Lot owner unsuccessful in obtaining an order revoking the appointment of the Owners Corporation manager for Richmond block of nine units

The case demonstrates the very broad scope of issues that can arise under the Owners Corporations Act 2006 which can be determined by VCAT. These include VCAT:

1. Confirming that lot owners do not have a contractual relationship with the owners corporation manager. This is because it is the owners corporation that enters into a management contract with the manager not individual lot owners. Notwithstanding this, a lot owner may apply to VCAT under Section 122 of the Owners Corporations Act 2006 for an order revoking the appointment of a manager. The Tribunal will not usually exercise that power unless the manager has been proven to have been in breach of the manager’s duties. It should be noted that an order of termination (absent a breach or right under the contract to terminate the manager) may put the owners corporation in a position that the owners corporation is still subject to certain contractual arrangements;

2. Short Notice of AGM: Whether or not a manager giving short notice (two-days short) of an annual general meeting renders the resolutions passed at the AGM legally invalid or not;

3. Not executing instrument of delegation properly: Whether or not a failure to comply with the legal requirements for applying the common seal to an instrument of delegation to a Chairperson renders the delegation legally invalid or not;

4. Telephoning some lot owners before the AGM but not others: Whether or not a manager’s conduct of telephoning certain lot owners, but not others, to encourage them to attend the Annual General Meeting amounts to a breach of the manager’s duty, or whether it is simply discourteous to those lot owners not called;

5. Accessibility of Owners Corporation Register: Confirming that an owners corporation manager must keep the owners corporation register in a manner that is readily accessible to lot owners who wish to inspect it – and confirming that there is no reason why a manager cannot keep a computerised record of an owners corporation register – but it must do so in a way that makes the details on the register readily identifiable. Providing a computer to review documents on a USB that were not in any understandable order – does not comply with this requirement;

6. Independent Advice: Confirming that a Committee is allowed to engage independent legal advice on issues that the owners corporation is facing, especially where a lot owner is raising a dispute.

Ultimately, the lot owner, who had been seeking a number of VCAT orders including an order revoking the appointment of the manager, was only successful in obtaining an order that he and his brother (who was also a lot owner) be appointed to the Committee. However, VCAT’s lengthy reasons show that lot owners may raise a broad range of legal issues in any owners corporation dispute.

Tisher Liner FC Law have specialist expertise in providing owners corporations in Victoria with easy to understand legal advice. If you would like a quote please email the details of your matter to [email protected].

VCAT Case reference: Marcus v Turnbull Cook Body Corporate Management Pty Ltd (Owners Corporations) [2020] VCAT 298 (10 March 2020)