**1. By 30 September 2015 the respondent must remove from the common property described in plan of subdivision 11672 that part of her garage which encroaches beyond the boundary of unit 5 on the plan of subdivision onto common property ("the encroaching part"), unless by that date:

(a) the members of the applicant owners corporation have resolved unanimously to transfer the encroaching part to the respondent; or

(b) the members of the applicant owners corporation have passed a special resolution to lease the encroaching part to the respondent; or

(c) the respondent has commenced a proceeding in this Tribunal asking for orders under section 34D of the Subdivision Act 1988 in relation to the plan of subdivision and the encroaching part.

2. Each party has liberty to apply, by giving notice in writing to the principal registrar and

to each other party, for further orders or directions. Without limiting the generality of the liberty to apply, there is liberty to apply if necessary for an order staying the operation of the order beyond 30 September 2015.**

1. An owners corporation has sought an order for removal of part of the entrance to a lot owner's garage which encroaches onto common property.
2. The applicant, Owners Corporation 11672 ("the OC") affects land situated at 11 Yarrbat Avenue, Balwyn and described in plan of subdivision no. 11672. The plan of subdivision had been registered under the Strata Titles Act 1967 and so the individually owned parcels of land shown on it are called units.
3. The respondent Brenda Moore is the owner of unit 5. She purchased it in early 2006 from Terrence Mervyn Martinesz and Merna Payek. Mr Martinesz has been named in the proceeding as an interested party. Unit 5 includes a brick dwelling and a garage. They were in place when Ms Moore purchased unit 5.
4. The OC alleges that part of the garage encroaches onto common property, which is a driveway that leads to the entrance to the garage. In this proceeding the OC seeks an order requiring Ms Moore to remove the encroaching part, or alternatively an order requiring her to purchase from the OC the area of common property on which the encroaching part stands.
5. The OC had two representatives at the hearing on 28 November 2014. One was Brenda Roberts, the chairperson of the OC, who told me that she was a proxy for a lot owner. The other was Brian Kent-Hughes, the owner of unit 6. They both gave evidence. Ms Moore appeared in person. She raised no objections to the right of Ms Roberts and Mr Kent-Hughes to represent the OC and pursue this proceeding in its name. She and her husband, Kieran Moore, gave evidence. Mr Martinesz had been given notice of the hearing but did not appear. At the end of the hearing I reserved my decision.
6. In January 2002 Mr Martinesz had circulated to the unit owners some plans for proposed extensions to the dwelling. Those plans did not propose any extensions to the garage. They showed the garage in a position where its western extremity, the entrance, appeared to correspond to a title boundary to unit 5. That title boundary is shown on the registered plan of subdivision as a line which extends from a point where the southern brick wall of the dwelling ends.
7. The plan for extensions which a building surveyor and the local municipal authority approved on 19 December 2002 was different, however, from the plans which Mr Martinesz had circulated to the unit owners. That approved plan described an "existing garage" and a "garage extention [sic]". Beneath the line on the plan that depicted a new western extremity for the garage were the words "garage extended 1000 forward". Beyond that line was another dotted line beneath which were the words "extend eaves". A block on the plan headed "site analysis" included the phrases "existing garage area: 35m²" and "proposed garage area: 41m²". I have inferred that what was proposed in that approved plan was an extension to the walls and floor of the garage for a distance of one metre west, and for an overall extension of the garage area, including the area covered by roof eaves, of six square metres.
8. The garage appears to have had an extension built on it in accordance with the approved plan. Photographs of the garage were tendered at the hearing. They show a tilt door at the garage entrance and a roofed superstructure for it. The western extremity of the superstructure is not on a line which would extend from the point where the southern brick wall of the dwelling ends, but is about three brick lengths west from that point, back along the southern wall.
9. No survey evidence was produced at the hearing. Ms Moore did not concede that the garage, as now positioned, encroaches beyond the title boundary of unit 5 onto common property. Nevertheless, I am satisfied, from my observations of the plan of subdivision, and of the approved plan and of the photographs, that there is an encroachment of between half a metre and one metre in length. In the absence of a survey I cannot say exactly what is the distance of the encroachment or the area of the encroachment.
10. Ms Moore gave evidence, which the OC did not dispute and I accept, that when she purchased unit 5 in early 2006 she did not know that the garage encroached beyond the title boundary onto common property. The OC itself did not become aware until later in 2006 that there was an encroachment. It became aware when Mr Kent-Hughes, investigating measurements and boundaries on the plan of subdivision for the purpose of another (now irrelevant) dispute between Ms Roberts and Ms Moore, discovered the discrepancy between the title boundary to unit 5 and the occupation boundary represented by the entrance to the garage.
11. At the end of the driveway, on its south side, is a storeroom. It is not part of the common property. It is a separate unit. The storeroom door opens onto the driveway. The evidence at the hearing was that the garage presently positioned does not impede access to or from the storeroom. There was no evidence whether the garage door, if opened by being tilted outwards, would impede access to or from the storeroom.
12. The OC's representatives told me that its concern is the risk of injury to a person that might be caused by the opening of the garage door or who might for whatever reason be at or near the door. At the moment the OC bears that risk and would suffer the financial consequences of that risk, especially if the OC's public liability insurer were to take issue with the OC's failure to take action to have the encroachment removed. For example, if a person emerged from the storeroom and did not notice that the garage door was open, tilted outwards, the person might walk into the garage door and sustain an injury. Apart from that concern, so the OC's representatives told me, its members considered that it would set a bad precedent to let the encroachment remain.
13. Ms Moore submitted that, if there is an encroachment, it is small and the effect on the legal rights of other unit owners to use the common property is small. I agree. There is no entrance to a unit off the driveway that leads to the garage except the garage door and the storeroom door. No unit owner other than Ms Moore would ordinarily have any need to use the driveway except to get access to the storeroom. I do not regard the encroachment as trivial, however. The length of the encroachment could not be described as minimal, and there is the theoretical risk of injury as I have described.
14. Removal of the encroachment would involve Ms Moore in expense. There was dispute about how expensive it would be. She produced a builder's quotation for "approximately $40,000" for doing work involving the removal of the roof, removal of the tilt door, pulling down a main steel beam, building brick piers and reinstating the door. Mr Kent-Hughes told me that he was a retired master builder and that he regarded the estimate of $40,000 as greatly excessive. He told me that although the OC sought an order for removal of the entire encroachment it might be prepared to allow the roof to be left in place so that only the door and its surrounds needed to be brought back to the title boundary; the cost of doing that, he said, would be $6,000 at most. As Ms Moore was obtaining the quotation to support a submission she made that removal of any encroachment was impractical and prohibitively expensive, I would not be surprised if the quotation was for an excessive figure. Nevertheless, there is no doubt that Ms Moore will be faced with an expense of several thousand dollars if she has to remove the encroachment.
15. Ms Moore alleged that the OC had given permission to Mr Martinesz to extend the garage in accordance with the approved plan. The OC denied the allegation. Ms Moore gave evidence, which in the absence of any evidence from Mr Martinesz I accept, that he has told her that the OC did give him the permission. There was no documentary evidence of any such permission having been given. There was no evidence that any other unit owner was aware of the plan for which he eventually obtained approval. He had circulated a different plan to the other lot owners. Ms Moore has not made out this allegation.
16. Ms Moore submitted that because she purchased unit 5 after having received an owners corporation certificate that made no mention of the encroachment the OC is not now entitled to complain of the encroachment and seek its removal. She produced a certificate dated 10 September 2004, headed "Body Corporate Certificate", which bore the common seal of the OC and was signed on its behalf by Mr Martinesz as "secretary". The certificate followed the form of certificate which was required under the law which was then in force.[1] Paragraph 11 of the certificate stated:

11. The body corporate is not a party to any proceedings or aware of any circumstances which may give rise to proceedings except the following-

The rest of the paragraph was blank. So the paragraph amounted to a statement that the OC (then called a body corporate) was not aware of any circumstances which might give rise to legal proceedings.

1. In my opinion the certificate does not assist Ms Moore. The law which was then in force[2] did not require a body corporate to specify whether there were or were not any unauthorised encroachments onto common property. Although, on the evidence, I would conclude that Mr Martinesz knew in 2004 that an extension to the garage had created an unauthorised encroachment, that is a different thing from concluding that he, let alone the OC as a whole, was aware that the encroachment might give rise to legal proceedings; I would not go that far.
2. Ordinarily a unit owner or lot unit who builds in a way that encroaches upon common property will have breached a provision of the relevant legislation[3] by having damaged common property or will have breached a rule of the owners corporation. Model rule 3.1(1) provides:
   • 3.1 Use of common property

(1) An owner or occupier of a lot must not obstruct the lawful use and enjoyment

of the common property by any other person entitled to use the common property.

Model rule 3.3(1) provides that an owner or occupier must not alter the common property without the written approval of the owners corporation.

1. Ms Moore, however, is not in breach of the legislation or the rules. She did not build the encroachment; her predecessor in title did; she did not damage or alter common property. There is no breach by her of model rule 3.1(1), in my opinion, because while the encroachment amounts to an obstruction placed upon common property, Ms Moore is not obstructing the lawful use and enjoyment of the common property by any other person entitled to use it. The question is not whether part of common property is being obstructed by an encroachment. Rather, the question is whether the lawful use and enjoyment of the common property, regarded as a whole, is being obstructed. On the evidence, it is not. There was no evidence that access to the storeroom is being affected or that any other person entitled to use the common property is not able to use it in the way that person might wish.
2. Accordingly, whether the OC is entitled to an order for removal of the encroachment, or to some other remedy, depends upon the application of general property law relating to encroachments, not upon the application of the law relating to owners corporations in particular.
3. Before I deal with the relevant principles of general property law, I observe that, irrespective of the outcome of this proceeding, the existence of the encroachment is a legal difficulty for Ms Moore. If she were to sell unit 5 she could not give a good title to a purchaser for that part of the garage which is outside the title boundary. She could give a good title only if she were to become the owner of the encroaching part by taking a transfer of it from the OC. Registration of the transfer would require there to be an altered plan of subdivision that had enlarged lot 5 by including the encroaching part of the garage, or had created a new lot for that encroaching part. In turn, preparation of an altered plan of subdivision would require the services of a surveyor. All of that would involve considerable expense. Whether that expense, when added to whatever purchase price the OC and Ms Moore might agree upon, would be more or less than the cost of removing the encroachment, I cannot presently say.
4. In the alternative to an order for removal of the encroachment, the OC has sought an order that Ms Moore purchase the area of land being encroached upon. So it would appear that, if the OC and Ms Moore could agree upon a price, the OC members might well resolve to sell and transfer the land to Ms Moore and to agree to the necessary alteration to the plan of subdivision. At present, however, they do not agree upon a price, nor is a purchase Ms Moore's preferred option. She has offered to take a long term lease of the relevant area. Such a long-term lease might comfort a prospective purchaser of unit 5 but would not be a solution to the difficulty of giving a good title. At all events, the OC has decided against the idea of a lease.
5. I turn to the principles of general law that apply. They are as follows:

Where a building traverses the boundary of an adjoining piece of land belonging to another, the owner of the land which has been encroached upon may apply to a court for relief, which would normally be an order for possession, or a mandatory order for the taking down of the offending building. The owner of the land may seek to exclusively occupy the encroaching portion of the building or, in exceptional cases where immediate relief is imperative, destroy the encroaching building. The right to destroy the encroaching building is not available where the owner of the land upon which it encroaches has already sought a court order and been refused. The court will not normally make an order for damages which would amount to a compulsory purchase of the encroached land.

The courts have the power to award damages in lieu of a mandatory injunction in circumstances where the trespass causes only a small injury to the plaintiff, and disproportionate hardship constituting oppression, to the defendant. It should be noted such an award remains the 'exception' rather than the rule.[4]

1. A mandatory injunction - an order requiring a defendant to remove an encroaching building - is similar to the kind of order that the OC seeks in this proceeding. One starts with the general rule that a person (in this case the OC) whose legal right has been invaded by the encroaching building is entitled to a mandatory injunction requiring its removal. That rule may be relaxed when the wronged person's own conduct disentitles the person to an injunction, or when, in certain limited circumstances, the appropriate remedy is damages instead of an injunction. A "good working rule" is that damages, not an injunction, is an appropriate remedy:

1. if the injury to the legal right is small; and 2. the injury is capable of being estimated in money; and

1. the injury can be adequately compensated for by a small money payment; and

1. the case is one in which it would be oppressive to the defendant to grant an injunction.[5]
2. The awarding of damages instead of the injunction to which, at first sight, the wronged person is entitled, is justified only if there is a relationship of significant disproportion between the righting of the wrong and the hardship to the wrongdoer that the grant of an injunction would create.

The question whether to substitute damages for an injunction for trespass to land is necessarily determined after the plaintiff (in contrast to an applicant for an interlocutory injunction) has established the invasion or breach of its property right. Ordinarily, in such circumstances, unless the hardship to the defendant entailed by a specific remedy is out of all proportion to the relief thereby assured to the plaintiff, the plaintiff should not be compelled to exchange or suffer continuing invasion of its proprietary right for a money payment at the behest of the wrongdoer.[6]

1. From the above statements of principle it is clear that, in the absence of some conduct that disentitles the wronged person from a remedy, a court or Tribunal ought to make an order that remedies appropriately the injury to a legal right that an encroaching building causes, even if the encroachment is minor. In the present case there is no disentitling conduct on the OC's part. The allegation that it approved the encroachment has not been made out. The giving of the body corporate certificate was not disentitling conduct. So I consider that it is not a permissible legal option for me to dismiss this proceeding, even though I regard the encroachment as minor and even though the cost of complying with an order for its removal will be high. The OC is entitled to a remedy. The issue becomes whether there is any permissible alternative to making an order for removal of the encroachment.
2. The injury to the OC's legal right is small. I also consider that the hardship to Ms Moore that would be involved in removing the encroachment is so out of proportion to the benefit that the OC would obtain from its removal that it would be oppressive to her. Two parts of the "good working rule" operate in her favour. The others do not, however, at least as matters presently stand. If the garage remains in its present position and as an encroachment onto common property, the financial risk to the OC that would be the consequence of a physical injury to a person caused by the encroachment is difficult to estimate in money, and could not be adequately compensated for by a money payment. The risk would remain for as long as the encroachment remains. The OC avoids the risk only if the front of the garage is moved back to the title boundary of unit 5 or if the presently encroached-upon area is no longer common property but becomes Ms Moore's property, so that she assumes the risk. An award of a small sum of money equivalent to the value of the encroached-upon area, whatever that value is, would not be adequate compensation unless it was accompanied by a transfer of that area to Ms Moore so that the OC no longer bears the risk.
3. At the moment it is not possible for me to make the alternative order that the OC seeks, for Ms Moore to purchase the land in question. In the absence of survey evidence I cannot describe the land with sufficient precision for the purposes of such an order. I cannot specify a sale price. The parties have not agreed upon one. The value of the land is an issue that has not been adequately explored in this proceeding. Valuation of a small piece of common property, on its own, is an unusual and difficult exercise. Ms Moore told me that she had had the land valued at $3,020. Although she did not produce it as evidence at the hearing, she had filed with the Tribunal before the hearing a copy of a valuation at that figure made in 2011.
4. Ms Moore complains that the OC has permitted other unit owners to encroach upon common property. Air conditioning units attached to walls of units have encroached in that way, she alleges. She feels that she has been unfairly singled out in this proceeding. The evidence presented at the hearing does not enable me to say whether her allegation about other encroachments is correct. But even if it is, the members of the OC have apparently chosen to take action to have one particular encroachment removed and not to take action to have others removed. There is nothing legally improper in them so choosing, and there is no reason to deny the OC the relief that it seeks in this proceeding simply because the members have so chosen.
5. There being, to my mind, no legally permissible or presently practicable alternative, I regretfully conclude that I must make an order for removal of the encroachment.
6. The OC's representatives told me that they had no objection to the granting of a lengthy time for compliance with an order for removal; in particular, they had no objection to the granting of a period of six months. I propose to allow nine months, which will be sufficient time for the parties to arrive at a solution which would suit each of their interests better than an enforcement of my order, or, if there is no such solution, will be sufficient time for the necessary work on the garage to be done.
7. From remarks I have made above it will be obvious that I regard a better solution to the dispute to be a transfer to Ms Moore of the part of the common property upon which there is encroachment. The parties would need to take a number of steps to achieve that solution. First, a surveyor would have to prepare a new plan of subdivision. Secondly, the parties would have to agree upon a price for the transfer. Thirdly, the OC's members would have to resolve unanimously[7] to alter the plan of subdivision in the way proposed by the new plan and by the transfer; or, if there was no unanimous resolution, an application would have to be made to the Tribunal under section 34D of the Subdivision Act 1988,[8] by either Ms Moore or by the OC itself, for an order permitting the proposed alterations. Finally, the new plan and the transfer would have to be registered at the Land Titles Office.
8. Two things have been standing in the way of the parties' achievement of this solution. The first is that Ms Moore has been asking the OC to bear the surveying, legal and registration costs that would be involved in achieving it. To my mind, that is an unreasonable request. The encroachment is a problem that she inherited, unwittingly, when she purchased unit 5. There is a defect in the title that she would be able to offer to a prospective purchaser of unit 5 under a sale that includes the garage. Logically the expense of rectifying it falls upon her, not upon all members of the OC. (Of course, they may change their minds and decide to share the expense.) The second is the parties have not been able to agree upon a sale price. It would be a mistake for members of the OC to think that, with the advantage of the order that I shall be making for the removal of the encroachment, they can hold Ms Moore to ransom and demand an unreasonably high price. If it were possible for the Tribunal, as an alterative to the mandatory order for removal, to order payment of a money sum, the Tribunal ought to calculate the sum on the basis of the price for which a reasonable seller would sell the land, not a ransom price.[9]
9. The parties may be able to reach a different solution that would remove the need for the OC to enforce my order or to enforce it in full. So far, the members of the OC have rejected the idea of a lease. I would not attempt to order the parties to enter into a lease, against the wishes of the majority of members, partly because I do not regard a lease as a permanent solution to the problem of the encroaching garage and partly and more importantly because I see no good reason to interfere with the members' decision; but the members may change their minds and the parties may be able to agree upon a lease, in which case the OC would no longer be entitled to enforce the order I am making. If the parties cannot agree upon a sale or a lease, the OC may see fit not to enforce the order completely. It has asked for, and I will be granting, an order for removal of the entire encroachment, but as I mentioned above, the OC might be prepared to allow the roof to be left in place.
10. I shall order that Ms Moore must remove the encroachment by 30 September 2015 unless by that date the parties have agreed upon a transfer of the relevant land to her and the members of the OC have resolved unanimously to alter the plan of subdivision and make the transfer, or the members have resolved to leave the relevant land to her, or she has commenced an application under section 34D of the Subdivision Act 1988 asking for orders enabling an alteration of the plan of subdivision and a transfer to her even though there has been no unanimous resolution. I shall grant the parties liberty to apply, in case, for example, there should be good reason to stay the operation of the order and thus extend the deadline for compliance.
11. As I have stated above, and as I emphasised during the hearing, even after the making of an order for removal of the encroachment, the parties remain free to agree upon a course of action that renders compliance with the order unnecessary, and the OC remains free to choose not to enforce the order fully or at all.
12. There is a presumption that the OC, as a successful applicant, is entitled to an order that Ms Moore reimburse it for the filing fee it paid to commence this proceeding.[10] This matter was not canvassed during the hearing. There is certainly an argument open to Ms Moore that she should not have to reimburse the OC and that all members should bear equally the expense involved in the commencement of this proceeding. Because the matter was not canvassed during the hearing, I make no decision about it. One party or the other may take advantage of the liberty to apply in order to have a further hearing to argue the matter if it or she wishes.
13. Mr Martinesz was joined as an interested party to the proceeding because Ms Moore considers that he ought to compensate her for any expense she has to incur in complying with the order I am making or in otherwise dealing with the fact of encroachment. I make no comment on whether she has any legal claim against him. I only observe that he had the opportunity to attend the hearing in order to protect his interests but did not attend.

[1] Subdivision (Body Corporate) Regulations 2001, reg. 221 and Form 3 in the Schedule.

[3] Now the Owners Corporations Act 2006, section 130.

[4] Halsbury's Laws of Australia, vol. 22 para. [355-14090] (footnotes omitted).

[5] Break Fast Investments Pty Ltd v PCH Melbourne Pty Ltd [2007] VSCA 311; (2007) 20 VR 311 at [36]- [41], approving Shelfer v City of London Electric Lighting Co [1895] 1 Ch 287.

[6] Break Fast Investments Pty Ltd v PCH Melbourne Pty Ltd [2007] VSCA 311; (2007) 20 VR 311 at [49].

[7] Section 32 of the Subdivision Act 1988 empowers an owners corporation to allow a plan of subdivision by (eg.) disposing of the fee simple in part of the common property, if there is a unanimous resolution of the members.

[8] Section 34D provides that a member of the owners corporation, or the owners corporation itself, may apply to the Tribunal for an order requiring the owners corporation to do any of the things set out in section 32 (see footnote 7 above) or an order consenting on behalf of a member or group of members to the doing by the owners corporation of any of the things set out in section 32.

[9] Jaggard v Sawyer [1995] 1 WLR 269 at 282-283.

[10] Victorian Civil and Administrative Tribunal Act 1988 section 115C.