grant a stay of the proceeding to allow the non-compliance to be rectified.
7. I consider it appropriate to allow OC1 time to comply with s 18(1) of the OC Act and thus, I will adjourn this proceeding to an administrative mention.

1. I do not consider the standing of OC3 to raise the procedural non-compliance to be a bar to the receipt of submissions from OC3 on this issue. Compliance with s 18 of the OC Act was raised by VCAT and is a threshold issue for this proceeding.
2. Further, I note the application itself identifies OC3 as a respondent to this proceeding.
3. Having regard to the importance of compliance with s 18 of the OC Act, and having made a finding on that issue, I do not consider it material to this proceeding to make any final determination with respect to the standing of OC3 to make submissions about compliance.

1. I find that OC1 has not complied with s 18(1) of the OC Act and in the circumstances, I will adjourn this proceeding to an administrative mention in six months' time.

[1] See Application form dated 21 October 2024 at question 33.

[2] See written submissions in support of the application [7].

[3] [2022] VCAT 149 [21].

[4] (Owners Corporation) [2022] VCAT 1203.

[5] See submissions of OC3 dated 7 March 2025 at [11].

[7] [2021] VSCA 19.

[10] [2015] VSC 160.

[11] [2024] VSC 710.