ACAT’s powers
Are you at a disadvantage by not hiring a lawyer to represent you at ACAT?
Probably not.
This issue was raised in In Uren & Anor v UP No 396, where the applicants hired a solicitor and a barrister and the OC Secretary presented the case of the owners. ACAT does not expect that parties are represented by lawyers and many represent themselves. The Tribunal members offer assistance to unrepresented parties and try to establish a level playing field.
Applicants might be better served by getting professional assistance to frame their application and arguments and then to speak for themselves.
Can an owner bring a matter against an EC member rather than the OC?
Yes
In Leonard v Michie, ACAT decided that an owner does not necessarily have to commence an action against the OC when they want to take action against the EC or some EC members. They can take action under S128 as an owner against another owner who also happens to be an EC member. This right existed under the former Unit Titles Act and the Unit Titles (Management) Act does not show any intention to remove it.
Amendments to the UT(M)A at S125 have further clarified that an owner can take action against the Executive Committee.
If an EC member brings a matter against other EC members, and some or all of them cease to be EC members while the matter is being dealt with, does the matter have to be withdrawn or dismissed?
No.
In Leonard v Michie, ACAT encouraged as wide a reading of Ss125 to 128 as possible so that owners have access to ACAT to resolve disputes wherever possible. If the dispute relates to matter when the owners were members of the EC that can proceed under S127 and also under S128 as owners in dispute.
Amendments to the UT(M)A at S125 have further clarified this.
Who should be made parties to an ACAT action?
It depends. This is potentially a tactical matter that an OC might want to get some professional advice on.
ACAT suggested in Uren & Anor v UP No 396 that where various owners have strong but disparate views, the OC makes its own application to ACAT to make the various owners parties to the case in their own right, so each of them has to defend their own arguments. Consequently if any one party refuses to defend their position they are effectively withdrawing their arguments.
However if the OC can speak with the majority voice, it does so and leaves it to others to join themselves to an action on their own behalf if they want to do that.
How can the EC Code of Conduct be enforced?
In Leonard v Michie, ACAT noted that the Code applies to EC members personally and decided that an owner can bring an action seeking an Order under S129 that named EC members adhere to the Code as S46 requires and refrain from acting contrary to the Code as S46 requires.
ACAT noted no penalty can be enforced against EC members found not to be adhering to the Code but concluded Orders can certainly be made against them to adhere to the Code.
The Appeal Panel in Johnson v UP4373 noted that ACAT makes Orders not findings or opinions about the conduct of people.
Does ACAT have the power to remake an Executive Committee decision?
Yes.
The ACAT Appeal Panel in Johnson v UP4373 makes very clear that ACAT has the power to stand in the shoes of the EC and make the decision. If ACAT agrees with the EC, the EC decision stands. If ACAT’s decision is different, it can vary or remake the EC decision.
Should ACAT always seek to remake the EC’s decisions?
The ACAT Appeal Panel in Johnson v UP4373 concluded that if ACAT is asked to make an order voiding or revoking the EC’s decision it must turn its mind to remaking the decision and testing whether the decision is reasonable in the circumstances.
Are there limits on ACAT substituting its own decision when undertaking a merits review?
Yes.
The position ACAT might take in any particular case is probably very dependent on the facts of case.
In Brudenhall v UP202, ACAT was asked to substitute a lawful resolution that had never been put to an OC for a lawful resolution that was put and appropriately passed on the basis that the substitute resolution was more equitable to all the owners.
ACAT outlined the process of a merits review under Section 129(1)(f) of the UT(M)A at length but found itself limited to amending the motion “within the limits applicable to the original decision.”
ACAT found the proposition the Applicants were asking for was a step too far. They were asking ACAT to decide at a merits review to put into place a proposition that was almost the complete opposite of the resolution that was adopted by the OC and never rescinded or amended. So ACAT concluded that the only lawful options open to it were revoke the resolution or leave it as it was. ACAT decided to leave it as it was and let the owners change the situation themselves if they chose to.
If an owner suffers loss as a result of the OC not performing its statutory duties can the owner claim financial compensation?
Probably not under ACAT’s unit title jurisdiction.
In Riley v UP706, ACAT concluded that a claim for compensation, whether as a negligence claim or a claim for breach of statutory duty, probably cannot be brought under the UT(M)A. However, a civil claim for compensation could be lodged and argued along with a UT(M)A dispute.
Can an EC apply to ACAT for an order that they can enter a unit and perform work, like removing an unauthorised structure?
Probably No.
In UP116 v Nicholson, ACAT was quite clear that the OC does not, without the owner’s consent, have the right to enter a unit other than for the reasons and with the provisos set out in Ss 28 and 29 and default rule 10 of the UTMA. Section 129(1)(l) of the UTMA deals with orders for the removal of an animal and would necessarily require entry to a unit, but there is no other specific provision in section 129(1) that deals with access to units. ACAT was not therefore willing to give the EC a power it does not have when it could order the owner to undertake the removal themselves, which it did in this case.
If the owner failed to carry out the order the EC or OC can pursue the enforcement of that order in the Magistrates Court pursuant to Part 2.18 of the Court Procedure Rules 2006, and in particular rule 2442. The EC or OC would of course have to comply with the provisions for commencing legal action in the UT(M)A and may be able to recover the legal costs under S 31 of the UTMA.
So the EC or OC could well be better off seeking the order they are very likely to get rather than one ACAT is most unlikely to grant.
If you vote against an unopposed resolution and the matter goes to ACAT do you need to defend why you voted against the resolution?
Yes.
In Floro v UP 630, an AGM had agreed that owners could seek use of a small part of common land to facilitate the building of carports. When an owner sought the necessary special privilege over 1.65 sq mtr of common land, one owner voted against so the request failed. But that owner then refused to take any part in the ACAT proceeding brought by Floro to get that objection overturned.
ACAT took the view that the owner’s refusal to either outline the basis of their opposition or defend their position meant ACAT was free to conclude the opposition was unreasonable.
Can ACAT award costs against the party that loses a case? So can an OC have costs awarded against it?
Yes. And costs can be awarded against owners as well.
ACAT decided this issue in Lanfranchi v UP 806, (civil dispute) [2011] ACAT 83. The presumptive rule is that each party at the Tribunal bears their own costs but the Tribunal has the discretion to award costs where it sees that one party has brought about the action on frivolous grounds, has made decisions on irrelevant grounds, is not acting in good faith or has prolonged the action by not accepting a reasonable offer of settlement
ACAT concluded that as the EC persisted in defending its unreasonable decision after the hearing found the decision was unreasonable, costs should be awarded to the Applicant from the date of the settlement offer (ie seven weeks before the hearing).
In Webster v UP 3967, ACAT awarded costs against the OC, which was represented by its manager, because the manager failed to action the Orders and prepare for and attend a hearing thereby delaying resolution of the matter and compensation of the applicant.
ACAT said while it accepted that there was no intention on the part of the respondent to delay the hearing of the matter, the fact is that the resolution of the matter was delayed as a direct result of the respondent's conduct.
This would indicate that ACAT is prepared to award costs under a less stringent test than it applied in Lanfranchi.
As many OCs are represented by their manager before ACAT the Webster decision suggests that ECs should keep themselves appraised of the progress of any ACAT action.
Recently ACAT has become more willing to apply costs against losing parties generally (see Davidson and Craven), so all parties should be more circumspect about allowing disputes to go unresolved.
Can ACAT remove EC members or ban owners from being elected to the EC in future?
No.
In Leonard v Michie, ACAT was firm that there was no power for ACAT to remove a member but noted the OC can do that under S39 (5). ACAT found no power for itself or the OC to ban owners from exercising their rights to stand for election. It was up to owners to elect who they wanted to the EC.
Can an EC or OC be statue barred from taking action against an owner?
Theoretically Yes.
The ACT Limitations Act provides that action cannot be taken if it is not taken within six years of the event that gives rise to the claim.
UP 68 v Haughey, deals with when the cause of action arises.
ACAT’s arguments suggest that, if an owner made some infringement and other owners, the EC and the OC had been complaining about it ineffectually from shortly after its occurrence, the owner could claim action was statute barred after six years.
On what grounds does ACAT dismiss or strike out an action as frivolous and vexatious or lacking in substance and merit?
In UP 68 v Haughey, ACAT decided that it had to conclude an action was very obviously being brought to harass or annoy another party or than it obviously did not involve objective facts or an arguable point of law before it could strike it out.
In Maher v UP3115, ACAT took a stronger view that S 32 of the ACAT Act gives the Tribunal power to dismiss an application that is frivolous, vexatious, lacks substance or otherwise amounts to an abuse of process.
Can an owner go to ACAT and claim against anyone potentially at fault and expect ACAT to sort out who they should be claiming against and for what?
No.
In Adam v CHU Underwriting (2007), Mr Adam failed against both CHU and his upstairs neighbours because the Small Claims Court found that he had no relationship to CHU and that his neighbour was not responsible. On both counts he should have taken action against the OC.
The decision suggests that any owner should get informed advice before undertaking scatter gun action and work out against whom they should proceed. In short, it might be prudent for unit owners to always include the OC itself in any claim.
In Garcia v UP 10 the owner lost a substantial amount of rent because a unit was made uninhabitable by a water leak on common property. All the parties involved, the owner, the manager, the insurance company and the builder failed to take action to rectify the damage. But the owner was not able to claim the lost rent that the insurer refused to pay because the grounds of his claim were not made out and the Senior Member declined to rectify it.
In Johnson v UP4373 ACAT noted that …
The Tribunal does not have a general regulatory role under the UTM Act. Its jurisdiction is determined by the kinds of disputes that may be brought before it for determination and the kinds of orders it may make in accordance with section 129. The Tribunal is not vested with a general power to simply inquire into the conduct of an owners corporation or executive committee.
Is the monetary limit on a unit titles matter in ACAT $10,000?
No.
In the several cases of Levet and Levet v Dalla, ACAT repeatedly dealt with this and the Master of the Supreme Court agreed that ACAT’s unit title jurisdiction comes from the Unit Titles Act and the UT(M)A and the $10,000 limit that applies to ACAT’s civil dispute jurisdiction does not apply to unit title matters.
Is it true that the amount of money ACAT can require one party to pay another is limited to $1,000?
No.
In Levet and Levet v Dalla (Appeal) AA 13/16 the Appeal Panel dismiss this proposition.
Is it true that only the OC can take action relating to the common property?
No.
In Damiano and UP 584 it was suggested that only the OC can commence an action about the common property, presumably against an individual owner. The Senior member dismissed that contention as not consistent with Ss 125 and 128 of the UT(M)A.
Amendment to S125 now makes clear that an owner can take action against a manager.