The applicant is the Owners Units Plan No. 14 and the respondent is Mr Wright from Unit 2.
Since 2009 the owners had been trying to stop Mr Wright from using the common car park to store cars and car parts in ways which annoyed and inconvenienced other owners. The owners were also at times concerned, but to a lesser extent, about the untidy and congested state of Mr Wright’s yard. In late 2017 the owners’ focus of concern shifted from Mr Wright’s use of the car park to the use of his own unit, when his refusal to give the corporation’s insurer access to his unit resulted in the insurer refusing to renew cover beyond February 2018.
Insurance from a second insurer was able to be secured but only at a significantly higher premium. In March 2018 an assessor working for the second insurer conducted a risk assessment survey of the units plan including Mr Wright’s yard and warehouse and did not identify any risks associated with his unit.
By 2020, the owners risked losing insurance coverage entirely despite the statutory obligation to maintain building insurance pursuant to section 100.
At the executive committee meeting on 19 June 2018 it was resolved to “instruct the Managing Agent to issue Rule Infringment Notices against unit 2 for …”. Significantly the resolution did not identify which rules Mr Wright had contravened or how he had done so.
On 2 July 2018 the strata manager issued five RINS and each RIN identified the rule contravened and described the contravention.
Two of these RINs related to Mr Wright’s use of the common car park and the other three related to the use of his lot property. The owners alleged that Mr Wright did not remedy the infringements as required by the notices and the owners applied to ACAT for orders pursuant to section 109(3)(f) of the UTMA.
At the outset ACAT focused on the meaning of reasonable belief under section 109(1) and held that the test of reasonable belief is both subjective (that is, did the executive committee genuinely hold the requisite belief that Mr Wright had infringed the rule stated in the RIN) and objective (that is, was such a belief reasonable according to the standards of a reasonable person in similar circumstances?). The onus of proof is on the applicant. In this case, a reasonable hypothetical person is a reasonable executive member performing their functions in accordance with the UTMA including the mandatory executive committee Code of Conduct. This reasonable person is neither a lawyer nor an expert in the law of unit titles in the ACT. Finally, the belief under section 109(1) must be formed before the power to authorise a RIN under section 109(2) can be exercised.
ACAT noted that the executive “committee’s failure to be specific made it difficult to determine both whether it held the requisite beliefs at the relevant time, and if so whether such beliefs were reasonable in the circumstances”. Notwithstanding this, ACAT accepted that the resolution should be read in the historical context and then proceeded to have regard to the history leading up to the 19 June 2018 meeting.
Two of the RINs issued to Mr Wright related to his use of the common car park, more specifically, in contravention of the Storage Rules and Default Rule 5. Mr Wright stored vehicles in the common car park for extended periods, and failed to remove them despite repeated requests to do so. Mr Wright contravened Rule 5 as the illegal parking of his cars caused access difficulties to the owners and occupiers of other units. The Tribunal was satisfied that at the time the RINs were authorised, a reasonable executive member could have believed that Mr Wright contravened both rules (in addition to the genuine belief Mr Wright had contravened those rules). Further Mr Wright’s past behaviour gave reasonable grounds to believe that he was likely to continue or repeat the contravention.
ACAT then made orders that Mr Wright not park or store goods on the common property and further that he remove any goods (including motor vehicles) from common property.
The other three RINs issued to Mr Wright related to the use of his own unit. The owners alleged that Mr Wright contravened Default Rules 3, 6 and 7.
Rule 3 states that a unit owner must ensure that the unit is in a good state of repair. The owners believed that Mr Wright had contravened this rule due to the “unkempt state of the unit with overflow of parked cars within the unit”. The Tribunal noted that the executive confused the notions of repair and tidiness. Mr Wright’s unit did not need to be mended or fixed, rather, it needed to be tidied. Therefore, the executive did not have requisite belief (subjective or objective) for the purposes of section 109(1).
Rule 6 provides that a unit owner must avoid the hazardous use of a unit. The owners were concerned that Mr Wright’s yard could hamper efforts to contain an emergency, including a fire. The Tribunal noted that there was an obvious logical connection between the potential scenario above and the harm Rule 6 was designed to address. The Tribunal was therefore satisfied that the executive held the genuine belief of contravention of Rule 6. However, the test of reasonable belief was not met as there was no evidence that when the executive authorised the RINs, any current risks had been identified in Mr Wright’s unit and there was no attempt to test their assumption that Mr Wright’s yard created a hazard notwithstanding the power under Default Rule 10 to inspect unit 2.
Rule 7 provides that a unit owner must not cause nuisance or substantial annoyance. The owners viewed Mr Wright’s refusal to provide the insurer with access to his unit a contravention of Rule 7. However, the Tribunal found that it was not nuisance because it was ongoing, and any harm caused was not a reasonably foreseeable consequence of the refusal.
In summary, the Tribunal had jurisdiction to hear the application for orders in relation to Mr Wright’s failure to comply with the two common property RINs. However, the RINs relating to Mr Wright’s lot property were not properly authorised in accordance with section 109(1).