Ermanno Giurina (as executor of the estate of Irma Locher)

Owners Corporation RP001579 v Giurina (Owners Corporations) [2017] VCAT 1509

1. The respondents must pay the applicant the sum of $11,161.72 plus interest from 9 August 2016 to today.
2. Under section 109 of the Victorian Civil and Administrative Tribunal Act 1998 (Vic), the respondents must pay the applicant's standard costs from 24 March 2017. Costs are to be assessed in accordance with Rule 1.07 of the Victorian Civil and Administrative Tribunal Rules 2008, that is under the 'County Court costs scale' as defined in Rule 1.13 of Chapter I of the Rules of the County Court and, in default of agreement, are to be assessed by the Costs Court.

1. Under section 115B(1)(a) of the VCAT Act, by 18 October 2017, the respondents must reimburse to the applicant the application fee paid, being $292.70.

1. This proceeding relates to a Coburg North development which has five units.
2. The applicant, Owners Corporation RP 1579 (OC) has legal responsibility for the common property located in the development. Under the Owners Corporations Act 2006 (Vic) (OC Act), it claims the respondents, Ms Licia Giurina and Mr Ermanno Giurina, owe $11,161.72 in fees, levies and interest. They seek an order for that amount plus interest and costs.
3. The respondents are the executors of the estate of Irma Locher, the registered proprietor of lot 4 in the plan of subdivision for the development.
4. The respondents assert they are the legal owners of lot 4 and so are the proper respondents. The OC has proceeded on that basis, as do I.
5. Mr Giurina is the attorney for Ms Giurina and represents her in this proceeding.
6. The proceeding is brought by the OC with the support of all of the other lot owners, namely Ms Gabrielle New, Ms Marie Ricotta, Ms Marie Picone and Mr Russell Ward. Ms New, Ms Ricotta and Mr Ward all gave evidence before me, as did Mr Giurina.
7. Ms Maria Deak, owners corporation manager and director of Strata Connect Pty Ltd (Strata Connect) made an affidavit in support of the OC's application and gave evidence.
8. Mr David Free, solicitor, represented the OC in the proceeding and at the hearing before me.

1. There has been a lengthy history of litigation between Mr Giurina and the other lot owners. It is not necessary for me to recount that history in detail, however, there are three proceedings which require mention.

1. On 1 May 2012, Deputy President Lulham decided a proceeding brought by the OC, Ms Ricotta, Ms Picone and Ms New against Mr Giurina. [1]
2. DP Lulham declared that a management agreement between Mr Giurina and the OC terminated on 24 July 2011. DP Lulham made other declarations including that Mr Giurina, in acting as the OC manager:
   • breached his duties to the OC as trustee of the sum of $8,000.00 by mixing that trust money with his own funds. The $8,000 was collected from lot owners to pay for works done by Building Solutions (Victoria) Pty Ltd (Building Solutions);
   • breached his duties under section 122(2) of the OC Act by failing to account separately for the money held by him for the OC;
   • breached his duties under section 122(1)(c ) of the OC Act by failing to pay his contribution of $2,000.00 to the OC despite requiring the other lot owners to do so; and
   • breached his duties under section 122(1)(b) of the OC Act by failing to disclose to the other lot owners Magistrates' Court proceedings issued against the OC by Building Solutions, and by settling those proceedings without obtaining approval from the OC, Ms Ricotta and Ms Picone.
3. DP Lulham also declared that Mr Giurina had attempted to deceive the Tribunal within the meaning of section 78(1)(e) of the Victorian Civil and Administrative Tribunal Act 1998 (VCAT Act).

1. Mr Giurina appealed DP Lulham's decision to the Supreme Court. On 10 October 2012, her Honour Associate Justice Lansdowne gave her decision.[2] Leave to appeal was refused and the originating motion was dismissed. While Lansdowne AsJ found DP Lulham made an arguable error of law, she was satisfied the core findings made were 'unassailable' and so there was no substantial injustice to Mr Giurina in refusing leave.

1. In March 2014, Mr Giurina commenced proceeding OC 453/2014 against Ms Deak and the OC.
2. On 27 March 2014 an application for an interlocutory injunction was dismissed. The application was amended to show the claims were for an order about the manager for the OC, Ms Deak, a declaration that the OC was not indebted to Wisewould Mahonys Solicitors and a declaration that Mr Giurina was not indebted to the OC for the sum of $4,529.
3. On 26 May 2014, the Tribunal made an order that unless Mr Giurina paid the appropriate application fee by a 17 June 2014, it would be struck out. As no fee was paid, that order was made.
4. On 27 January 2017, Mr Giurina paid the required fee and sought to exercise a right of reinstatement. As that proceeding concerned the same parties and similar issues to this, it was listed for hearing before me on 17 May 2017. At the conclusion of the hearing I made orders for filing written submissions after these reasons were published.
5. I will refer to proceeding OC453/2014 as the 'related proceeding' in these reasons.

1. The OC's claim against the respondents is for the sum of $11,161.72 comprising fees and levies and interest up to and including 8 August 2016. The OC seeks an order for interest to the date of final order and costs.
2. The fees and levies comprise:
   • Quarterly levies as budgeted for at the OC annual general meeting (AGM) held in 2012, 2013, 2014, 2015 and 2016;
   • A levy of $1,883.83 payable by quarterly instalments commencing on 15 October 2013. The levy related to an agreement to pay the sum of $9,324.96 to Building Solutions in order to settle a claim against the OC in the Magistrates' Court; and
   • Levies to pay insurance premiums including shortfalls in insurance premiums.
3. There was no dispute that the fees and levies had been correctly calculated based on lot liability.
4. On 24 November 2016, Ms Deak, manager of the OC, made an affidavit in support of the claim. In that affidavit, she deposed that, on or about 30 June 2016, she sent a fee notice to the respondents' nominated address by ordinary pre-paid post. On or about 8 August 2016, she sent a final fee notice to the same nominated address for the respondents, again by ordinary pre-paid post. The final fee notice claimed the sum of $11,161.72.
5. Mr Giurina confirmed to me the notices were addressed to the correct address for the respondents.
6. The fee notices were exhibited to the affidavit. There was no dispute they were in the proper form and complied with the OC Act.
7. Leaving to one side the respondents objections to the content of the fees and levies for the moment, it is convenient to deal with two matters the respondents raised now.
8. First, Mr Giurina noted that the ledger produced to support the OC's claim carried an entry for the sum of $4,529. He said that amount ought never to have been applied to lot 4's account. It is not necessary to deal with this point in any detail given the ledger shows that the amount was cancelled and so the starting balance on the ledger as at 1 February 2012 was zero. The amount related to the balance of funds the other lot owners gave to Mr Giurina when he was the OC manager and which they say he had retained for himself. The circumstances surrounding that transaction were dealt with DP Lulham's decision[3] and there is no need to comment further here given the amount is not claimed from the respondents in this proceeding.
9. Second, Mr Giurina claimed that the fee and final fee notices were not received by him. In evidence he referred to a fee notice dated 29 June 2016 which claimed the sum of $17,590.72 was payable. That notice was addressed to and received at the respondents' nominated address. Mr Giurina stated he received the 29 June 2016 notice but not the 30 June 2016 fee notice or the 8 August 2016 final fee notice.
10. The OC places no reliance on the 29 June 2016 notice. Ms Deak conceded in her oral evidence that it ought not to have been sent as it included the sum of $4,529 discussed above. Her evidence was that a replacement fee notice was sent on or around 30 June 2016 with that sum removed from the balance due.
11. In his submissions, Mr Giurina said Ms Deak also conceded in her evidence that she had not given the respondents the fee and final fee notices the OC relies on for its claim.
12. I have listened to the recording of the hearing and find that no such concession was made. Ms Deak was asked whether she handed the fee notice to Mr Giurina. She said 'no'. She did not withdraw or in any way move away from her evidence that the notices were sent to the nominated address by ordinary pre-paid post. I accept Ms Deak's evidence that the notices were sent by that means.
13. Mr Giurina gave evidence he received a fee notice dated 29 June 2016 but did not receive a fee notice sent the next day or the final fee notice, both of which were sent to the same correct address.
14. While it is possible that the notices went astray in the post, I find on Ms Deak's evidence that the fee and final fee notices were sent to the nominated address and so the service requirements in section 31 and 32 of the OC Act were met.
15. The consequence of these findings is that, provided the fees and levies contained in the notices were authorised by the OC, the requirements for proof of the OC's claim have been met.

1. The respondents said they are not required to pay the claim for 10 reasons.[4] I have dealt with two of those above.
2. In brief the respondents' remaining defences and objections are as follows:
   • The various resolutions passed by the OC imposing fees and levies were invalid because, at relevant times, lot owners who voted were said to be unfinancial;
   • Strata Connect, did not give valid notice of an AGM held on 10 February 2012 to all lot owners and so all resolutions passed by the OC at that meeting were invalid;
   • Due to the invalidity of resolutions passed on 10 February 2012, including as to the appointment of Strata Connect as manager, all subsequent AGM's of the OC were invalid as they were not properly convened;
   • On 19 January 2014, at a Special General Meeting (SGM) convened by Mr Giurina, he was appointed as manager of the OC. As a result, any claims for management fees payable to Strata Connect were not authorised or claimable;
   • There was no valid resolution of the OC authorising the levy to pay Building Solutions and further a payment of $2,000 towards the debt had not been accounted for;
   • There was no valid resolution of the OC authorising a levy for insurance premiums including brokerage;
   • The OC was said to be insolvent and Mr Giurina was said to be the principal creditor under the terms of a loan he granted to the OC and as a result of unpaid accounts for legal services he provided. He contended, if any amount was payable by the respondents to the OC, it was receivable by him as principal creditor; and
   • The solicitors representing the OC in this matter and the related proceeding and the manager have no legal authority and have acted inappropriately.
3. The respondents have the burden of proving the factual basis for the defences.
4. I have dealt with these matters by grouping related matters together.

1. In around December 2004, Mr Giurina was appointed as the OC manager under the terms of a management agreement.
2. As set out earlier, on 1 May 2012, DP Lulham declared that the management agreement between Mr Giurina and the OC terminated on 24 July 2011. That declaration was based on a finding that a resolution to that effect was passed at a SGM held on 24 July 2011.[5]
3. On the question of the properly appointed manager of the OC, Mr Giurina contended:
   • The 24 July 2011 resolution was not validly passed on 24 July 2011 because the three lot owners who voted in favour were not financial at the time. In support of that contention, Mr Giurina relied on comments made in Lansdowne AsJ's judgment;
   • Strata Connect was not appointed as manager at the SGM in 2011;
   • Strata Connect did not give notice of the 10 February 2012 AGM to one lot owner, Mr Ward, and so that AGM was not properly convened with the consequence that the resolutions passed, including as to the appointment of Strata Connect, were not valid; and
   • In any event, at an SGM convened by him on 19 January 2014, he was appointed as OC manager.

The validity of the resolution passed on 24 July 2011

1. Mr Giurina's contention that voting lot owners were not financial and so were ineligible to vote at the 24 July 2011 SGM, depends largely on comments made by Lansdowne AsJ in her judgment. Her Honour said this commencing at paragraph 91 (footnotes omitted):

Question 16 challenges the conclusion that the applicant's appointment was terminated at the meeting in a different way. It asserts that the Tribunal erred in law in failing to address the applicant's submission that a resolution could not have been passed to terminate his appointment because the three individual lot owners who are now the respondents, and voted for termination of the agreement, were in arrears and so could not vote pursuant to s94 of the OC Act. I accept that failure to address an important submission can be an error of law. The respondents do not dispute that there was evidence they were in arrears, and that the Tribunal did not give reasons for rejecting the applicant's submission as to the effect of s94, which is recorded at paragraph 37 of the Reasons but not subsequently discussed.

I accept the applicant's case that by Question 16 he raises an arguable error of law. In the discussion of the meeting, the Tribunal does not address the s94 submission at all, let alone explain on what basis it is rejected. It is critical to the Tribunal's reasons at this point that a simple majority of the lot owners present voted for termination of the agreement. This is only maintainable if those lot owners were entitled to vote, and the submission as to s94 was to the effect that they were not so entitled.

It is not enough, however, to justify leave to appeal that an arguable error of law is established. The error must be relevant to the relief sought. Further, there must be substantial injustice in allowing the error to go uncorrected, being injustice to all parties, not just the applicant. Here the substantive relief sought is to quash the orders dated 1 May 2012 and dismiss the proceeding. It is clear from the other orders sought in the proposed notice of appeal that the intended effect is that the applicant remain as manager of the Owners Corporation. Any error in the Tribunal's conclusion that the management agreement was terminated at the meeting, for want of lot owners who could vote, does not impeach the other finding and orders of Deputy President Lulham as to breach by the applicant of his duties under the OC Act. On the basis of these findings, Deputy President Lulham also concluded that the applicant had repudiated his management agreement, which repudiation had been accepted. For the reasons set out below in relation to Question 14, I do not consider any error justifying the grant of leave to appeal is shown in that conclusion. Accordingly, there is an alternative basis for the conclusion that the management agreement was terminated.

For this reason, I do not consider that substantial injustice would be occasioned by the refusal of the grant of leave in respect of Question 16, notwithstanding that arguable error of law is shown. Indeed, in the circumstances of this case, I consider that to grant leave on this basis would be unjust to the respondents, given that the ultimate orders in relation to the applicant as manager are otherwise justifiable (my emphasis).

1. It is apparent from the words highlighted by me that, while Lansdowne AsJ found there was an arguable error of law in respect of the financial status of the relevant lot owners, no finding was made that those lot owners were not financial and so ineligible to vote.
2. In his reasons for decision, DP Lulham set out the following extract from the SGM minutes:

Mr Giurina stated that votes by all present were invalid as fees had not been paid. Ms New reported she had not received notice of fees for 2011. She also stated that given the lack of transparency with [the] bank account, she Ms Ricotta and Ms Picone had requested that bank statements be presented prior to additional fees being paid. All present agreed to pay on receipt of copy bank statements. Ms Ricotta stated she lacked confidence in Mr Giurina representing owners' interests adequately. Ms New supported this.

1. The extract shows Mr Giurina was present at the meeting and that he raised the financial status of the relevant lot owners with those present. The minutes show Ms New said she had not received fee notices for 2011 from Mr Giurina. The minutes record that the lot owners had asked for bank statements to be produced so they could understand what had been paid to date before further payments had been made. The lot owners agreed to pay on receipt of copies of the bank statements.
2. It is correct that Lansdowne AsJ identified an arguable error of law which, if proven may have invalidated the resolution in issue. However, the matter went no further than the identification of a possible error.
3. In those circumstances, DP Lulham's finding that a valid resolution was passed terminating Mr Giurina's management agreement must stand. It is not open for the Tribunal to now re-consider the question of eligibility to vote on that resolution, or at the meeting more generally, as issue estoppel applies.

Was Strata Connect appointed as manager in July 2011?

1. Mr Giurina contended that Strata Connect was not appointed as manager until the AGM of 10 February 2012 and so it had no entitlement to send notice of the AGM in January 2012. In support of that contention, he relied on the fact that DP Lulham made no order which had the effect of appointing a new manager.
2. In the course of determining that the management agreement with Mr Giurina had been terminated, DP Lulham considered the way in which resolutions were passed at the meeting on 24 July 2011. The relevant part of the minutes of the meeting said this:

Ms Ricotta advised that she had obtained the additional two quotes for external Owners Corporation manager (as discussed in previous meeting). In that meeting they had a majority vote to arrange an external Owners Corporation manager. Mr Giurina did not recall this vote being taken. Mr Giurina said there had been a discussion, but not a vote. The others agreed it had been a vote, called the vote again, and again a majority voted for external manager. As Mr Giurina was opposed to an external manager, he opted not to participate in selection of a company from the three quotes obtained by Ms Ricotta and Ms New.

1. DP Lulham the said the following commencing at paragraph 83 of his reasons:

No doubt a Minute which stated that, 'It was resolved that ...' may be easier to construe than Minutes expressed in a narrative style, but in my view, paragraphs 7, 8, 10 and 11 of the above Minutes record a resolution that Mr Giurina cease to act as manager and that Strata Connect be appointed.

Four of the five Lot owners were present. Three of them voted in favour, which amounts to a simple majority. The OC Act does not require a resolution to terminate a management agreement to be passed by special resolution [see ss 23(3) and (4), 52 and 53 for situations requiring a special resolution], and an ordinary resolution can be passed by a simple majority on a show of hands [s 92].

I find that the Owners Corporation resolved on 24 July 2011 to terminate the management agreement (my emphasis).

1. Mr Giurina was correct to say DP Lulham made no declaration that Strata Connect had been appointed as manager. That does not mean no finding was made. Having regard to the reasons given, and the above paragraphs in particular, a finding of fact was made to the effect that the OC resolved at the 24 July 2011 AGM to both terminate its agreement with Mr Giurina and to appoint Strata Connect as manager.
2. Section 70 of the OC Act says that any one of the following may convene an AGM:
   • The chairperson of the OC
   • The secretary of the OC
   • The manager of the OC, acting on the authority of the committee; or
   • In the absence of a committee, the manager of the OC or a lot owner.
3. Given DP Lulham's finding, I find that Strata Connect was entitled to convene the AGM held on 10 February 2012 under section 70 of the OC Act.

Was proper notice of the 10 February 2012 AGM given?

1. Section 72 of the OC Act says the person convening an AGM must give 14 days' notice in writing to each lot owner.
2. A notice of AGM dated 25 January 2012 on Strata Connect letterhead was before me.
3. Ms Deak of Strata Connect gave evidence that no notice of the 10 February 2012 AGM had been given to Mr Russell Ward, owner of lot 1.
4. While Mr Ward has not challenged the validity of the meeting, it is apparent that the requirements of section 72 were not complied with in respect of one lot owner.
5. Mr Giurina contended that the failure to give notice of the AGM to Mr Ward rendered the entire meeting invalid. He contended the consequence was that any resolutions passed at that meeting were of no effect. As a resolution was passed at that meeting appointing Strata Connect as manager, that appointment was said to be invalid and the contract signed the same day could not be relied on. Mr Giurina contended the further consequence was that all future meetings called by Strata Connect were also invalid because it was not authorised to call them under section 70 of the OC Act. Mr Giurina described this as the 'domino effect'.
6. There is no express provision in the OC Act which sets out consequences of a failure to give proper notice of an AGM - so there is no provision which provides that resolutions passed at such a meeting are invalid.
7. Mr Giurina referred me to a decision of Senior Member Vassie in J & G Knowles & Associates Pty Ltd v Owners Corporation RP12247.[6] That case concerned whether proper notice was given for an SGM convened to decide whether to alter the plan of subdivision. At paragraph 43, SM Vassie said this (footnotes omitted):

Failure to give proper notice of a meeting might mean that no valid resolution could be passed at the meeting. The following passage from Halsbury's Laws of Australia, although expressed in the context of meetings of corporations registered under the Corporations Act 2001 or its predecessors, seems to have general application:

The right to receive notice of a meeting, and to attend and to be heard at it is not an insubstantial one. The right to advance arguments and to influence the course of discussion at a meeting may affect the decisions reached. At common law, no business can be validly conducted at a meeting if any person, who is entitled to notice of the meeting, has not been properly notified. However, if a person attends a meeting with knowledge of a defect in notice and otherwise than to protest the deficient notices, the person may be taken to have waived the defect. Such a person may be estopped from relying on the deficient notice when subsequently attacking the validity of resolutions at the meeting.

Not surprisingly, cases in which meetings or resolutions have been held to be invalid because of a defective notice have been commenced at the instance of a person who has complained of not having been given a proper opportunity either to attend the meeting or to influence the course of discussion at the meeting towards a different outcome.

1. In J & G Knowles, the only person whom the respondents proved to have been given short notice of the meeting was the applicant itself, which had sought the convening of the meeting, attended the meeting and voted for the relevant resolution.
2. SM Vassie was unwilling to make an order which would have amounted to supporting what he described as the 'illogical proposition' that a lot owner who received notice of a meeting could rely on the failure to give proper notice of the meeting to another lot owner member who not only attended the meeting but also supported the very resolution that the first lot owner wished to have declared invalid.[7] As Mr Ward did not attend the 10 February 2012 meeting, the facts before me are not directly analogous to J & G Knowles.
3. I have noted that SM Vassie said that a failure to give proper notice 'might' mean no valid resolution could be passed but also acknowledge that he seems to imply that outcome might be correct.[8]
4. I am unaware of any decision of this Tribunal which makes the position absolutely clear.
5. In The Owners - Strata Plan No. 57164 v Yau, [9] the NSW Supreme Court has found that a failure to give proper notice of a Strata Plan executive committee meeting did not render a decision made at that meeting invalid. The relevant provision of the NSW Act required notice to be given to all lot owners and not just lot owners who were members of the executive committee. That requirement had not been complied with but the meeting proceeded and resolutions were passed.
6. The Court noted that the Strata Schemes Management Act 1996 (NSW) did not in express terms specify the consequences of such a failure and in particular did not expressly state whether an executive committee convened contrary to the statutory requirements was invalid or that decisions made at such a meeting were invalid or of no force or effect. The Court stated that it was necessary to undertake the task of statutory construction in order to ascertain the consequences of the failure to adhere to the notice requirements. The Court had regard to the rules of statutory construction as discussed in Project Blue Sky Inc v Australian Broadcasting Authority.[10]
7. The Court concluded that, while the meeting notice provision regulated the exercise of powers by the executive committee, provided the exercise of the powers was within the powers of the executive committee, the non-compliance did not render its resolutions invalid.
8. The Court also commented that a failure to comply with a notice requirement may take any number of forms and that some failures may be significant while others may be trifling. The Court said that it is difficult to see why the objects or purpose of the applicable act would be promoted by holding that every resolution or decision of an executive committee made at a meeting convened contrary to the notice requirements was invalid and of no effect. [11]
9. There are relevant differences between the NSW Act considered in Yau and the OC Act. Resolutions passed by an executive committee might be regarded as materially different from those passed by the OC at an AGM. However, the absence of a provision of the OC Act rendering invalid a resolution passed at an improperly convened AGM means the consequences are not clear.
10. I am not persuaded that the resolutions passed at the 10 February 2012 meeting ought to be treated as invalid. I express that view noting that the quorum requirements of section 77 were met and, as discussed below, it was apparent that at least three of the five lot owners wished to appoint Strata Connect as manager. There was no evidence that Mr Ward disagreed with Strata Connect's appointment. Even if Mr Ward had been given notice of the meeting, attended and voted against the resolution, it would have been passed.
11. While the failure to give notice to one lot owner might not be regarded as 'trifling', in the circumstances of this case, the resolution was hardly controversial or adverse to the interests of all except the respondents. I prefer the view that the resolution was not rendered invalid by the failure to give Mr Ward notice of the AGM.
12. Even if the correct finding is that the failure to give proper notice rendered the resolution invalid, I am satisfied that the principal of ratification would apply such that the resolution appointing Strata Connect ought to stand.
13. In Owners Corporation No 1 PS511693Q v Sulomar,[12] SM Vassie considered a dispute where a fee notice had been issued for a fee which had not at that time been set via a resolution of lot owners. He relied on ratification by implication to find the fee had been approved at the relevant meeting by those present who had full knowledge of how the amount of the fee had been calculated.
14. In Burbank Australia Pty Ltd v Owners Corporation PS447493,[13] the Supreme Court decided that, although the owners corporation had commenced a proceeding without there having been a special resolution authorising it to do so, the passing of a subsequent special resolution ratified the decision to commence the proceeding, because the absence of a special resolution at the beginning did not render the proceeding a nullity but had created an irregularity which could be and had been cured.[14]
15. I find on the evidence that at all times from the 24 July 2011 meeting until 10 February 2012, at least three of the lot owners wished to have Strata Connect appointed as manager of the OC. That evidence is found in the minutes of the SGM held on 24 July 2011 as set out in DP Lulham's reasons. It is also established by the fact that the 10 February 2012 meeting passed a resolution appointing Strata Connect as manager for 12 months and a contract to that effect was signed the same day. Further, at every meeting thereafter, Strata Connect was reappointed as manager on the same terms. As noted above, Mr Ward has not complained about the appointment at any time.
16. I find any invalidity caused by the failure to give notice of the AGM to Mr Ward was overcome by the resolution appointing Strata Connect being passed at the meeting and confirmed by the OC's subsequent conduct including the execution of the management agreement.

Mr Giurina's purported appointment as manager on 19 January 2014

1. On 19 January 2014, some 18 months or more after DP Lulham's decision, Mr Giurina sought to convene an SGM.
2. He gave evidence that he served a copy of the notice of meeting by putting one in each lot owner's letterbox. None of the lot owners gave evidence they received such a notice or were otherwise aware of the meeting.
3. The meeting apparently proceeded and Mr Giurina was the sole attendee.
4. A resolution was said to have been passed which included the following:

It was resolved unanimously that the OC revokes any acceptance of any repudiation of the Management Agreement dated 12 December 2004 between itself and Ermanno Giurina and confirms Ermanno Giurina as Manager of the [OC] pursuant to the terms of the Management Agreement dated 12 December 2004.

1. Mr Giurina contended that he declared the resolutions were passed as interim resolutions under section 78 of the OC Act and that, as there was no petition for an SGM, the resolutions became binding resolutions of the OC.
2. Under section 74(c) of the OC Act, an SGM may be convened by 'a lot owner nominated by lot owners whose lot entitlements total at least 25% of all lot entitlements for the land affected by the owners corporation'.
3. Under the Plan of Subdivision, lot 4 is noted as having a lot entitlement and liability of 100 out of 500 which is 20%.
4. Mr Giurina contended that:
   • He and Ms Licia Giurina are each owners of the lot in their capacities as executors and their ownership is indivisible;
   • Accordingly they each hold a 20% lot entitlement within the subdivision;[15]
   • As a consequence they may each be counted as lot owners with the consequence that there are a total of six lot owners;
   • As Mr Giurina holds power of attorney for Licia Giurina, he and she were entitled to call the meeting as they comprise lot owners with more than 25% of lot entitlements.
5. Mr Giurina relied on differences in wording between section 74(c) and sections 95(a) and 96(a) of the OC Act to contend that the power to call an SGM depends on numbers of owners rather than lot entitlements of the owners.
6. In reply, the OC drew my attention to the applicable definition of 'lot entitlement'. Relevant definitions are as follows:

lot entitlement in relation to a lot affected by an owners corporation, means a number specified in the plan as the lot entitlement for that lot, expressing the extent of the lot owner's interest in any common property affected by the owners corporation;

lot owner, in relation to an owners corporation, means an owner of a lot affected by the owners corporation;

lot affected by an owners corporation means a lot the owner for the time being of which is a member of the owners corporation;

1. Mr Giurina relied on my decision in Babray v Whittles Australia Pty Ltd,[16] to contend that the issue under section 74 is how many owners out of the total lot owners want a meeting to be convened. I do not accept that decision stands for the proposition Mr Giurina relied on.
2. First, the SGM which was the subject of discussion in the case was called by the Chairperson and not by lot owners under section 74(c). Second, while acknowledging there was discussion in the reasons about 25% of lot owners calling for a meeting, none was in fact called and so I was not required to examine the meaning of section 74(c).
3. Having looked closely at that sub-section, I consider my language in Babray was somewhat loose in referring to lot owners when the clear words of section 74(c) depend on the call for a meeting being made by 'lot owners whose lot entitlements total at least 25%'.
4. The correct approach to section 74(c) is to assess lot entitlement as set out in the plan of subdivision. As shown by the above definition, that entitlement does not depend on the number of individual lot owners.
5. As mentioned earlier, the lot entitlement for lot 4 is 100 out of a total of 500. As a consequence, assuming Mr Giurina was properly nominated under section 74(c), I find that, at best, only a total of 20% of lot owners made the nomination.
6. I find that Mr Giurina had no power to convene an SGM on 19 January 2014. I further find that absence of power was more than an irregularity of the kind discussed above in the context of the 10 February 2012 meeting. To adopt the approach of the NSW Supreme Court in Yau, the failure cannot be cured because a lot owner with less than 25% of the total lot entitlements has no power to convene meetings. As a consequence, there was no power to pass resolutions at such a meeting.
7. Mr Giurina's alternative contention was that he was the secretary of the OC as at January 2014 as evidenced by a 2006 ANZ Bank company account authority which listed him as such. He contended that DP Lulham's decision did not affect that position.
8. This argument may be disposed of simply. There was no evidence before me that at any time after February 2012, Mr Giurina was appointed as secretary of the OC. Accordingly to the minutes of the 2012 and 2013 AGMs he was not appointed as a committee member and so he was not capable of being appointed as secretary of the committee and therefore of the OC.[17]
9. I find Mr Giurina was not appointed as manager of the OC on or after 19 January 2014.

1. Mr Giurina makes a range of complaints about Ms Deak's personal and professional conduct. They include complaints that:
   • She failed to disclose the transfer of the OC's insurance brokerage to United Insurance, a company in which her father-in-law has an interest. Mr Giurina characterised that as a conflict of interest;
   • She conducted herself inappropriately in relation to these and other proceedings between the parties; and
   • The management fees charged are excessive.
2. None of those matters are relevant to whether the respondents are properly required to pay fees and levies approved by the OC. If Mr Giurina has an objection to the terms of the management contract or the conduct of the manager he can raise that with the other lot owners or take other action as he sees fit.
3. I will consider those complaints no further.

1. For the above reasons, I find that, on and from 10 February 2012, Strata Connect was the appointed manager of the OC and was entitled to convene that meeting and those convened up to and including 3 May 2016.
2. I will now turn to Mr Giurina's contentions as to the eligibility of lot owners to vote.

Lot owners' entitlement to vote at meetings in 2011 and 2012

1. Mr Giurina contended that the lot owners who attended the SGM in July 2011 were not entitled to vote as they were in arrears. I have dealt with that issue above.
2. He further contended that the lot owners who voted at the AGM held on 10 February 2012 were not financial either.
3. As a consequence he contended the resolutions passed at the 10 February 2012 meeting were invalid. As discussed above, Mr Giurina contended that, if the 10 February 2012 meeting resolutions could not stand, including as to the appointment of Strata Connect, all subsequent meetings convened by Strata Connect were invalid as were any resolutions passed, including as to fees and levies imposed on lot owners;

Were the voting lot owners at the 10 February 2012 meeting financial?

1. Section 94(1) of the OC Act, which took effect from 1 January 2012, has the effect that a lot owner who is in arrears for any amount owed to the OC is not entitled to vote unless the full amount of arrears have been paid. Section 94(3) provides that cash payments must be made in full four days before the relevant vote.
2. Mr Giurina gave sworn evidence that, at the 24 July 2011 SGM, he handed fee notices to each of Ms New, Ms Picone and Ms Ricotta. Section 31 of the OC Act requires that fee notices be in the approved form.
3. At the hearing before me on 8 May 2017, Mr Giurina handed up what he said were copies of the notices handed out that day. They listed quarterly fees of $70 as due on 16 April 2011 and 16 July 2011. The notice for Ms New also indicated a further fee of $70 was due on 15 January 2011. So, according to those notices, Ms New was required to pay $210 and Ms Picone and Ms Ricotta were required to pay $140.
4. No explanation for the difference in the amount of fees payable by the lot owners was given. No minutes were produced showing a resolution approving the fees had been passed. No financial records were produced to show that any amounts had or had not been received.
5. The notices Mr Giurina produced were single sided and did not include the mandatory information required by the OC Act, including about dispute resolution.
6. After the hearing, on 18 May 2017, Mr Giurina made a further affidavit which included the following:

During the course of the hearing on 8 May 2017 I tendered as evidence the first page of the Fee Notice given by me to each of the lot owners who were in arrears at the meeting of 24 July 2011 referred to at paragraph 24 of my Affidavit in Reply of 3 May 2017. I now exhibit the complete notice given to each lot owner who was in arrears being Maria Ricotta, Maria Picone and Gabrielle New. Now produced and marked with the letters "EG-1" are true copies of these complete Owners Corporation Fee Notices' and also the Due Date notice given to all lot owners on or about the start of 2011 by me in my capacity as manager of the OC. (my emphasis)

1. Also attached was a single page document which Mr Giurina described as the 'Due Date notice'. That document was headed:

2011 DUE DATES OF QUATERLY OWNERS' CORPORATION FEE ($70)

1. It contained a list of dates without reference to a year and each was prefaced by 'Saturday'.
2. Mr Giurina swore before me that the contents of the affidavit were true and correct.
3. On 5 July 2017, I made an order requiring Mr Giurina to produce the originals of the documents identified as exhibit EG-1 to the Tribunal. Mr Giurina agreed to do so.
4. On 10 July 2017, Mr Giurina wrote to the Tribunal. He referred to the order to produce the exhibit and then said:

2. After the hearing on 5 July 2017 it occurred to me that the originals of the documents referred to in the above Order (being the Fee Notices) are held by a third party on behalf of the DPP for use in proceeding D1039258 in which I am a party currently before the Magistrates' Court.

3. I have checked all my relevant files which confirmed this.

4. I am therefore not able at this stage to produce the originals to the Tribunal. If they again become available to me in the immediate future I will produce them to the Tribunal.

1. Mr Free for the OC invited me to find the notices were fabrications.
2. Returning to his evidence at the hearing before me on 8 May 2017, Mr Giurina said he only prepared fee notices when he felt the need to for a particular levy.
3. I record that the fee notices Mr Giurina relied on were not for a levy but were expressed to be for quarterly fees.
4. Mr Giurina contended that, on the lot owners' own evidence, the fees had not been paid by 10 February 2012 and so each lot owner was in arrears and ineligible to vote. Mr Giurina also relied on Ms Deak's evidence, given in cross-examination, that no cash payments were made at the commencement of the February 2012 meeting.
5. Ms New was asked whether, during the period July 2011 and February 2012, she made payments of any amounts of arrears. She said that she paid all amounts she was asked to pay and could not recall paying any arrears. She gave evidence that she did not believe she was in arrears in that period.
6. As noted above, the minutes of the 24 July 2011 meeting record Ms New as stating that had not received notice of fees for 2011. Ms New was shown a copy of the July 2011 fee notice at the hearing before me. Mr Giurina asked if she recalled that he 'tabled' the fee notices at the 24 July 2011 meeting. Ms New did not recall that happening.
7. Ms New gave evidence that, having become aware of Mr Giurina's dealings with the $8,000 funds paid to him for the Building Solutions debt, at the 24 July 2011 meeting, the lot owners decided not to pay funds to Mr Giurina until that matter was clarified.
8. Mr Giurina asked Ms Ricotta questions about arrears. While her evidence was that she had some arrears and was on a payment plan, she was uncertain as to what period that related. Ms Ricotta gave evidence that it may have been around 2013 and 2014. The evidence indicated that Ms Ricotta continues to pay under a payment plan but there was no detail as to what amounts were paid and when and whether the payments related to arrears.
9. Mr Giurina produced an edited version of a statement Ms Picone made to police in November 2012. Because of the editing it is difficult to be certain about when some of the events described occurred. The statement says relevantly that, after she moved into her lot, Mr Giurina would come around and ask Ms Picone for cash payments for costs such as gardening. She stated he would generally just 'pop in' for the money but that he had given her a 'letter' which listed dates for payment, being Saturday 17 January, Saturday 18 April, Saturday 18 July and Saturday 17 October. The statement said that, initially the fees were about $50 to $60, and at some stage increased to $70.
10. The police statement referred to an event that was edited out and then said 'After this I didn't feel like I could trust Ermanno' and went on to refer to his refusal to provide them (I infer the lot owners) with financial statements. She stated she ceased paying quarterly fees because she did not know what was happening with the money. She stated that then Mr Giurina started sending bills saying she was behind in payments and that he wanted payment in cash or by cheque. Ms Picone's statement then referred to the 24 July 2011 meeting and said, 'we' (presumably a reference to herself and the other four lot owners) did not give Mr Giurina more money and decided to go with Strata Connect.
11. It was apparent at the hearing and in Mr Giurina's correspondence that the past financial and other records for the OC are not held by Strata Connect and, it would seem, they are not in Mr Giurina's possession either. There is no need for me to comment further on why that is the case but note that there is no suggestion Strata Connect or the other lot owners have ever had possession of records pre-dating February 2012.
12. The consequence though is that Mr Giurina has been unable to produce any statements of account or ledger records which demonstrate that any of Ms New, Ms Picone or Ms Ricotta were in arrears as at 10 February 2012.
13. The minutes of the July 2011 SGM refer to the issue of arrears but not to the 2011 fee notices Mr Giurina produced and claimed were 'tabled' at that meeting. Even allowing for the vagaries of minute taking at meetings, it seems rather unlikely that they would not have made reference to the fee notices if they were tabled and indeed handed out at the meeting itself.
14. I accept Ms New's evidence that she did not believe she was in arrears in the period July 2011 to February 2012. Even accepting she and the other lot owners decided not to make further payments to Mr Giurina at that time, that does not establish she or the others were in fact in arrears such that they could not vote in February 2012.
15. The fact that Ms Ricotta agreed she may have had some arrears at some point and was on a payment plan does not demonstrate there were arrears outstanding at the time of the 10 February 2012 meeting or at the time of any subsequent meeting.
16. Noting the close correlation between Ms Picone's description of a letter in her police statement and the '2011 Due Date Notice' document Mr Giurina produced, I consider it more probable than not that she was given the '2011 Due Date Notice' not accompanied by a fee notice.
17. I am not persuaded that the 2001 fee notices produced by Mr Giurina were given to Ms New, Ms Ricotta, Ms New or Mr Ward. Mr Giurina has not proven those notices or any other records can support a finding there were arrears in February 2012.
18. Ms Deak from Strata Connect gave evidence that she had been informed that all lot owners were financial and that none of the OC's pre-2012 financial documents had been produced to the OC (as required by DP Lulham). The minutes of the meeting on 10 February 2012 do not refer to any lot owner being in arrears.
19. It is for Mr Giurina to demonstrate on the balance of probabilities that one or more of the lot owners who voted at the 10 February 2012 meeting was unfinancial.
20. On the evidence before me, Mr Giurina has not demonstrated that those lot owners who attended and voted at the 10 February 2012 meeting were ineligible to vote.
21. I find that the lot owners in attendance were eligible to vote and that the resolutions passed were valid.

Levy associated with the settlement of court action against the OC

1. Mr Giurina contended that the OC had no entitlement to levy a share of the Building Solutions judgment debt to lot 4.
2. The background to this contention is dealt with in DP Lulham's decision and may be summarised as follows:
   • In 2010, Building Solutions (t/as Johns Lyng Group) performed work for the OC under an insurance claim. Mr Giurina considered that there were defects in its work;
   • The OC, through Mr Giurina as manager, obtained a 'contribution' from the four other Lot owners of $2,000.00 each to go towards payment of Building Solutions bill. As DP Lulham, noted, Mr Giurina sought to distinguish between that 'contribution' and a 'levy';
   • Mr Giurina agreed before DP Lulham and before me that he did not make an equivalent 'contribution';
   • Mr Giurina did not deposit any of the $8,000.00 received from the lot owners into the OC's ANZ Bank account. Instead he deposited those funds into his own bank account;
   • Building Solutions sued the OC and Mr Giurina for its debt in the Magistrates' Court;
   • Mr Giurina did not disclose the litigation to any other lot owner but he did file a defence on his own behalf and on behalf of the OC;
   • On 2 April 2012 Mr Giurina consented to judgment for $7,000.00 plus costs of $2,324.26 with a stay of one month that expired on 2 May 2012; and
   • Mr Giurina gave evidence before DP Lulham and me that he did not propose to pay Building Solutions the consent judgment debt on 2 May 2012, but rather planned to seek to negotiate instalments by alleging that the work done was defective. Mr Giurina gave evidence that he did not inform the other lot owners about the judgment debt because he did to want to burden them.
3. The fact that Building Solutions had not been paid came to the attention of the other lot owners by around July 2011.
4. Mr Giurina's affidavit material indicated that in around 2013 he had successfully applied to the Magistrates' Court for judgment to be set aside despite the fact that it had been entered by consent. I understand that Mr Giurina again failed to disclose that matter to the OC and it would appear he took that step without the authority of the OC, despite DP Lulham's decision having been given in May 2012 terminating his role as manager. The matter was listed for a pre-hearing conference in early 2014. I noticed that the hearing notices were sent to Mr Giurina's address.
5. It is apparent that around this time, the solicitors for Building Solutions became aware Ms Deak was the OC manager. They wrote to her in September 2013 referring to the judgment debt of $9,324.96 and stating that Building Solutions would accept the OC's offer to repay the debt by instalments commencing in October 2013. The final payment was due on 30 September 2014.
6. Mr Giurina complained no proper resolution was passed by the OC:
   • Authorising Ms Deak to settle the matter by payment of instalments; or
   • Levying the total sum against lot owner's accounts.
7. The ledger for lot 4 shows that monthly from 15 October 2013, the sum of $156.97 was debited being a levy for 'Debt Owed to Building Solutions Vic'.
8. Ms Deak was asked about section 24 of the OC Act and whether a special resolution was passed to raise these funds as extraordinary fees. Section 24(4) provides that a special resolution is only required if the amount to be levied is more than twice the annual fees. She confirmed that, at the time, the annual fees totalled $6,500 and so no special resolution was required for the $9,324.96 debt.
9. Section 112 of the OC Act sets out how committees are to proceed. It provides:
   • A quorum is at least half of the members of the committee;
   • A resolution must be made by ballot or by show of hands or by another prescribed means;
   • Committee members may attend by teleconference or by another prescribed manner;
   • Each committee member has one vote;
   • Resolutions are passed by majority; and
   • The committee may regulate its own proceedings.[18]
10. Section 113 of the OC Act says a resolution of the committee has effect as a resolution of the OC.
11. Mr Giurina drew my attention to section 114 which requires that minutes be taken of committee meetings and that those minutes must, in addition to other matters, record resolutions passed. The committee is required by section 115 to report on its activities to the AGM.
12. Ms Deak's evidence was that the matter of the debt and its settlement was discussed by the committee and it was decided it needed to be paid. She gave evidence that discussion occurred by email.
13. Ms New did not recall the detail of how the decision to levy the lots was reached but gave evidence she thought a meeting was held. Her clear evidence was that it was agreed by all of the four lot owners that Ms Deak should negotiate a settlement to allow the debt to be paid by instalments.
14. Mr Ward recalled the debt was arranged to be paid in small parts over time. He gave evidence that 'the group' decided the best thing to do was to pay the builder because the work had been done. He said they agreed it was important to pay even in small amounts. When asked, he clarified that 'the group' he referred to comprised all lot owners other than lot 4.
15. Ms Ricotta gave similar evidence - the four lot owners decided the debt had to be paid and asked Ms Deak to arrange for payments by instalments.
16. According to the minutes of the AGM held on 7 February 2013, the committee of the OC comprised all lot owners other than the respondents. Accordingly, Ms New, Mr Ward and Ms Ricotta were committee members at the relevant time.
17. The evidence does not allow me to make a finding about when the committee meeting was held, whether committee members attended in person or by teleconference or by other means. Mr Giurina was entitled to complain that no minutes of the meeting were produced to clarify these and other matters.
18. While acknowledging those shortcomings in the evidence, I am comfortably satisfied on the evidence of Ms Deak, Ms New, Mr Ward and Ms Ricotta that Ms Deak was authorised by the OC committee to settle the debt owed to Building Solutions and that the levy raised to cover the costs was authorised by the committee. The fact that the payments have been made by those lot owners supports the finding that the agreement they described was reached and was the subject of a resolution.
19. The fact that no minutes have been produced does not render the resolution invalid.
20. Mr Giurina also complained that Ms Deak failed to contact him to discuss the debt so he could explain his plans to negotiate a reduction and to ensure that a payment of $2,000 he says he made was taken into account.
21. In circumstances where there was no evidence Ms Deak knew Mr Giurina had such a plan and he had kept the initial proceeding and apparently the further steps he took in 2013 from the OC, I find she had no obligation or reason to contact him.
22. I do not have sufficient evidence before me to make a finding about whether the payment of $2,000 was taken into account when the debt was settled. If it was not, in my view, responsibility for that matter lies with Mr Giurina given he had failed to fully disclose the circumstances of the debt and associated litigation to the OC from the outset.
23. I find that the levy imposed on lot 4 in respect of the settlement of the Building Solutions debt was authorised by the OC and is payable.

Insurance premiums and levy associated with insurance premiums

1. Section 4 of the OC Act says that one of the functions of an owners corporation is to take out, maintain and pay premiums on insurance required or permitted under the OC Act or any other act. By section 23 an owners corporation has the power to levy fees to cover a range of expenses including insurance.
2. Section 59 of the OC Act requires an owners corporation to take out reinstatement and replacement insurance for all buildings on the common property and section 60 requires an owners corporation to take out public liability insurance in respect of the common property;
3. Mr Giurina complains that the OC never passed a valid resolution authorising the payment of brokerage fees to United Insurance. This complaint is linked to Mr Giurina's criticisms of Ms Deak's conduct as manager and her alleged conflict of interest.
4. The minutes of each AGM held between 10 February 2012 and 3 May 2015 show that resolutions were passed for the OC to hold appropriate insurance and for the premiums to be included in the quarterly administration levy.
5. The lot 4 ledger shows that on 20 March 2013 and 1 May 2014, the sums of $656.50 and $404 respectively were debited as 'Insurance premium shortfall'. The minutes of the7 February 2013 AGM show a resolution was passed to raise a special levy of $3,250 to cover the then outstanding insurance premium. The minutes of the 13 March 2014 AGM show that a resolution was passed for a further special levy of $2,000 to meet insurance premium shortfalls.
6. Ms New made an affidavit on 21 March 2014 in the related proceeding. In that affidavit she deposed:

Due to the significant amount of money required for legal representation against Mr Giurina and that lot 4 does not pay its quarterly levies, the Owners Corporation has struggled to find the funds to cover the renewal of the insurance premium annually. Maria Deak of Strata Connect has personally paid any shortfall, until such time that the Owners Corporation was in a financial position to reimburse her.

1. Ms Deak confirmed the above arrangement in her evidence before me.
2. I find that the debiting of the quarterly administration levies which covered recurring insurance premiums and the special levies for the insurance premium shortfalls to lot 4's ledger were authorised by the OC and are payable.

Authority to commence proceeding and appoint solicitors

1. Mr Giurina complained that the solicitors representing the OC had no authority to commence the proceedings and that Ms Deak had no authority to swear her affidavit in support of the application.
2. Mr Giurina referred to his alleged appointment as manager in January 2014 and asserted that he was solely authorised to attend to the recovery of any outstanding fees and levies in arrears. Given my finding about the purported SGM held on 19 January 2014, it is not necessary to address this contention.
3. The minutes of each AGM held between 10 February 2012 and 3 May 2015 show that resolutions were passed authorising the OC manager to commence recovery proceedings in this Tribunal for the recovery of outstanding contributions and charges for any lot when necessary.
4. The minutes of the AGM held on 3 May 2016 show that the executive committee (which comprised all other lot owners) reported on litigation in this Tribunal. The minutes show the committee instructed the manager to proceed with debt recovery against lot 4. I note that the committee then instructed the manager to remove the entry of $4,529 from lot 4's ledger and issue a fee notice less that amount 'as the committee would like this amount to be included as part of the new hearing with the [Director of Public Prosecutions].'
5. As these are proceedings to recover fees, no special resolution was required to be passed by the OC to authorise their commencement.[19] As Ms Deak was authorised to commence action to recover arrears, she was also authorised to engage solicitors to act on behalf of the OC to do so.
6. The fee notice relied on for this proceeding was issued on 30 June 2016 and the final fee notice was issued on 8 August 2016. This proceeding was commenced on 19 October 2016.
7. I find the commencement and running of the proceeding was authorised by the OC.
8. I disregard entirely Mr Giurina's complaints about Mr Free's conduct and that of other solicitors engaged by the OC.

Fees and levies charged to the respondents for 1 February 2012 to 31 January 2016

1. I am satisfied that all fees and levies debited to the ledger of lot 4 and which are claimed by the fee and final fee notices issued to the respondents are payable.
2. Having regard to resolutions passed at each AGM authorising the collection of interest on arrears, I find the respondents are liable for interest on the outstanding fees and levies to the date of my final orders. I will make an order for payment of $11,161.72 plus interest from 9 August 2016 to the date of that order.

1. Mr Giurina contended that the OC is insolvent because it has not:
   • Repaid him a loan of $18,715 he gave to the OC in 2002 and for which he is now owed $45,000 to $50,000; and
   • Paid him fees due following his appointment as solicitor on 11 August 2002.
2. Accordingly, he says the OC must be regarded as insolvent because it is unable to pay its creditors. He contended that any amount he owes to the OC is in effect an asset of his as the creditor.
3. The Tribunal does not ordinarily allow claims of a set off. However, as Mr Giurina relied on his claims to defend the OC's claim and the parties presented evidence and made written submissions on both matters, I have made the following findings.

1. Mr Giurina relied on a document dated 20 October 2002 which is entitled 'Loan Agreement'. The document says in the recitals that the lender, Mr Giurina, has agreed to provide the borrower, the OC, a loan of $18,715 and the borrower confirmed it had received those funds. The loan was repayable at whatever time Mr Giurina determined at his sole discretion, (provided it was not after more than 25 years) and by payments to be determined by Mr Giurina. The interest rate is stated to be 10% per annum.
2. Mr Giurina signed the loan agreement and the seal appeared to have been affixed in the presence of two former lot owners. Both of those lot owner have passed away.
3. Mr Giurina gave evidence that the loan was advanced because, from time to time lot owners had trouble paying their fees and insurance premiums and so the OC was unable to meet its financial obligations. Relying on a document produced by an accountant, apparently without any reference to account statements or original records, Mr Giurina asserted that repayments totalling $12,500 had been made but that no further repayments had been made since 5 August 2014. Mr Giurina gave evidence that the loan agreement was prepared by a solicitor. [20] When asked about records of the loan funds being advanced or used, Mr Giurina said he had no records available. That was despite the fact that, at the relevant times, Mr Giurina was the sole signatory of the OC bank account. Presumably at minimum, he could have produced his own bank statement showing the funds were advanced.
4. Mr Free for the OC asked Mr Giurina to explain the contents of a certificate he signed as on behalf of the OC on 25 May 2008. The certificate was prepared under section 151 of the OC Act to meet a request for information from a potential purchaser of a lot. It was in the standard Consumer Affairs Victoria form and included the following (answers are shown in italics below):

Are there any liabilities of the owners corporation that are not covered by annual fees, special levies and repairs and maintenance as set out above?

The members are each liable to pay an additional amount for the owners corporation insurance cover which is estimated to be $395.00.

Are there any current contracts, leases, licences or agreements affecting the common property? No

Are there any notices or orders served on the owners corporation in the last 12 months that have not been satisfied? If so, then provide details: There are no notices or orders as at 21/5/2008

Are there any legal proceedings to which the owners corporation is a party and any circumstances of which the owners corporation is aware that are likely to give rise to proceedings? No

1. Mr Giurina was asked why the loan agreement was not referred to in some way in the certificate. He said it was for potential purchasers to make their own enquiries and check the register. A December 2011 register entry noting the loan agreement was before me.
2. I note in passing that, despite asserting in the proceeding that he had been appointed as manager in December 2004 and on an ongoing basis thereafter, Mr Giurina answered 'no' to a question on the May 2008 certificate that asked if the owners corporation had appointed or resolved to appoint a manager.
3. Mr Giurina's gave evidence before me that, when he collected the $2,000 from the other lot owners in around 2010 (as discussed in paragraph 136 above and following), he used those funds as part repayment of the loan. His further evidence in response to a question from me was that when he collected the $2,000 from each lot owner, he told them it was a 'contribution to the OC's business'. Mr Giurina explained that, after receiving a 'tip off' about the poor quality of Building Solutions' work, he decided to use the $8,000 from the other lot owners to reduce the loan balance and gave an undertaking that, if the funds were payable to Building Solutions, he would re-draw the funds from the loan. He gave evidence he discussed these arrangements with Mr Ward and Ms Picone at a meeting in 2011 but produced no minutes or other documents to support that claim. He did not ask Mr Ward about the loan, the repayment or the undertaking during the course of cross-examination before me.
4. The OC's written submissions noted the 2011 annual budget appeared to be around $1,400. I presume that is based on Mr Giurina's fee notices said to have been issued in July 2011. Ms Picone's police statement as set out above was that the quarterly fees at the time were around $50 to $70. If those figures are accurate then the loan funds would have covered all levies for 13 years.
5. The only documents Mr Giurina produced to support the existence of the loan was the agreement described above, the accountant's calculations and the register entry. There was no evidence of any special resolution about the loan, any proof the funds were advanced or any proof as to the repayments shown in the accountant's document. I note that document does not reveal the repayment of the sum of $8,000 Mr Giurina says was made with the funds collected to pay Building Solutions. Mr Giurina did not explain the sources of the other claimed repayments. Mr Giurina has never demanded repayment of the loan.
6. Mr Free for the OC submitted the loan agreement was a fabrication. Mr Giurina denied that was the case.
7. I am not satisfied on the evidence before me that the OC passed a resolution agreeing to the loan or that the funds were in fact advanced or are repayable.
8. I am not willing to accept any of Mr Giurina's evidence about this matter in the face of his previous dealings with OC funds as discussed in DP Lulham's decision and also the extremely unsatisfactory evidence he gave before me about his treatment of the $8,000 he received from the other lot owners: he informed the other lot owners $2,000 was required from each to pay for the work done but instead of paying for the work or retaining the funds, he applied them to himself to repay part of the claimed loan.
9. Clearly, in view of the judgment obtained by Building Solutions, contrary to his claimed undertaking, Mr Giurina never returned the $8,000 to the OC when the debt fell due.
10. I find Mr Giurina has not proven the OC is liable to him for the claimed loan amount of $18,715 plus interest.

1. In his affidavit sworn on 3 May 2017, Mr Giurina deposed that he was appointed as solicitor for the OC at a SGM held on 11 August 2002. He produced minutes which contained a unanimous resolution 'to appoint Mr Ermanno Giurina to act as solicitor for fee and reward of the Body Corporate and its members with power to instruct external solicitors if necessary and to brief Counsel'. The minutes later state that, Mr Giurina having been appointed, was instructed to act in all cases for and on behalf of the 'Body Corporate' and its members in their best interests. I understood Mr Giurina relied on that resolution to support his claim that, even as at the hearing before me, he was the properly appointed solicitor for the OC. [21]
2. Mr Giurina further deposed he had provided 'extensive legal services since about May 2006' including in relation to a planning matter in this Tribunal. Mr Giurina produced a 'lump sum bill' dated 29 July 2011 of which he claimed $2,650 remained outstanding. He gave evidence that the sum of $7,000 had been paid, although he could not recall the detail of how that occurred.
3. That document showed that fees of $9,400 were claimed for professional services provided for the planning matter between 23 July 2010 and 29 July 2011 plus $250 in disbursements. In a later affidavit, Mr Giurina deposed the document was sent to the OC under cover of a letter dated 12 August 2011. The letter carried no letterhead and was signed by Mr Giurina personally.
4. Mr Giurina further deposed:

I estimate that at the time of swearing this affidavit a further amount of $13,810 remains outstanding in relation to my professional services rendered to the [OC].[22]

1. At the 8 May 2017 hearing, Mr Giurina was asked in cross-examination about the legal work he had undertaken. He referred to the planning case in 2010 and 2011 and contractual services in respect of insurance work in the period 2006 to 2008.
2. Mr Giurina was asked whether he had entered into a costs agreement with the OC under the Legal Profession Act 2004 (Vic) (LP Act) and shown such an agreement to the lot owners. He said 'yes' and that he also had charge out sheets for the work but he did not have a copy of any of those with him.
3. Mr Free for the OC drew my attention to the fact that no liability for legal fees was shown in the 25 May 2008 certificate Mr Giurina signed.
4. On completion of the 8 May 2017 hearing, I made orders for the parties to file written submissions. The OC filed such a document on 12 May 2017 and then filed further written submissions on 1 June 2017. Attached to those latter submissions was a copy of a certificate issued by the Victorian Legal Services Board. The certificate dated 25 May 2017 set out Mr Giurina's practising certificate history and relevantly showed that:
   • For the period 1 January 1990 to 31 December 1990 he held an 'employee without trust authorisation practising certificate';
   • For the period 12 November 2007 to 30 June 2009 he held an 'employee without trust authorisation practising certificate';
   • For the period 4 February 2010 to 30 June 2011 he held an 'employee without trust authorisation practising certificate';
   • For the period 10 August 2011 to 30 June 2012 he held a 'corporate practising certificate'; and
   • For the period 15 March 2017 to 25 May 2017 he held a 'volunteer practising certificate'.
5. Following receipt of Legal Services Board certificate (and Mr Giurina's further affidavit sworn on 18 May 2017 addressing his July 2011 fee notice) I made procedural orders giving the parties an opportunity to ask for the matter to be relisted to allow the further material to be the subject of evidence and cross-examination. Mr Giurina asked for the matter to be listed for a further hearing. On 3 July 2017 he filed a further affidavit addressing issues related to the claim for legal charges.
6. At the further hearing on 5 July 2017, Mr Giurina gave sworn evidence adopting his 18 May 2017 and 3 July 2017 affidavits as true and correct. He made submissions about his authority act as representative of the OC under an exemption under the LP Act (and its predecessor) and the Subdivision Act.
7. Mr Free for the OC sought leave to cross examine Mr Giurina about the content of the Legal Services Board certificate. Mr Giurina did not object to me granting leave. Then followed a series of questions about the legal services Mr Giurina claimed he had provided to the OC.
8. Part way into the cross-examination, I stood the matter down to enable Mr Giurina to consider his position and/or seek legal advice in circumstances where it appeared the evidence he was giving could support an allegation that he had practiced unlicensed. Mr Giurina elected to continue. I warned him that he was under oath and that the proceeding was being recorded. I outlined in general terms findings I might make about his defence which might have consequences elsewhere. I gave the parties an opportunity to have settlement talks. They did not take up that option. Mr Giurina elected not to seek an adjournment to obtain legal advice or representation.
9. Mr Giurina gave further evidence including that he was owed around $23,000 by the OC for legal services. He also asserted that he was solicitor to the OC for the whole period of August 2002 to May 2017 on the basis of the 2002 resolution referred to above. Mr Giurina made a number of further admissions about his status as a solicitor. He claimed he had a solicitor's lien over the OC's funds.
10. Mr Giurina filed detailed submissions outlining the basis for his contention that, at all relevant times, he was entitled to payment for professional services. He made extensive reference to legislation and case law. As I understood them, the submissions seemed to abandon a claim for an amount above the costs said to be outstanding from the planning matter in 2010 and 2011. In the submissions, Mr Giurina sought to represent himself as an advocate rather than a solicitor and seemed to resile from his evidence that he acted as a solicitor and he was entitled to fees in that capacity.
11. In my view, this is not the proper case to make findings about whether Mr Giurina engaged in unprofessional conduct or practice contrary to the LP Act or its predecessor or successors. That is a matter for the Legal Services Board to consider. I do not intend to undertake an analysis of the varied bases on which Mr Giurina now says he provided services, including advocacy, to the OC.
12. Mr Giurina gave evidence in his affidavits and before me that the amounts he claimed arose from him acting as a solicitor for the OC - not as a representative or professional advocate. That is the claim I have assessed.
13. On that evidence and having regard to the Legal Services Board certificate, I find that Mr Giurina:
    • Did not hold a practising certificate when he says he was appointed as solicitor of the OC on 11 August 2002 or in 2006;
    • Did not hold a practicing certificate for the period commencing in 2006 to 11 November 2007 when he says he provided legal services in relation to insurance works; and
    • Did not hold a practising certificate during July 2011 when he purported to charge legal fees for acting as a solicitor for the OC in a planning matter before this Tribunal.
14. Despite the break between hearings before me, Mr Giurina was unable to produce a costs agreement for any of the legal work he says he completed or any other documents which showed what work was done or on what basis. In particular, other than the undated bill, Mr Giurina produced no evidence to show what work he did in the planning matter for which he says he is still owed the sum of $2,650.
15. I accept the OC's contention that, as a consequence of section 3.4.17 of the LP Act, a failure to provide a costs agreement renders a claim for costs by a law practice unrecoverable unless and until it has been reviewed under Division 7. The time for review of Mr Giurina's bill passed in or around July 2012. I also accept the submissions that the account document referred to earlier is not a bill of costs under the LP Act, including because it did not contain mandatory information.
16. At no time has Mr Giurina produced a demand for payment of the amount claimed. There is no mention in the OC meeting minutes since February 2012 of a claim for payment or any reference to Mr Giurina's claimed entitlement to payment.
17. I reject Mr Giurina's evidence as contained in his 3 May 2017 affidavit and confirmed in evidence before me that he was the solicitor for the OC for the entirety of the period between 2006 and 2017.
18. Mr Giurina has not proven that he is entitled to any amount in respect of legal advice and services undertaken during the above period in his personal capacity. That finding is made given, at relevant times, he only held an employee or corporate practicing certificate. Mr Giurina did not explain or produce any evidence about his employment arrangements or on what basis he claims a personal debt against the OC.
19. I reject the claim that the OC fees and levies claimed against the respondents as owners of lot 4 are to be set off by any amount said to be owed to Mr Giurina as a solicitor.
20. Given the paucity of evidence about the basis for appointment, the work done and the lack of demands for payment, I reject the claim the OC is otherwise indebted to Mr Giurina in the capacity of professional advocate or advisor.

1. I find the OC is entitled to payment by the respondents of the sum of $11,161.72 plus interest from 9 August 2016 to the date of my order.

1. The OC claims its costs in the proceeding under section 109 of the VCAT Act.
2. The OC seeks an order for costs on an indemnity basis or at the least on the County Court scale to be taxed in default of agreement.
3. Mr Giurina said no order for costs ought to be made against him and in fact one should be made in the respondents' favour on an indemnity basis with those costs to be payable by Ms Deak and Mr Free personally.
4. Section 109 of the VCAT Act says:

(1) Subject to this Division, each party is to bear their own costs in the proceeding.

(2) At any time, the Tribunal may order that a party pay all or a specified part of the costs of another party in a proceeding.

(3) The Tribunal may make an order under subsection (2) only if satisfied that it is fair to do so, having regard to -

(a) whether a party has conducted the proceeding in a way that unnecessarily disadvantaged another party to the proceeding by conduct such as -

(i) failing to comply with an order or direction of the Tribunal without reasonable excuse;

(ii) failing to comply with this Act, the regulations, the rules or an enabling enactment;

(iii) asking for an adjournment as a result of (i) or (ii);

(v) attempting to deceive another party or the Tribunal;

(b) whether a party has been responsible for prolonging unreasonably the time taken to complete the proceeding;

(c) the relative strengths of the claims made by each of the parties, including whether a party has made a claim that has no tenable basis in fact or law;

(e) any other matter the Tribunal considers relevant.

1. The proper approach to the assessment of an award of costs under section 109 may be summarised as follows:
   • The presumption in section 109 is that costs lie where they fall;
   • The Tribunal has a wide ranging discretionary power to award costs if the Tribunal is satisfied that it is fair to do so;
   • The Tribunal may have regard to the specific matters set out in section 109(3)(a) to (d) and, under (e), any other relevant matter; and
   • An order ought to only be made where it is fair to do so.
2. The OC contended that the following were relevant matters for my consideration:
   • Mr Giurina relied upon documents that had no validity and he failed to provide any supporting documentation for various assertions;
   • The hearing ought not to have taken as long as it did - it was prolonged by Mr Giurina's affidavit material that contained assertions which had no basis in law or fact;
   • Mr Giurina deliberately prolonged and complicated the application relying on 'baseless defences';
   • Mr Giurina failed without reasonable excuse to produce materially relevant documents; and
   • Mr Giurina had and continues to litigate against the other lot owners many of whom are on fixed incomes. Reference was made to six specific proceedings, the first of which was decided in 2012. The submissions noted that costs have been awarded in many of those proceedings with none having been recovered to date.
3. The OC submissions also referred to the factors contained in section 109 (a)(v) and (vi), (c) and (d). As no specific explanation was given for claiming Mr Giurina attempted to deceive another party or the Tribunal and that he conducted the proceeding vexatiously, I leave those factors to one side.
4. I have discussed above shortcomings in the record keeping of the OC. There were times at the hearing when it was apparent the OC had failed to bring documents which would have readily resolved matters such as the individual state of lot owner's ledgers at specific points in time. The OC conducted the proceeding in this way despite having received notice of Mr Giurina's defences and his intention to put a wide range of material before the Tribunal. As a consequence, the hearing was at times more complicated than necessary.
5. Having said that, as is apparent from these reasons, Mr Giurina's evidence in support of his various defences was often questionable. There is no doubt Mr Giurina's case was weak in comparison to the OC's. Mr Giurina's affidavit material was extremely lengthy and led to a considerably longer hearing than was necessary or justified.
6. Mr Giurina sought declarations in his favour on matters connected with the fee recovery claim but also to his own professional conduct and that of Ms Deak, Mr Free and other solicitors engaged by the OC. In my view, Mr Giurina treated the proceeding as something of a commission of inquiry including as to the correctness of DP Lulham's 2012 decision and the Supreme Court's decision on appeal.
7. In these circumstances, I am satisfied that the respondents unreasonably prolonged the time taken to complete the proceeding.
8. I am also satisfied that many of the respondents claims had no tenable basis in fact or law including:
   • The claim the OC acted inappropriately in settling and repaying a judgment debt incurred because of Mr Giurina's own actions and which he kept from the OC. I make that comment taking into account DP Lulham's findings as to Mr Giurina's improper conduct, which were affirmed on appeal;
   • The claim Mr Giurina was appointed as manager of the OC on 19 January 2014;
   • The claim the OC was indebted to Mr Giurina personally for a loan of $18,715 when no evidence was produced to demonstrate the funds had been advanced; and
   • The claim the OC was indebted to Mr Giurina personally for a fees for legal services when Mr Giurina did not hold a practising certificate.
9. The fact this is an owners corporation fee recovery proceeding is also relevant. The OC relies on lot owners paying their fees to manage and maintain the common property and meet obligations such as the duty to hold insurance. As is apparent from these reasons, the other four lot owners have, for many years, covered the respondent's financial obligations in respect of lot 4. In addition, they have had to pay legal costs associated with Mr Giurina's many claims against them as members of the OC and personally.
10. I find, in the circumstances of this case, it is fair that the respondents pay the OC's costs.
11. In order to take account of the comments I have made in respect of the way the OC's case was run, I have decided not to allow all of the OC's costs. Doing the best I can I have decided the respondents will only be ordered to pay the OC's costs on and from the day after the directions hearing on 23 March 2017 and so the OC must bear the costs associated with the initial instructions, the application to the Tribunal and the attendance at that directions hearing.
12. The OC made no submissions in support of its application for indemnity costs and so I decline to make that order.
13. I will make an order that standard costs be paid (that is, on the County Court scale) to be taxed in the event of a dispute.
14. Section 115B(1) of the VCAT Act empowers the Tribunal to make orders for the reimbursement of the whole or part of an application fee. It may only make such an order after having regard to the nature of any issues involved in the proceeding, the conduct of the parties in respect of the proceeding and the result of the proceeding.
15. Section 115C creates a presumption that a party who has substantially succeeded against another party in respect of proceedings such as these, is entitled to an order for reimbursement of the whole of the fees.
16. Given my findings in the proceeding, I am satisfied it is appropriate for an order to be made for the respondents to reimburse the OC the application fee.

[1] Owners Corporation RP 1579 v Giurina [2012] VCAT 643.

[2] Giurina v Owners Corporation No 1579 & Ors [2012] VSC 466.

[4] As set out in the respondents' outline of submissions dated 3 August 2017.

[6] [2014] VCAT 98.

[9] [2016] NSWSC 1056.

[10] [1998] HCA 28.

[12] [2012] VCAT 944.

[13] [2015] VSC 160.

[15] I leave to one side Mr Giurina's contention that Perpetual Trustee also holds a 20% lot entitlement.

[16] [2013] VCAT 327 at paragraphs 132 to 134.

[17] See sections 99 and 107 of the OC Act.

[18] No regulations have been made prescribing matters under section 112.

[20] The accountant's document states at the end 'Prepared as requested, based on Agreement'. The accountant's document records repayments of $7,000 on 17 March 2011, $4,500 on 4 August and $1,000 on 11 August 2011.

[21] Affidavit sworn on 3 May 2017, paragraph 18.