ACAT may make an order repealing or amending a resolution of a general meeting or executive committee based on a merits review of the resolution by the tribunal.
[3]
In other recent matters, the Tribunal has outlined what a merits review involves. The approach is often summarised as requiring the reviewing body to stand in the shoes of the decision maker and make the correct or preferable decision.
There are some accepted features of merits review which warrant mention. First, the review is essentially de novo, that is, the Tribunal is able to consider issues of both fact and law anew. Secondly, the Tribunal is considering and determining these issues as at the date of the hearing before the Tribunal, not as at the time of that original decision, which means in this case the Tribunal is able to consider evidence not available before the executive committee in reaching its decision. Thirdly, and this is particularly relevant for section 129(1)(f), 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.
In that respect, section 129(1)(f) is different to section 129(1)(g), which also requires the Tribunal to undertake a merits review but limits action taken by the Tribunal after conducting the merits review to only allow orders to be made where the opposition to the motion was unreasonable.
In looking at the decision of the executive committee in May 2013 to authorise removal of the tree, the Tribunal is entitled to consider all of the facts and the evidence as at the time of the Tribunal's decision. In some senses, this can feel a little unfair to the executive committee because the Tribunal has before it a report of Mr Mann that the executive committee did not have in May 2013, and they may well have made a different decision if they had had that report.
There is nothing in section 129(1)(f) that requires the Tribunal to find that the original decision was unreasonable on what the executive committee had before it, or reasonable on what it had before it. The Tribunal is simply conducting a merits review of the decision but as at the current date and with reference to the evidence that is currently available.
Another interesting feature of merits review is that the tribunal is not obliged to choose either the orders proposed by Ms Parker or approve the original decision of the Owners Corporation. Rather, the Tribunal is to make the correct or preferable decision on the merits of the case.
[4]
What is the correct or preferable decision in this case?
[5]
The starting point for consideration of the correct or preferable decision in this matter must be a recognition of the legal framework within which the owners corporation operates. As submitted by the respondent, the tribunal needs to consider all of the circumstances of this case and, particularly, the law relating to owners corporations and the obligation to suitably address issues of safety.
After having regard to all of the evidence about the tree, on the key issue of the risk posed to safety of persons or property by this tree, in my view removal of the tree is not at this time clearly necessary. Alternative measures could be taken that would mitigate the risk, but those measures would not remove all risk.
Mr Mann in his evidence said, effectively, that every tree poses a risk of dropping limbs. As soon as you have a tree you have a risk, and the only way to obliterate risk entirely is to remove all trees. Mr Mann also pointed out in his evidence that the presence of trees provides amenity both to the individual owners and the neighbourhood.
The question that confronted the executive committee in May 2013, and now the Tribunal in reviewing the decision, was how to balance the risks posed by this particular tree, the amenity it provides, and the cost of alternative actions in relation to the tree.
If the tree is removed all risk of damage to people and property is gone, but so also is the amenity which this tree poses. The immediate cost of removal (around $7000) is certainly much more expensive than the immediate cost of remediation (around $4000). The issue of immediate costs is something that some residents may feel quite strongly about.
Further, if the tree is retained there is no certainty that something will not happen in three or four years that means this tree needs to come down at that time; that it is not a matter of balancing, it is just clearly necessary that it must be removed to protect safety to persons or property. If this happens, the owners corporation will have been put to greater cost than if the tree had simply been removed at the outset.
If the measures to remediate the tree are taken, the overall financial cost to the owners corporation may be greater in the long term, however, the amenity provided by the tree, and there may be different views by residents as to the extent of that amenity, will remain for the enjoyment of all residents.
It's not just the financial cost of the different approaches that is relevant, but also the administrative costs. If the tree is retained, the owners corporation will need to ensure that the recommendations of Mr Mann are followed and that the tree is being checked every year or every two years. Even though the remediation measures seem cheaper in the short term, they may be greater in the long term, over 20 or 40 years, and they will come at an administrative cost.
Even if the remediation measures are taken, there will be a residual risk of injury or harm to persons or property. While ever the tree is there it will continue to pose some risk.
At the time the executive committee was making the decision, it had a report from Trees R Us which they believed was of a certain level of expertise, recommending removal. The Tribunal, however, has an additional report from another expert who has a higher level of expertise and a different view.
Looking at the background to how the executive committee came to be faced with making a decision in May 2013, it seems to me that the approach originally proposed by the owners at the AGM in February 2013 was that the executive committee should obtain expert opinion and be advised by that opinion. The Tribunal has competing expert opinions. While the Tribunal would prefer the opinion of Mr Mann as to whether it is necessary that the tree be removed, the financial and administrative consequences of adopting either course of action vary dramatically.
When merits review is conducted, the role of the tribunal is to make the correct or preferable decision. Having had regard to all of the factors that I have outlined in these reasons, I consider it is appropriate for the owners as a whole to consider the report of Mr Mann together with the quotes provided and the report of Mr Bowen so that they consider the two alternative approaches. All owners should be involved in making a decision as to how they wish to balance amenity versus risk versus financial and administrative costs. I do not consider that it is appropriate for the Tribunal to impose its view of how those factors should be balanced in the absence of the owners themselves having first had the opportunity to consider those matters.
In other words, the better decision for the executive committee to make, when now confronted with competing expert evidence of managing risk, posing different financial and administrative outcomes, would be to refer the matter back to the owners corporation at an urgently called special general meeting. That is the order that I will make at the conclusion of this matter.
I can understand that the participants in these proceedings may feel disappointed that they have not received an outcome today which asserts the correct decision to be made in relation to removal or retention of this tree in this Units Plan. However, because of the way in which the matter and evidence has urgently come before the Tribunal, I do not consider it is appropriate for the Tribunal to make that decision on the material before it at this time.
As I noted above, I gave consideration to adjourning these proceedings, admitting the additional witness statements into evidence, inviting the owners corporation to advise the owners of these proceedings and the Tribunal's desire to hear from any of them who wish to express a view about the correct way to balance the amenity that is given to them by the tree versus the amount of money they want to put into the sinking fund over the relevant sinking fund plan period of time to manage the tree. Although tribunal proceedings are designed to be informal and accessible in nature, the reality is that in a matter of this kind even the most informal of 'hearing' processes will usually require the preparation and exchange of witness statements, attendance at the tribunal and the making of oral arguments. The time and expense to everybody by taking that course of action was prohibitive.
It seems to me that is more efficient and expedient for the Tribunal standing in the shoes of the executive committee, to refer this matter back to the owners at a special general meeting and allow that democratic process to occur in a more informal and dynamic way at that grass roots level. There is competing expert opinion and there are competing options on the table with different financial ramifications over a certain period of time of the sinking fund plans. Those are things that the owners as a whole are, I think, properly entitled to express a view on and to talk about amongst themselves. Some owners of unit plans may consider "We want to be prudent. While we're going to enjoy the amenity of trees in the courtyard area, we don't care about a tree in the car park, so we'll take it out." But other owners corporations may be made up of people who strongly want to retain trees and are willing to bear the risk and pay the extra money to proactively manage them, and that is a matter that is best ventilated first at a general meeting of the Owners Corporation.
[6]
Consequently, the order I make is that the resolution of the executive committee to remove the tree is amended to provide, instead, that the reports of Mr Mann and Mr Bowen be provided to the owners together with the competing quotes, and a summary of ongoing costs over the applicable sinking fund period, at a special general meeting urgently called to determine the question of whether the tree is to be removed or remediated.
It follows from this that I will set aside the interim order staying removal of the tree. I anticipate the executive committee, having heard what I have said, is unlikely to take any action to remove the tree in the period of time between this decision and the special general meeting that will be held. However, it needs to be clear to everybody that should something happen in the meantime that means that the tree poses an immediate danger or an unacceptable danger, in other words, should the fact situation change or should new information come to light that means that tree clearly poses a danger, the owners, through their executive committee, should feel free to act appropriately at that time to deal with that risk.