Repercussions for breaching Model Rules and VCAT Orders.
The Owners Corporation Act 2006 (VIC) ("OC Act") outlines that the Rules of an Owners Corporation that are binding on thThe Owners Corporation Act 2006 (VIC) ("OC Act") outlines that the Rules of an Owners Corporation that are binding on the Owners Corporation, lot owners, lessee or sub-lessee of a lot and occupiers of lots. The Owners Corporation Regulations 2007 ("OC Regulations") prescribe the Model Rules that apply to Owners Corporations who have not made their own registered Rules. Owners Corporation, lot owners, lessee or sub-lessee of a lot and occupiers of lots. The Owners Corporation Regulations 2007 ("OC Regulations") prescribe the Model Rules that apply to Owners Corporations who have not made their own registered Rules.
In the recent Victorian Civil and Administrative Tribunal case of Kanter v Milroy Investments Australia Pty Ltd [2015] VCAT 90, there were serious repercussions for lot owners who negligently or deliberately breached the Model Rules and VCAT Orders. Kanter (“the Applicant”) and Milroy Investments Australia Pty Ltd (“the Respondent”) were members of an Owners Corporation for a commercial property made up of factories.
The Applicant conducted business within his lot in manufacturing stationary. The Respondent conducted business within his lot producing certain materials for motor vehicles. The factories of each party are side by side where they share a driveway that is common property.
The Applicant alleged that the Directors of the Respondent continuously contravened the Model Rules by allowing motor vehicles of all descriptions to regularly park on the Common Property, preventing the Applicant’s customers from entering the premises safely, or at all. The Tribunal’s findings indicated that the Respondent had breached the Model Rules and previous VCAT orders by obstructing the lawful use of the Common Property entitled to be used by other lot owners and their customers, and that the Respondent had obstructed the driveway and pathway to a lot by parking a vehicle on Common Property. A significant amount of evidence about the Respondent’s behaviour was given.
VCAT ordered that the Respondent guilty of contempt of the VCAT and ordered the Respondent to pay a $10,000.00 fine. The Respondent was also ordered to pay the Applicant the amount of $2,996.30 for reimbursement of filing fees. This case shows that breaching the Model Rules can have significant financial repercussions for lot owners and makes enforcing rules an attractive option for Owners Corporations regulating Common Property.
Any further questions, please contact a member of our Owners Corporation team.
