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August 09 Edition Cover

VCAT victory for operators

11 Feb 2014

VCAT victory for operators Image

The Victorian Civil and Administrative Tribunal (VCAT) last month ruled the Conder Owners Corporation (OC) did not have the authority to restrict access to recreation areas in the building.

In February last year the Conder OC introduced rules making pool, sauna and gym induction mandatory and restricted access for residents who hadn’t completed the induction.

Induction sessions were held each Monday morning, which short-stay operators said was impractical for short-term residents, who often booked weekend stays.  

Metro Real Estate, a MAB Corporation business, which trades as Grand Mercure Docklands, represented 37 lot owners in VCAT action opposing the induction procedure.

Docklands Private Collection of Apartments managers Peter and Lyn Kelly also launched VCAT action (independent of the business), claiming the rule was discriminatory.

Under section 14 of the Owners Corporations Act 2006 any OC rule which is discriminatory or inconsistent with a legal right of a lot owner or occupier is invalid.

Member Linda Rowland heard the case on November 11 before returning her decision in December.

The VCAT decision found that the OC committee did not have the power to make the rule requiring residents to undergo an induction before being granted access to the pool and sauna, because a rule requires a special resolution of lot owners.

The OC had contended that this rule was a sub-rule of rule 28 (j), which required residents to be inducted before being given access to the gym.

Member Rowland disagreed with this and found the extension of the rule to the rest of the recreation area required a special resolution.

Member Rowland also found that the gym induction rule (rule 28(j)), while not discriminatory in how it was applied to all lot owners and occupiers, was discriminatory in the way it was implemented.

The procedure was found to be discriminatory because not all residents were able to attend the induction sessions offered by the OC. She found the implementation of the rule to be unreasonable because there was no flexibility around when and how the induction took place and who facilitated it.

The owners corporation had pointed to insurance advice as the reason behind the introduction of the induction procedures.

However, Member Rowland found that the insurer did not specifically require residents undergo professional induction on the use of gym equipment.

Rather, the insurer had suggested the OC develop an induction procedure that outlined safety rules, provided a health check and indemnified the OC against any incident arising from a resident’s impaired health.

Ms Kelly said she was pleased with the outcome of the case and that “the right thing has been done at the end of the day”.

Conder OC manager Michael Nugent said the OC committee was disappointed with the decision but was unlikely to appeal it.

An appeal against the decision would need to be on a point of law and would be to the Supreme Court.

Metro Real Estate declined the opportunity to comment on the outcome of the VCAT case.

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