To amend Strata Plan 021615Q by including the lots 102, 105, 106, 115, 119, 121, 122, 123, 126, 127, 139, 140, 141, 142, 143, 144, 145, 146 and 147 in to common property and by extinguishing lot entitlement and liability for lots 102, 105, 115, 119, 121, 122, 123, 126, 127, 139, 140, 141, 142, 143, 144, 145, 146 and 147.

1. Under s 32 of the Subdivision Act a unanimous resolution is required before an owners corporation can proceed to take action that would have the effect of altering a plan of subdivision. The motion was carried, but not unanimously.
2. The respondents are the only lot owners who voted against the motion.
3. The result of the ballot was:

One of the respondents, Gaetano Bisignano, owns two lots. Hence, on a numerical count of one vote for each lot owned, there were four votes against.

1. This proceeding is the owners corporation's application under s 34D of the Subdivision Act for an order consenting, on behalf of all members who did not consent, to the action proposed in the motion that was the subject of the ballot. When the order is made, the resolution that resulted from the ballot becomes a unanimous resolution and, under s 32 of the Subdivision Act, the owners corporation is able to act upon it and amend the plan of subdivision in the ways set out in the motion.

1. The registered proprietor of each of the 19 accessory lots identified in the motion that resulted in the resolution is shown on the relevant certificates of title as Jonabe Pty Ltd. That company became deregistered on 10 July 1992 and so by virtue of s 601AD(1) of the Corporations Act 2001(Commonwealth) ceased to exist. By virtue of s 601AD(2) of the Corporations Act the ownership of the 19 lots then vested in the Australian Securities and Investment Commission ('ASIC').
2. The owners corporation wishes to purchase the 19 lots from ASIC so that it may, if the Tribunal makes the order sought, proceed to amend the plan by including the 19 lots in common property and by extinguishing lot entitlement and lot liability in respect of them.

1. The first respondent Rayina Pty Ltd ('Rayina') is the owner of lot 124 on the plan. It purchased lot 124 in 1992. A factory is built on the lot.
2. Lot 126, one of the 19 lots registered in the name of Jonabe Pty Ltd and the subject of the resolution, adjoins Rayina's lot 124. Lot 126 is not part of a carriageway. It is sandwiched between Rayina's lot 124 and the western boundary of the site that adjoins the Frankston-Mitcham freeway. There is no point of entry from the freeway. A roller door at the rear of the factory on lot 124 is the only means of access to lot 126. Since it purchased lot 124 Rayina has used lot 126 as a back yard and barbeque area.
3. Lot 141, another of the 19 lots, has a surface which is partly concreted and partly dirt. It is used at the moment as a car park if it is used at all.
4. In August 1992 a real estate agent purporting to act for Jonabe Pty Ltd (although in July 1992 it had became deregistered and so did not exist) offered for sale lot 126 and lot 141. On or about 25 August 1992 Mr R A Scott, on behalf of Rayina, signed a contract note for the purchase of lots 126 and 141 for $9,000.00. Rayina paid a deposit of $900.00 when Mr Scott signed the contract note. The vendor named in the contract note was Jonabe Pty Ltd. It bore the signature of Roger Alberti, a director of Jonabe Pty Ltd.
5. On or about 28 August 1992 Rayina paid the balance of purchase money and took delivery of two instruments of transfer and two certificates of title, one for lot 126 and the other for lot 141. The transfer for lot 126 specified a consideration of $8,000.00. The transfer for lot 141 specified a consideration of $1,000.00. Each transfer bore the common seal of Jonabe Pty Ltd and the signature of Mr Alberti as the attesting director.
6. Had the instruments of transfer been registered at the Office of Titles, Rayina would have obtained an indefeasible title to the two lots, despite the fact that the purported transferor no longer existed.
7. But the instruments of transfer were never registered. They were submitted to the State Revenue Office for assessment of stamp duty in September 1992. That was last trace of them. Rayina cannot locate the instruments of transfer or the certificates of title.
8. On 6 July 2012 Rayina obtained a Supreme Court order reinstating the registration of Jonabe Pty Ltd. Had that order remained in force, Jonabe Pty Ltd by virtue of s 601AH(5) of the Corporations Act would have been taken to have continued in existence as if it had not been deregistered, and the property that had vested in ASIC would have re-vested in Jonabe Pty Ltd. Rayina, however, would have had a claim to be an equitable owner of lots 126 and 141 as purchaser. But the order has not remained in force. At the instance of the owners corporation the Supreme Court has set aside the order made on 6 July 2012. Jonabe Pty Ltd is still deregistered and does not exist. The contract into which Rayina had entered, and the instruments of transfer of which it took delivery, have no legal effect as matters presently stand.
9. Rayina, however, wishes to pursue its claim to be the owner of lots 126 and 141 - particularly lot 126 - if it can. It wishes to purchase them from ASIC, if it can. That is why it voted against the motion and opposes the owners corporation's application in this proceeding.

1. The third and fourth respondents Joe Mijac and Bronwyn Mijac are the owners of the lot which was described on the plan as unit 48. To further their intention to redevelop the lot they had another plan of subdivision prepared and approved by the local municipal council. Their plan showed a subdivision of what had been lot 48 into three separate lots. Their intentions are to extend the existing warehouse building (presently occupied by a tenant) and to build two new warehouses. Their plan must have been registered as an amendment to plan of subdivision 21615Q because the Registrar of Titles has issued to them on 2 May 2012 three new certificates of title for lots 148, 149 and 150 respectively on plan of subdivision 21615Q. That is to say, what had been lot 48 has become lots 148, 149 and 150.
2. Lot 141 lies across what Mr and Mrs Mijac have planned to be a driveway to a loading bay for the proposed new warehouse on lot 148. There will be no vehicular access to that driveway other than across lot 141.
3. Mr Mijac's attitude to the application in this proceeding is that he does not oppose it so long as the outcome will not prevent such access across lot 141.

1. I commenced to hear the proceeding on 25 July 2012. The only respondents who appeared were Rayina (through its solicitor Mr Morris) and Mr Mijac (on behalf of himself and his wife).
2. The only witnesses who gave oral evidence were James Parnell, the director of the owners corporation's manager, and Mr Mijac. Without objection I received as Rayina's evidence witness statements of three persons: R A Scott, J O B Stenberg, Roger Alberti and Mr Morris.
3. Mr Parnell gave evidence, and I accept, that he has spoken to the second respondent Gaetano Bisignano and to the fifth respondent Budimir Sckuloski, that Mr Bisignano has told him that he now consents to the resolution, and that Mr Sckuloski has told him that he and his wife the sixth respondent Brankica Sckuloski now consent to the resolution.
4. At the end of the hearing on 25 July 2012 I reserved my decision. In the course of reviewing the evidence while considering my decision, I thought that Mr Parnell's evidence about the result of the ballot had been left unclear. So I ordered a re-listing of the proceeding for further hearing.
5. The further hearing took place on 18 September 2012. Mr Morris again appeared for Rayina but Mr Mijac did not appear. He had written to the principal registrar stating that he and his wife were travelling overseas and applied for an adjournment. As will appear below, he and Mrs Mijac were not prejudiced or disadvantaged in any way by not having been able to attend the further hearing.
6. During the further hearing Mr Parnell gave additional evidence which clarified the matter that had been left unclear.
7. None of the evidence that I received from any party was contradicted or challenged. The only faintly controversial matter was the extent to which lot 141 was covered with concrete. The facts that I have sent out above and will be setting out below are findings made upon that uncontradicted evidence, except that the history of the obtaining and then the setting aside of the Supreme Court order for reinstatement of Jonabe Pty Ltd's registration was given to me from the Bar table.
8. At the conclusion of the hearing on 18 September 2012, I granted the owners corporation's application, subject to conditions, and made the order that is set out at the commencement of these reasons. I told the parties' representatives that I would give reasons for my decision later, in writing. These are the reasons.

1. Sections 32 and 34D of the Subdivision Act 1988 apply to this proceeding. So far as they are presently relevant, they provide:
   1. Powers to alter subdivision

If there is a unanimous resolution of the members, an owners corporation may proceed under this Division to do one or more of the following -

(a) ...;

(b) purchase or otherwise obtain land -

(i) for inclusion in or to become common property; or

(k) create, alter or extinguish lot entitlement or lot liability in any way necessary because of the exercise of its other powers under this section;

(1) A member of the owners corporation, an owners corporation, an administrator of an owners corporation or a person with an interest in the land affected by the owners corporation may apply to the Victorian Civil and Administrative Tribunal for -

(b) an order consenting on behalf of a member or group of members of an owners corporation to the doing by the owners corporation of any of the things set out in section 32 or 33; or

(3) The Victorian Civil and Administrative Tribunal must not make an order on an application under subsection (1)(b) unless it is satisfied that -

(c) the member has or members have refused consent to the proposed action and -

(i) more than half of the membership of the owners corporation having total lot entitlements of more than half of the total lot entitlement of the members of the owners corporation consent to the proposed action; and

(ii) the purpose for which the action is to be taken is likely to bring economic or social benefits to the subdivision as a whole greater than any economic or social disadvantages to the members who did not consent to the action.

(4) For the purposes of sections 32 and 33, an order made on an application under subsection (1)(b) is to be treated as a vote by the member in favour of the proposed action of the plan.

(6) Subject to this section, the Victorian Civil and Administrative Tribunal may make any order it thinks fit on an application under this section.

1. Section 12(2)(a)(iii), (b) and (e) of the Subdivision Act provide that, subject to subsection (3) (which is presently irrelevant), there are implied, over any land affected by an owners corporation, and for the benefit of each lot and 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.
2. Section 130(1) of the Victorian Civil and Administrative Tribunal Act 1998 provides that the power of the Tribunal to make an order includes the power to make the order subject to any conditions or further orders that the Tribunal thinks fit.
3. To meet the requirements of s 32 and s 34D of the Subdivision Act and to obtain an order under s 34D(1)(b) the owners corporation must prove four things:

[1] There has been a resolution of the members for it to do one or more of the things set out in paragraphs (a) to (m) (inclusive): s 32.

[2] A member has, or members have, refused to consent to the action proposed in the resolution: s 34D(3)(c).

[3] But more than half of the membership of the owners corporation, having total lot entitlements of more than half of the total lot entitlement of members, consent to the proposed action: s 34D(3)(c)(i).

[4] The purpose for which the action is to be taken is likely to bring economic or social benefits to the subdivision as a whole, greater than any economic or social disadvantages to the members who did not consent to the action: s 34D(3)(c)(ii).

1. Upon proof of those four things the Tribunal may make an order granting the application: s 34D(6). It is not required to do so. It has a discretion in the matter. It may make any order it thinks fit. Moreover s 130(1) of the VCAT Act empowers it to make the order subject to conditions.

1. The resolution of the members, although not unanimous, was one that expressly envisaged the extinguishment of lot entitlement and lot liability for the 19 lots identified in it. Such an extinguishment comes within the scope of s 32(k) of the Subdivision Act if it is 'in any way necessary because of the exercise of its other powers under this section'.
2. One of the other powers referred to in s 32 is the power to purchase or otherwise obtain land for inclusion in common property: s 32(b)(i).
3. The owners corporation intends to purchase the 19 lots from ASIC if it can. It has commissioned from the Australian Valuation Office a valuation of the 19 lots. The written valuation dated 29 November 2007 valued them at $1.00 each. The valuer expressed the view that there was an implied easement for access over the 19 lots which precluded development by building upon them, and made its valuation accordingly.
4. The resolution does not, in so many words, purport to authorise the owners corporation to 'purchase or otherwise obtain' the lots. But it purports to authorise their inclusion in common property. Obviously it cannot do that unless it first somehow obtains ownership of them, by purchase or otherwise. So I consider that the resolution was one to extinguish lot entitlement and lot liability in a way necessary because of the exercise of power to purchase or otherwise obtain land for inclusion in common property, within the meaning of s 32(k) and (b)(i).
5. By voting against the motion proposed in the ballot, members of the owners corporation refused to consent to it. Although some of those members have consented since, there are still members who refuse to consent. Rayina refuses. The consent of Mr and Mrs Mijac is a consent with qualifications; they have refused to consent unconditionally.
6. On any view of the meaning of s 34D(3)(c)(i), the owners corporation has established that more than half of its membership, having total lot entitlements of more than half of the total lot entitlement of members, have consented to the proposed action, by voting in favour of the motion. I think there is a real question whether s 34D(3)(c)(i) imposes one requirement or two: whether it is sufficient for the owners corporation to satisfy the Tribunal that the consent carries more than half of the total lot entitlement of members, or whether the words 'more than half of the membership of the owners corporation' mean that the owners corporation must also satisfy the Tribunal that the consent is of the owners of more than half the number of lots: a numerical majority. In the present case the question is academic because, if there are two requirements, the result of the ballot, as set out in paragraph 9 above, shows that the owners corporation has satisfied both of them. My tentative view is that there is one requirement only, that is, a consent that carries more than half the total lot entitlement of members. I think that the change of language from 'members' elsewhere in the section to 'membership', in the phrase 'more than half of the membership of the owners corporation', supports the view that the phrase is not dealing with numbers of members but with the lot-entitlement value for the members who have consented, so that s 34D(3)(c)(i) should be read as meaning 'more than half of the membership of the owners corporation, that is to say, members whose lots carry more than half of the total lot entitlement of members ...'. But the occasion to make a proper decision on the question will be one in which the question is not academic and is fully argued.
7. The owners corporation has satisfied the first three of the four requirements to which I have referred.

1. If one leaves aside lot 126, in which Rayina claims to have an interest, and lot 141 in which both Rayina and Mr and Mrs Mijac claim to have an interest, there is no difficulty in concluding that the inclusion of the 19 lots in common property is likely to bring economic or social benefits to the subdivision as a whole, greater than any economic or social disadvantages to the members who did not consent to the proposed action to include the 19 lots in the common property. There is no economic or social benefit to any of those members in having the 17 lots (leaving aside lots 126 and 141) in the name of the non-existent Jonabe Pty Ltd as registered proprietor and in the present ownership of ASIC or in having Jonabe Pty Ltd's registration reinstated so that it becomes the effective owner of them. But the economic or social benefit that all members would derive from the inclusion of the 17 lots in the common property is that the members, having become the beneficial owners of them as tenants in common in shares proportionate to their respective lot entitlements, will gain in law the ability which they presently have in fact, to use the concreted surfaces of the lots as carriageways so that the factories and warehouses are accessible to vehicles. Individual ownership of the lots as accessory lots involves a risk, at least in theory, that individual owners might exclude others from use of the lots as carriageways so that the factories and warehouses become inaccessible. Once the lots are included in common property, the members of the owners corporation will become bound by the rules that prohibit obstruction of common property or use of it as car parking space unless it was properly designated as such, and the owners corporation will be able to enforce those rules.
2. But one cannot leave aside lots 126 and 141. The resolution of the members was to include those lots also in the common property and to extinguish lot entitlement and lot liability for them. The Tribunal's power under s 34D(2) is to make an order consenting to that resolution on behalf of those members who did not consent. There is no power to consent to something different from what was resolved so that, in effect, the resolution is altered. Although s 34D(6) provides that the Tribunal may make any order it thinks fit on an application made under the section, I agree with the decision of Senior Member Young in Butten v Khung & Ors (Real Property) [2010] VCAT 252 that that subsection does not empower the Tribunal to do more than s 34D(1)(b) empowers it to do, that is to say, to consent to the doing of what the members had resolved to do although not unanimously.
3. The non-consenting members will not gain any economic or social benefits from the inclusion of lot 126 in the common property. Nor will any other members gain such benefits. Lot 126 is not used as a carriageway. It is landlocked behind the factory on lot 124 which Rayina owns. It is inaccessible except through the factory. There would be a distinct disadvantage to Rayina if lot 126 were to be included in the common property. The potential right that it has to secure and enforce an equitable interest in lot 126 would be lost. That such a disadvantage might result from an order giving consent on behalf of non-consenting members to the resolution is a powerful reason that would weigh against making the order that the owners corporation seeks.
4. By virtue of s 130(1) of the Victorian Civil and Administrative Tribunal Act I have the power to make an order subject to any condition that I see fit to make. I must either consent to the resolution (for inclusion of 19 lots, including lot 126, in the common property) or refuse to consent. But I may impose conditions that would remove the disadvantage to Rayina to which I have referred. Upon removal of the disadvantage, the benefits which s 34D(3)(c)(ii) requires me to consider are not outweighed by any disadvantage.
5. That is why in paragraph 3 of the order made on 18 September 2012 I set out two conditions to which the order was subject. They were that the owners corporation shall not lodge for registration any plan of subdivision or amended plan of subdivision which includes lot 126 in common property and shall not lodge for registration any application for alteration of lot entitlement or lot liability for 126. Accordingly, although there is now unanimous consent (as a consequence of the order) to the inclusion of lot 126 in the common property, the owners corporation must not lodge any plan that includes lot 126 in the common property. There will be no point in the owners corporation attempting to purchase lot 126 from ASIC and nothing that would prevent Rayina from purchasing lot 126 from ASIC if it can.
6. The balance between benefits and disadvantage with respect to lot 141 is not as easy to judge. To the extent that it might be used as a carriageway (for its surface is at least partly concreted) the non-consenting members would obtain some benefit from the inclusion of 141 in common property. To the extent that they might wish to use it as a car park - and apparently Rayina sought to purchase it with that wish in mind - the inclusion in common property would not assist them. Rules of the owners corporation would prevent it being used as a car park unless the members were to approve its use as such.
7. Mr and Mrs Mijac are anxious to ensure that access to their lot 148 across lot 141 is preserved. Mr Sowden for the owners corporation stated that his client does not dispute that Mr and Mrs Mijac as the owners of lot 148 have the benefit of a right of way over lot 141 as an implied easement under s 12(2)(e) of the Subdivision Act. Indeed he positively submitted that they did have such a right. While I think that the argument for them having such a right is strong I cannot decide whether they do have it. That issue has not arisen for determination in the proceeding.
8. Rayina also wishes to assert an interest in lot 141. It claims a potential equitable interest as purchaser. In my opinion lot 141 is not moral high ground for Rayina in the way that lot 126 is. I was anxious to do nothing that might adversely affect Mr and Mrs Mijac. Declining to make the order that the owners corporation sought would clear the way for Rayina to purchase lot 141 from ASIC if it could. If Rayina then attempted to use lot 141 as a car park Mr and Mrs Mijac would have to take action to enforce a right of way over it. They might or might not succeed in that action.
9. From Mr and Mrs Mijac's point of view the best outcome would probably be to have matters remain the way they were before this proceeding was heard. The registered proprietor of lot 141 is a non-existent company that is incapable of resisting their claim to a right of way. The next best outcome would be the inclusion of lot 141 in the common property, for the owners corporation does not dispute the right of way. The worst outcome would be for Rayina or some other person to become the legal owner of lot 141 as an accessory lot and to be in a position to deny a right of way. On balance, they will be less disadvantaged by an order consenting to the proposed inclusion of lot 141 in common property than they would be by the refusal to make such an order.
10. Because I included as paragraph 3 of the order the conditions to which I have referred, and because the order noted in paragraph 5 that the owners corporation had stated that it did not dispute the right of way over lot 141, I was satisfied that an order in that form consenting to the proposed action would result in economic or social benefits to the non-consenting members that are greater than any disadvantages to them that would result. The fourth requirement to which I referred in paragraph 36 above was proved.
11. For those reasons I made the order on 18 September 2012 in the form that it took.