Caroline Emily Cole v the Proprietors - Units Plan 109 [1996] ACTSC 60 (14 June 1996)

SUPREME COURT OF THE ACT

CAROLINE EMILY COLE v. THE PROPRIETORS - UNITS PLAN 109
No. SC243 of 1996
Number of pages - 9
Unit Titles

COURT

IN THE SUPREME COURT OF THE AUSTRALIAN CAPITAL TERRITORY
MILES CJ

CATCHWORDS

Unit Titles - application for orders under s.113 Unit Titles Act 1970 - nature of jurisdiction - orders limited to those contemplated by section - no power to make orders against persons other than committee or corporation - rules of evidence and procedure waived in favour of applicant in person in order to complete hearing - allegation of various breaches of duty by corporation - insufficiency of evidence.

Unit Titles - obligation of corporation to maintain and keep common property and chattels in good repair - various breaches alleged - only one proved - tree posing potential problem ordered to be removed within six months.

Unit Titles - unanimous resolution required for corporation to purchase or acquire chattels - installation of new letterboxes and security system - whether unanimous resolution required - it was - corporation ordered to put motion at next annual general meeting for restoration of status quo and to carry out necessary works if authorised by simple majority at meeting.

Unit Titles Act 1970 (ACT), s.113

HEARING

CANBERRA, 2, 3, 4 April and 10 May 1996
14:6:1996

The Applicant appeared in person

Counsel for the respondent: Mr. D. Flint

Solicitors for the respondent: Clayton Utz

ORDER

THE COURT ORDERS THAT:
1. Within six months the corporation cause to be removed the poplar

tree between Block C and Block D, Melrose Mews, Chifley.
2. (a) The corporation cause notice of the following motion to be
given to unit holders prior to the next Annual General Meeting
and that the corporation cause the motion to be put at that
Annual General Meeting:
(i) that all letterboxes be removed from their present
positions on the outside of the buildings and be relocated
to their previous positions inside the buildings.
(ii) that the present security system on external access doors
be replaced by push-button locks.
(b) The corporation cause the work referred to in the above motion
to be carried out in the event, but only in the event of the
motion being passed by a simple majority of unit holders
present in person or by proxy at the meeting.
3. The applicant pay one half of the costs of the corporation of and
incidental to these proceedings to be agreed or taxed on a party
and party basis.

DECISION

MILES CJ This is an application under s.113 of the Unit Titles Act 1970 (the Act).

2. The applicant, Mrs. Caroline Emily Cole, has been the proprietor of Unit 16, Units Plan No. 109 since 3 October 1995. She appears for herself and has not neglected to prepare the case thoroughly, to cross-examine expert witnesses and to put comprehensive oral and written submissions on her behalf. Mr. Flint, who appears for the respondent, the Proprietors - Units Plan 109, has made a commendable effort to keep the issues within limits and once it became reasonably clear what they were, refrained from taking technical objections. Nevertheless, the case has presented the Court with a problem in relation to how far the applicant should be confined by the usual rules of evidence and conventional court procedures in the presentation of her case. Application of those rules and procedures to persons acquainted with them, as legal practitioners are required to be, keeps litigation flowing smoothly and relatively swiftly. However, in an effort to conclude the hearing within a reasonable time, with due recognition of the need to have regard to determining the issues according to law in the light of the material available to the Court, the usual rules of procedure and evidence had to be waived in favour of the applicant.

Nature of case
3. The application was filed on 4 August 1995 and sought a number of orders. Not all the orders sought are within the scope of s.113 of the Act which provides as follows:

"Enforcement of Act
113.(1) Where a corporation fails to carry out a requirement or
perform a duty imposed on it by this Act, a proprietor or mortgagee of
a unit may apply to the Court for an order requiring the corporation
or the committee to carry out the requirement or perform the duty, as
the case may be.
(2) On an application made under the last preceding subsection the
Court may, if it is satisfied that the failure has occurred, make such
order as it thinks just."

4. Sub-section 113(2) must be read in the light of sub-s.113(1). It is only when the Court is satisfied that the corporation has failed to carry out a requirement or perform a duty imposed on it by the Act that there is any power to make an order at all. There is no room for reading into sub-s.113(2) power to make any order whatsoever. Further, the order must reflect the type of application that a proprietor or mortgagee is entitled to make, that is an application for an order requiring the corporation or the committee to carry out the requirement or to perform the duty. I do not think that the order that the Court is empowered to make on the application may go beyond an order which is properly characterised as an order which requires the corporation or committee to perform the duty. That is not to say that in proceedings properly constituted a proprietor or mortgagee may not proceed against the corporation to make a claim in respect of an action at law or some equitable right which is not concerned with the failure to carry out an obligation or perform a duty imposed by the Act. It means only that s.113 does not enlarge the powers of the Court beyond making orders of the type described in sub-s.113(1) except to the extent that the Court is not confined to granting or refusing the particular order sought by an applicant in an application made under the section.

5. Hence, at the outset, it must be said that several of the orders sought lie outside the scope of s.113. For instance, para.12 of the notice of motion claims $25,000 exemplary damages. Paragraph 7 seeks an order against the managing agent. These orders sought are clearly not available under s.113 and the issues raised are not justiciable under the section. The only paragraphs expressly seeking orders against the corporation are orders 10 and 11, although most of the other paragraphs could be liberally read in this way. The matters raised by the various paragraphs may be dealt with under various headings. Many of the matters raised allege of the breach of duty cast on the corporation by para.36(1)(b) of the Act to keep in a "good state of repair and properly maintain the common property and all chattels in its possession custody or control". The duty has to be seen in the context of the units comprising a complex of four blocks, constructed in 1963 according to the standards of the time. The complex is known as Melrose Mews and is situated off Melrose Drive at Chifley.

Trees
6. Paragraphs 1 to 4 of the notice of motion seek orders relating to trees. The applicant wants all trees on the property removed which are at a distance equal to or less than their height from all buildings and stormwater drains.

7. In support of the application for removal of such trees, the applicant relied on various documentary material from the CSIRO. There was also in evidence a report from Mr. Ron Rogers, an engineer, Mr. Keith McIntyre, a horticultural engineer, and Dr Ken Eldridge, a tree breeding consultant. Mr. Rogers made observations of cracking to the exterior masonry walls, particularly in areas adjacent to or near the applicant's unit, No. 16. He considered that the cracking was moderate and not unusual for buildings of the age and type of those in question. He did not think that the standards in the CSIRO documents were appropriate for buildings such as those inspected because of the enormous loads that such buildings exerted in comparison to ordinary single domestic dwellings.

8. Mr. McIntyre inspected the site and saw no evidence of damage to buildings or structures that could be attributed to tree roots. He pointed out that a combination of clay soil types and lack of moisture under the extensive concrete and bitumen areas adjacent to the buildings made it unlikely that tree roots extended under the buildings or foundations.

9. Mr. McIntyre conceded that tree roots could draw moisture from the ground and cause shrinkage that might not otherwise occur but that there had to be a source of moisture for this to occur. However, he did not think that that had occurred at the site.

10. There was, however, one tree, a poplar, between Blocks C and D, which Mr. McIntyre considered could be a potential problem. However, the committee obtained a quote for the removal of that tree and it was submitted on the corporation's behalf that there was no failure under s.113 warranting a remedial order.

11. Whilst, in my view, there has been no failure in any pejorative sense on the part of the committee and the corporation, the fact remains that the Board has not taken positive steps to have the tree removed as ultimately it should be in the interests of proper maintenance of the property. I think that an order in this regard should be made, to take effect within six months.

12. There is no dispute that some tree roots have entered parts of certain sewer and drainage pipes. It is idle to debate whether the trees have caused the damage or merely contributed to it. On the evidence, tree roots could not invade the pipes unless there was some means of water escaping and nourishing the roots to grow along the escape route. Once the roots were established in the line of escaping water or moisture, they were likely to contribute to further damage, so that in various places the concrete and earthenware pipes that were standard at the time of the construction of Melrose Mews have become the subject of invasive tree root growth. The committee is aware of the problem and is endeavouring to meet it by replacing the clay and concrete pipes with PVC pipes over a period of time. In my view, it is both unreasonable and unnecessary that the whole of the drainage and sewerage systems be replaced all at once and no failure on the part of the committee or the corporation has been identified in this regard.

13. There was some evidence that eucalyptus trees shedding their leaves have contributed to the clogging of sumps near Blocks C and D. The extent to which the shed leaves contributed to the problem was, however, not clear. It has not been shown that a reasonably prudent property owner taking reasonable steps for the amenity of the residents and the maintenance of the property would get rid of the trees and it has not been shown what particular practical steps would alleviate this problem, apart from the obvious need to clear the sumps from time to time. However, no failure on the part of the committee or corporation has been proved in this respect.

14. There was a claim that eucalyptus trees overhanging a public walkway outside the property should be removed in order to avoid the risk of injury to persons using the walkway. There was no evidence as to particular dangers which these trees posed. As Mr. McIntyre said, all trees pose dangers of this kind. Whilst proper practice no doubt demands that the trees be inspected regularly on behalf of the corporation and that regular maintenance be carried out to remove dead limbs or other hazards, again no failure on the part of the corporation or committee was proved to my satisfaction.

Drains
15. The applicant seeks an order that certain work recommended by Allied Plumbing Services Pty Ltd in a report made in July 1994 be carried out.

16. Mrs. Marian Eldridge gave evidence that the committee had considered the Allied Plumbing report and sought a second opinion from William Edmund Pty Limited, which was acted upon. Mr. Cleary of the latter company gave evidence that in March 1996 his company carried out and completed drainage work between Block A and Block C. It is not necessary to repeat the details of his evidence. A blockage was removed and concrete pipes were replaced with PVC pipes. According to Mr. Cleary, the stormwater drainage system was working satisfactorily downstream from where the repairs had been carried out. Mr. Cleary has considerable experience in plumbing and drainage and I found him an impressive witness. I am convinced by his evidence that in acting upon his recommendations the committee discharged its duty with regard to maintenance of the drainage pipes and in regard to the drainage problems in general.

17. There was some evidence particularly by way of photographs that some sumps have been prone to fill up quickly and overflow in sudden, heavy rain. It is reasonably clear that fallen leaves which are swept into the sumps by ground water are substantially responsible. This does not appear to me to be a problem of maintenance as so much of design and I do not think that the committee or corporation are to blame for lack of maintenance in this regard. The most obvious remedy would be for the residents to sweep up the leaves when they congregate, as they must do from time to time.

18. Examples of individual steps taken by the committee in order to respond to drainage problems from time to time were given by Mrs. Eldridge in her evidence. They tend to support the proposition that the committee has not been guilty of any failure.

19. There was a good deal of evidence on the matter, but I do not think it necessary to discuss it further. I find no failure on the part of the corporation or committee to keep the drains and stormwater and sewerage lines in reasonable repair.

Locks and letterboxes
20. Prior to 1994 letterboxes for the use of unit holders were located in the foyer of the various buildings near the stairwells. The external doors were not secured. In response to complaints of persons loitering and the risk of vandalism, the letterboxes were relocated to a position on the outside of the building adjacent to the external door. The external door to each building was secured by a locking system integrated with an intercom system. The integrated system allows visitors to gain entry to the building by speaking to the unit holder in the unit from near the door and the unit holder, if he or she chooses to do so, responding by unlocking the door by means of a remote control mechanism. A previous intercom system whereby the unit holders could communicate with each other in their respective units was bypassed. Apparently new letterboxes and various items of security equipment were purchased. These alterations and additions were carried out in accordance with decisions of the committee and were not authorised by any special resolution or unanimous resolution of the corporation.

21. The applicant seeks orders that in effect the status quo be restored and the letterboxes be again relocated to where they were previously within the building and that either a non-locking handle be placed on the stairwell door leading to her unit (No. 16, Block A), or a simple push-button lock be installed for residents to lock and unlock as they choose. The applicant said in support of this application that she does not wish to be inconvenienced by having to answer calls over the security intercom system by persons wishing her to open the door.

22. The applicant submitted that the work carried out to relocate the letterboxes and install the integrated security system was not authorised by resolutions complying with ss. 44 , 45 and 46 of the Act. It is conceded by Mr. Flint on behalf of the corporation that the resolution authorising the work did not comply with these sections.

23. Paragraph 44(1)(a) authorises a corporation by special resolution to purchase, hire or acquire personal property for its own use or for any use in connection with the use and enjoyment of the common property. The applicant's argument is that the letterboxes and the security system at the time of acquisition were personal property. Since then these items have been installed and have of course become fixtures and part of the realty or common property in respect of which the corporation stands possessed of an estate of leasehold for a term expiring on the date specified in the units plan under s.25 of the Act. But the fact is that they were acquired without special resolution. The corporation is therefore, on the face of it, in breach of para.44(1)(a).

24. Mr. Flint submitted that para.44(1)(a) is not directed towards personal property which becomes part of the common property. He referred to para.36(1)(b) which casts on the corporation an obligation to keep in a state of good repair and properly maintain the common property or chattels in its possession, custody or control. He further submitted that this duty authorised the corporation to purchase and acquire consumable items, such as cleaning agents, necessary for the proper maintenance and repair of the common property and chattels. I gather that the submission extends to items purchased for the maintenance of chattels in the possession, custody or control of the corporation, such as washing-machines and lawn mowers.

25. I think that Mr. Flint's point is, in broad terms, well taken. It may extend to the acquisition of letterboxes and intercom equipment which are intended to replace similar items which have become worn out and unserviceable, but I do not think that it extends to the acquisition of such items acquired in order to supplement or upgrade existing items of a similar nature.

26. The acquisition of the letterboxes and intercom equipment without special resolution is in contravention of para.44(1)(a). But this does not mean that the Court is obliged to make an order of the nature sought by the applicant. Other unit holders appear not to be as concerned as she is about the present arrangements, and they may well prefer the present arrangements, although not properly authorised. The unit holders should be given the opportunity to require the corporation to restore the status quo, if that is what they want. A simple majority of unit holders voting to that effect at the next annual general meeting would provide a convenient, inexpensive and just way of putting this matter to rest. I propose to order accordingly.

No levy for legal costs or costs of repairs
27. The applicant seeks an order that the corporation not compel certain named unit holders to contribute by way of levy to the corporation's costs in these present proceedings.

28. She seeks a similar order whereby certain members of the corporation are to be exempted from any levy to cover the costs of repairs or structural damage to any unit by way of tree root invasion or water conduit.

29. No proper basis for these orders was laid. They are outside the scope of s.113 of the Act under which the application is brought. More fundamentally, they do not recognize that the corporation exists only for purposes of the functions conferred upon it by the Act and that without recouping costs from unit holders, the corporation would be unable to incur necessary expenditure in order to carry out its proper functions.

Detailed expenditure statements
30. The applicant sought an order that the managing agent engaged by the corporation to manage the units supply a detailed expenditure statement of transactions to unit holders with each quarterly levy notice, instead of the summary report which is currently sent. The order sought goes beyond s.113 of the Act, which authorises the Court to make orders only against the corporation or the committee. However, assuming that an order could be made against a corporation or committee to similar effect, I do not think that the applicant has proved any breach of duty.

31. Mrs. Eldridge gave evidence, which I accept, that the applicant had been advised on several occasions that the books and records were available for her inspection at the managing agent's office and that printouts were available on written request. Further, any unit holder who wishes to receive details of the corporation's account beyond those in summary form sent with the quarterly levy notice, may do so upon written request. This is completely in accord with the requirements of s.39 of the Act.

Screens, cats, Gwainurra Pty Limited
32. Although the notice of motion does not seek an order in respect of such matters, the applicant raised at the hearing her objection to one of the unit holders, (Unit 21), fixing a screen to the balcony of the unit. She complains that in effect the unit holder has converted the balcony to an extra room and has contravened the by-laws of the corporation. However, despite some doubt about the matter, the evidence is not sufficient to establish positively that the screen is a fixture. If the screen is moveable, which it may well be, there is no breach of the by-law which the corporation can be called upon to enforce.

33. The applicant complained during the hearing about cats roaming the premises and the corporation failing to take any action against the unit holders who own the cats. However, again the evidence is insufficient to establish that any of the cats belong to any specified unit holder, or indeed to any unit holder at all.

34. The applicant unilaterally amended her notice of motion to include a claim for an order that she as sole proprietor of Unit 16 since 3 October 1995 "has legal standing to be substituted for Gwainurra Pty Limited as applicant in the matter". No such order is necessary or appropriate in the present proceedings. The applicant's standing is not in question. There were other proceedings, now determined, in which it was held that she had no standing (Matter No. SC 517 of 1995) but they are not relevant to the present application.

Sections 45 and 46
35. Section 45 is concerned with agreements between the corporation and members for the repair and maintenance of the unit belonging to a proprietor or occupier. Section 46 is concerned with special privileges granted by the corporation to a member relating to common property. The corporation must be authorised by special resolution under s.45 and unanimous resolution under s.46. However, the corporation had not entered into any agreements of the nature contemplated by either section and there was no breach by it of the provisions of either section.

Costs
36. Although orders will be made against the corporation, the proceedings have been greatly protracted and made much more expensive by the way in which the applicant has conducted them. The circumstances giving rise to the making of the orders do not involve serious breaches by the corporation or the committee of their duties. The applicant should therefore contribute one half of the corporation's costs of these proceedings.

Orders
37. The Court makes the following orders:

1. That within six months the corporation cause to be removed the
poplar tree between Block C and Block D.
2. (a) That the corporation cause notice of the following motion to be
given to unit holders prior to the next Annual General Meeting
and that the corporation cause the motion to be put at that
Annual General Meeting:
(i) that all letterboxes be removed from their present
positions on the outside of the buildings and be relocated
to their previous positions inside the buildings.
(ii) that the present security system on external access doors
be replaced by push-button locks.
(b) that the corporation cause the work referred to in the above
motion to be carried out in the event, but only in the event of
the motion being passed by a simple majority of unit holders
present in person or by proxy at the meeting.
3. That the applicant pay one half of the costs of the corporation of
and incidental to these proceedings to be agreed or taxed on a
party and party basis.