1. The Tribunal declares that the applicant is entitled to rent out each accessory car park unit that she owns.

Transcription

1 VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL CIVIL DIVISION OWNERS CORPORATION LIST VCAT REFERENCE NO. OC384/2011 CATCHWORDS Car park accessory unit whether owner s right to rent it out was restricted by-law made under Strata Titles Act 1967 by-law ceased to have effect claims for compensation dismissed Strata Titles Act 1967 s 24 Subdivision (Body Corporate) Regulations 1989 r 909 Owners Corporations Regulations APPLICANT Keile Buchanek FIRST RESPONDENT Binks & Associates Pty Ltd (ACN ) Withdrawn from proceeding on 17 April 2012 SECOND RESPONDENT WHERE HELD BEFORE HEARING TYPE Owners Corporation SPO A Melbourne Senior Member A Vassie Hearing DATE OF HEARING 17 April, 15 May 2012 DATE OF ORDER 12 July 2012 DATE OF REASONS 12 July 2012 CITATION Buchanek v Owners Corporation SPO A (Owners Corporation) [2012] VCAT 1040 ORDER 1. The Tribunal declares that the applicant is entitled to rent out each accessory car park unit that she owns. 2. Otherwise the proceeding is dismissed. A Vassie Senior Member

2 APPEARANCES: For Applicant For First Respondent For Second Respondent Mr D Silberman, solicitor Mr J Santamaria, manager Ms D Wilson, solicitor VCAT Reference No. OC384/2011 Page 2 of 10

3 REASONS FOR DECISION 1 The applicant Keile Buchanek owns three lots on plan of subdivision number SP26405 which are affected by the second respondent, Owners Corporation SPO 26405A. The three lots are numbered 4, 14 and 20. Because the plan was registered as a plan of strata subdivision under the Strata Titles Act 1967 the lots are referred to on the plan as units. So for ease of reference I describe them as such. 2 Unit 4 is a residence. Units 14 and 20 are accessory units. They are also described on the plan as car park units. Unit 14 is next to Ms Buchanek s residence, unit 4, and is covered so that it is a car port. Unit 20 is one of three uncovered spaces next to the eastern boundary of the land at 25 Mayfield Road, East St Kilda which is the whole of the land described in the plan. There is common property which is used as a driveway. 3 The main dispute in this proceeding concerns what right, if any, Ms Buchanek has to permit any other person to use either of the car park units. She maintains that she had wanted to lease unit 20 throughout the last four months of 2010 and throughout 2011, and that the owners corporation had effectively prevented her from doing so. The owners corporation maintains that she is not entitled to let any other person into occupation of a car park unit in breach of one of the owners corporation s rules. Ms Buchanek has claimed $6, as compensation for loss of income and has claimed a declaration that she be entitled to lease the car park unit. 4 There is a second dispute. Ms Buchanek has claimed payment of $2, for gardening work that she did for the owners corporation in 2005 that a professional gardener engaged by the owners corporation had failed to do. 5 The first respondent Binks & Associates Pty Ltd is a former manager of the owners corporation and a franchisor of the present manager, Santamaria Strata Management Pty Ltd, whose director is Joseph Santamaria. That company now trades under the name Binks & Associates. Originally Ms Buchanek, who had prepared and filed her own initiating application, had named Mr Santamaria as the respondent. The Tribunal, realising that her intended claim was against the manager, mistakenly identified the manager as Binks & Associates Pty Ltd and named that company in the Tribunal s register as the respondent. By a Tribunal order dated 29 August 2011 the owners corporation became joined as a second respondent. 6 Once Ms Buchanek retained Mr Dov Silberman, solicitor, in the proceeding he filed Amended Points of Claim which made it clear that no claim against either the former manager or the present manager was being pursued. When the hearing of the proceeding commenced on 17 April 2012 Mr Silberman, who appeared for Ms Buchanek, sought and obtained leave to withdraw the application as against the first respondent. Nevertheless Mr Santamaria remained in attendance throughout the hearing. Ms Wilson, of LFS Legal, appeared for the owners corporation. VCAT Reference No. OC384/2011 Page 3 of 10

4 7 For reasons that I explain below, the hearing was not completed on 17 April 2012 and was adjourned. The hearing resumed on 15 May 2012 and was completed. I set a timetable for the parties to file and serve submissions on one aspect of the case and said that I would give written reasons after the times had elapsed. Mr Silberman filed and served a submission on Ms Buchanek s behalf. By a letter to the principal registrar dated 26 June 2012 LFS Legal stated that the owners corporation did not intend to file or serve a submission in reply. 8 On 17 April 2012 Ms Buchanek and a witness, Rhonda Rothschild, had given evidence and had been cross-examined by Ms Wilson. As I told the parties on 15 May 2012 when the hearing resumed, I had mislaid my notes of the evidence given on 17 April but had a reasonably good recollection of it. Before giving this decision I have listened to the audio recording of the evidence given on 17 April. The owners corporation filed an affidavit of Mr Santamaria sworn on 14 May Mr Santamaria was crossexamined by Mr Silberman on 15 May. The by-law 9 By s 24 the Strata Titles Act 1967 provided that a body corporate (as an owners corporation was then called) was regulated by the by-laws set forth in the First and Second Schedules to that Act but those by-laws might be added to or amended by the body corporate. The First Schedule contained 33 by-laws that set out duties and obligations of the body corporate and of its members. The Second Schedule contained one by-law only: that a member or occupier should not use a unit for an illegal or injurious purpose, make undue noise or keep any animal on the unit or the common property. Under s 24(7) (as amended in 1969) no addition to or amendment of the bylaws in the First Schedule had effect until the body corporate lodged a notification of it with the Registrar of Titles. That sub-section, however, did not apply to additions to or amendment of the by-law in the Second Schedule. 10 Minutes of an annual general meeting of the owners corporation (body corporate) held on 24 November 1987 show that the members passed a special resolution that there be additions to the Second Schedule By-laws of the Body Corporate. The additional by-law numbered 2 read: A Member shall not let any person into actual occupation (whether by means of Lease or Licence or howsoever otherwise) of the member s unit and/or accessory unit save on the footing that such person is bound by these By-laws and/or any other By-laws which may be in force at any time and from time to time with respect to that unit and/or accessory unit. 11 The Owners Corporations Regulations 2007, in Schedule 2, prescribe model rules for an owners corporation. Under the Owners Corporations Act 2006, if an owners corporation does not make any rules (which, by special resolution, it may do: s 138(1)) the model rules apply to it (s VCAT Reference No. OC384/2011 Page 4 of 10

5 139(2)); if the owners corporation makes or amends any rules it must lodge with the Registrar of Titles a copy of the rules (s 142(2)) and the rule or amendment takes effect on the day that rules are recorded by the Registrar or on a later date specified in the rules (s 142(4), (5)). So an amendment by any addition to the model rules requires lodgement with the Registrar of Titles to be effective. 12 The addition to the by-laws that the owners corporation made by special resolution on 24 November 1987 were not lodged with the Registrar of titles but under the legislation that was in force at the time that the additions were made they did not have to be. History of Use of the Car Park Units 13 The residential units at 25 Mayfield Road, East St Kilda are next to a school. Parents who want to drop off or pick up children at the school are in the habit of using the common-property driveway at 25 Mayfield Road to turn, stand or park their vehicles. For years this has been a nuisance to occupiers of the residential units and the owners corporation and its manager from time to time have wanted to stop it. 14 Between 2003 and 2008 Rhonda Rothschild s children attended the school. Ms Rothschild entered into an arrangement with Ms Buchanek and her then husband to get permission to use car park unit 14 when dropping off or picking up the children. Ms Rothschild paid Ms Buchanek $ per week for the use of car park unit 14 during school term time, twice a day, five times per week. There was no written agreement. Ms Buchanek does not now have any written record of the payments. The matters that I have recorded in this paragraph are findings from the evidence of Ms Rothschild and Ms Buchanek. Although Ms Wilson emphasised the lack of any written record of the matters I have no hesitation in accepting the evidence. 15 Car park unit 24, the other car park unit which Ms Buchanek owns, is near a boundary timber paling fence. The inward-facing side of the fence would appear to be part of the common property affected by the owners corporation. 16 In 2009 Ms Buchanek and her husband separated. She went to live in San Francisco. While she was there in the last third of 2010 a Mr Schwarz contacted her and asked for permission to use car park unit 24. Ms Buchanek gave her permission on condition that she paid a fee for using it but they did not agree on any fee. Shortly thereafter Ms Schwarz contacted her again and complained that she was not able to use the car park space because part of the fence had fallen down across the space. 17 In December 2010 Ms Buchanek returned to Melbourne. By that time Ms Schwarz was not using car park unit 24. Part of a trellis had fallen from the fence and was lying across the space. Ms Buchanek took a photograph of it and produced the photograph at the hearing. She also produced a photograph she had taken of the fence before she left for San Francisco. If VCAT Reference No. OC384/2011 Page 5 of 10

6 Ms Schwarz had ever used the car park unit she had not paid anything for the use of it. 18 The facts set out in the preceding two paragraphs are findings from the evidence of Ms Buchanek, which I accept, even though Ms Schwarz was not called as a witness. 19 In January 2011 Ms Buchanek received a letter from Binks & Associates dated 12 January 2011 headed Circular to Residents Re: Carparking. It read: The Owners Corporation has received reports that non-residents are parking motor vehicles in carparking spaces at the property. The reports state that non-residents are using the carparking spaces for the purpose of dropping children off at the neighbouring school. The use of carparking spaces by non-residents has caused unnecessary disruptions to carparking for residents at the property. The Owners Corporation reminds all residents that the carparking spaces within the property are for residents cars only. The use of carparking spaces by non-residents is strictly prohibited. The Owners Corporation requests that any resident or owner who permits non-residents to park a motor vehicle within any carparking space at the property to cease this arrangement immediately. The cooperation from residents with this matter is essential and will be appreciated by all residents at the property. 20 The owners corporation has contended that by-law number 2, created in 1987, is the source of its right to request that owners do not permit nonresidents to use car park units. The By-Law Ceases to Have Effect 21 On 17 April 2012, during the first day of the hearing, the owners corporation tendered an incomplete copy of the additions to the by-laws made in The significance of the by-law number 2 became apparent but I could not tell whether the by-laws read as a whole might affect its construction. I adjourned the hearing so that one party or the other might produce a properly authenticated search of the plan of subdivision and of any by-laws registered with it. 22 By the time of the resumed hearing on 15 May 2012 Mr Santamaria had exhibited to his affidavit of 14 May 2012 a copy of a search of the plan of subdivision, a copy of the minutes of the meeting of 24 November 1987 and a complete copy of the additions to the by-laws that were the subject of a special resolution passed at the meeting. From the search it became evident that the additions to the by-laws had never been lodged with the Registrar of Titles. Neither party was in a position to address me upon the significance or otherwise of the additions to the by-laws not having been lodged with the Registrar and in the short time available I was not able to VCAT Reference No. OC384/2011 Page 6 of 10

7 investigate the question properly myself. So at the conclusion of the hearing I gave the parties the opportunity of making written submissions on the issue of whether by-law number 2 was valid and set the timetable for the purpose. 23 Thanks to the industry of Mr Silberman, displayed in the written submission he filed on the applicant s behalf, the answer to the question has emerged from the legislative history he presented in the submission. First, there was the amendment in 1969 to s 24(7) of the Strata Titles Act 1967 (referred to in paragraph 9 above) so that it was no longer necessary for the validity of additions to the Second Schedule by-law that the additions be lodged with the Registrar of Titles. Secondly, the Subdivision Act 1988 repealed the Strata Titles Act. Thirdly, the Subdivision (Body Corporate) Regulations 1989, by regulation 407 and Form 2 in Schedule 1, prescribed standard rules for use of common property and lots and, by Part 9, made transitional provisions with respect to the by-laws created under the Strata Titles Act. Regulation 906 related to existing unchanged by-laws, regulations 907 and 908 related to existing changed First Schedule by-laws, and regulation 909 related to existing changed Second Schedule by-laws. Each of those transitional provisions gave temporary continuing force to the by-laws but provided that they ceased to apply to the body corporate on 1 May 1990 or if the body corporate earlier resolved that the by-laws ceased to apply. For present purposes the relevant regulation is 909. It provided: 909. Existing changed Second Schedule by-laws If, on the commencement of these Regulations, only the bylaws under the Second Schedule of the Strata Titles Act 1967 have been added to, amended or repealed by the body corporate then the by-laws as amended under the First and Second Schedules of that Act continue to apply to the body corporate, and prevail over these Regulations t the extent of any inconsistency. The by-laws cease to apply to the body corporate on 1 May 1990 or if the body corporate earlier resolves that the by-laws cease to apply to it. 24 Accordingly the additional by-law number 2, and all the other by-laws, additional or otherwise, ceased to have effect on 1 May Declaration of Entitlement to Rent Out 25 There was no evidence of the owners corporation having made any addition to or amendment of rules applicable from time to time under the Subdivision (Body Corporate) Regulations 1989 or under the Owners Corporations Regulations The rules of the owners corporation now, therefore, are the model rules set out in Schedule 2 to the Owners Corporations Regulations They prohibit obstruction of the use of common property (r 3.1) and regulate the parking or leaving of vehicles on common property (r 3.2). The owners corporation may invoke those rules if it claims that an owner or occupier of VCAT Reference No. OC384/2011 Page 7 of 10

8 a lot is infringing them. But the model rules do not affect the right of a lot owner to rent out an accessory car park lot. 27 Ms Buchanek is entitled to the declaration that she seeks, that she is entitled to rent out each accessory car park lot that she owns. I shall make that declaration in exercise of the power conferred by s 124 of the VCAT Act Claim for Compensation: Car Park 28 Ms Buchanek has claimed that because of the conduct of the owners corporation she has been unable to rent out car park 24 and has lost income at the rate of $ per week throughout the last four months of 2010 and throughout 2011: a total of $6, The evidence about Ms Rothschild s use of car park unit 14 has established that all car park units at 25 Mayfield Road, East St Kilda have had a potential rental value that comes mainly from their convenient proximity to the school. I find that that potential rental value is $ per week during school term time. Although car par unit 14 is a car port and car park unit 24 is uncovered, it is the availability of parking space at all, rather than the nature of the available parking space, that is important. 30 Nevertheless, I conclude that Ms Buchanek has not established that she has lost income as a result of anything that the owners corporation did and should not have done, or as a result of anything that the owners corporation ought to have done but did not do. 31 The owners corporation has a duty to repair and maintain common property. So it had a duty to repair and maintain the fence near car park unit 24. There is no satisfactory evidence, however, that the owners corporation failed to fulfil the duty. There is only the hearsay complaint of Ms Schwarz that she could not use the car park because the fence had fallen into it, and the photographic evidence of the fallen piece of trellis. There was no evidence of why the piece of trellis fell or whether the fall was the result of some failure to do maintenance on the fence. There was no satisfactory explanation of why the fallen piece of trellis could not be shifted. Evidence that Ms Buchanek gave of her reluctance to face the danger of protruding nails in the trellis, and of Ms Schwarz s assertion that her daughter-in-law was pregnant and could not be expected to clear away any obstruction of the car park space, did not impress me. 32 It is true that by its circular letter dated 12 January 2011 the owners corporation wrongly stated that the use of car parking spaces by residents was strictly prohibited. I accept that Ms Buchanek, having received the letter, believed that the statement was correct. I will assume that the incorrect statement somehow gave Ms Buchanek a right of legal action against the owners corporation, although how that right of action exists has not been clearly articulated. I doubt that it could arise under the Australian Consumer Law (Victoria) because the owners corporation did not make the VCAT Reference No. OC384/2011 Page 8 of 10

9 statement in trade or commerce. But she has not proved that the incorrect statement led to her suffering any loss. There was no potential tenant or licensee of car park unit 24 whom Ms Buchanek turned away because of her belief that she was prohibited from granting a lease or licence. There was no evidence of Ms Buchanek having advertised or solicited for tenants or licensees, or of any person other than Ms Schwarz having expressed an interest in using the car park unit. 33 So I reject the claim for compensation in respect of the car park unit. Claim for Compensation: Gardening 34 The owners corporation engaged a professional gardener and paid him at the rate of $44.00 per week. Ms Buchanek gave evidence that his attendance was unsatisfactory, that when she taxed him with the matter he claimed that he had been ill, and that she discovered that his claim was false. During 2005, for 11 months, he did not attend at all but the owners corporation continued to pay him. She decided to do the gardening herself during those 11 months, for the benefit of the owners corporation. She asked Mr Santamaria either to pay her for her gardening work or to compel the gardener to return to the owners corporation what he had been paid during those 11 months. Mr Santamaria did neither. 35 In her Amended Points of Claim Ms Buchanek has included a claim for $2, calculated at $44.00 per week for 11 months. 36 The claim cannot possibly succeed. There was no agreement between Ms Buchanek and the owners corporation for her to do the gardening for a fee or at all, and no request by the owners corporation to her to do the gardening. Doing it was her own idea. There were no circumstances that might have led an objective bystander to expect that the owners corporation would pay her for her gardening work, or that it was done otherwise than as good neighbourly behaviour. In her evidence Ms Buchanek stated that she had not expected the owners corporation to pay her and that her real concern was the gardener s ripping off the owners corporation. 37 So I also reject the claim for compensation for gardening. Other Matters 38 The Amended Points of Claim included a claim for recovery of owners corporation fees allegedly overpaid. When he opened Ms Buchanek s case on 17 April 2012 Mr Silberman expressly abandoned this claim, correctly conceding that the right occasion to make it, if it should be made at all, was upon an application for review and re-hearing of a fee-recovery proceeding in which the owners corporation had already obtained an order. 39 In the written submission Mr Silberman made an alternative submission based upon alleged irregularities in a postal ballot for a special resolution that had something to do with legal action to enforce the rules about use of the driveway. In its letter of 26 June 2012 LFS Legal correctly observed VCAT Reference No. OC384/2011 Page 9 of 10

10 that the alternate submission attempted to introduce new evidence and objected to Ms Buchanek s doing that. The objection was justified. But as I have accepted Ms Buchanek s primary submission that the 1987 by-law is no longer effective there is no need for me to consider the alternative submission. 40 I would like to record the Tribunal s gratitude to Mr Silberman. In correspondence to the principal registrar Ms Buchanek stated that she had engaged for free the voluntary services of a professional lawyer. Before his involvement her application was impenetrable. The Amended Points of Claim that he filed on her behalf made clear what had been unclear. At the hearing he properly withdrew or abandoned inappropriate parts of the claim. The written submission, tracing as it did the relevant legislative history, must have taken him many hours of work for which, if my understanding is correct, he is not going to be rewarded financially. His representation of Ms Buchanek has accorded with the best traditions of the legal profession. Outcome 41 I shall make the declaration of entitlement referred to in paragraph 27 above. Otherwise the proceeding is dismissed. A Vassie Senior Member VCAT Reference No. OC384/2011 Page 10 of 10