Introduction

The case of Owners Corporation No 1 PS401009W v Anderton (Owners Corporations) [2023] VCAT 426 (20 April 2023)  involves a dispute between an owners corporation and a lot owner who challenged the levying of an annual ‘owners corporation fee’ without a special resolution authorising the fee. The case highlights the increasing complexities around gated communities and the scope of an owners corporation's power to levy fees for the purpose of maintaining services that benefit all or part of the owners corporation within such a community.

Facts

The subject owners corporation is a part of a resort-style gated community that includes features such as a recreation centre, gymnasium, sporting facilities, ornamental lake, parks, streets, and footpaths. The owners corporation is separately gated and comprises a distinct part of the development. An annual ‘owners corporation fee’ was levied, which was pooled with contributions from owners in the wider development for the purposes of maintenance, security, irrigation, electricity, public liability insurance, and general administration of the development. However, a lot owner challenged the fee on the basis that there was no special resolution authorising the fee.

Decision

In line with precedent [1], the Tribunal found in favour of the owners corporation and ordered the applicant to pay the outstanding fee plus interest. Senior Member Vassie relied on the joint operation of sections 4 and 6 of the Owners Corporations Act 2006 (Vic) in making his decision, which stipulates that the functions of an owners corporation include repairing and maintaining services that benefit all or part of the land affected by the owners corporation. Section 6 of the Act further provides that an owners corporation has all powers that are necessary to enable it to perform its functions.

The applicant also argued that she should not have to pay the special fee because she did not want to receive the services that the fee covered. However, the Tribunal found that the relevant question was not whether the lot owner wanted or did not want the services, but whether there were lots that benefited more than her lot from the services, in which case the benefit principle would apply. The Tribunal concluded that there was no evidence that any lot in the subdivision benefited more as the services are available to all lots equally.

Key Takeaways

• An owners corporation can levy fees without first obtaining a special resolution from its members for the purpose of maintaining services that benefit all or part of the owners corporation. This is important for increasingly complex developments that offer a lifestyle vision.
• The owners corporation was correct to levy the special fee based on lot liability as it maintained services available to all lots equally, irrespective of whether the lot owner wanted to avail herself of those facilities.