Legislation: Unit Titles (Management) Act 2011, ss 109 and 129,

Cases: Artico Holdings Pty Ltd & The Owners Units Plan 3461 (Civil

Dispute) [2012] ACAT 31

Meaney v The Owners Corporation Units Plan 40 (Unit Titles)

[2013] ACAT 72

The Owners Units Plan No 116 & Nicholson and Ors (Unit

Titles) [2012] ACAT 63

1. Pursuant to section 129(1)(g) the ACAT gives effect to the motion allowing a special privilege for construction of the existing deck at unit 22 of Unit Plan 768; and approving that deck as constructed.
2. The application for an order for removal of the deck is refused.

1. This proceeding was commenced on 9 July 2013 by the Owners Corporation Units Plan No 768 (TOCUP 768) filing an application seeking orders requiring the respondent, Mr Lokusooriya, to remove a front deck attached to the outer wall of his unit, which is unapproved and protrudes on to common property.
2. Mr Lokusooriya opposed that application. On 15 August 2013, he filed a response, and counter claim seeking orders pursuant to section 129 of the Unit Titles (Management) Act 2011 (UTM Act) for, effectively, approval of the construction of the deck and granting of a special privilege for the deck to protrude, as it does, on to common property.

1. TOCUP 768 was represented by Mr Veurink of Ray White Canberra in the proceedings, and Mr Lokusooriya was self-represented.
2. TOCUP 768 provided documentation in support of its application. This included:
   • (i) witness statements from body corporate committee members;
   • (ii) photographs of the deck at Unit 22;
   • (iii) correspondence between the parties in relation to the removal of the deck;
   • (iv) a time line of the events leading to this proceeding;
   • (v) correspondence of TOCUP 768 about the matter, including:
     • (a) letter from William Dagger Consulting to the body corporate in relation to advice upon the statutory compliance of a small stair flight on the veranda;
     • (b) an email from Mr Ian Brown to Ms Judy Farrelly, strata manager, and members of the body corporate committee confirming evaluation of compliance issues of other units conducted by the committee;
     • (c) copies of emails between the parties, with comments added by Mr Martin Baggott, current strata manager of Ray White, and by the body corporate committee;
     • (d) a letter sent to owners in Federation Park by Mr Lokusooriya with comments provided by the body corporate committee;
     • (e) part minutes of the annual general meeting of 6 December 2011 (AGM) of the owners corporation in relation to construction of the deck at the front of Unit 22;
     • (f) part minutes of the extraordinary general meeting held 19 March 2012 (EGM) of the owners corporation in relation to granting approval and a Special Privilege for the deck at the front of Unit 22; and
     • (g) notes in relation to a meeting on site with Mr Lokusooriya.

1. TOCUP 768 did not call any witnesses to give evidence or be asked questions at the hearing, but relied on the documents filed which, as I have noted, included 5 witness statements. Mr Veurink made submissions on behalf of the applicant.
2. Mr Lokusooriya provided a book of documents in his response to the application. This included:
   • (i) a time line of the incidents that lead to these proceedings;
   • (ii) two proposed designs for Unit 22 to remove the hazard of tripping; and
   • (iii) photographs taken of Unit 22 and other Units around Unit 22.
3. Mr Lokusooriya gave evidence at the hearing, and made submissions to the Tribunal.

1. The facts of the matter were largely uncontested.
2. In 2009, Mr Lokusooriya became aware of a complaint by the tenant of his unit - number 22 at units plan 768. The tenant complained about a front veranda step which was asserted to be a trip hazard due to non-compliance with current building standards. Later that year Mr Lokusooriya moved into Unit 22. He says that he noted that the step to the veranda of the unit was causing him and visitors to the house to trip over it on their way to the door. He said that on one occasion a courier asserted that he had 'nearly broke his knee caps'.

Mr Lokusooriya's evidence, which was not contested, was that his neighbours with a similar step on their veranda had experienced similar issues. 3. The step complied with building requirements at the time of construction, around 1991, and consequently is now considered to be 'statutorily compliant'. However, it was conceded by TOCUP 768 that the step as constructed does not comply with current building requirements, and that there is evidence of persons having complained of tripping over it and similar steps in the complex. I am satisfied the step for practical purposes is a 'trip hazard'. 4. Mr Lokusooriya stated that he was concerned about his position as owner, and when undertaking renovations in February 2010 determined to also undertake works to rectify what he perceived as a safety issue. 5. There ensued various email correspondence between Mr Lokusooriya and Ray White Strata in relation to what owners corporation approvals were necessary for modifications to the house, which at that stage included a proposal for a back deck and landscaping. Mr Lokusooriya gave evidence that as a result of this correspondence he understood that a deck-like structure attached to the unit did not require approval by the owners corporation, as long as it did not have a roof over the deck. That understanding was incorrect. 6. Mr Lokusooriya proceeded in mid-2011 to obtain two quotes for a 'solution' to the front step problem, from professional landscape design firms. Both solutions proposed the construction of a low front deck, protruding forward of the front eaves by at least one metre, which would have a step on the garage side of the protrusion. It was suggested by Mr Lokusooriya that this construction would remove the 'hazardous' verandah step and encourage visitors and guests to access the property from the safest point. 7. Mr Lokusooriya proceeded with one quote and the front deck was constructed in October 2011. 8. The front deck as constructed is 2.5 m wide, and 1.2 m of the depth extends on to the common property. 9. Mr Lokusooriya was almost immediately contacted by Ray White Strata indicating that construction of the front deck was not approved as required by the rules of the owners corporation. Further, as the construction extended on to the common property a special privilege for use of the common property would be required. 10. The issue was raised at the AGM on 6 December 2011. The minutes record that a motion to issue a rules infringement was unsuccessful, and it was resolved that the deck question should be considered at a further general meeting:

MOTION 11 RESOLVED and carried that the Owners Corporation holds an Extraordinary General Meeting to consider the addition to Unit 22. This meeting would need to be resolved by way of an unopposed resolution;

MOTION 11a- FAILED That the Owners Corporation authorises the Executive Committee to issue an infringement notice on the owner of Unit 22, requiring the owner to remedy the contravention.

1. The EGM was held on 19 March 2012. The minutes record that a single motion, incorporating both the grant of a special privilege and approval of the deck as constructed, was unsuccessful:

MOTION 1-FAILED That retrospective corporation consent be granted to the owner of Unit 22 to install at his own expense a timber deck at the front entrance of his property which has been constructed and installed incorporating common ground, in accordance with circulated papers and in accordance with any law in force in the Territory.

9 votes in favour of the motion with 7 votes against.

1. The minutes noted that there needed to be a 66% majority for the motion and pass. There was only a 56% majority, so the motion failed. In fact, as was agreed at the hearing, under Rule 4 of the default rules approval by way of an unopposed resolution was required.

The procedural and legal issues raised at the hearing

1. At the outset of the hearing, Mr Lokusooriya raised as a procedural issue the fact that TOCUP 768 had not served upon him an infringement notice under section 109 of the UTM Act. Mr Lokusooriya submitted that it was not open to TOCUP 768 to bring proceedings in the ACAT in relation to a dispute, without first issuing a rule infringement notice.
2. Section 109 of the UTM Act provides that:
   1. Breach of rules - rule infringement notice

_(1) This section applies if the executive committee of an owners corporation reasonably believes that - _

(a) the owner or occupier (the person) of a unit has contravened a provision of the corporation's rules; and

(b) the circumstances of the contravention make it likely that the contravention will continue or be repeated.

(2) The owners corporation may, if authorised by an ordinary resolution of the executive committee, give the person a notice (a rule infringement notice) requiring the person to remedy the contravention.

Note If a form is approved under s 146 for this provision, the form must be used.

(3) A rule infringement notice must state the following:

(a) that the owners corporation believes the person is contravening, or has contravened, a provision of the rules;

(b) the provision of the rules the owners corporation believes is, or was, contravened;

(c) details sufficient to identify the contravention;

(d) if the owners corporation believes the contravention is continuing - the period (which must be reasonable in the circumstances) within which the person must remedy the contravention;

(e) if the owners corporation believes the contravention is likely to be repeated - that the person must not repeat the contravention;

_(f) if the person does not comply with the notice - _

(ii) the owners corporation may, without further notice, apply to the ACAT for an order in relation to the failure to comply with the notice.

(4) If a rule infringement notice is given to a person following a request under section 111, the owners corporation must, not later than 14 days after the day the request was received, tell the person who made the request that the notice has been given.

1. Section 109 does not impose an obligation on an owners corporation to issue an infringement notice in every circumstance in which a contravention of the rules is believed to have occurred, and is likely to be repeated. The use of the word 'may' in subsection 109(2) makers it clear that the decision whether or not to issue a rules infringement notice is discretionary.
2. Further, the UTM Act does not require the issuing of a rules infringement notice as a precondition to the filing of an application under section 125 of the UTM Act.
3. I am satisfied that TOCUP 768 is entitled to bring these proceedings under section 125 of the UTM Act, irrespective of the decision not to issue a rules infringement notice to the owner.
4. At the conclusion of the hearing, the Tribunal had before it competing applications - the application by the owners corporation seeking that the structure be removed due to lack of approval, and a later application by the owner of the unit seeking an order of the ACAT giving effect to the unsuccessful motion for approval. I advised the parties that as a matter of common sense I proposed to deal with the applications in reverse order.

Tribunal review of unsuccessful motion for approval and special privilege

1. Section 129(1)(g) of UTM Act gives ACAT the power to make:

...(g) an order giving effect to an unsuccessful motion for a resolution of a general meeting (either as originally proposed or as amended by the ACAT) if the ACAT is satisfied after a merits review of the motion that opposition to the motion was unreasonable;...

1. Section 129 (1)(g) marries two legal concepts, that of merits review and that of unreasonableness. I set out some of the implications of this conjunction in Meaney v The Owners Corporation Units Plan 40 (Unit Titles) [2013] ACAT 72 at [31]- [42]:
   1. First, the review is essentially de novo and Tribunal is able to consider issues of both fact and law anew.
   2. Secondly, the Tribunal considers and determines these issues as at the date of the hearing before the Tribunal, not as at the time of the original decision. That means the Tribunal is able to consider evidence not available before the owners corporation in reaching its decision. ...
   3. Thirdly, when conducting merits review there is no threshold question of reasonableness or unreasonableness of the original decision to be determined before the Tribunal may proceed to make an order.

1. Section 129(1)(g) places a significant limitation upon the merits review process, by requiring that the ACAT must be satisfied that opposition to the motion was unreasonable before an order giving effect to the motion may be made.
2. The word unreasonable is not defined in the UTM Act. Its ordinary English meaning, according to the Macquarie Dictionary, is:

Unreasonable: adjective 1. not reasonable, not endowed with reason. 2. not guided by reason or good sense. 3. not agreeable to or willing to listen to reason. 4. not based on or in accordance with reason or sound judgement. 5. exceeding the bounds of reason; immoderate; exorbitant.

1. There is an extensive body of authority outlining when administrative decisions are, or are not, considered to be unreasonable and therefore liable to be set aside.
2. An administrative decision may be unreasonable where it is capricious or irrational, is illogical or perverse, is inconsistent with other decisions on like facts, has simply no evidentiary basis or is based on an error of fact which is fundamental to the decision.
3. In some cases, a defect in the process leading to the making of the administrative decision will render the decision unreasonable . For example, where the process leading to the making of the decision lacked natural justice, this may lead to the decision itself being considered unreasonable .
4. Given that the Tribunal is tasked with conducting merits review of the motion, a process usually made available in relation to decisions of an administrative character, it is appropriate to draw on this body of law as providing some guidance as to whether opposition to the motion was unreasonable.
5. Further, as noted in The Owners Units Plan No 116 & Nicholson and Ors (Unit Titles) [2012] ACAT 63 at [84]:

The test to determine if the opposition to the motion was unreasonable is not a subjective test of the intentions of the unit owners who voted in opposition. Whether the opposition is in the circumstances unreasonable has to be considered objectively taking into account all relevant circumstances.

1. Mr Lokusooriya, in arguing that the opposition of Motion 1 at the EGM was unreasonable, submitted:
   1. He had built the deck without prior approval due to a misunderstanding, rather than in any sort of flagrant disregard for owners corporation approval.
   2. The structure of the deck has been designed professionally, by consultation with appropriate professionals with significant experience in the landscaping industry in Canberra.
   3. The design most importantly resolves a pressing safety issue (tripping over the step at the veranda) built into Unit 22 at the time of construction.
   4. In his view, the executive committee was operating on a strict legal basis without any practical, reasonable or compassionate grounds, especially regarding the safety issue.
   5. It is a minimalist structure which has little visual impact currently, and less in the future as shrubs mature.
   6. The neighbours around the vicinity have had no issues with the deck since it was attached 2 years ago.
   7. The majority of all members of the complex voted to keep the structure at the EGM thus it appear that only the executive committee had issue with the structure.
   8. The structure had no other issues of any nature whilst it has been in place for over the last 2 years.
   9. The landscaping around the structure enhances what used to be a neglected gardenscape, in line with the federation style of the complex.
   10. It is a solution that can be adopted by other members who may have similar safety issues and he has no objections in allowing other members access to the plans
   11. The structure has no insurance liability issue for the body corporate as the structure is covered under his liability insurance
   12. Only less than 30% of the structure is in the common property and that, on a rough estimate, is a use of less than about 5% of the total available common property around the unit- in an area that is not used by any other members for any other purpose and does not interfere with the reasonable enjoyment of the common property by other members.
   13. The structure is located in an area of the common property adjacent to his unit. This unit-specific common property is usually used by other members as part of their private garden. Other members have installed garden structures in like areas that are made out of pavers, rocks and similar materials without any concerns being raised by the executive committee.
   14. It would be a reasonable structure to be allowed to stay in its place to serve its legitimate purpose which is the issue of safety for occupants and visitor.

1. Mr Lokusooriya referred to The Owners Units Plan No 116 & Nicholson and Ors (Unit Titles) [2012] ACAT 63 and Artico Holdings Pty Ltd & The Owners Units Plan 3461 (Civil Dispute) [2012] ACAT 31 as providing examples of similar cases where common property was used by members and ACAT had ruled to allow the use.
2. On behalf of TOCUP 768, Mr Veurink acknowledged that the existing veranda step has caused complaints of tripping. He was not able to provide evidence of any construction response to this hazard as an alternative to the construction of a low deck extending on to common property. Mr Veurink submitted that the risk of tripping might be alleviated by appropriate signage near the step.
3. Mr Veurink agreed that the deck was not visually obtrusive or out of keeping with other modifications to units, and that it would probably be approved if not for the significant encroachment on to the common property. He acknowledged that there were other more visible modifications and equally if not more intrusive uses of common property that had been permitted throughout the units complex. However, he submitted that these were "landscaping" structures on common property rather than a construction over common property, and that, as a matter of principle, the use of common property by way of a structure attached to the external wall of the unit should not be permitted.
4. This distinction between landscaping works/structures and construction works/structures is not evident in Rules 4 or 5 of the Owners Corporations Rules (Rules),[1] which provide:
   1. Erections and alterations

_(1) A unit owner may erect or alter any structure in or on the unit or the common property only - _

(a) in accordance with the express permission of the owners corporation by unopposed resolution; and

(b) in accordance with the requirements of any applicable territory law (for example, a law requiring development approval to be obtained for the erection or alteration).

Note An example is part of the Act, is not exhaustive and may extend, but does not limit, the meaning of the provision in which it appears (see Legislation Act, s 126 and s 132).

(2) Permission may be given subject to conditions stated in the resolution.

A unit owner must not use the common property, or permit it to be used, to interfere unreasonably with the use and enjoyment of the common property by an owner, occupier or user of another unit.

1. Mr Veurink was not able to point the Tribunal to any authority for the proposition that a structure attached to the building should be treated differently to a structure which is simply placed or erected in the common property.
2. As a matter of principle, there should not be encroachment by one unit on to common property. However, the provision under the Rules for the granting of a 'special privilege' to use common property recognises that encroachment on to common property can, and does, happen.
3. As a matter of principle, it is preferable that every unit be of the same external construction so as to ensure consistency and a pleasing visual effect. However, the process for approval of alterations and additions provided by the rules acknowledges that variation from the norm will occur.
4. It is not contested that the existing veranda step posed a practical trip hazard. It is not reasonable to prevent a unit owner taking appropriate steps to remove or minimise a trip hazard. The only solutions to this hazard put forward by

Mr Lokusooriya required the building of a front deck, with encroachment on common property. TOCUP 768 provided no evidence of any other construction solution to the trip hazard. I do not consider that erection of a sign would be a suitable response in the circumstances of this case. 5. In this case, the common property encroached upon is landscaped as a front garden. Each unit in TOCUP 768 has its own 'front garden' which is common property, although it is maintained and used particularly by the relevant unit. From the evidence in this case, it appears that TOCUP 768 has allowed a variety of landscaping effects to be carried out to such common areas. Garden structures that are made out of pavers, rocks, boulders and similar materials - of greater visual impact and for similar use[2] to the deck in question - have been permitted. 6. In relation to visual impact, the evidence is that the deck is a modest and simple structure which currently has low visual impact, and will have less visual impact in the future as the shrubs grow. It is of lower visual impact than some landscaping measures taken to other 'front gardens'. TOCUP 768 has previously approved construction of iron security gates, albeit not on common property, which are of high visual impact and inconsistent with the federation style. 7. Having considered all the above and the evidence before me, I was satisfied that opposition to the motion to approve a front deck was unreasonable because it was inconsistent with other approvals and decisions of TOCUP 768. 8. I was also satisfied that the opposition for special privilege to be granted to Mr Lokusooriya to use the common property by construction of a deck protruding into the common property was unreasonable. It is unreasonable to prevent an owner from taking appropriate action to address a trip hazard, where the impact of that action upon the owners corporation either generally or at an individual unit-owner level is negligible, and there are no alternative designs that would address that risk without encroaching on the common property. 9. Accordingly, I exercised the power provided by section 129(1)(g) of the UTM Act, to make an order to give effect to the unsuccessful motion for a resolution of the EGM of the Owners Unit Plan No 768.

1. The deck now having the required approval and grant of special privilege, the application by TOCUP 768 for removal of the structure was dismissed.

1. Accordingly, at the conclusion of the hearing I made the following orders:
   1. Pursuant to section 129(1)(g) the ACAT gives effect to the motion allowing a special privilege for construction of the existing deck at unit 22 of Unit Plan 768; and approving that deck as constructed.
   2. The application for an order for removal of the deck is refused.

[1] See Default Rules in Schedule 4 of the UTM Act

[2] As a walkway for entrance to the unit