Thanks for the correction Austman, although being a Queenslander I find it bothersome that a Committee would be apparently authorised to impose such a significant and differential cost burden on its lot owners with no owner’s corporation input by way of a general meeting resolution.
It appears to me that it is very debatable whether the supposed additional day to day maintenance burdens of the Hotel apartment owners would be those that would trigger the necessity for a Special fee being imposed, and whether the Special fees have been considered within the owner’s corporation duty to act in “good faith”.
Consumer Affairs Vic gives the examples of Special fees as being “to urgently repair the building or to cover other costs such as legal action against the owners corporation”. The term “extraordinary works” is also used.
The Grudl case involved an issue of total roof replacement so it fitted within the definition and/or example of being an “urgent repair” or “extraordinary works”. The cost of the roof repair was genuinely verifiable. The Mashane case involved urgent safety repairs to balconies when the lot owner was one of the few owners who did not own a balcony.
This is in stark contrast to Mavcal’s situation where, rather than an “urgent” one off event such as a roof replacement there are instead claims of non urgent, intangible, unverifiable and unsubstantiated ongoing wear and tear costs, management fees, and electrical charges over a number of years.
Would the framers of the Act have intended a broadening of the imposition of Special fees based on such speculative claims?
It will be interesting to see where this goes.
From a “Madgwicks Australia” online article “Amendments to the Owners Corporation Act – The Mashane effect?” is this extract regarding the Owners Corporation Amendment Bill 2013.
During the second reading of the Owners Corporation Amendment Bill 2013, Ms Heidi Victoria, the Minister for Consumer Affairs noted that:
*The bill seeks to confirm the intention of the Owners Corporation Act 2006, namely that the annual fees of an owners corporation should be set according to each member’s lot liability, as set out in the plan of subdivision, and to overcome the effect of the Supreme Court case of Mashane Pty Ltd v Owners Corporation RN328577 [2013] VSC 417
*Mashane’s case held that the benefit principle must be applied to levies of annual or special fees that are for repairs, maintenance or other works.
*There is no objection to the benefit principle applying to levies of special fees for extraordinary works.
*However as Mashane’s case sets out, the application of the benefit principle for levies of annual fees will require owners corporations, when setting fees, to identify prospective works, allocate an appropriate proportion of the annual fee to those works, identify who will benefit more by those works and by how much, and issue different fee notice to each member based on those estimates.
*The changes to the act ensure there is no ambiguity about the way the benefit principle should be applied in owners corporations.