Owners Corporation No. 1 - PS434030V v Carroll (Owners Corporations) [2016] VCAT 1863 (16 November 2016)

Access - whether owners corporations had a right of access over respondent's lot or over the balcony on the lot - special rule granting a right of access, upon notice, for maintenance - meaning of "maintenance" - Owners Corporations Act 2006 ss 47, 48, 49, 50, 51.

Special resolution - no special resolution before commencement of proceeding - ratification by later special resolution - Owners Corporations Act 2006 s18.

Easement - whether an implied easement over the lot or the balcony on the lot - Subdivision Act 1988 s12(2).

Terms of settlement - claim for damages following refusal of access - settlement conditional upon respondent allowing access in performance of the terms.

Owners Corporation No. 1 - PS434030V v Carroll (Owners Corporations) [2016] VCAT 1863

1. The respondent must pay the applicants $13,799.00.

1. Each party has liberty to apply for an order for interest or for costs. The party making the application must pay any hearing fee that is required.

1. "The Arkley" is a 20-storey high rise apartment building in Rakaia Way, Docklands. Three owners corporations affect the land on which the building is situated and which is described in plan of subdivision PS434030V. The three owners corporations are the applicants in this proceeding.

1. The respondent Peter John Carroll owns the apartment which is lot 1802 on the plan of subdivision. He is a member of all three owners corporations. As its number implies, apartment 1802 is on the 18th storey of the building. It, and apartment 1801 next to it, have large balconies which face south. Mr Carroll's balcony is 18 square metres in area. The apartments which face south on storeys 5 to 17, and on storeys 19 and 20, have much smaller balconies. Apartments on storeys 5 to 17 on the other side of the building, facing north, also have small balconies. Apartments on storeys 18, 19 and 20 on the side facing north do not have balconies at all.

1. The external facades of the building are common property, as Mr Carroll has admitted.[1] The owners corporations, or one or more of them, have or has a duty to repair and maintain the common property.[2]

1. In 2013 the facades on both sides of the building required repair because of concrete spalling. Pieces of concrete were coming loose on the balcony facades. To repair the southern facades the owners corporations proposed to set up a swing stage temporarily on part of the floor of the balconies for apartments 1801 and 1802. A swing stage is a device for lowering a cradle on ropes so that a workman within the cradle can work on the balcony facades on lower storeys in much the same way as a window cleaner would work. There is a frame with counterweights so that the raising and lowering of the cradle can be controlled. The owners corporations proposed to install the frame on adjoining corners of the floors of the balconies for apartments 1801 and 1802.

1. At all material times the owner of apartment 1801 was Lynne Vandenberg-Khoury ("Ms Khoury"). At all material times a tenant of Mr Carroll occupied apartment 1802.

1. The owners corporations allege that Mr Carroll had, but breached, an obligation to allow them and their contractors the access to apartment 1802 and to its balcony that would have enabled them to do the repairs to the southern façade promptly and economically. At first, they allege, Mr Carroll refused them access. Then, after a long delay on Mr Carroll's part (they allege), and after a preliminary order in this proceeding that compelled him to allow access, he did allow access and the works were done. By that time, they allege, the cost of the necessary works had increased by $96,264.20. In this proceeding they claim that sum from Mr Carroll.

1. The obligation that Mr Carroll had to allow access, the owners corporations allege, came from provisions of the Owners Corporations Act 2006 ("the Act"), from the owners corporations' rules, and from the existence of an implied easement over lot 1802 for their benefit.

1. The owners corporations have registered their own special rules. Rule 26.3 provides:

26.3 A proprietor or occupier of a lot must grant to the Body Corporate its servants and agents upon the member being given twenty-four (24) hours prior written notice, the right of access to any balcony forming part of the Lot for the purpose of maintenance of the external walls of the Common Property and the cleaning of the outside of the windows and the external façade of the Common Property.

What was called a Body Corporate in 2001, when the rules were registered, is now called an owners corporation.[3]

1. In answer to the claim against him, Mr Carroll has contended that

(a) the owners corporations did not have any right of access unless and until they gave proper notice as required by rule 26.3;

(b) such notice was not ever given to him or to his tenant;

(c) there is no implied easement over lot 1802 for the benefit of the owners corporations;

(d) the dispute was settled by terms of settlement dated 28 August 2014;

(e) in accordance with and in performance of the terms of settlement he gave access to the owners corporations so that their contractors could do all necessary work;

(f) by reason of (d) and (e) the owners corporations are barred from pursuing the claim for damages;

(g) the amount claimed is excessive and no amount of damages has been properly proved.

1. In addition to those contentions, Mr Carroll through his Counsel in his final address persisted with another contention that he had made by way of preliminary objection at the start of the hearing on 12 September 2016. I ruled against the objection when it was made. The contention was that because there was no special resolution before the proceeding was commenced which authorised the owners corporations to commence it, the proceeding ought to be dismissed or stayed.

1. While it is true that there was no special resolution before the proceeding was commenced, the owners corporations conducted a postal ballot of members which closed on 8 August 2016 and which resulted in an interim special resolution to ratify the decision to commence the proceeding. The owners corporations argued that that was sufficient answer to the contention about the absence of a special resolution. For reasons I shall be giving below, the absence of a special resolution at the outset does not affect the owners corporations' ability to pursue this proceeding and ask for an award of damages.

1. The owners corporations' answer to Mr Carroll's reliance upon the terms of settlement is that the terms of settlement would not have become binding until he granted access in accordance with them, which he never did but instead breached them.

1. During the hearing on 12 and 13 September 2016 the witnesses who gave evidence for the owners corporation were:

(i) Louie Panagakos, the building manager for "The Arkley", who also resided in an apartment on the 18th storey;

(ii) Christopher Liew, who at all material times until July 2014 was employed by the owners corporations' manager, Melbourne Inner City Management Pty Ltd ("MICM") and had the conduct of their management;

(iii) Casimir Lukauskas, who at all material times since July 2014 has been employed by MICM and has had the conduct of the owners corporations' management;

(iv) Petrus Siemonsma, the general manager of Vertitech Australia Pty Ltd ("Vertitech"), the company which performed the repair work on the building's facades; and

(v) Andrew Parlour, who is a member of the owners corporations' committee and also a partner in the firm Russell Kennedy, solicitors.

1. Mr Carroll, who gave his occupation as "retired lawyer", was the only witness on his own behalf.

1. The applicants had prepared a Tribunal book. During the hearing various witnesses identified and proved some, but not all, of the documents in the book. The parties agreed that those documents to which reference was made in the evidence could be treated as part of the evidence. I did not have the Tribunal book marked as an exhibit, but have treated documents in it in the way that the parties agreed that I could. Unless I state otherwise, all documents to which I refer in these reasons were in the Tribunal book and were the subject of a witness's evidence.

1. The only marked exhibits were a "security service report" from MICM's records, one email from Mr Carroll to Mr Parlour which was not in the Tribunal book, and a series of photographs which Mr Carroll took of his balcony and of the swing stage.

1. As final addresses, Mr Beck-Godoy of Counsel for the owners corporations spoke to a written submission, and Mr Agardy of Counsel for Mr Carroll spoke to a written outline of argument. I reserved my decision.

1. Mr Liew, the owners corporation manager, prepared and signed a notice headed "Notice of Access - Apartments 1801 and 1802" and sub-headed "Re: Access to facilitate Concrete Spalling Works". The notice was dated 1 November 2013. He gave copies of the notice to Mr Panagakos, the building manager, and asked him to deliver them to the occupiers of the two apartments. He told me that because he did not have Mr Carroll's email address he posted to him a copy of the notice. He did not tell me what was the postal address he used.

We write as the Owners Corporation managers of this development and seek your co-operation in providing access into your apartment and balcony to facilitate the Concrete Spalling Works by the appointed contractor, Vertitech Australia Pty Ltd.

They will require access for 10 to 15 working days, weather permitting, to complete this task on your side of the façade. Safety checks will usually take 5 to 10 minutes each and is done at the start of the working day from

7am and further checks throughout the day, as required, depending on the tasks at hand. Please note that equipment set-up will require more time initially.

Your co-operation in this matter is very much appreciated to ensure these works are completed without undue delays. The Owners Corporation will be subject to additional costs, per the terms of the contract, if delays are caused by the lack of access to the building. Unfortunately, this will undoubtedly result in more costs passed to all owners that the Owners Corporation wants to mitigate.

The notice concluded with an invitation to make any enquiries to him (Mr Liew) or to Mr Panagakos, and with an apology for any inconvenience that the access might cause.

1. On the same day, 1 November 2013, Mr Panagakos placed a copy of the notice under the door of apartment 1802 and handed a copy to someone who answered the door of apartment 1801.

1. At the time the occupier of apartment 1802 was Mr Carroll's tenant, Welding Guns of Australia Pty Ltd. Ian Finlayson was that company's sales manager. His teenage son Dan was the only person actually residing in the apartment at the time. On 2 December 2013 Dan Finlayson sent a text message by telephone to Mr Panagakos saying that the equipment could be set up on the balcony on Wednesday, 4 December 2013. On that day, and on the following day, Vertitech set up the swing stage on the balcony in preparation for the repair work.

1. Mr Carroll gave evidence, and I accept, that when the owners corporations gained access and Vertitech set up the swing stage he had received no notice that access for that purpose had been sought. He told me, and I accept, that the first he knew of what had happened was when on 10 December 2013 Ian Finlayson, who was overseas, telephoned him. He then went to the apartment and saw how furniture within the apartment had been shifted to one side, tarpaulins placed down inside it (for equipment had had to be carried through the apartment to the balcony), and the swing stage set up on the balcony.

1. Late in the afternoon of that day, 10 December 2013 Mr Carroll sent an email to Mr Liew, complaining of the "arrogance" of the owners corporations and of MICM, asserting that there was "no right of access", stating that access would require the consent of him and of his tenant, and concluding with this statement: "I do not consent to anyone having further access to the apartment for any purpose except for the purpose of removing the mess they have created", which could be had by arrangement with him.

1. Evidently Ms Khoury had also had something to say by email to Mr Liew about her apartment having been used to set up the swing stage because late on 11 December 2013 Mr Liew sent an apologetic email to her and to Mr Carroll, asking for an extension of time for the removal of the swing stages and of the protective floor covering and for reinstatement of furniture, and telling them that Vertitech and he would meet on the following day to set a time frame for those things. The email include the following paragraphs:

To put this matter into perspective, Vertitech has identified at least 92 areas of concrete spalling/cancer affecting balcony slab edges on this façade alone. The balcony slab edges of Lots 1801 and 1802 are also affected by concrete spalling. If this work is not done now, these slab edges will only deteriorate further with pieces of loose concrete coming away, exposing the steel reinforcement which in turn will corrode if left untreated. The end result will be structural damage and more costs to all owners to repair in the future. This affect [sic] is already occurring. We invite you to visit The Arkley to see for yourselves the concrete spalling before and after repairs.

The uncomfortable fact is that the only safe means of getting access to these slab edges is by way of a swing stage and the safest place to set this equipment up is from the balconies of Lots 1801 and 1802. The swing stage gives workmen a firm footing from which to jack hammer/break out affected concrete areas for proper repair and sealing. This they have already done on the façade facing Caravel Lane and others.

Aurecon and Vertitech have investigated access to "your" façade by other means including that from the common roof to perform these works via rope access. Unfortunately this method is simply not safe enough as workmen have minimal support, as you may appreciate, when they are dangling from ropes while working with tools etc. They cannot use swing stages from the roof either.

The Owners Corporation does require access to your Lots 1801 and 1802 in order that these concrete spalling repair works can be done, not only for your lots but many others below yours.

Aurecon Australia ("Aurecon") were the engineers and project managers for the works.

1. Next day, 12 December 2013, Mr Carroll by email to Mr Liew, said, in effect, that if Mr Liew did not arrange for the removal immediately he would put other arrangements in place to get the equipment removed, and if cables hanging over the edge of the building from the balcony were preventing removal of equipment "they will be cut and dropped over the side".

1. Before 31 January 2014, there were negotiations between Mr Carroll and Mr Parlour, who had become involved on behalf of the owners corporations, about when and on what terms there could be access to the balconies so that the works could be done. Mr Parlour drafted an agreement and sent it by email on 31 January 2014 to Mr Carroll, who replied that there would be no agreement "without serious compensation for my tenant and something in it for me".

1. On 31 January 2014, having received Mr Carroll's reply, Mr Parlour sent a further email to Mr Carroll and copied into the email Ms Khoury and Ian Finlayson. In it, Ms Khoury is named as "Lynne". It read:

Please confirm what you mean by "serious compensation". The agreement contains an offer of $100 per week to your tenant for the duration of the works for the small inconvenience of having equipment located on your balcony. The current proposal is based on your balcony being accessed from Lynne's to avoid any need to access your apartment.

I do not see why there should be "something in it for you". You have not suffered any loss. The inconvenience of having to deal with issues like this is part of owning and residing in an apartment complex. It is unfortunate that you feel as though you should profit at the expense of other owners.

THE OWNERS CORPORATION HEREBY GIVES NOTICE TO YOU, LYNNE AND YOUR TENANT that it requires access to Lots 1801 and 1802 for the period commencing Monday 10 February 2014 for the purpose of the Owners Corporation maintaining the external walls and façade of common property. Access is required each day until the maintenance works have been completed and all equipment has been removed. This notice is given under Rule 26.3 of the Rules of the Owners Corporation which requires a proprietor or occupier of a lot to grant access to any balcony forming part of a Lot on 24 hours prior notice.

THE OWNERS CORPORATION HEREBY GIVES NOTICE TO YOU, LYNNE AND YOUR TENANT to comply, at your own cost with the requirements of the Owners Corporations Act 2016 (Act), including but not limited to section 130 (Care of Common Property) and section 137 (Duties of occupiers of lots). This notice is given under rule 26.1 of the Rules of the Owners Corporation and for the purposes of the Act.

Your attention is also drawn to sections 48 to 51 of the Act.

Failing receipt of written confirmation/agreement from you, Lynne, your tenant and ACT Apartments (Recipients) BY THE CLOSE OF BUSINESS TUESDAY 4 FEBRUARY that access will be granted as currently proposed, the Owners Corporation will have no alternative but to apply to VCAT under Part 11 of the Act for an Order that each Recipient complies with the Rules of the Owners Corporation and the Act. The Owners Corporation reserves all of its rights in respect of such an application, including its right to apply for an order that the Recipients pay a sum of money by way of damages and/or restitution in respect of additional costs incurred as a consequence of the Recipients refusing to grant access to Lots 1801 and 1802 as proposed. A failure to give access to Lots 1801 and 1802 as proposed will cause the Owners Corporation to incur significant expense that is likely to run into the tens of thousands of dollars. THE OWNERS CORPORATION RESERVES ITS RIGHT TO SEEK REIMBURSEMENT OF SUCH COSTS FROM EACH RECIPIENT BY WAY OF DAMAGES AND/OR RESTITUTION.

This email is being sent by me in my capacity as a committee member of the Owners Corporation 434030V and has been authorised by the Committee of that Owners Corporation. This email and any other related correspondence is not being sent for or on behalf of the law firm known as Russell Kennedy.

1. Mr Carroll's reply, by email to Mr Parlour on the same day, was that the compensation he required was $100.00 per day of inconvenience for his tenant and, for himself, "anything less than 3 months owners corporation fees means no access". Mr Parlour's rejoinder, by email later on the same day, to Mr Carroll was that his refusal to grant access was a breach of the Act and the rules, and that the owners corporations' committee had resolved to apply to VCAT for an order compelling access and for damages. He also stated in that email that all that the owners corporations were seeking at that time was access to the balcony itself, not to the rest of apartment 1802.

1. Mr Carroll did not, in compliance with the notice given on 31 January 2014, agree by 4 February 2014 to the granting of access. Instead, by email to Mr Parlour dated 5 February 2014,[4] he in substance reiterated the conditions for the granting of access which he had sought to include in any agreement for the granting of access, and added a further condition: that the maximum period of occupation of the balcony be 30 days and that there be a "drop dead final date" of occupation specified in such an agreement.

1. On 13 March 2014 the owners corporations filed their application to commence this proceeding, not having accepted Mr Carroll's conditions.

1. The way in which the owners corporation attempted to give notice of the request for access in December 2013 left a good deal to be desired. Leaving a notice under the door of apartment 1802, and sending it by post to Mr Carroll, was a hit-or-miss approach. Mr Carroll was entitled to have been displeased by it. His response to it, however, and his refusal of access - for that is what, in my view, his communications to Mr Liew in December 2013 and to Mr Parlour in January 2014 and on 5 February 2014 amounted to - were wholly disproportionate to the offence which the owners corporations' approach might have caused. There was no evidence that the tenancy of apartment 1802 was put at risk in any way. I think that Mr Beck-Godoy was entitled to submit, as he did, that Mr Carroll had sought to exploit the state of affairs for financial gain.

1. I have to decide, however, whether Mr Carroll had any legal obligation to comply with the request for access.

1. The owners corporations have contended that they had a right to have access to enter Mr Carroll's apartment for the purpose of doing the proposed repair work and that there were three alternative sources of the right. First, they say, provisions of the Act conferred that right. Secondly, upon having given notice in accordance with rule 26.3 they gained that right. Thirdly, there is an implied easement of way for their benefit over apartment 1802 for the purpose of doing the proposed work.

1. The provisions on which, according to the owners corporations' Amended Points of Claim, they relied were sections 47 to 51 (inclusive) of the Act. I accept Mr Agardy's submission on Mr Carroll's behalf that none of those provisions conferred a right of entry.

1. Section 47(2) confers a power upon an owners corporation to repair and maintain a "service" in or relating to a lot if it is impracticable for the lot owner to repair or maintain that service. It does not confer a power of entry for the purpose of repairing or maintaining the service. For an owners corporation to exercise the power to repair or maintain the service if the lot owner refused access, the owners corporation would need to seek and obtain a Tribunal order compelling the lot owner to grant access.

1. Section 48 empowers an owners corporation to serve a notice upon a lot owner requiring that lot owner to carry out certain repairs, maintenance or other works. The notices which the owners corporations addressed to Mr Carroll and his tenant were not notices of that kind; the owners corporations were not requiring Mr Carroll to carry out any repairs, maintenance or other works; rather they were seeking access so that their contractors could carry out works.

1. Section 49 empowers an owners corporation to recover as a debt the cost of any works that it did after service of notice under section 48 when the lot owner had not done them. It is irrelevant to the question of whether there was a right of entry for the doing of the works.

1. Section 50 empowers an owners corporation to authorise a person to enter a lot or a building or a lot on its behalf to carry out works in accordance with the preceding sections. It does not in its terms compel the lot owner to allow the person to enter. Again, the owners corporation's remedy against a lot owner who refused access would be an application to the Tribunal for an order compelling the lot owner to grant access to the person.

1. Section 51 requires an owners corporation to give to an occupier under a residential tenancy agreement the same notice of intention to enter the lot as a landlord is required to give under the Residential Tenancies Act 1997. Again, the section prescribes the kind of notice which must be given but does not in its terms compel the occupier to permit entry.

1. So the sections relied upon might provide a basis for an owners corporation to apply to the Tribunal for an order compelling a lot owner or occupier to permit access and entry but do not themselves confer any right of access or entry.

(b) Notice under Rule 26.3

1. The owners corporations purported to give to Mr Carroll two notices: one on 1 November 2013 and the other on 31 January 2014. The owners corporations did not prove that they had effectively given the first notice to Mr Carroll. They did prove that they had given the second notice to Mr Carroll. If it was a notice that met the requirements of rule 26.3, it obliged Mr Carroll to allow access to the balcony of apartment 1802 and created a right of access to the balcony of apartment 1802. Mr Agardy submitted, however, that it did not meet the requirements of rule 26.3.

1. For ease of reference I set out rule 26.3 again:

26.3 A proprietor or occupier of a lot must grant to the Body Corporate its servants and agents upon the member being given twenty-four (24) hours prior written notice, the right of access to any balcony forming part of the Lot for the purpose of maintenance of the external walls of the Common property and the cleaning of the outside of the windows and the external façade of the Common Property.

1. The owners corporations' rules do not define the terms "proprietor" and "member". When a plan of subdivision provides for the creation of an owners corporation, the owners for the time being of the lots specified in the plan are the members of the owners corporation.[5] So a "member" is a lot owner. The Act speaks in terms of a lot "owner", not a lot "proprietor", but there is no reason not

to construe the word "proprietor" in the rule as meaning "owner". Rules of an owners corporation should be read fairly and their import derived from a reasonable interpretation of the language they employ.[6] Read in that way, "proprietor...of a lot" and "member" in rule 26.3 both mean "lot owner" and apply to Mr Carroll with respect to apartment 1802. Mr Agardy did not contend otherwise.

1. Mr Agardy's submission that the notice given to Mr Carroll on 31 January 2014 did not create a right of access to his balcony focussed upon the phrase "for the purpose of maintenance" in rule 26.3 and proceeded as follows. What the owners corporations proposed to do after giving the notice, and what they actually did when eventually they got access, was not "maintenance" within the meaning of rule 26.3 but was repair work. The rule does not confer any right of access for repair work once a notice is given under the rule, only a right of access for "maintenance". There was no purpose of "maintenance" and so the notice was ineffective to create a right of access to the balcony.

1. The words "repair" and "maintain" are not synonyms. Nor are the words "repair" and "maintenance". The Act imposes upon an owners corporation an obligation to "repair and maintain" common property (s46), implying that there are two distinct components of the obligation, and speaks of the carrying out of "repairs, maintenance or other works" (ss48, 49 and 50), implying that there is a difference between "repairs" and "maintenance". A covenant in a lease to "repair" implies an obligation to put into repair, while a covenant to "maintain" usually implies taking preventative action to prevent the demised premises from falling into a state of disrepair.[7] Dictionary definitions of "repair" are in terms of restoring to a good condition, or mending, whereas dictionary definitions of "maintain" are in terms of preserving, maintaining and keeping in repair.[8]

1. In some contexts, however, the notions of "repair" and "maintenance" overlap. An obligation to "maintain" can extend beyond mere servicing to include positive repair.[9] The Act also uses the word "maintenance" in the overlapping way: s37 provides that where an owners corporation prepares a "maintenance

plan", the plan must set out (among other things) "the present condition or state of repair" of major capital items "anticipated to require repair and replacement within the next 10 years". The word "maintain" may take colour from the work of maintenance and be used in reference to acts done or requisite to be done in the course of maintenance.[10]

1. As well as being read fairly, rules of an owners corporation should be construed not narrowly or pedantically but as a flexible document, and construed in a way that gives them business efficacy.[11]

1. The context within which rule 26.3 should be construed is that of owners corporations having an obligation to repair and maintain common property which includes external facades of the building. The external facades involve balconies which have concrete panels on their front edges. Some of the panels had loosened, exposing steel reinforcement and allowing it to rust. The necessary work to make the balcony edges safe and sound was repair of the concrete and the application of protective coating and sealant.[12] What the owners corporation had to do to discharge its obligation to repair and maintain the external facades of

the building was, on one view, a mixture of repair and maintenance or, on another and better view, "maintenance" within the meaning of that expression in rule 26.3. It is a better view because it is the result of a construction that allows the expression to take colour from the work that was required, and gives business efficacy to a rule designed to assist the owners corporations to do what might have to be done to keep the facades safe and sound. To construe the expression to mean that if what had to be done was or included "repair" it could not be "maintenance" would be to construe the rule narrowly and pedantically, in my opinion.

1. So I do not accept Mr Agardy's submission that the notice given to Mr Carroll on 31 January 2014 was not a notice properly given under and in compliance with rule 26.3. The notice was effective to oblige Mr Carroll to allow the owners corporations access to the balcony of apartment 1802.

1. By virtue of sections 128 and 141(b) of the Act, Mr Carroll was bound by rule 26.3 and was obliged to comply with it. By refusing access to the balcony of apartment 1802 he was in breach of the Act and the rule and became exposed to potential liability to the owners corporations in damages.

1. In view of the conclusion I have reached and expressed in the previous paragraph it may be unnecessary for me to decide whether, as the owners corporations claimed in the alternative, they had the benefit of an implied easement of way over apartment 1802 or over the balcony of the apartment. Nevertheless, in case my conclusion is wrong I will deal with that alternative case.

1. So far as it is applicable to the present proceeding, section 12(2) of the Subdivision Act 1988 provides that there are implied, over any land affected by an owners corporation, and for the benefit of any common property, all easements and rights necessary to provide rights of way -

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

1. My conclusion is that the easement argued for is consistent with the reasonable use and enjoyment of lot 1802 and the common property but is not necessary for the reasonable use and enjoyment of any other lot and the common property, so does not exist.

1. The evidence of Mr Siemonsma of Vertitech, the company which performed the repair of the concrete spalling, was to the following effect:

(a) The only economical way of repairing the balconies between levels 5 and 18 on the southern side of the building was the swing stage method. Had there been a more economical way he would have recommended it.

(b) The only places upon which the swing stage frame could be erected were the large balconies of apartments 1801 and 1802. All other balconies were only 1.5 metres deep: too small for the purpose.

(c) To set up the swing stage the equipment had to be carried through one of the apartments and onto the balconies.

(d) The use of scaffolding was a possible alternative to the use of a swing stage, but he doubted whether it was a safe method because he doubted whether the levels below level 18 could have withstood the weight of scaffolding.

1. Both Counsel cited to me the leading case on the application of s12(2) of the Subdivision Act: Body Corporate No 413424R v Sheppard.[13] In that case Dodds-Streeton JA, with whose judgment the other members of the Court of Appeal agreed, referred to the condition in s12(2), that the easement or right be necessary for the reasonable enjoyment of the lot or the common property, as "the first

condition" and to the condition that the easement or right be consistent with the reasonable use of the other lots and the common property as "the second condition". There was no dispute that in the first condition "the lot" meant the property or properties to be benefited by the implied easement. Her Honour held that "the other lots" included the lot which was to be subject to the implied easement.

1. Speaking of the decision of the trial judge, which was the subject of the appeal, as to the meaning of "necessary" within s12(2), Dodds-Streeton JA stated:[14]

In my opinion, the word "necessary" bears its ordinary meaning of "essential". It is not, however, to be construed in isolation, but in the context of the composite phrase, in which it is qualified by the broad concept of reasonable use and enjoyment of the benefited property. Further, it is the easement, rather than the function it secures, which must be "necessary". The reasonable use and enjoyment of the property not only clearly exceeds mere use, but also admits consideration of the effect on the reasonable use and enjoyment of property if the function to be achieved by the easement is unavailable and of the costs or detriments of securing the function by means other than the easement.

His Honour, in my view, correctly concluded that "necessary" meant that the easement was essential to achieving the specified function, in the sense that no alternative means of achieving the relevant function was feasible or reasonably available. It determining whether an alternative to the easement was reasonably available, all relevant circumstances, including physical factors, legal restrictions, safety considerations and cost should be considered.

While the mere possibility of an alternative to the easement would not preclude the satisfaction of the first condition, his Honour did not hold the contrary, but rather, correctly concluded that if the alternative were reasonable, although involving some inconvenience or additional cost, an implied easement would not be necessary in the relevant sense.

1. Following events which I have not yet recounted, the owners corporations eventually got access to Mr Carroll's balcony in September and October 2015 and Vertitech did the concrete spalling remedial work during those months. Vertitech brought all its equipment through apartment 1801 and set up the swing stage on the balconies of apartments 1801 and 1802. That is to say, the only access it needed to get and did get to apartment 1802 was access to the balcony.

1. I consider that the second condition in s12(2) has been satisfied: that the existence of an implied easement over the balcony of apartment 1802 is consistent with the reasonable use and enjoyment of lot 1802 and of the common property. While the swing stage equipment on the balcony of apartment 1802 was unsightly and occupied part of the balcony's surface, Mr Carroll's own photographs[15] show that it occupied much less than one half of that surface. The presence of the swing stage on part of the balcony, and Vertitech's presence otherwise when doing the remedial work, did not affect Mr Carroll's tenant's reasonable use and enjoyment of apartment 1802 as a whole. On the other hand, the second condition could not be met if what was ultimately needed (although it was not) was a right of way over the whole of apartment 1802. As the events which occurred over about two days in December 2013 showed - days when Vertitech did get temporary access and brought its equipment into and through apartment 1802 - the entry into apartment 1802 was disruptive and inconsistent with the reasonable use and enjoyment of the apartment; furniture was displaced to one side of the apartment and protective covering put down over the floor.

1. The first condition in s12(2) has not been satisfied, however. The right of way sought was not "essential...in the sense that no alternative means of achieving the relevant function was feasible or readily available", so was not "necessary". There was an alternative means of reaching the areas on the southern façade where the remedial work needed to be done. According to Mr Siemonsma evidence, scaffolding could have been used, even though it would have been more expensive for the owners corporations to have had the work done with scaffolding in place, and even though there was a safety risk involved in the use of scaffolding. Had there been evidence that there was a probability of the building being damaged through not being able to bear the weight of scaffolding, or evidence that the scaffolding method was so prohibitively expensive that it was simply not feasible, matters might have been different, but Mr Siemonsma's evidence did not go that far. The existence of an implied easement was not necessary in the relevant sense.

1. So I reject the alternative case that an implied easement gave the owners corporations a right of access. I have accepted, however, the case put of Mr Carroll having breached his obligation to allow access to the balcony following notice given to him in accordance with rule 26.3.

1. The owners corporations filed their application with the Tribunal, and so began this proceeding, on 13 March 2014. On or very shortly before that date they also commenced a proceeding against Ms Khoury[16], who up to that time had been refusing access also.

1. At the time that the owners corporations had begun this proceeding there had been no special resolution authorising them to begin it. Section 18 of the Act provides that an owners corporation must not bring legal proceedings unless it is authorised by a special resolution to do so, but there are exceptions which include (relevantly) an application to enforce the rules of the owners corporation.

1. This proceeding is, and always has been in part, one that seeks to enforce the rules of the owners corporation. But it also is, and always has been, one that seeks compensation for breach of a lot owner's obligation to permit access to the lot. So the relevant exception is not applicable. By virtue of s18, a special resolution was required.

1. Non-compliance with s18 is a procedural irregularity which can be cured by a special resolution made after the commencement of the proceeding but which ratifies its commencement. If the irregularity is not cured, the proceeding can and should be stayed.[17]

1. By a postal ballot of their members which closed on 8 August 2016, the owners corporations obtained an interim special resolution that authorised them "to continue VCAT proceeding OC671/2014 for the purpose of pursuing damages against the proprietor of lot 1802". When ballot papers were sent they were accompanied by an explanatory letter signed by the committee chairperson. On 15 August 2016 the owners corporations gave written notice to members of the result of the ballot.[18] The interim special resolution became a special resolution when by 8 September 2016 there had not been a petition against the resolution.[19] The hearing of the proceeding began on 12 September 2016.

1. By way of a preliminary objection at the start of the hearing, which I overruled, and again in his final address, Mr Agardy submitted that there had been no compliance with s18 and so the proceeding should be dismissed or stayed, for these reasons:

(a) A resolution to "continue" a proceeding is not a resolution that ratifies a decision to commence it, he submitted. I disagree. After a proceeding had been commenced the only way in which members can sensibly express approval of it is to resolve to "continue" it. It is wrong to treat the construction of a resolution of members as strictly as one would treat the construction of a statute.[20] A reasonable person in the shoes of a member of the owners corporations, having read the proposed resolution and the explanatory letter, would know that the members were voting on a proposed resolution to approve, from the beginning, for the present and for the future, the bringing of a proceeding to recover damages from Mr Carroll.

(b) The explanatory letter was misleading, he submitted. It was not. There was nothing in the letter which was inconsistent with the facts as I have found them above or with the facts I will be finding below.

(c) The special resolution was made so late, he submitted, that in the exercise of my discretion I should find that it had not cured the procedural irregularity. It is true that the resolution was made very late, a few days before the hearing of the proceeding began. It is also true that in one reported case that Mr Agardy cited the court, in holding that a special resolution had ratified a decision to begin a proceeding, stated that the procedural irregularity had been cured promptly.[21] But the case is not authority for the proposition that the irregularity cannot be cured by a ratifying special resolution made late in the proceeding. Moreover there was no evidence that Mr Carroll was prejudiced in any way by the late making of the special resolution.

1. So I conclude that the owners corporations have complied with s18 of the Act by obtaining a special resolution that ratified the decision to begin the proceeding.

1. In this proceeding and in the proceeding against Ms Khoury the Tribunal made directions requiring the parties to attend a compulsory conference presided over by a Tribunal member. On 28 August 2014 the compulsory conference was held in both proceedings together.

1. The compulsory conference resulted in the parties signing terms of settlement dated 28 August 2014. The owners corporations' chairperson, Mr Carroll and Ms Khoury all signed them. Paragraphs 5, 6, 7, 8 and 10 of the terms of settlement are material to this proceeding. They were:

1. Peter Carroll will allow the applicants access to the balcony of his property via the balcony of Lynne Vandenberg-Khoury's property for the applicants to undertake concrete spalling remedial works between 10 November 2014 and 15 December 2014 and/or during February 2015 on dates to be agreed by the parties.

1. The applicants agree that if the concrete spalling remedial works are not completed by 15 December 2014, they will arrange for the cranes to be immediately removed from the balconies and will complete the work in February 2015 or on dates to be agreed at the applicants' costs.

1. The applicants will indemnify the respondents for the cost of repairing any damage done to the balcony because of the concrete spalling remedial works.

1. The applicants will pay Peter Carroll $500.00 for the inconvenience caused to his tenant because of having to access his balcony to undertake concrete spalling remedial works.

1. This agreement is in full and final settlement of all claims between the parties arising out of the concrete spalling remedial works, including the work undertaken between 4 December 2013 and 13 December 2013.

Despite the wording of paragraph 10, the evidence as I understood it was that no work had been undertaken between 4 and 13 December 2013; all that had happened was that the swing stage had been set up then removed.

1. On the same day, 28 August 2014, the presiding member ordered by consent that this proceeding was struck out with a right to apply for reinstatement.

1. One of Mr Carroll's defences is that the terms of settlement operate as a bar to the owners' corporations' pursuit of this proceeding: that they had given up any cause of action based upon any breach by Mr Carroll of the Act or of the owners corporations' rules, and had agreed to accept instead the promise he made in paragraph 5 of the terms of settlement to allow access to his balcony. The argument that the terms of settlement had that effect gets support from paragraph 10, which states that they are "in full and final settlement of all claims between the parties" and does not contain any qualifying words such as "subject to performance of these terms of settlement".

1. In response to that defence Mr Beck-Godoy submitted that the terms of settlement amounted not to an accord and satisfaction but only to an accord executory[22], so that they would not have displaced the owners corporations' cause of action unless and until Mr Carroll had performed his obligation under them by allowing access as agreed.

1. I prefer not to explore the fine distinctions between an "accord and satisfaction" and an "accord executory" but rather to answer this question: on a proper construction of the terms of settlement, were the owners corporations agreeing to take Mr Carroll's promise, as set out in paragraph 5, in settlement of the proceeding, or were they agreeing to take the performance of the promise - his actual allowing of access, once it occurred - in settlement of the proceeding?

1. Terms of settlement, like any other contract, have to be construed objectively. Their meaning is to be determined by what a reasonable person would have understood them to mean, when regard is had not only to their text but also to the surrounding circumstances known to the parties, and to their purpose and object.[23] Mr Beck-Godoy sought to rely upon evidence of Mr Lukauskas and of Mr Parlour, who both were present during the compulsory conference, as to what the owners corporations intended when entering into the terms of settlement, but such evidence is irrelevant. The meaning of the terms of settlement, and what the parties intended when entering into them, have to be determined objectively, in the manner described in this paragraph.

1. The surrounding circumstances known to the parties were the existence of a proceeding in which the owners corporations were maintaining that they had a right of access so that they could do remedial work on the concrete slabs of balconies on the southern façade of the building and that Mr Carroll was wrongly refusing access, and in which Mr Carroll was disputing the alleged right of access and maintain that he had not refused access. A reasonable person in the position of the parties would have understood that the purpose of paragraphs 5 and 6 of the terms of settlement was to secure for the owners corporations a right of access which to that point had been disputed, so that settlement of the proceeding depended upon Mr Carroll performing his promise to allow access, not just upon the mere promise.

1. Moreover, the very text of paragraph 5 tells against a construction of the document as an acceptance of the mere promise in place of the cause of action that the owners corporations had claimed to have had. Mr Carroll's promise was to allow access during two time frames, the second of which was "during February 2015 on dates to be agreed." A reasonable person in the position of the parties would have understood that if the promise fell to be honoured during the second time frame there would need to be agreement about the dates for access, and if there were no agreement it might become difficult for the owners corporations to enforce the promise, yet the whole purpose of the terms of settlement from the owners corporations' point of view was to secure a right of access that previously had been disputed. The person would have concluded that the parties intended that owners corporations should be promising to give up their claims in the proceeding only when Mr Carroll had actually allowed access for the doing of the remedial works during one of the two time frames.

1. So I conclude that the terms of settlement did not operate as a bar, from the date of their execution, to the owners corporations' further pursuit of this proceeding. They would operate as a bar only upon Mr Carroll's performance of the obligation he agreed under them to undertake: an obligation to allow access to the balcony of apartment 1802 during the two time frames. As events turned out, he refused to perform that obligation, and eventually allowed access only when a Tribunal order required him to allow it.

1. Mr Lukauskas gave the following evidence, which I accept. He had attended the compulsory conference. He had learned from Ms Khoury that she had signed a contract to sell her apartment 1801. He got agreement from her and from the purchasers for access to the whole of apartment 1801. He decided that, to minimise inconvenience to Mr Carroll and his tenant, when the works were to be done all the workmen's equipment should be taken through apartment 1801 so that the only access to apartment 1802 that would be required was access to the balcony itself. The owners corporations engaged Vertitech to do the work contemplated in the terms of settlement. He spoke to Mr Siemonsma of Vertitech and sought from him a guarantee that the works could be completed during the first time frame provided for in the terms of settlement: 10 November 2014 to 15 December 2014. Vertitech would not give such a guarantee. The reason, Mr Siemonsma told me, was that the number of days on which work could not be done because of rain or because of high winds could not be predicted.

1. On 24 October 2014 Mr Lukauskas sent the following emails to Mr Carroll and copied it to Ms Khoury:

I have met with the contractors who were to carry out the remaining concrete repairs and they have advised that they can't guarantee that the works can be completed in the narrow window of access as proposed. Accordingly, we will need to reschedule the work to be done after the Christmas/holiday season and ask that you are happy to provide access from say 1 February 2015.

The work should take about a month but with weather being an uncontrollable factor, we can't be sure of the exact time for the works.

I have corresponded with the new owners to be of Lynne's apartment and they have agreed to provide access for the duration of the works.

I look forward to hearing from you so that we can continue our planning for the works.

1. On the same day, Mr Carroll responded by email to Mr Lukauskas:

No, I am not happy with a month's work being carried out. I am intending to put my property on the market in the new year, and a bloody big crane in the middle of the balcony won't help the marketing campaign one bit.

We were talking a week to 10 days being all that was required. And that's all I am interested in allowing. Get them to put more people on the job and get it done rather than drag it out after Christmas. I am happy to accommodate delays caused by adverse weather. But nothing more.

1. On 12 November 2014 Mr Carroll sent the following email to Mr Parlour:

I am not sure if you are aware of it, but the Arkley Building Managers have breached the agreement that we made at the VCAT mediation a couple of months ago. The deal was that Lynne would terminate her lease three weeks early, the Owners Corp would rent her unit for three weeks prior to her settlement, I would give them access to my balcony and the concrete works would be carried out over that period.

Lynne terminated her lease as agreed, (from a few days ago) but no one has made arrangements for the works to be carried out, no one has paid her the $2,700.00 that she is now out of pocket, and the Managers are now talking about getting the work done in February, over a period of about a month. I don't know what view you take of this behaviour, but as far as I am concerned it shows a serious lack of good faith.

I don't know what planet these people are on, or why they think they can ignore the deal we reached and just carry on like they owned both of our apartments. But if they are half way interested in getting the repairs done then they had better get off their arses and get it started straight away. If they are wanting my balcony for a moth [sic] over February then we might as well go straight back to VCAT and beyond. They won't be getting access to my property at all if they don't do it now as we agreed. As you know, this is exactly the same problem we had with them about this time last year. I thought we had resolved things to everyone's satisfaction. Apparently it wasn't to their satisfaction.

1. Mr Carroll's two emails are noteworthy in these respects. First, his allegation of breach of an agreement related to those parts of the terms of settlement that were with Ms Khoury, not to those parts that were with him. Secondly, he was mis-stating the terms of settlement with him: they had not required the owners corporations to have done the remedial work during the first time frame if Ms Khoury had terminated a lease before 10 November 2014 or at all. Thirdly, he was stating that he was refusing access to his balcony during February 2015 or at any time other than within the first time frame.

1. The Tribunal book contains other emails between Mr Parlour and Mr Carroll in November 2014 but they were not referred to during the evidence.

1. On 2 February 2015 Mr Parlour sent the following email to Mr Carroll:

The Owners Corporation are currently finalising arrangements for completion of the concrete remediation works. I have suggested that arrangements not be finalised until the Owners Corporation has agreed with you specific arrangements for access to your balcony. I understand that the new owners of apartment 1801 have agreed to their apartment being accessed for the purpose of setting up and dismantling the swing stages and for the purpose of performing daily safety checks. Access to your balcony is required for the purpose of ensuring that the works are performed in a safe manner. MICM has been instructed to do all that it can to ensure that the works are completed as soon as possible and that inconvenience to your tenant is minimised. Unfortunately the contractors are unable to commit to a fixed period to complete the works. From what I recall you were satisfied with the information that was provided in connection with the VCAT terms. Please let me know if this not the case and whether you have any particular preference for when works can commence. If suitable arrangements cannot be made then unfortunately the Owners Corporation will have little alternative other than to apply for reinstatement of the dispute before VCAT.

1. Mr Carroll's email in reply, on the same day, 2 February 2015, was:

Andrew, I am away in New Zealand for a few days. A family funeral I have to attend. I will be back early next week.

You might want to try to revive the VCAT proceedings, because I am not in any circumstances going to accept an open ended deal. Nor will VCAT force me to accept one.

1. The Owners Corporation pays Lynne the 2 weeks rent they agreed to pay her when we did the deal in October last year. It was disgraceful that they welched on this deal that we hammered out at the mediation. She terminated her tenant 3 weeks early because of it, and the Owners Corporation just ignored it. That is bad faith, whatever kind of spin you want to put on it. They owe her $2,700.00 and should pay.

1. Access limited to 12 days, which covers 2 full working weeks plus 1 weekend in between. I will extend it for seriously inclement weather that causes days to be lost, but I won't accept any bullshit self-assessment. If they want an extension, there had better be a

meteorology expert that says it was too dangerous to work, or no deal. You are asking my tenant to give up the enjoyment of the balcony during about the only time they ever get to enjoy it, and its not going to continue for a second longer than it needs to.

1. Compensation for my tenant of $500.00, as we agreed.

1. Supervised access limited to twice daily visits by named personal unless safety demands require additional access (i.e. to correct a working problem).

1. Full indemnity from the Owners Corporation as per the licence agreement we negotiated.

1. Proof of insurance cover for any damage prior to the commencement of any work.

I am pretty pissed off that the Owners Corporation thought it was fine to hammer out a deal at the mediation, and then not honour their side of the deal. That's not how these things work. Its not how I work, and I don't want to deal with people who think that agreements are only binding on other people.

1. After further email correspondence between Mr Parlour and Mr Carroll, in the Tribunal book but not referred to in the evidence, the owners corporations took up Mr Carroll's challenge and applied on 5 May 2015 for reinstatement of the proceeding. On 29 June 2015 the Tribunal heard and granted the application for reinstatement and fixed the proceeding for hearing.

1. The terms of settlement had obliged Mr Carroll to allow the owners corporations access to his balcony "during February 2015 on dates to be agreed by the parties" and, if the remedial work had not been completed by 15 December 2014, had obliged the owners corporations to "complete the work in February 2015 or on dates to be agreed". Each party had a duty to co-operate with the other: to do whatever was reasonably required to have been done by him or by them to arrive at mutually acceptable dates.

I think I may safely say, as a general rule, that where in a written contract it appears that both parties have agreed that something shall be done, which cannot effectually be done unless both concur in doing it, the construction of the contract is that each agrees to do all that is necessary to be done on his part for the carrying out of that thing, though there may be no express words to that effect. What is the part of each must depend on circumstances.[24]

Mr Carroll did not fulfil that duty to co-operate. At first he made no effort to agree on dates in February 2015 for the undertaking of the works and said that he would not give access to his balcony except during the first time frame. Then in his email of 2 February 2015 he attempted to renegotiate the terms of settlement by demanding that access be limited to twelve days, that the access be by "named personnel" and that the access be "supervised".

1. The owners corporations have made out their allegation in the Amended Points of Claim that Mr Carroll breached the terms of settlement. In my view the breach amounted to a repudiation of the terms of settlement insofar as they related to him.

1. A repudiation of a contract occurs when one party clearly indicates an absence of readiness or willingness to perform that party's obligations under it. If what the defaulting party is unready or unwilling to perform is sufficiently serious, the other party may accept the repudiation, discharging both parties from any further obligation to perform the contract. Whether there has been a repudiation is to be determined upon objective inquiry. Whether the defaulting party intended to repudiate is not relevant. What matters is the conduct of the party in default which conveys to the other party his intention not to perform the contract or to fulfil it only in a manner substantially inconsistent with his obligations and not in any other way.[25]

1. A refusal to perform a contract according to its terms unless the contract is renegotiated may, therefore, amount to a repudiation of the contract.[26] Moreover, an attempt to impose upon a party to a contract a new term which had never been agreed to may amount to a repudiation of the contract.[27]

1. Mr Carroll's obligation under the terms of settlement to allow the owners corporations access to the balcony of apartment 1802 during February 2015, albeit on dates to be agreed, was fundamental to the efficacy of the terms of settlement. He was refusing access in accordance with the terms, in that, on a take-it-or-leave-it basis, he was seeking to impose a limitation of twelve days and, by saying what he "will sign up for" and seeking to put other qualifications upon the allowing of access, he was attempting to renegotiate the terms. His expressed unwillingness to allow access in a way that accorded with the terms of settlement was, in my view, sufficiently serious to amount to a repudiation of them.

1. The owners corporations accepted the repudiation by applying to the Tribunal for reinstatement of the proceeding.

1. Although Mr Carroll made allegations in his emails that the owners corporations had failed to honour their obligations to Ms Khoury under the terms of settlement, no evidence was led about the matter and, if it had been, I think it would have been irrelevant.

1. Having been reinstated, the proceeding came on for hearing before Deputy President Lulham on 1 September 2015. The hearing seems to have devolved into a preliminary hearing about whether an order requiring Mr Carroll to allow access to the balcony should be made and whether the claim for damages should be dismissed summarily. At the end of the hearing, the Deputy President made an order the first two paragraphs of which were:

1. The applicants will give notice to the respondent of the date upon which the applicants, by their contractors, intends to install swing stages and store building materials for use in the works on the balcony of apartment 1802, being a date in either of the weeks commencing 21 September 2015 or 28 September 2015.

1. The respondent shall give the applicants their contractors servants and agents access to the balcony of apartment 1802, for the period of 32 calendar days commencing on the date on which the swing stages are installed.

The order defined "the works" as meaning the work of repairing concrete spalling on common property in the vicinity of apartment 1802. The Deputy President reserved his decision on the application for summary dismissal of the proceeding otherwise.

1. On 3 September 2015 the Deputy President refused the application for summary dismissal and gave written reasons for doing so.

1. Following the making of the order Mr Carroll allowed access to the balcony of apartment 1802 to the owners corporations and to their contractors on a date in September 2015. Vertitech proceeded to complete the remedial work on the southern façade of the building. Mr Siemonsma's evidence was that the work was completed before the end of October 2015.

1. After further directions hearings this proceeding was eventually fixed for hearing on 12 September 2016, and I heard it on that day and on the following day.

1. I have concluded that Mr Carroll, in breach of the owners corporations rules which he had a duty to obey, refused access to his balcony for the owners corporations in November and December 2013 and in February 2014, and that his breach of duty caused delay in completion of concrete spalling remedial work on the southern façade of the building. The owners corporations are entitled to an order that Mr Carroll must pay them whatever sum they can prove was a loss they suffered because of the delay.

1. When the owners corporation began this proceeding the amount they claimed, in Points of Claim attached to their application, was $78,832.00, said to be estimate of the cost incurred because of delay. Their Amended Points of Claim, filed and served by leave,[28] claimed $96,254.20. They have given particulars of the amount claimed as follows:

Cost of making safe loose concrete spalls pending access

Repairs to concrete spalling following grant of access pursuant to VCAT orders dated 1 September 2015

Allowance for uncompleted works against original contract price for works to be performed on Arkley tower in its entirety. Amount determined by consultant AURECON

Project Management in respect of works performed pursuant to VCAT orders dated 1 September 2015

1. The evidence of Mr Lukauskas, in particular, explained the role of the various persons set out in the above table.

(a) Skyhooks was a firm which, before the remedial works were begun in September 2015, inspected the southern façade of the building to determine whether there had been more concrete spalling than had been evident in late 2013.

(b) Vertitech Australia Pty Ltd, as previously mentioned, was the company which had been engaged to do the remedial work on the southern façade in 2013, although it did not then do the work because of Mr Carroll's refusal of access to apartment 1802 or to its balcony, and was the company which eventually did that work in September and October 2015.

(c) Varney McLean Pty Ltd was the company engaged by the owners corporations as project manager for the works done in 2015.

(d) Aurecon Australia had been the firm engaged as consulting engineer and project manager for works done on the northern façade in 2013 and for works that were intended to have been done on the southern façade in 2013.

(e) Van Grieken and Associates Pty Ltd was a company whose director was Albert Van Grieken. He had been an employee of Aurecon Australia in 2013. The owners corporations engaged his company as a consulting engineer for the works done in 2015 because of his previous experience in that role at Aurecon Australia.

(f) Dearness Property Services Pty Ltd was engaged to dispose of drums of paint that had been intended for use on the building in 2013 but had exceeded the use by date before September 2015.

1. With the exception of the sum of $15,731.30, which was a credit allowed to the owners corporations and which I shall address below, the owners corporations paid each of the sums under the heading "Cost/Allowance" to the corresponding "Contractor/Consultant" in the table.

1. Although I saw no documents that related to Vertitech's original contract with the owners corporation for performance of remedial concrete spalling works in 2013 for the whole building, Mr Lukauskas gave evidence that the contract price was $331,279.00. The Tribunal book contained a copy of a payment schedule from Aurecon which identified that sum as the lump sum contract price. Mr Liew gave evidence that the contract price had been $440,000.00, but he did not substantiate that figure in any way. I consider that it is more likely that the present owners corporation manager's evidence, supported as it is by that Aurecon document, is correct. I find that the original contract price was $331,279.00.

1. Mr Lukauskas gave evidence that Varney McLean Pty Ltd had accepted a tender from Vertitech for $98,186.00 ($89,200.00 plus goods and services tax) for completion in 2015 of the remedial work on the southern façade from the 6th storey upwards. The remedial work on the first five storeys on the southern side

had been done in 2013. Mr Siemonsma told me access to the balconies of apartments 1801 and 1802 had not been needed for that work. The Vertitech tender was the lowest of three tenders that Varney McLean Pty Ltd had received, Mr Lukauskas told me.

1. Vertitech's tender had included an allowance of $7,150.00 ($6,500.00 plus goods and services tax) for remedial work on the southern façade of storeys 18, 19 and 20. Mr Siemonsma told me that work on the southern façade of those storeys had not been part of Vertitech's original contract price. So it could not be said that anything that Mr Carroll had failed to do had any bearing upon the need for the owners corporations to incur that cost of $7,150.00. It should be deducted from the tender price of $98,186.00, reducing to $91,036.00 the cost of Vertitech's work in 2015 on the southern façade of storeys 6 to 18, and reducing the owners corporations' overall claim from $96,254.20 to $89,104.20.

1. I have no difficulty in accepting that $91,036.00 was the reasonable cost of Vertitech's remedial work on the southern façade of storeys 5 to 18 in 2015. That sum is easy to reconcile with the original contract price of $331,279.00 for Vertitech's remedial works for the whole building when one appreciates that $91,036.00 does not include any work on the southern façade of the first five storeys. There is also the evidence of Vertitech's tender having been the lowest of three.

1. I also accept that the amounts that the owners corporations paid to other contractors, as identified in the table of particulars set out in paragraph 100 above, were reasonably and properly incurred so as to complete the remedial works on the southern façade of the building, and were expenses that the original contract price could not have taken account of and did not take account of, and were incurred as a consequence of Mr Carroll's breach of duty to allow access.

1. In the calculation of its claim for damages of $96,254.20 (which, at its highest, ought to have been for $89,104.20) the owners corporations have deducted $15,731.30. As the table indicated, and as Mr Lukauskas confirmed, that was an amount which Aurecon had calculated as an allowance or deduction from the original contract price, payable and paid by the owners corporations, for those works which Vertitech had contracted to perform but had not been able to perform in 2013.

1. Here, in my view, is a large gap in the owners corporations' proof of the damages they claim from Mr Carroll. There was no evidence by any person from Aurecon, or at all, to explain how that deduction of $15,731.30 was calculated or arrived at. It is astonishingly small, when one compares it to the original contract price of $331,279.00 - for proposed work on both northern and southern facades - and when one takes into account that the work that was not done in 2013 was the work required to remedy about two-thirds of southern façade.

1. I can accept that it must have cost more for Vertitech to have done its work in two separate periods, one in 2013 and the other in 2015, than it would have cost if Vertitech had been able to do its work in one uninterrupted period in 2013. I can accept too that it is likely that some extra cost was involved in Vertitech's working within the restrictions of having to carry its equipment through apartment 1801 only, and of having to do work on the edges of Mr Carroll's balcony as a priority. I cannot conceive, however, of how the extra cost could have been $75,304.70 (for that is the difference between the 2015 cost of $91,036.00 and Aurecon's allowance of $15,731.30 for work contracted for but not done in 2013).

1. Because there was no satisfactory evidence of what ought to have been allowed by way of a deduction from Vertitech's contract price, there is no satisfactory evidence of how much more it might reasonably have cost the owners corporations when Vertitech completed the remedial work on balconies on the southern façade in 2015. This is not a case on which a difficulty of proof justifies a guess of how much the reasonable extra cost was, for the owners corporations could have led evidence to prove it; nor is this a case in which I could fix a nominal amount, because the proceeding is a claim for damages for breach of a statutory duty where damage is the gist of the cause of action and such damage has to be proved.[29]

1. So I have concluded, reluctantly, that I cannot make an award of damages for the sum that the owners corporations have paid to Vertitech, or any part of it. I can and shall, however, award as damages the sums that they paid to the other contractors involved in the remedial work done in 2015:

1. I calculate the amount of damages to which the owners corporations are entitled to be $13,799.00, as follows:

1. In their Amended Points of Claim the owners corporations claimed entitlement to costs on an unusual basis, it being one of the rules. Both Counsel touched on the question of costs briefly in their submissions but I did not hear full argument on the question. So I shall reserve liberty to the parties to make any application for costs or for an award of interest on $13,799.00 if either should see fit to do so. The party making the application must pay any hearing fee that is required.

1. Subject to that, there will be an order that the respondent pay the applicants $13,799.00.

[1] The admission is made in paragraph 18 of Mr Carroll's "Response to Amended Points of Claim" dated 4 August 2016.

[2] S46 of the Act. From page 44 of the plan of subdivision it would appear that the third applicant alone might have had the obligation to repair and maintain the southern façade of the building, but no objection was ever taken to the standing of the first and second applicants. Moreover, Mr Carroll has admitted that all three applicants had the obligation: see footnote 1.

[3] Schedule 2 of the Act, clause 3, is a transitional provision to that effect. Clause 5, another transitional provision, states that any rules of a body corporate in force immediately before the commencement of the Act continue in force and are deemed to be rules of the owners corporation.

[4] The email is not in the Tribunal book but is Exhibit B.

[6] Avranik Pty Ltd v Lloyd [2012] VSC 306, per Garde, J, President of VCAT. The decision was upheld on appeal: Avranik Pty Ltd v Lloyd [201] VSCA244.

[7] Halsbury's Laws of Australia, volume 16, para [245-3240].

[8] Shorter Oxford Dictionary, 3rd edition; The Macquarie Dictionary, 2nd revised edition.

[9] John Fairfax & Sons Ltd v Australia Telecommunications Commission [1977] 2 NSWLR 400 at 413.

[10] Galashiels Gas Co Ltd v O'Donnell [1949] UKHL 2; [1949] AC 275 at 286.

[11] Avranik v Lloyd: see footnote 6.

[12] Mr Siemonsma of Vertitech gave evidence to that effect.

[13] [2008] VSCA 118; (2008) 20 VR 362.

[14] [2008] VSCA 118; (2008) 20 VR 362 at 374.

[16] The proceeding against Ms Khoury was numbered OC669/2014. This proceeding against Mr Carroll is numbered OC671/2014.

[17] Burbank Australia Pty Ltd v Owners Corporation PS 447493 [2015] VSC 160.

[18] The ballot paper form, the explanatory letter and the notice of the result of the ballot are all in the Tribunal book.

[20] Kenros Nominees Pty Ltd v Tipperary Group Pty Ltd [2009] 524 at [63], approving Myer Queenstown Garden Plaza Pty Ltd v Corporation of the City of Adelaide (1975) 11 SASR 504 at 520.

[21] 2 Elizabeth Bay Road Pty Ltd v The Owners - Strata Plan No 73943 [2014] NSWCA 409 especially at [107] - [108].

[22] Mr Beck-Godoy cited McDermott v Black [1940] HCA 4; (1940) 63 CLR 161 at 183-4 where Dixon J explained the distinction between accord and satisfaction and an accord executory.

[23] Pacific Carriers Limited v BNB Paribas [2004] HCA 35; (2004) 218 CLR 451 at 461-2; Toll (FGCR) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 at 179.

[24] Mackay v Dick (1881) 6 App Cas 251 at 253, per Lord Blackburn; cited with approval by Mason J in Secured Income Real Estate (Aust) Ltd v St Martins Investments Pty Ltd (1979) 144 CLR 597 at 607, which whose judgment the other members of the High Court agreed.

[25] Laurinda Pty ltd v Capabala Park Shopping Centre Pty Ltd [1989] HCA 23; (1989) 166 CLR 623 at 647, per Brennan J; Sopov v Kane Constructions Pty Ltd (2008) 20 VR 127.

[26] Poort v Development Underwriting (Victoria) Pty Ltd (No. 2) [1977] VicRp 52; [1977] VR 454.

[27] Freedom Homes Pty Ltd v Boros [2002] Qd R377.

[28] By the Tribunal's order made on 14 July 2016.

[29] J.L.W. (Vic) Pty Ltd v Tsiloglou [1994] VicRp 16; [1994] 1 VR 237 at 241.