VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL
civil DIVISION
OWNERS CORPORATIONS LIST		VCAT REFERENCE NO. OC1224/2023 and
OC2/2023 
CATCHWORDS	
Dispute concerning CCTV cameras, awning and air conditioning unit alleged by the owners corporation to have been installed without its consent, contrary to Rule 5.2 of the Model Rules; giving notice of intention to effect such installations does not amount to seeking consent; validity of breach notices issued; consideration of the conduct of the parties; imposition of civil penalties on lot owner for breach of the Model Rules; Owners Corporations Act 2006 ss 164, 165, 167, 169G and Schedule 2.	

In OC2/2023		
APPLICANT	Natalie Hong Qiang Fang	
RESPONDENT	Owners Corporation Plan No.RP001311	
In OC1224/2023		
APPLICANT	Owners Corporation Plan No. RO001311	
RESPONDENT	Natalie Hong Qiang Fang	
WHERE HELD	Melbourne	
BEFORE	Senior Member L Johnson	
HEARING TYPE	Hearing	
DATE OF HEARING
DATE OF FINAL SUBMISSIONS	27 May 2024 and 17 June 2024
28 June 2024	
DATE OF ORDER	10 January 2025	
CITATION	Fang v Owners Corporation Plan No. RO001311 (Owners Corporations) [2025] VCAT 32	

Order

1	By 14 February 2025, Ms Fang must remove the CCTV cameras installed by her.
2	By 14 February 2025, Ms Fang must remove the awning installed in the courtyard of Ms Fang’s property.
3	By 14 February 2025, Ms Fang must remove the external component of a split system air conditioning unit installed by her some 2 metres above ground level, and relocate the unit so that it is not visible from outside Ms Fang’s lot.
4	By 31 January 2025, Ms Fang must pay the owners corporation $5,000 in satisfaction of a levy of $20,000 imposed by resolution of the Owners Corporation on 19 December 2022, in anticipation of future legal costs.
5	By 31 January 2025, pursuant to s 166 of the Owners Corporations Act 2006, Ms Fang must pay to the owners corporation a Civil Penalty of $2,371.08 in respect of the breaches.
6	Any application for costs must be sent to the Tribunal and to the other party by 28 February 2025.
7	Any response to any application for costs must be send to the Tribunal and to the other party by 14 March 2025.

L Johnson
Senior Member			

APPEARANCES:		
For Applicant  (OC)	Mr K Mihaly of Counsel	
For Respondent (Fang)	Mr D Colman of Counsel	

Reasons
1	These proceedings concern a dispute affecting a four lot subdivision in Kew. The subdivision comprises two buildings, with basement level carparking. Lots 1 and 4 are located one above the other in the building at the front of the land. Lots 2 and 3 are located one above the other in the building at the back of the land.
2	In this subdivision, the boundaries defined by a building are the external face of the building. The common property in the subdivision comprises a driveway to the west of the buildings, a pedestrian pathway to the east of the buildings, an entrance way to lots 1 and 4, and land above and below the lots. 
3	Ms Fang owns residential lot 2, which is at ground level, and accessory unit 6 which is a basement level garage. She acquired the lot in February 2011. Initially, Ms Fang let her apartment to tenants. Lot 1 is also tenanted. Lots 2 and 3 are owner occupied. Early in 2021 Ms Fang undertook a substantial renovation to her lot. She gave evidence in the hearing that she moved into her lot in March 2021.
4	In proceeding OC2/2023, commenced on 12 January 2023, Ms Fang seeks Orders:
a.	that certain breach notices and final breach notices issued by the owners corporation be “removed from the Record and Register” of the Owners Corporation;
b.	that the “allowance” for $30,000 in legal costs be “removed” from the owners corporation’s budget;
c.	termination of the contract of appointment of the manager, on the grounds that the manager “knew or ought to have known the breach notices were unenforceable”;
d.	appointment of an administrator; and 
e.	costs.
5	For an Order to be made appointing an administrator to the owners corporation, Ms Fang must demonstrate grounds that justify allocation of all decision making for the owners corporation to an independent third party appointed by the Tribunal.
6	Ms Fang asserts that the owners of the three other lots, and the manager, have acted to perpetrate a fraud on the minority lot owner, herself, and to intimidate her. She says that the conduct of the other lot owners, and the manager, constitute a ‘fraud on the minority’ and this conduct invalidates the breach notices and special levy notices that were issued, and warrants the removal of the manager and appointment of an administrator.
7	Following a compulsory conference conducted on 14 September 2023, orders were made, by consent, under which Ms Fang agreed to permit the owners corporation to have an engineer conduct non-destructive inspection of her lots, and to permit the owners corporation and its tradespeople, on giving 7 days’ notice, to enter her Lot for access to and inspection of common property or for window cleaning or termite inspection. It is apparent, from that Order, that there were many more issues in dispute between the parties than those raised by Ms Fang.
8	The owners corporation commenced proceeding OC1224/2023 on 28 September 2023. In that proceeding, the owners corporation seeks Orders requiring Ms Fang
a.	to remove, or alternatively, reorient, CCTV cameras alleged to have been installed, variously, on Ms Fang’s lot and on common property, without the approval of the Owners Corporation, and which the Owners Corporation say are an unreasonable invasion of the privacy of other lot owners;
b.	to remove “a large awning” installed in the courtyard of Ms Fang’s property which is said to have been attached to common property without the Owners Corporation’s approval; 
c.	to remove the external component of a split system air conditioning unit, and to seek approval of the owners corporation before installing the unit in a new location; and
d.	to pay $5,000 in satisfaction of a levy of $20,000 imposed by resolution of the Owners Corporation on 19 December 2022, in anticipation of future legal costs; 
e.	to pay a Civil Penalty [of $1,100, pursuant to s 166 of the OC Act] in respect of each breach; and 
f.	costs.
9	I conducted two days’ hearing, on 27 May 2024 and 17 June 2024. I heard evidence from Ms Fang, and from: Lisa Moore, who owns lot 3 above Ms Fang, Graham Spence, who resides in lot 1, which is owned by Marian Bourke, and Peter Hore and Hazel Stokes-Hore who own and occupy lot 4. I also heard evidence from the manager, Ricky McVeigh and from 5 expert witnesses called by the Owners Corporation: Damien O’Sullivan, real estate agent; Mitchell Fraser, air conditioning mechanic; Dr Gabrielle Gottschild, general practitioner; Peter Kyriakou, builder; and Erica Maloni, builder.
10	At the end of the hearing, the parties were directed to file final written submissions. Having considered the evidence, and all submissions, I now provide my decision.
11	The parties each filed separate Tribunal Books. The Owners Corporation’s Tribunal Book is referred to as Tribunal Book 1 in these reasons. That filed by Ms Fang is referred to as Tribunal Book 2. The owners corporation filed additional documents in the form of Tribunal Book 3 on the first day of the hearing.
12	In her Points of Claim, Ms Fang gave details of seven breach notices to which she objects:
a.	a breach notice dated 30 March 2022, in relation to the installation of four CCTV cameras by Ms Fang;
b.	a breach notice dated 30 March 2022, in relation to the installation of a split system air-conditioning unit on the external wall of Ms Fang’s lot;
c.	a breach notice dated 30 March 2022, in relation to replacement of a gas fireplace flue by Ms Fang;
d.	a breach notice dated 30 March 2022, in relation to the installation of “a small roof covering part of the applicant’s courtyard” in circumstances where the courtyard is within her lot;
e.	a ‘final breach notice’ dated 10 October 2022, regarding the applicant’s failure to provide access across her lot to the common property “gardener’s toilet”;
f.	a ‘final breach notice’ dated 10 October 2022, in relation to the renovation of the applicant’s bathroom;
g.	a ‘final breach notice’ dated 10 October 2022, in relation to the replacement of a side fence and gate which the applicant says was located entirely within her lot.
13	The owners corporation confirmed in the hearing that it no longer seeks to rely on the breach notices relating to the flue, access to the ‘gardener’s toilet’, renovation of the bathroom or the replacement of the side fence. I have not heard any evidence in relation to those breach notices, and make no decision about them in these reasons.
14	Accordingly, the breach notices that are in contention in these proceedings are only those relating to the installation by Ms Fang of:
a.	CCTV cameras;
b.	an awning in her courtyard area; and
c.	an external split system air conditioning unit.
15	The issues to be determined in this proceeding are
a.	Has Ms Fang acted in breach of the requirements of the Owners Corporations Act 2006 (‘OC Act’), in respect of the CCTV cameras, the awning and the air conditioning unit?
b.	Were the breach notices in contention validly issued by the Owners Corporation in accordance with the requirements of the OC Act?
c.	Should Orders be made requiring Ms Fang to remove the CCTV cameras, the awning and the air conditioning unit?
d.	Are there grounds for the imposition of civil penalties?
e.	Was the decision to raise a special levy of $30,000 made in accordance with the requirements of the OC Act?
f.	Is Ms Fang liable to pay $5,000 in respect of that levy?
g.	Should the appointment of the manager be terminated?
h.	Should an administrator be appointed?
16	It will be convenient to begin with an examination of the breach notices, but before turning to that detail I will refer to the relevant Owners Corporation Model Rules which Ms Fang is said to have contravened.
Model Rules
17	The owners corporation relies on the following Model Rules:
1.1	Health, safety and security of lot owners, occupiers of lots and others
A lot owner or occupier must not use the lot or permit it to be used so as to cause a hazard to the health, safety and security of an owner, occupier or user of another lot.
…
4.1 	Use of common property
(1)	An owner or occupier of a lot must not obstruct the lawful use and enjoyment of the common property by any other person entitled to use the common property.
4.3 	Damage to common property
(1)	An owner or occupier of a lot must not damage or alter the common property without the written approval of the owners corporation.
…
5.2 	External appearance of lots
(1)		An owner or occupier of a lot must obtain the written approval of the owners corporation before making any changes to the external appearance of their lot.
(2)		An owners corporation cannot unreasonably withhold approval, but may give approval subject to reasonable conditions to protect quiet enjoyment of other lot owners, structural integrity or the value of other lots and /or common property.
5.3 	Requiring notice to the owners corporation of renovations to lots
An owner or occupier of a lot must notify the owners corporation when undertaking any renovations or other works that may affect the common property and/or other lot owners’ or occupiers’ enjoyment of the common property.
18	Section 113 of the OC Act is also relevant. It provides
A lot owner must give notice to the owners corporation of any application by the lot owner for a building permit or planning permit or the certification of a plan of subdivision affecting the lot.
Has Ms Fang acted in breach of the requirements of the OC Act?
19	The evidence of the parties in relation to each of the installations is that Ms Fang did not seek the written approval of the owners corporation as contemplated by Rule 5.2. Rather, in each case, Ms Fang sent emails in which she announced her intention to carry out the works. Ms Fang submits that, in notifying the lot owners and the manager in this way, she was entitled to assume, if there was no response from the lot owners, that they acquiesced in her proposed course of action.
The awning
20	Ms Fang relies upon the following email, which she sent to the manager at 9:55am on 8 April 2021 as her “notice” of her proposal to install the awning:
Hi Ricki
I tried a couple of times to call you, all not successfully.   When you have a chance, please give me a call.  I am free after 4.00pm today (going to a meeting very soon). 
See the attached photo.  When we were cleaning the underside (it looked a lot worse and disgusting than the photos) some big “bubbles” peeled and left concrete exposed without a protection layer.  It should be fixed sooner rather than later to avoid further damage.
If you have a trades, please arrange the repair work, otherwise we are more than happy to help send a person we know to give you a quote.
The water seeping into the concrete from above has to be fixed as soon as possible.  I don’t think the damage is covered by the insurance when we know the problem and do not fix it.
Reading Lisa’s email (see below after this email), it appears the only option we could possibly have is to erect a verandah.  We will proceed with this.
21	It seems that Ms Fang’s email is referring to damage to the underside of Ms Moore’s balcony. The copy of the email set out above includes an email Ms Fang had received from Ms Moore, the day before, in which Ms Moore had said to Ms Fang
Dear Natalie
The issues raised by you are clearly matters for the Body Corporate (sic) and should be raised with them.   I deny that I have been responsible for release of water from my balcony other than natural run-off.  Please direct any further communication on the issue to the Body Corporate.
22	Presumably, Ms Moore was responding to an email from Ms Fang in which an allegation about “release of water” from Ms Moore’s balcony had been made. That earlier email from Ms Fang is not in evidence before me.
23	The installation of a “verandah” clearly involves an alteration of the external appearance of Ms Fang’s lot. Ms Fang gave no details about the proposed “verandah” in her email to the manager. There is no evidence before me of Ms Fang seeking written approval of the owners corporation, as contemplated by Model Rule 5.2. Equally, there is no evidence before me of the manager drawing Ms Fang’s attention to Model Rule 5.2 or asking Ms Fang to provide details of the proposed construction adequate to enable the owners corporation to consider the proposal.
24	Four months later, on 3 August 2021, Ms Fang obtained planning permission from the City of Boroondara to install a large awning in her courtyard. There is no evidence before me that Ms Fang gave notice to the owners corporation of the applications for building and planning permits, as she was required to do by s 133 of the OC Act.
25	On 20 September 2021, after the planning permit had been granted, and before construction had commenced, Ms Bourke sent an email to Ms Fang, and copied this to the other lot owners and to Ms McVeigh, informing Ms Fang of s 133 of the OC Act. Ms Bourke’s email noted
It is at times frustrating to have to work with the Owners Corporation but a necessity.  You have to seek permission before you can proceed with this project.  This permission should have been sought before the application proceeded to council.  Now you are aware, I look foreword (sic) to seeing your project proceed through the appropriate channels.
26	Apparently, Ms Fang did not reply to this email: there is no further email correspondence in either Tribunal Book.
27	The Tribunal is aware that planning permits granted for works on land that is part of a subdivision, where an owners corporation is in operation, often include a notation that the grant of the permit does not override the need for compliance with any applicable Rules of the Owners Corporation. The responsible authority later confirmed in writing to the owners corporation that the issue of a planning permit is not contingent on owners corporation approval being obtained in advance of the planning permit, and that the issue of the planning permit does not negate the need for compliance with the Model Rules. Ms Fang has not suggested that she was under any misapprehension as to the effect of the planning permit.
28	Later, in response to enquiries by the manager, the Council also confirmed that the endorsed plans for the awning “clearly show that the verandah would not be attached to the balcony of [Lot] 3”.
29	The awning appears to have been installed on 25 November 2021, as this date is referred to in the Notice to rectify breach dated some 6 months later, on 28 March 2022. The Notice lists the breaches as
Rules	Description of breach	Date of breach	
4.3 Damage to common property

5.2(1) [Alteration of] external appearance of lot	erecting aluminium roof over courtyard approx. 3m x 2.5m no permission sort (sic) or granted by the Owners Corporation
attaching the structure to the south wall of the building in a number of places
undertaking further work to secure awning to south wall and application of sealant
Failing to comply with request to stop work	25 November 2021

4 February 2022	

30	The photographs of the awning submitted by the owners corporation clearly show that it is connected by a metal beam to the external wall of the building. The owners corporation suggests that the construction is not in accordance with the terms of the planning permit, and/or that the construction has been altered since its initial construction.
31	Ms Moore gave evidence in the hearing, that the installation of the awning affects her quiet enjoyment of her first floor lot, its value, and her safety and security.
32	Ms Moore’s evidence was consistent with a complaint dated 4 August 2022 in which she stated:
The awning is visually unattractive and has destroyed my outlook from my south facing windows and balcony.  It has also created ready access to my balcony and rear door … and has had a negative impact on our safety and security”
33	Ms Fang objects to this complaint, and others, because, in the section where the complainant is to record what has been done to try to resolve the complaint, Ms Moore recorded
Natalie refuses to engage with the Owners Corporation or individual owners.  I have contacted the OC Manager and other owners to express my dismay and concern.  These have been brought to Natalie’s attention.  
34	Ms Fang asserts that the reference to ‘refuses to engage’ appears in the complaints made by each of the lot owners and in the breach notices. On the basis of the similarity of language, Ms Fang asserts that the other lot owners, and the manager are working together against her, in what she says is a ‘fraud on the minority’. For the reasons set out later, I do not consider that there has been any ‘fraud on the minority’.
35	Model Rule 5.2(1) requires a lot owner who seeks to alter the external appearance of their lot to seek the written approval of the owners corporation.  Model Rule 5.2(2) requires that the owners corporation not withhold approval unreasonably, but also provides that the owners corporation may give approval subject to reasonable conditions to protect quiet enjoyment of other lot owners, structural integrity or the value of other lots and or common property.  The owners corporation is entitled, and required, to turn its mind to the issues of quiet enjoyment, structural integrity and value before giving its approval to works proposed to alter the external appearance of a lot.         Equally, a lot owner is required to act reasonably in assisting the owners corporation to undertake that consideration.
36	Similarly, a lot owner who makes an application for a building permit or a planning permit, is required, by s 133 of the OC Act, to notify the owners corporation of that application.  Such notification would be expected to include a copy of the application, and include the technical specifications required to be given in an application for such a permit.
37	I am satisfied on the evidence before me that the owners corporation was not given the opportunity it is entitled to be given, to consider the construction of the awning before the works were carried out.
38	I note the evidence given by Mr Kyriacou that the awning is structurally attached to Lot 3’s balcony, and noted that the building permit did not provide for any attachment to Lot 3.  There is no evidence before me that the awning as presently constructed does not pose a hazard to safety and security, contrary to Model Rule 1.1.
39	In all the circumstances, I am satisfied that Ms Fang made no real attempt to meet the obligations placed on her by the OC Act and the owners corporation’s rules in relation to the awning. The assertion that an email that gave no more detail than “it appears the only option we could possibly have is to erect a verandah” should be taken as both notice of proposed works for the purpose of s 133 of the OC Act, and a request for written approval for the works for the purposes of Model Rule 5.1, suggests that Ms Fang has not taken seriously her obligations under the OC Act and the Model Rules.
The CCTV cameras
40	Ms Fang’s email regarding the security cameras was also sent on 8 April 2021. She said:
As a courtesy, we would like to advise that we will be engaging a licensed security company to install a security camera system for our apartment. 
The planned security cameras will be installed at the following locations
1. One camera outside the lower end of our north facing balcony wall to focus on our garage.
2. One camera on the wall just inside of and above our courtyard gate to focus on the our two bedroom windows and the courtyard gate all of which are facing an unsecured common footpath.
One or two cameras inside our courtyard to focus on our courtyard area.
We have checked all relevant laws and regulations, in particular privacy laws.  These will be closely observed and followed to ensure lawful compliance.  Signs will be displayed to advise that a security camera is in operation.
41	The proposal to install security cameras on the external face of Ms Fang’s lot was, of course, a proposal to alter the external appearance of her lot, however minor the impact. She was required, by Rule 5.2 of the Owners Corporations Model Rules to seek the written approval of the owners corporation to the proposed installation. So, sending an email about this was not merely “a courtesy”, it was a necessary step to obtaining the approval of the owners corporation.
42	Ms Fang relies on approval for the installation of the cameras which was given at a Special General Meeting convened on 6 May 2021. The owners corporation disputes that the Minutes of that Meeting accurately record the decision of the owners corporation at that meeting.
43	The resolution recorded in the Minutes of the Special General Meeting on 6 May 2021 is as follows:
Unit 2 requested to install cameras in 4 cameras locations 3 in unit 2 court yard 1 on balcony wall within unit 2 lot to monitor intruder access points to unit 2 garage door.  Manager spoke to consumer affairs and the office of information commissioner and others and I could find no law to prevent the installation of cameras.
Vote take (sic) 2 fore (sic) 1 against 1 abstained 
Moved Trish Bourke Seconded Natalie Fang.
44	The four CCTV cameras were installed on or around 30 July 2021. The owners corporation says that the cameras unreasonably compromise the privacy of the other lot owners, because they are angled to surveil the common property pedestrian walkway, including the common entrance to Lots 1 and 4, and the common property driveway.
45	At the following Annual General Meeting on 24 August 2021, which Ms Fang did not attend, a further resolution was passed in relation to the security cameras:
General Business
Item 1: Security Cameras
Resolution:  The Owners Corporation resolved that the current orientation and coverage of the common areas by the security cameras installed by Owner Lot 2 & 6 are an invasion of the privacy of the occupants of the building and their guests.  This surveillance infringes the other owner and occupiers’ rights to use the common property and is a breach of Rule 4.1 of the Owners Corporation Common (sic) Rules 2018.
Action:  The Owners Corporation requires that the Owner Lot2 & 6 take action to reorient the cameras so that they no longer observe occupants’ movements through the common areas at the front entrance and the driveway and garages of the building, nor should they intrude on neighbours’ right to privacy in their backyards.  This action must be undertaken as soon as the current COVID 19 restrictions are lifted and to the satisfaction of the current occupiers of the building. 
46	Ms Fang responded to the Minutes of this Annual General Meeting, by email to Ms McVeigh dated 9 September 2021. In relation to the CCTV cameras, Ms Fang said
my security system installation and orientation fully meet the legal requirements.  The system was installed within my private property boundary by a licensed installer.  The accusation against me in the minutes of the meeting is false and self-serving to say the least.
I do not wish to repeat and correct your/others’ self-serving interpretation of the relevant laws, OC’s Act (sic) and false accusation here.  Owners’ personal preference and prejudices cannot override laws.  If is simply outrageous to demand us to forgo our legal right to please other owners’ personal preferences.
It should be on record that we will vigorously defend any actions that may be instituted upon us and in doing so will seek full costs incurred.
47	The evidence before me in this proceeding includes footage and recordings from the cameras, filed by Ms Fang. That footage and recordings demonstrate that the cameras do not focus, as Ms Fang proposed, on her garage, her courtyard area and her bedroom windows. The footage and recordings show clearly that at least one camera is directed the full length of the common property pedestrian access path, and that the audio recording settings of the CCTV system allow conversations many metres away to be recorded clearly. Another camera is directed almost the full length of the common property driveway. Both of these cameras capture the comings and goings, and conversations, of persons on common property.
48	In the course of the proceeding, Ms Fang was asked to produce the invoice for installation of the cameras. That invoice might be expected to record whether the installer held a private security operator licence under the Private Security Act 2004. It might also be expected to record the installer’s confirmation of compliance with the requirements of the Surveillance Devices Act 1999.  Ms Fang was unable to produce the invoice.  She filed an affidavit giving evidence that she had “misplaced it, or lost it, when renovating or moving house”.  I note that Ms Fang gave evidence in the hearing that she moved into the Lot in March 2021. The renovations to the Lot (which were also a source of friction with the other lot owners at that time) were carried out prior to her moving into the Lot.  The cameras were installed around 30 July 2021.  Ms Fang gave evidence that she had no bank records in relation to the name of the installer, because she had paid the installer in cash. It is remarkable that Ms Fang, who has demonstrated herself to be very particular about records, has not retained records that would, for example, enable her to demonstrate the date of purchase for warranty purposes, let alone in the context of the dispute which emerged within a few weeks of the installation of the cameras.   In the absence of an invoice, it is not possible to determine whether the cameras were indeed installed by a person or business holding a private security operator licence under the Private Security Act 2004.  There is simply no evidence before me to confirm the assertions made by Ms Fang as to the cameras’ compliance with the applicable laws.
49	Further, it is apparent from the evidence before me that, even if the minutes of the Special General Meeting, were, as Ms Fang asserts, an accurate record of the resolution passed at that time, nevertheless, the installation of the cameras has been effected quite differently from the proposal considered at that meeting. The installation effected by Ms Fang is not the installation that was approved by the owners corporation.
50	I am satisfied that Ms Fang has not complied with the OC Act and Model Rules in relation to the installation of the security cameras.
The air conditioning unit
51	On 6 June 2021, Ms Fang sent an email to the manager and to all other lot owners, saying
Hi All
We are going to install a split system (heating and cooling) unit in our main bedroom.  Unlike upstairs units, we can only place the external unit on the ground or mount on the wall but not on the roof.
Our main bedroom has two walls facing externally, one is facing north, the other is facing east, our private courtyard just behind the entry footpath.
We would prefer to contain the external unit within our courtyard and keep it out of sight as much as possible. We ought not affix the external unit permanently on the ground next to this east facing wall because the 5 gas pipes are just 300mm below the surface and it is also a thoroughfare in/out of our courtyard.  Therefore the only workable option is to mount the external unit on the east facing wall in our courtyard.
We are open to any constructive suggestions if any (sic).  The scheduled installation time is later this month.
Kind regards, Natalie and Steve

52	The split system was installed on 29 July 2021. Ms Fang says that the external unit was installed on the eastern wall, some 2 metres above ground level, and 800mm north of Ms Fang’s bedroom wall. 
53	Photographs filed by Ms Fang show that the unit is visible from the common property entrance to the building just north of Ms Fang’s courtyard fence, and that it is 7 brick courses below and some 4.5 brick lengths to the right of Ms Moore’s bedroom window. 
54	Photographs filed by the owners corporation show that the unit has been installed several centimetres above the level of the top of the fence and gate, and that the unit installed by Lot 1 is at ground level.
55	The owners corporation says that the installation of the split system involved alteration of the external appearance of Ms Fang’s lot, and that the use of the split system adversely affects Ms Moore’s quiet enjoyment of her lot.
56	At the Annual General Meeting on 24 August 2021 the following resolution was passed: 
Item 2: Installation of split system on East side of the building
Resolution:  That the Owners Corporation resolve that installation of the split system by the Owner of Lot 2 & 6, on the east side of the building, was unauthorised as the owner failed to seek the Owners Corporation’s agreement to the installation and location in accordance with Rule 5.2 and 5.3 of the Owners Corporation Common (sic) Rules 2018.  Further the OC recognises that the current location is undesirable and unacceptable as it fails to meet the Residential Best Practice Guidelines (Victoria) as its placed to close (sic) to Lot 3’s bedroom, it’s in clear line of sight to the front entrance of the building and fails to shield to contain noise and visual effects.
Action: That the Owners Corporation requires the Owner of Lots 2 & 6 to remove the split system unit from the east wall at the soonest opportunity and at her cost, noting any future proposals regarding its relocation must be formally presented to the Owners Corporation for consideration and agreement.  This action must be completed within 30 days of the current COVID 19 restrictions being lifted whereby building and construction work is permitted in residential settings.
57	The owners corporation says Ms Fang knew that the OC Act required lot owners to seek approval to install the air conditioning unit. The owners corporation refers to correspondence from Ms Bourke in May 2019 when Ms Bourke sought permission to install a similar air conditioning unit on the eastern wall of the building.
58	Mr Hore and Ms Stokes-Hore responded, suggesting that the unit not be placed under their bedroom window, but be located further away.  Ms Fang responded, saying  
the external unit can easily be placed on the ground and a small duct running between inside and outside wall (sic).  This is much less visible, and avoiding a big item “hang” on the wall.  ….
59	I am satisfied that Ms Fang understood the obligations placed on her, as a lot owner, by the OC Act.  I am satisfied that she chose to behave in a manner that was inconsistent with the obligation of the owners corporation to give consideration to the issues of quiet enjoyment, structural integrity of lots and common property, and value of lots and common property.  I am satisfied that, in the installation of the awning, the CCTV cameras and the air conditioning unit, Ms Fang was in breach of the requirements of the OC Act.
Were the breach notices valid?
60	There is no dispute between the parties that breach notices and final breach notices were given to Ms Fang by the owners corporation manager. Each of the three breach notices at issue in this proceeding was issued to Ms Fang on 28 March 2022.
61	Ms Fang says the breach notices and final breach notices were not properly authorised and that there was no “decision” of the owners corporation to give the breach notices.
62	Some time was spent in the hearing examining a number of complaint forms completed by various lot owners, and the issuing of the breach notices. The complaints made in respect of the air conditioning unit, and the awning are dated 4 August 2022, and the complaint in respect of the CCTV cameras is dated 1 August 2022. That is, the complaints were made some 5 months after the breach notices were given. I do not consider these complaint forms to be relevant to the validity of the breach notices, however, I return to a discussion of the complaints later in these reasons.
63	The provisions of the OC Act dealing with breach notices are in Division 1 of Part 10, Dispute Resolution, of the OC Act, sections 152 to 159. There are two pathways that may lead to a breach notice being issued.
64	The differing pathways depend on whether a complaint is made under s 152 of the OC Act or not. Section 152 of the OC Act provides that a lot owner, an occupier or a manager may make a complaint to the owners corporation about an alleged breach by a lot owner, an occupier, or a manager, of an obligation imposed on that person by the OC Act, the Owners Corporations Regulations 2018 (the ‘OC Regulations’) or the owners corporations rules.
65	If a complaint is made, the owners corporation must follow the dispute resolution process required by the Rules before taking any further action, and may only take further action if the matter has not been resolved. The dispute resolution process is set out in Model Rule 7. It requires that there be a meeting of the parties to the dispute.
66	However, the owners corporation is not required to follow the dispute resolution process if the alleged breach comes to the attention of the owners corporation in a manner other than by a complaint.
67	Whether a complaint is made, or the owners corporation becomes aware of the alleged breach in some other way, section 153(2) of the OC Act requires the owners corporation to decide whether to take action under Part 10, to apply to VCAT for an order requiring the person to rectify the breach, or to take no action. That is, there must be a formal decision made under s153(2) in relation to an alleged breach.
68	If the owners corporation decides to “take action” in respect of an alleged breach, s 155 of the OC Act requires the owners corporation to “give notice of the allegation to the person alleged to have committed the breach”. That notice is commonly referred to as a ‘breach notice’. The breach notice must be in writing in the approved form, and must give 28 days to rectify the breach.
69	If the person does not rectify the breach within 28 days, the owners corporation must make a further decision in accordance with s 156: whether to give the person more time to comply, or to give the person a final notice, or not to proceed with action under Part 10. Notice of that decision must be given to any person who made a complaint, and to the person to whom the breach notice was given. 
70	Section 157 of the OC Act provides that a final breach notice must be in writing in the approved form, give a further 28 days to rectify the breach, and give notice that the owners corporation may decide to apply to VCAT for an order requiring rectification of the breach. Notices may be given electronically.
71	Section 164 of the OC Act provides that VCAT may dismiss or strike out an application made by an owners corporation for an order requiring rectification of an alleged breach, if satisfied that the owners corporation has not complied with s 153 of OC Act.
72	So, a threshold question in every application brought by an owners corporation to VCAT seeking rectification of an alleged breach, is whether the owners corporation followed the procedure set out in s 153 of the OC Act. 
73	As I have noted above, it is not necessary that there be a complaint to found the giving of a breach notice, if the breach “otherwise comes to the attention of the owners corporation”.  It is apparent, in a 4 lot subdivision in which the majority of lots are owner occupied, that members of the owners corporation will “become aware” of matters of concern simply by empirical observation, whether this is hearing unwanted noise, seeing works being undertaken, or experiencing their free passage of common property driveway being obstructed, and so on. In the circumstances of this case, it was not essential that complaints be made before the owners corporation could take action in relation to conduct that was of concern.
74	In my view, the resolution passed under General Business Item 1, at the 24 August 2021 Annual General Meeting was sufficient to authorise the giving of a breach notice requiring Ms Fang to reorient the cameras as set out in that resolution. Similarly, I consider that the resolution passed at that same meeting in relation to the installation of the air conditioning unit, was also sufficient to authorise the giving of a breach notice. I form that conclusion because the resolutions recorded both the nature of the breach and that the owners corporation “required” Ms Fang to remedy the breach. Each resolution on its own could not have the effect of a breach notice, but clearly was expressed in terms which, to be effective, required a breach notice in those terms to be issued. That is, I consider that it was implicit in the wording of the resolutions that the owners corporation intended that breach notices be issued. An alternative approach might have been for the owners corporation to pass a resolution recording their consideration of the situation that had come to their attention and directing the manager to issue a breach notice. However, the resolutions actually passed set out the allegations to be included in the breach notice and, for that reason, in my opinion, it is appropriate to draw the inference that there was an intention that breach notices be issued in respect of the CCTV cameras and the air conditioning unit. I find that the resolutions passed at the 24 August 2021 Annual General Meeting in relation to the CCTV cameras and the air conditioning unit amount to decisions to take action in accordance with s 153(2)(a) of the OC Act.
75	The breach notice dated 30 March 2022 issued in respect of the awning was not the subject of a decision of the owners corporation. As a consequence, the procedure set out in s 153 of the OC Act was not followed in the giving of that breach notice and final breach notice.
76	Accordingly, I find that the breach notices relating to the CCTV cameras, and the external split system air conditioning unit, are valid, but the breach notice relating to the awning is void and ineffective.
The complaints and the final breach notices
77	Considerable attention was given, in the hearing, to complaint forms completed by various lot owners in early August 2022, some five months after the breach notices were issued. Ms Fang says that the timing of the complaints, between the breach notices and the final breach notices, demonstrates that the manager, and the three other lot owners have acted “against her” and that the actions of the owners corporation in relation to the breach notices constitute ‘a fraud on [her] minority’.
78	After receiving the breach notices on 30 March 2022, Ms Fang sent an email to the manager, dated 4 April 2022, asking her to “provide full and complete copies of all complaints received for which (sic) you relied upon to issue the four ‘notices to rectify breach’ on me. It is understood I am entitled to this information upon request.”
79	On 7 April 2022, Ms Fang sent a complaint about the manager to Consumer Affairs Victoria.
80	On 14 April 2022, the manager replied, informing Ms Fang that the breach notices in respect of the air conditioning unit and the CCTV cameras were authorised by the resolutions passed at the Annual General Meeting held on 21 August 2022, and that the breach notice relating to the awning had been issued on the basis that the breach had “otherwise come to the attention of the owners corporation” as provided for in s 153(b) of the OC Act.  Ms McVeigh referred to emails sent to Ms Fang on 4 February 2022 and 22 February 2022 in which Ms McVeigh had asked Ms Fang to ‘stop work’ on the installation of the awning.
81	Ms Fang continued to take issue with the validity of the Breach Notices, responding on 18 April 2022, saying: 
From reading your reply, it appears that you did not receive any complaints for which you relied upon (sic) to you to issue the 4 ‘Notice to Rectify Breach against me (sic).  Could you please confirm this?
Your reply also said that the OC acted as per s 153b of the OC Act to issue the 4 ‘Notice to Rectify Breach’ against me.  Please email me a copy of the OC’s decision which directed you to invoke the section of the act.
You also said in your reply that ‘the breaches are obvious and can be seen from inspection”. Please advise who undertook the claimed inspection for each of the items in your 4 “Notice to Rectify Breach” and when the inspection’s (sic) were carried out.
Furthermore, I request full and complete copies of any information, documentation, reports and images for which you relied upon (sic) to issue the said notices against me (sic). 
82	On 30 August 2022, Ms McVeigh sent copies of 7 complaints to Ms Fang. The complaints were dated between 31 July 2022 and 9 August 2022, and clearly postdate Ms Fang’s request for copies of complaints. Six of the complaints had been prepared by lot owners or occupiers.  One had been prepared by the manager.   
83	The complaint notices are
a.	A complaint dated 31 July 2022 from Mr Hore and Ms Stokes-Hore complaining of damage to common property, in relation to works to the exterior face of the building, and exhaust fumes;
b.	A complaint dated 1 August 2022 from Ms Bourke complaining about the orientation of the CCTV cameras;
c.	Three complaints dated 4 August 
i.	One from Ms Moore, Ms Bourke and Mr Hore and Ms Stokes-Hore complaining about works to the gate and fence on the perimeter of Ms Fang’s lot which they allege is common property;
ii.	One by Ms Moore, owner of lot 3 above Ms Fang’s lot, about the air conditioner; 
iii.	One from Ms Moore in relation to the installation of the awning;
d.	A complaint dated 8 August 2022 from Ms Moore, Mr Hore and Ms Stokes-Hore and Ms Bourke, concerning lack of compliance with Model Rules in relation to Ms Fang’s renovation.
e.	A complaint dated 22 August 2022 from the manager, concerning alleged failure by Ms Fang to allow access through her courtyard to the common property behind her lot, and to lot 3, by a window washer, a termite inspector and an emergency plumber, each engaged by the owners corporation manager.
(‘the Complaints’)
84	Only the forms have been produced. There is no documentary evidence before me as to the date on which each of the complaints was sent to the owners corporation manager. No record of any decision by the owners corporation about the complaints has been produced. However, as I have noted above, a complaint is not a necessary pre-condition to the issuing of a breach notice if an alleged breach comes to the attention of the owners corporation by some other means, and the owners corporation resolves, in accordance with s 153(2) to take action in relation to the alleged breach. These complaints were made after the breach notices were issued. They were not relevant to the issuing of the breach notices, As far as the breach notices are concerned, it is not important, in this proceeding, what action was taken by the owners corporation in response to the complaints. Nevertheless, the terms of the Complaints are relevant in a different way.
85	This is because the Final Breach Notices issued in respect of the split system air conditioning unit, the awning and the CCTV cameras all incorporated paragraphs from the Complaints in the description of the breach.
86	For example, the description of the complaint given by Ms Moore, about the air conditioning unit, is as follows:
The installation of the split system by the owner of Lot 2, on the east side of the building, was unauthorised. The owner failed to seek the Owner's Corporation agreement to its installation and location. The current location is undesirable and unacceptable as it fails to meet the Residential Best Practice Guidelines (Victoria) as its placed too close to my bedroom, it can be seen from the first floor and the front entrance of the building and fails to shield or contain noise and is detrimental to the look of the building. See attached photos (Attachment A).
87	Under the heading “What has been done to try to resolve this complaint?”, Ms Moore stated:
Issue raised at AGM (24 August 2021) and motions passed for the Split System’s removal, but the Split System unit is still there.  There appears to be no intention to alter or move the system.  Follow up letters and requests have been ignored.
88	Under the heading “What remedy are you seeking?” Ms Moore stated:
The Owner of Lot 2 to remove the split system unit from the east wall. Any proposal for relocation is to be solicited to the Owners Corporation. The air conditioner should not be situated near any bedrooms of other units and will not affect any neighbour's amenity or increase noise levels. The placement should respect the heritage values of the building and avoid negative visual effects. 
89	These three paragraphs, including the phrase “too close to my bedroom”, were “cut and pasted” into the Final Breach Notice dated 2 November 2022 relating to the air conditioning unit.
90	On page 2 of that Final Breach notice the action required to rectify the breach is not “remove the split system unit from the east wall at the soonest opportunity and at her cost” as in the Breach Notice, but instead reads:
Issue raised at AGM (24 August 2021) and motions passed for the Split System’s removal, but the Split System unit is still there.  There appears to be no intention to alter or move the system.  Follow up letters and requests have been ignored.
91	It is doubtful, for this reason, that the Final Breach Notice relating to the air conditioning unit was effective.  It does not direct Ms Fang to remove her air conditioning unit. The description of the breach does not describe the manner in which the Rules referenced in the Form have been breached. It introduces a new issue that was not included in the Breach Notice: the “Residential Best Practice Guidelines”. While those Guidelines may be a useful reference for an owners corporation considering whether a proposed installation will negatively impact the quiet enjoyment of other lot owners, a failure to comply with those guidelines is not of itself a breach of the OC Act, the OC Regulations or the Model Rules.
92	In my view, the owners corporation cannot rely upon the Final Breach Notice in relation to the air conditioning unit because of these issues.
93	Similarly, the owners corporation cannot rely on the Final Breach Notice relating to the awning as this suffers from the same defects as the Final Breach Notice relating to the air conditioning unit.
94	The Final Breach Notice relating to the CCTV cameras and the Breach Notice which preceded it, both suffer from a different defect, in that it alleges breach of Model Rule 4.1. That rule requires that a lot owner or occupier must not obstruct the lawful use and enjoyment of the common property. I heard evidence from the lot owners about the impact the orientation of the CCTV cameras had had on them, in particular that they felt under surveillance, and that they had no privacy. It is apparent that the lot owners’ peace of mind, and mental health has been adversely affected by the ongoing feeling that they were under surveillance, but I do not consider that this can amount to “obstruction” of lawful use and enjoyment of common property. The language of Model Rule 4.1 is not strong enough to support such a finding, in my view. That Final Breach Notice is therefore ineffective.
“Fraud on the minority”
95	Ms Fang asserts that the transposition of the text from the complaints into the final breach notices demonstrates a concerted action by the other lot owners against her, and therefore, that the owners corporation’s continued action in relation to the alleged breaches constitutes a ‘fraud on the minority’.
96	The term ‘fraud on the minority’ has been used in a number of claims in the owners corporations list. That concept derives from corporations law, to enable minority shareholders to commence proceedings to protect their interests, if the majority has acted in a way that is not in the best interests of the company as a whole, or taken money, property or other advantages that belong to the company. The mere casting of votes by a majority does not amount to a fraud on the minority. There must be an element of betterment or lack of good faith on the part of the majority to amount to a fraud on the minority. In the context of owners corporations disputes, if a majority group of lot owners cast their votes in order to better themselves at the expense of a smaller group of lot owners, in a manner not in the interests of the owners corporation as a whole, that will amount to a failure of good faith, contrary to ss 5 or 117 of the OC Act, depending on the circumstances.
97	In this proceeding, I am satisfied that Ms Moore, Mr Hore and Ms Stokes-Hore, and Ms Bourke were attempting to address ongoing conduct by Ms Fang that plainly disregarded the obligations imposed on her by the OC Act. The lot owners expressed their frustration in their emails and in their interactions with Ms Fang. The manager initially took a fairly non confrontational approach to Ms Fang’s conduct. With the benefit of hindsight, it would be fair to say that firm action to address Ms Fang’s conduct was required. It is equally fair to say that the description of Ms Fang’s conduct as “failing to engage” is accurate.
98	It is apparent from the history I have set out above, that the complaints were, more probably than not, prepared in response to Ms Fang’s mistaken insistence that breach notices could only be issued if there had been complaints made. Ms McVeigh was asked in the hearing whether she had “had a hand” in drafting the complaints. She denied that, and said the lot owners themselves had done so.
99	Ms McVeigh was not asked to comment on how it came about that the Final Breach Notices were not in the same terms as the Breach Notices. It is not necessary to examine that further.
100	Having regard to all circumstances, including Ms Fang’s disregard of her obligations under the OC Act in relation to the air conditioning unit, the CCTV cameras and the awning, the apparent prior history of difficulties between the lot owners in relation to Ms Fang’s contractors and disputes about access to common property behind her lot, I find there has been no failure of good faith on the part of the majority of lot owners.
Removal of the breach notices and final breach notices from the Record and Register
101	Ms Fang seeks orders that the breach notices and final breach notices be “removed from the Record and Register” of the Owners Corporation. Breach notices and final breach notices are not documents required to be held in the Owners Corporation Register that must be established under s 147 of the OC Act. Breach notices and final breach notices are records that are required to be kept by the owners corporation under s 144(p) of the OC Act.  Notices and Orders of a court or tribunal are also required to be kept, under s 144(o).  In my view, the purported breach notices and purported final breach notices are presently records of the Owners Corporation.  It is undesirable to make Orders altering the public record of a body that is required by statute to maintain certain records.  The inclusion of these Orders and reasons in the records of the Owners Corporation should be sufficient notice of the status of the breach notice relating to the awning and the final breach notices in respect of the awning, the CCTV cameras and the air conditioning unit.
Should Orders be made requiring Ms Fang to remove the CCTV cameras, the awning and the air conditioning unit?.
102	Ms Fang seeks orders dismissing or striking out the owners corporation’s application, in accordance with s 164 of the OC Act. Section 164 of the OC Act gives a discretion to the Tribunal to make an order dismissing or striking out an application for an order requiring the rectification of an alleged breach, if the Tribunal is satisfied that the owners corporation has not complied with s 153 of the OC Act.  Ms Fang submits that I should find that the owners corporation has not complied with s 153 of the OC Act.  As I have noted above, s 153 of the OC Act requires that the owners corporation must decide whether to take action to issue breach notices, whether to apply to VCAT for an order requiring the person to rectify the alleged breach, or to take no action. I have found that there was no decision by the owners corporation to issue the breach notices relating to the awning.
103	Even absent a resolution of the owners corporation authorising the giving of breach notices, it does not necessarily follow that the owners corporation’s application for orders requiring rectification of the alleged breaches should be dismissed or struck out. The Tribunal’s power is discretionary, not obligatory. Further, in making any order under the OC Act, s 167 of the OC Act requires that I consider the conduct of the parties, and any act or omission of a party.
Reliance on approval of the CCTV cameras
104	In her written submissions, Ms Fang submits that the Owners Corporation expressly approved the installation of the CCTV cameras, and “acquiesced” to the installation of the air conditioning unit and the awning, and that she should not be required to remove those installations.
105	In relation to the CCTV cameras, Ms Fang relies on the approval contained in the resolution passed at the Special General Meeting on 6 May 2021. The other lot owners dispute that the minutes of that meeting accurately reflect the decision that was made. It is not necessary for me to determine whether that was the case. As I have noted above, all evidence relating to the position, and scope of surveillance, of the cameras indicates that the approval recorded in the minutes as having been given at the Special General Meeting on 21 May 2021 was for a very different installation from that actually effected by Ms Fang.
106	Dr Gabrielle Gottschild, general practitioner, and Ms Stokes-Hore gave evidence as to the impact of the CCTV cameras on Ms Stokes-Hore. I note that the impact is said to relate expressly to the focus of the cameras beyond Ms Fang’s lot, and the ability to record conversations at significant distance. These are matters which the owners corporation was entitled to consider in determining the conditions on which approval might be given for the installation of the cameras. That it did not do so in the resolution recorded as having been passed at the 2021 Annual General Meeting, did not mean that Ms Fang was entitled to install cameras with a completely different configuration from that which had been described at that meeting.
107	Further, I consider that the resolution passed at the 24 August 2021 Annual General Meeting, recording the owners corporation’s concerns about the orientation of the cameras is consistent with the evidence filed by Ms Fang herself which shows the focus of the cameras, and their ability to record conversations at a significant distance from Ms Fang’s lot. I do not consider that Ms Fang obtained the approval of the owners corporation for the CCTV cameras as they were in fact installed.
108	I find that the installation of the CCTV cameras by Ms Fang was not carried out in accordance with the requirements of the OC Act and the Model Rules, and, further, was implemented without regard to the proposal that Ms Fang had put to the owners corporation.
109	It is appropriate to order Ms Fang remove the CCTV cameras.
Reliance on “acquiescence of the owners corporation
110	Ms Fang’s submissions in relation to “acquiescence” to the installation of the air conditioning unit and the awning are based on the principles of equitable estoppel. Ms Fang’s submission, in summary appears to be that she has an equitable right to retain the air conditioning unit and the awning, on the grounds that the owners corporation, by not responding to her emails giving notice of her intention to install the air conditioning unit, and the awning, induced her to assume that she could proceed.
111	Ms Fang apparently acknowledges that the approval of the owners corporation has to be in writing, and is fully aware that decision making of an owners corporation must occur by formal resolution. Nevertheless, she submits that, based on the conduct of the owners corporation, she “believed she had that approval, and she was acting entirely reasonably in that belief”. That submission must be rejected.
112	In my view, the suggestion that a lot owner, fully aware that she must seek the owners corporation’s approval in writing, but who fails to request that approval, and then seeks to rely principles of equity, to protect works carried out without approval, does not “come with clean hands”. Further, I consider the argument that equitable principles might confer rights on Ms Fang in the manner she asserts, is entirely inconsistent with the scheme of the OC Act. 
113	The OC Act does not support a conclusion that notification alone could be sufficient. It is significant that that the requirement in Rule 5.2 to obtain the written approval of the owners corporation is expressed in very different terms from the requirement in Rule 5.3 to notify an owners corporation of renovations or other works that may affect the common property and or other lot owners’ enjoyment of the common property. Rule 5.2 can also be contrasted with the requirement in s 133 of the OC Act that a lot owner give notice to an owners corporation of any application by the lot owner for a building permit or a planning permit.
114	I consider that, if it had been intended that notification alone be sufficient in the case of proposed alteration to the external appearance of a lot, Model Rule 5.2 would only require notification by the lot owner. The drafting of Model Rule 5.2 clearly requires the lot owner proposing alterations to the external appearance of the lot to obtain written approval for those alterations.
115	Accordingly, I find that Model Rule 5.2 requires that a lot owner expressly seek the approval of the owners corporation and that the lot owner provide the owners corporation with full details of what is proposed, including plans, and specifications.  Only by so doing, can the owners corporation have sufficient opportunity, before the proposed works are carried out, to consider what conditions on approval may be reasonably necessary to protect the interests of other lot owners, in relation to quiet enjoyment, structural integrity, whether of other lots or of the common property, and potential impact on value of lots or common property, as envisaged by Model Rule 5.2(2). 
116	An application made in good faith, seeking an owners corporation approval for proposed alterations would acknowledge the obligation placed on the owners corporation by Model Rule 5.2(2). A lot owner acting reasonably, and giving due consideration to that purpose, might be expected to give reasonable particulars of the proposed works. Ms Fang did not seek written approval, nor did she give reasonable particulars.
117	In making her submissions that it would not be fair for the Tribunal to order that she remove the installations, Ms Fang relies on the decisions in Owners Corporation PS611240X v Brady, Owners Corporation PS502321G v R and Barouche v Owners Corporation No 1 PS 409234V. I do not consider these cases assist Ms Fang.
118	In Brady the owners corporation sought Orders requiring the lot owner, Brady, to reinstate part of a common property wall, where he had installed a door in the wall. The lot owner had installed the door in the wall to facilitate access to the terrace of his apartment, which required waterproofing repairs due to building defects. The lot owner asserted that the builder undertaking the repairs suggested that the door be installed to facilitate the repairs. The lot owner also relied on representations made to him by the Chairman of the Owners Corporation, and another Committee Member, both of whom were members of the Owners Corporation’s Building Sub-committee, formed to oversee the response to a wide range of building defects. Those representations were said to be to the effect that there would be no opposition to the proposed door. The lot owner was himself an experienced building professional, he obtained expert engineering assessment that the door presented no structural risk to the building, and requested that the Owners Corporation consider retrospective approval.
119	The lot owner in Brady conceded that he had not obtained the prior written consent of the owners corporation to the works, and that this was a failure to comply with Model Rule. At issue in the proceeding was whether the OC Act imposes an “obligation” on VCAT to make a reinstatement order where there has been a breach of the model and special rules.  The presiding member found that there is no such obligation, and further, that s 167 of the OC Act requires VCAT to consider the conduct of all the parties, their acts and omissions, the impact on lot owners as a whole, any oppression or unfair prejudice to any lot owner. The presiding member declined to make the order for reinstatement sought, noting that Mr Brady had installed the door, having “found himself in a predicament not of his own making and did his best to deal with significant defects on his terrace by working collaboratively with the appointed members of the Building Sub-committee and the builder”. The presiding member considered it relevant that the lot owners with whom Mr Brady discussed the proposed door, “participated in the discussions with the express authority of the OC Committee which appointed them members of the Building Sub-committee”, and found that Mr Brady “made every effort to discuss his options with the members of the OC who were authorised to deal with the defects.  In circumstances where no objections to the installation of the door were raised, I find his conduct reasonable”. The presiding member concluded that it was unfair to require Mr Brady to reinstate the common property wall, and not fair to make the Orders sought.
120	In contrast, Ms Fang did not attempt discussion with the other lot owners about her proposals. She did not acknowledge that the owners corporation’s approval was required, but instead sent emails purporting to be sent “as a courtesy” simply informing them of her intentions.  She did not give proper particulars of the installations she proposed that would have enabled the owners corporation to engage in the deliberations required of it by Rule 5.2.
121	In Owners Corporation PS502321G v R, Ms R had installed a storage unit in her accessory car park, without consent of the owners corporation.  The owners corporation had applied for an order requiring Ms R to remove a storage unit which she had installed in her car parking space. In that case the Tribunal found that Model Rule 5.2 (which provides that a lot owner may not alter the external appearance of their lot without the consent of the owners corporation) did not apply to Ms R's circumstances because there were Special Rules that dealt specifically with the installation of structure in a car parking space. The Tribunal noted that the owners corporation had been misled in its approach to the issue by the manager’s advice that a change to the Rules was required in order to accommodate storage units of the kind Mr R sought to install, when this was not the case. The Tribunal noted that the owners corporation was aware of Ms R’s wish to install a storage unit, and that it had conducted a survey of lot owners in which 35 lots expressed interest and 103 said they were not interested, following which the owners corporation resolved “not to proceed with a ballot to amend the OC Rules”. Ms R asserted that she had sought the consent of the owners corporation in a conversation with the owners corporation manager. The Tribunal found that Ms R and the manager had discussed what options were available to Ms R following the survey results, that the manager’s response had been equivocal, and that Ms R decided to “take the risk” that installation of a storage cage would not be challenged.
122	Although the Tribunal ordered Ms R to remove the storage unit she had installed, operation of the order was delayed for 12 months, “to give the members of the OC the opportunity to consider the matter afresh and make a decision that means that the order will not be enforced”. Implicit in that direction is that the Tribunal considered that it would be within the owners corporation’s power to give consent, and that to do so would be acting reasonably.
123	In Ms R’s case there had been no allegation that storage cage installed by her had impacted the quiet enjoyment of any lot owner, structural integrity, or the value of other lots and/or common property, those considerations being relevant to any reasonable conditions that might be required in giving approval. In those circumstances, although the Tribunal found that Ms R had installed the storage cage without consent, and that it was appropriate to order her to remove the storage cage, the Tribunal “delayed” operation of the Order precisely because, there were no grounds on which the owners corporation in that case could reasonably object to its installation, and it was appropriate to allow time for the owners corporation to attend to that.
124	Unlike Ms R, Ms Fang did not actively seek the approval of the owners corporation. Ms Fang adopted the position that she was entitled to do as she liked within her property boundaries. That assumption was not correct, and did not have proper regard for the mutual obligations of all lot owners. Unlike the storage cage installed by Ms R, the air conditioning unit, the CCTV cameras and the awning, all impact other lot owners.
125	I do not consider Barouche to assist Ms Fang. In that case, the applicants challenged the validity of a special resolution granting a 99 year lease over common property car parking spaces to 24 lot owners. The development in that case had originally been a company title based subdivision. The company had made decisions relating to the allocation of the car parks prior to conversion of the land to a subdivision with owners corporation. The proposed leases were intended to honour decisions of the company prior to the conversion. In those circumstances, the Tribunal found that there was no ‘fraud on the minority’ in the decision to grant the leases, but rather the leases gave effect to expectations and agreements as to proprietary interests, which had been created at an earlier time.
The air conditioning unit
126	As I have noted above, the air conditioning unit is installed at a point that is just within the upper boundary of Ms Fang’s lot, the upper boundary being nine feet from the lower boundary. It is plainly visible from outside Ms Fang’s lot. Photographic evidence tendered by both parties show that the unit is in effect located as close to Ms Moore’s window as can be achieved while still being within Ms Fang’s lot and not immediately beside Ms Fang’s windows.
127	The owners corporation relies on a report prepared by Mitchell Fraser, air conditioning mechanic of VicAir, and his oral evidence in the hearing.  Mr Fraser has over 10 years’ experience in the air conditioning industry.  He conducted an inspection of the air conditioning unit on 12 February 2024. Mr Fraser expressed the opinion that the air conditioning unit did not comply with industry best standard, namely the Air Conditioning Residential Best Practice Guideline published by the Australian Institute of Refrigeration, Air Conditioning and Heating Inc (‘Guide’). He considered the unit is too close to the neighbouring windows, and expressed the opinion that the best place for the unit to be installed would be on ground level, at a safe distance from neighbouring windows. I note that the Guide records that an elevated installation less than three metres above ground level may result in increased noise as a result of sound reflection back from the ground. Model Rule 5.2 contemplates that the owners corporation may have regard to, and impose reasonable conditions relating to the impact on quiet enjoyment of other lot owners, when granting permission for changes to the external appearance of lots. Ms Fang’s conduct meant that the owners corporation was not afforded that opportunity. 
128	Damien O’Sullivan, real estate agent gave evidence in the hearing that the placement of the air conditioning unit might affect the price that could be obtained for the other units in the subdivision. He considered, from his long experience as a real estate agent, that prospective purchasers would consider the placement of the air conditioning unit to detract from the appearance of the development. This was Mr O’Sullivan’s personal opinion. Mr O’Sullivan is not a valuer, and did not provide concrete examples to support his opinion. His evidence is not expert opinion in the sense required by the VCAT Practice Note. While his evidence is not persuasive in this proceeding, had Ms Fang formally sought approval for the air conditioning unit, Model Rule 5.2 contemplates that an owners corporation may impose reasonable conditions required to protect the value of lots and common property. 
129	In all the circumstances, I consider that it is appropriate to order Ms Fang to remove the air conditioning unit from its present location, and relocate the unit so that it is not visible from outside her lot.
The awning
130	The owners corporation relied on the report and oral evidence of Peter Kyriakou, registered building practitioner, of Buildspect. Mr Kyriakou expressed the opinion that the awning installation does not comply with the relevant building standards. He acknowledged that the areas of non- compliance might be rectified without requiring complete demolition, but considered that the flashings are defective, and could not be made waterproof in its current configuration. 
131	I am satisfied that Ms Fang did not seek the approval of the owners corporation for the installation of the awning. Giving ‘notice’ of intended installation does not satisfy the requirement in Model Rule 5.2 that the written approval of the owners corporation must be obtained. Ms Fang did not make an application for such approval. No approval was given. Any grant of planning or building permission by the relevant authority does not override the need to obtain the permission of the owners corporation for works which alter the external appearance of the lot. Ms Fang did not comply with the requirements of the OC Act and the Model Rules in installing the awning.
132	It is appropriate that I order Ms Fang to remove the awning.
Are there grounds for the imposition of civil penalties?
133	The owners corporation seeks orders requiring Ms Fang to pay $1,100 to the owners corporation as a civil penalty, in respect of each breach of the OC Act, pursuant to s 166 of the OC Act. Ms Fang has made no submissions on this point.
What are the principles for the imposition of a civil penalty?
134	The criteria for imposition of a civil penalty in accordance with s 166 of the OC Act are that there is a valid rule of the owners corporation, which imposed an obligation that was binding on a person, and the Tribunal has determined that the person has failed to comply with the rules.  Those criteria are satisfied in this proceeding.  The model rules, including Rules 5.1 and 5.3 are valid rules of the owners corporation.  They are binding on all lot owners.  I have determined that Ms Fang failed to comply with those Rules.
135	There is no guidance given in the OC Act for setting the amount of civil penalty to be imposed. The Tribunal must act fairly, according to law, and the substantial merits of the case.
136	Section 167 of the OC Act requires that I consider the conduct of the parties; any act or omission or proposed act or omission of any party; and whether a resolution or proposed resolution is oppressive to, unfairly prejudicial to or unfairly discriminates against, a lot owner or lot owners; and any other matter I think relevant.
137	I am satisfied that the resolutions passed by the owners corporation, while directed to conduct by Ms Fang, were not oppressive to or unfairly prejudicial to Ms Fang. I am satisfied, also, that the resolutions did not unfairly discriminate against Ms Fang.  Ms Fang was in the wrong, and the resolutions recorded that fact. I am satisfied that Ms Fang fully understood the requirements placed on her as lot owner, but chose to ‘notify’ the owners corporation of her intentions, and wait for their response, rather than proactively providing the particulars that were required. In so doing, her conduct can be characterised as confrontational toward the other lot owners, rather than co-operative.
138	Is it appropriate to impose a civil penalty of $1,100 in respect of each of the three breaches of the Model Rules? I note that s 166 provides that a civil penalty “not exceeding $1,100” may be imposed.
I consider it relevant that, when courts determine the relevant level of penalty, whether civil or criminal, the maximum is reserved for the worst possible case. Sentencing principles applied in the courts are also relevant. All things being equal, intentional offending should attract a higher sentence than reckless offending. Repetitive or persistent offending is considered, in the criminal courts, to increase culpability because of the offender’s knowledge of its unlawfulness and their failure to take the opportunity to cease, as well as the fear it engenders in victims and the community. In contrast, intermittent offending is generally considered less serious.
139	One purpose of imposing a penalty is to deter others from similar conduct. The more serious the contravention, the greater relevance of general deterrence. Another purpose of punishment is to deter the specific offender from re-offending. Specific deterrence proceeds from the assumption that the offender is capable of learning from the experience of punishment and, through this, be deterred from repetition of the same or similar conduct. 
140	Whether there is evidence of remorse, and whether that remorse is genuine, is a very important element in the exercise of the sentencing discretion. Genuine remorse is said to enhance prospects of rehabilitation and reduces the need for specific deterrence.
141	Ms Fang has made no expression of remorse. Her breaches of the OC Act and OC Rules were, it would appear, intentional.  This proceeding has concerned three separate instances of very similar breaches. I consider that it is appropriate to impose a civil penalty in relation to each of the breaches.
142	I note that, on 1 December 2021, when the current form of s 166 of the OC Act came into operation, $1,100 was equivalent to 6.05 penalty units. Currently, $1,100 is equivalent to 5.6 penalty units. I consider that it is appropriate to impose a civil penalty equivalent to 4 penalty units for each breach, $790.36 x 3 a total of $2,371.08.
Special Levy
143	I turn now to the imposition of the special levy.
144	The Minutes of the Annual General Meeting held on 19 December 2022 record that the meeting was attended by Ms Moore, Ms Stokes-Hore and that Ms Bourke was represented by a proxy, Neil McCart.
145	The meeting accepted a proposed annual budget for the 2022-2023 financial year of $11,760.00, and resolved that levies would be issued half yearly. Under General Business, the Minutes also record that “there was much discussion on the special Levy” and that the following resolution was agreed by all present:
The Owners Corporation resolves to engage legal counsel to assist with a number of issues and disputes where breach notices were issued in November 2022 and further action may be required to secure compliance with the notices.  A special levy will be raised to fund this work.  In the first instance the levy with (s.c. will) be for $5,000 per Lot, Total of $20,000.00, payable in 28 days after the issue of the levy notice.  The meeting also resolved that if further funds were required a second levy of $2,500 per unit, total of $10,000 would be raised.
146	Section 24 of the OC Act gives an owners corporation power to levy special fees and charges to cover extraordinary items of expenditure. The resolution was passed by lot owners holding 75% of the lot entitlement, either personally or through a proxy. The resolution was passed as a special resolution. Although there was some contention during the hearing whether the resolution passed approved the raising of a levy of $20,000 or $30,000, a special resolution would have been required in either case, and that was achieved. The resolution is in fact a series of resolutions: a resolution to engage legal counsel to assist, that is, to advise, on disputes relating to the breach notices, and to take action, that is legal action, in relation to those disputes; a resolution to raise a special levy of $20,000 and a resolution to raise a further special levy of $10,000 if required to meet the anticipated but, at that time, unquantified, legal costs.
147	In her Points of Claim, Ms Fang asserted that 
the $30,000 resolution has not been passed validly, is an abuse by a majority of lot owners against a minority and should be ordered unenforceable by the Tribunal and all levies pertaining to it should be removed from the [owners corporation’s] ledger.
148	In submissions made after hearing Ms Fang submitted that the resolution was “flawed” because “the minutes are silent as to how the sum of $20,000 was arrived at”; the work to be funded “is vague”; and Mr Cart’s standing as proxy for Ms Bourke has not been produced. 
149	In my view, the description of the decision as being to engage “legal counsel” to assist with disputes relating to the breach notices issued in November 2022, and to set a special levy to cover those costs, is sufficiently certain. Until solicitors had been engaged and provided a fee estimate, the lot owners could have no more than a general idea of the likely cost. It was prudent to set the amount they did.
150	Ms Fang’s Points of Claim made no claims about the proxy. No evidence was given by Ms Fang in the hearing in relation to the proxy given by Ms Bourke to Mr Cart. Had Ms Fang genuinely considered that the proxy should not have been accepted, she might herself have requested to inspect the records of the owners corporation to examine the proxy.  She has not filed or disputed the proxy documents; nor has she alleged that there are no proxy documents.
151	Ms Fang has not proved any defect in the voting at the Annual General Meeting held on 19 December 2022.  The passing of a resolution to raise a levy to meet anticipated legal costs in relation to proceedings involving another lot owner is not, of itself, an ‘abuse’ by a majority of lot owners against that other lot owner.
152	In my view, the resolution passed authorised both the $20,000 levy to be imposed immediately, and a subsequent levy of $10,000. I find that the resolution passed at the Annual General Meeting in December 2022 to levy special fees and charges was an effective exercise of the owners corporation’s power to do so, and, as 75% of the total lot entitlements voted in favour of the resolution, it was passed as a special resolution. 
153	I find that Ms Fang is liable to meet her share of the special levy and I will order that she pay the owners corporation the amount of $5,000 which has been levied on her.
Should the appointment of the manager be terminated?
154	Ms Fang seeks that the manager’s contract of appointment be terminated, and an administrator appointed to the owners corporation for a period of 12 months. Ms Fang has not specified what actions the administrator should particularly undertake, nor the criteria for conclusion of the period of administration.
155	In support of the application to replace the manager with an administrator, Ms Fang submits that Ms McVeigh has not “reigned in hurtful and inappropriate approaches to Ms Fang from other owners”; that Ms McVeigh “has failed to ‘exhibit the appearance of independence’”, which she submits is required of a manager; and that the owners corporations dispute resolution efforts were “a shambles”. Further, Ms Fang asserts that the manager “knew or ought to have known the breach notices were unenforceable”.
156	The functions of a manager are set out in s 122 of the OC Act. The manager’s functions are those conferred on the manager by the OC Act and OC regulations, the rules of the owners corporation, the resolutions of the owners corporation and the delegations given to the manager by the owners corporation. It is not a function of a manager to “reign in” comments by lot owners.
157	Ms Fang refers to McKinnon v Adams, as authority for her submission that a manager should “exhibit the appearance of independence”. The submission is both disingenuous and misconceived. McKinnon v Adams is a much referenced decision of Bongiorno J under the Subdivision Act 1988. In that decision, Bongiorno J enunciated the principle that the appointment of an administrator is an extreme decision, which must be justified by some incapacity of the owners corporation or dysfunctionality of actions that renders the provision of appropriate services and or care of the common property so beset by difficulties as to render the owners corporation unable to function at a satisfactory level.
158	Bongiorno J’s comments as to ‘independence’ were made in the context of selecting between two candidates for appointment as administrator, each of whom he considered qualified and suitable, but one of whom he rejected on the basis of the individual’s prior association with a party. Bongiorno’s observations reflected his conclusion that to appoint the candidate associated with a party would not satisfy the necessary requirement that there be both independence and the appearance of independence of the proposed administrator.
159	An administrator is appointed in order to resolve deficiencies in the operation of an owners corporation, and the nature of the appointment, standing in the shoes of the lot owners, requires the administrator to work independently of the lot owners. A manager, on the other hand, is selected by the owners corporation, and appointed to work under the direction or delegation of the owners corporation.
160	Working under the direction or delegation of the owners corporation generally means carrying out delegated functions, and working under the direction of the committee, or, in a small subdivision, if there is no committee, under the direction of a majority of lot owners in accordance with resolutions passed in accordance with the requirements of the OC Act. In that context, a manager must act on the decisions of the committee, or the lot owners, as the case requires. A question of ‘independence’ therefore does not arise.
161	For completeness, I note that a manager is not failing to perform the functions of manager simply because they do not respond the same day to ad hoc emails from individual lot owners that are not related to urgent repair, common property or insurance issues. In such cases, it will be reasonable that the manager first seek the committee’s views in matters outside the manager’s delegation.
162	I have noted above that the breach notices prepared by Ms McVeigh, dated 30 March 2022, issued in respect of the split system air conditioner and the CCTV cameras, were issued in accordance with the resolutions passed at the Annual General Meeting held on 24 August 2021. I have noted also, that the breach notice dated 30 March 2022 issued in respect of the awning had not been the subject of a decision of the owners corporation.
163	As I have noted above, considerable attention was given, in the hearing, to complaint forms completed by various lot owners in early August 2022. Ms Fang accused Ms McVeigh of orchestrating the complaints. In the hearing, Ms McVeigh disputed that and said the complaints were prepared by the lot owners.
164	The complaints were sent to Ms Fang by Ms McVeigh on 30 August 2022. Six of the complaints had been prepared by lot owners or occupiers. One had been prepared by the manager. Section 152 of the OC Act provides that a lot owner, or an occupier of a lot, or a manager, may make a complaint to the owners corporation about an alleged breach of the OC Act.
165	Ms McVeigh’s covering email is not in evidence before me, but Ms Fang’s reply dated 11 October 2022 begins “Dear Ricki, You sent me by email and hard copy of 7 (sic) complaints ‘for my (your) reference’ on 30 August 2022”.  Ms Fang informed Ms Mc Veigh that the complaint made by Ms McVeigh were “not factual based and untrue”, and “It is very unprofessional, to say the least, to make such a ridiculous complaint.”
166	The complaint made by Ms McVeigh describes 
ongoing frustration with [Ms Fang’s] lack of compliance with the OC Model Rules in respect of her apartment’s renovation… [including]… failing to provide accurate advice about the scope, size and extent of her renovation … No plans, work programs, schedules … have been provided.
167	Ultimately, this complaint was not reflected in a breach notice. Although this proceeding was not concerned with Ms Fang’s earlier renovation works, each of the lot owners made reference to those works in their evidence. It appears that the lot owners and occupier considered that they had been greatly inconvenienced by trades coming and going, and parking on common property, while Ms Fang’s renovations were being carried out.
168	The final breach notices issued by Ms McVeigh incorporated substantial material from the complaints, which had not been included in the earlier breach notices. The differing focus of the initiating breach notices from that in the final breach notices had the effect, in my view, that the final breach notices do not comply with the OC Act. That error necessarily reflects on Ms McVeigh. However, in itself, these matters are not sufficient reason for this Tribunal to terminate Ms McVeigh’s appointment as manager.
169	I consider it relevant that the lot owners had an opportunity, in May 2022 to consider a proposal to terminate the appointment of Ms McVeigh as manager. That ballot was conducted at the request of Ms Fang. It was not successful. In all the circumstances, I do not consider that there are grounds that would warrant my making an order that Ms McVeigh be removed as manager. Of course, that finding does not prevent the lot owners deciding differently at an Annual General Meeting in the future. 
Should an administrator be appointed?
170	Ms Fang seeks that an administrator be appointed to the owners corporation for a period of 12 months. She has made no submissions as to the actions that an administrator will need to carry out during that period.
171	It may be that Ms Fang thinks of the appointment of an administrator as some kind of ‘time out’, or a form of ‘punishment’ for the other lot owners. The effect of the appointment would be to deprive the lot owners of any say in the running of the owners corporation, including the setting of budgets and fees, for a period of 12 months. The cost to the owners corporation of an administrator would be considerably greater than the cost of a manager. While the appointment of an administrator would remove all decision making from the lot owners, and avoid the need for them to meet in General Meetings, an administrator could have no influence on potential confrontation between the lot owners and occupiers on the site. 
172	While it is true to say that the manager and the other lot owners struggled with the challenges that Ms Fang placed before them, it appears that the owners corporation has otherwise been adequately managing its obligations for maintenance of common property, insurance and financial management, including the holding of Annual General Meetings. With the exception of Ms Fang’s failure to pay the $5,000 special levy, the owners corporation’s finances appear to be in a satisfactory state.
173	I do not consider that there are grounds for the appointment of an administrator.

L Johnson
Senior Member