Circle Developments Pty Ltd (ACN: ) Owners Corporation PS1897 Melbourne Member E Wentworth Hearing

Transcription

1 VICTORIAN CIVIL AND ADMINISTRATIVE TRIBUNAL CIVIL DIVISION OWNERS CORPORATION LIST VCAT REFERENCE NO. OC1230/2012 CATCHWORDS Owners Corporation Owners Corporation refusal to allow Lot owner to install air conditioning ductwork on common property roof with penetrations of concrete slab whether Owners Corporation obliged to agree to and pay for the proposed works under section 46 whether installation of new ductwork is repair and maintenance whether old ductwork was common property or a chattel, fixture, fitting or service relating to common property or its enjoyment where air conditioning unit and ductwork for the sole benefit of Lot owner where no implied easement claimed and no lease or licence of common property sought Owners Corporation Act 2006 ss 46, 47; Subdivision (Registrar s Requirements) Regulations APPLICANT RESPONDENT WHERE HELD BEFORE HEARING TYPE DATE OF HEARING Circle Developments Pty Ltd (ACN: ) Owners Corporation PS1897 Melbourne Member E Wentworth Hearing DATE OF ORDER 20 December 2012 CITATION 8 October 2012, 9 October 2012, 10 October 2012 Circle Developments Pty Ltd v Owners Corporation PS1897 (Owners Corporation) [2012] VCAT 1941 ORDER 1. The application is dismissed for the reasons in writing which follow. 2. The parties have liberty to apply for orders as to costs. E Wentworth Member

2 APPEARANCES: For Applicant For Respondent Mr D Pumpa of Counsel Instructed by Neil McPhee & Associates Mr N Jones of Counsel Instructed by HWL Ebsworth Lawyers VCAT Reference No. OC1230/2012 Page 2 of 15

3 REASONS Background 1 In 2011 the applicant owner purchased Lot 25, 33 Murphy Street, South Yarra (Unit 25). Unit 25 is one of two penthouse apartments on the eighth floor of a block of apartments built in the early 1970 s. The respondent is the Owners Corporation in respect of the subdivision. 2 At present, Unit 25 is a shell. The owner commenced renovation works in December Before the work started, the apartment had air conditioning via a relatively new Daikin unit, installed on the roof above Unit 25, which connected to the original, internal ductwork, located in a space between the ceiling slab and a plaster ceiling in the unit. That air conditioning system was entirely for the benefit of Unit The Daikin unit above Unit 25 is still on the roof, but the ductwork is now stored in the basement. The owner removed it in the course of the renovation works. Mr Bancroft, a director of the owner, said that part of the old ductwork fell out when the builders started removing the plaster ceiling in about December The builders removed the rest of it between December 2011 and February The owner wants the Owners Corporation, at the Owners Corporations cost, to install new, larger-sized ductwork externally on the roof above Unit 25 with eleven new penetrations of the concrete roof slab. The Owners Corporation has refused to do so. 5 The other penthouse, Unit 26, has an identical Daikin unit connected to internal ductwork, entirely for the benefit of Unit 26. The other units in the building have a separate hydronic system. 6 The Owners Corporation installed the Daikin units in 2010 under an agreement with the then owners of Unit 25 and the owners of Unit 26. Under the agreement, the Owners Corporation advanced the price of the Daikin units to the owners, to be repaid over a two-year period, and undertook to carry out routine maintenance of the units. The implications of that agreement are in dispute. 7 The roof is common property. 8 In this proceeding, the owner seeks an order under s 46 of the Owners Corporation Act (the Act). Section 46 obliges an Owners Corporation to repair and maintain common property, and the chattels, fixtures, fittings and services related to the common property or its enjoyment. 9 The owner claims that the ductwork was common property, or affixed to common property. It claims that the Owners Corporation is obliged to install new ductwork, at the Owners Corporation s expense, under the repair and maintenance obligation in section 46. The owner claims that installation on the roof is the only reasonable and practical solution: larger- VCAT Reference No. OC1230/2012 Page 3 of 15

4 sized ductwork is required for optimum operation of the air-conditioning system, and that if it is installed internally the ductwork will reduce the ceiling height to below that required by the Building Code of Australia. 10 Counsel for the owner confirmed that the owner is not seeking a declaration that there is an implied easement under s 12(2) of the Subdivision Act 1988 allowing the proposed works, nor is the owner seeking a lease or licence of the common property roof under s 14 of the Act. 11 The respondent Owners Corporation says that it has no obligation to replace the ductwork; no obligation to allow ductwork to be installed on the roof; and no obligation to allow the roof slab to be penetrated. 12 The Owners Corporation says the ductwork is not common property, nor is it a fixture, fitting or service relating to common property or its use or enjoyment (s 46); and nor is it a service in or relating to a lot that is for the benefit of more than one lot and the common property (s 47(1)). 13 In any event, the Owners Corporation says the proposed work is neither repair nor maintenance of the old ductwork: it is replacement, and it is replacement of what was there before with a new and better system of ductwork, which is an upgrade (s 53). It says the old ductwork worked well enough. The owner made no requests for repair or maintenance of the old ductwork before unilaterally removing it. 14 As to the claim that the proposal should be allowed as the only reasonable and practical solution, the Owners Corporation says that is not a test known to law; and in any event, it is possible to install internal ductwork of a suitable size, while still complying with ceiling height requirements. It says the owner is free to do so. 15 The owner has also sought damages as a result of delay in the building works. The Tribunal has ordered that the s 46 claim be heard first. 16 I heard evidence from Simon Bancroft, director of the applicant, and Robert Smith and Gordon Harris who were engaged to provide reports for the applicant; and from Archer Broughton, owner with his wife of Unit 26, David Fitzpatrick who was engaged to provide reports for the respondent, and Geoff Watson who was engaged by David Fitzpatrick to provide concept drawings. Counsel for both parties made oral submissions. Issues 17 The issues raised by this dispute are; Are the proposed works repair and maintenance? Was the old ductwork common property, or a chattel, fixture, fitting or service related to the common property or its enjoyment? What is the relevance of the 2010 agreement? VCAT Reference No. OC1230/2012 Page 4 of 15

5 Are the proposed works the only reasonable and practical way of replacing the old ductwork without breaching ceiling height requirements? Is that a relevant consideration? Are the proposed works repair or maintenance? 18 The original ductwork is no longer there. It is apparently in the basement. In theory, it could be reinstated and then assessed to see whether repairs could be carried out to it. The owner s case, however, is not that the ductwork did not function; the claim is that the ductwork was undersized for the Daikin unit and did not allow it to perform at optimum levels. 19 In this case, what is proposed by the owner, and what has been rendered necessary by the owner s removal of the old ductwork, is its complete replacement. The question is whether that can be either repair or maintenance. 20 The owner relied upon reports provided by Mr Robert Smith of Complete Systems Pty Ltd and Mr Gordon Harris of Harris Consulting Pty Ltd. 21 Mr Smith provided an initial report to the owner on 28 March He had been asked to design and install ductwork to connect to the existing Daikin unit. He found the following: The existing supply air and return air ducting are both under size for air capacity of existing Daikin fan coil unit, creating a problem of restricted air volume that will compromise performance of air conditioning equipment through short cycling (cutting in and out) and increased air noise above an acceptable inhabitable level of 30 dba for Bedrooms and 35 dba for Living Areas as per AS2107, 2000 Acoustic Recommendation Design Levels. Therefore, our only proposal for ducted air conditioning to these premises for a successful result and compliance with industry regulations will be to provide externally roof mounted ductwork with supply air outlets penetrating the roof for each room. There would be a total of 11 supply air penetrations. 22 Mr Smith conceded at the hearing that he did not inspect or test the ductwork while it was still in place. He did not hear the air conditioning in operation and, necessarily, did not witness any problem of short cycling. He based his opinion on a consideration of the air volume of 1400 L/s of the Daikin unit, and observations of the size of the ducts, and concluded that there would be a problem of restricted air volume that would compromise performance of the air conditioning equipment. 23 Counsel for the respondent submitted that the proposed works were neither repair nor maintenance and referred to a number of decisions relating to the meaning of repair in particular contexts. 24 In the context of a covenant to repair the English Court of Appeal in Brew Bros Limited v Snax (Ross) Ltd & Anor 1 made the following observations. 1 [1970] 1 All ER 587, VCAT Reference No. OC1230/2012 Page 5 of 15

6 25 Harmon, Sachs & Phillimore LJJ drew a distinction between work that could properly be described as repair because it involved no more than renewal or replacement of defective parts, and renewal or replacement of substantially the whole. Sachs LJ 2 referred to the judgment of Lord Esher MR in Lister v Lane 3 that: However large the words of the covenant may be, a covenant to repair is not a covenant to give a different thing from that which the tenant took when he entered into the covenant. 26 Lister v Lane was a case where a tenant of a house was bound by a covenant to repair. The house fell down. The landlord sought to recover the cost of rebuilding the house from the tenant. Harman LJ observed, at p507, that you are not bound to hand back to your landlord a different thing from that which he demised to you. 27 In the context of the obligations of an owners corporation under equivalent New South Wales legislation, 4 Brereton J 5 observed that: The duty to maintain involves an obligation to keep the thing in proper order by acts of maintenance before it falls out of condition, in a state which enables it to serve the purpose for which it exists. His Honour considered that the obligation included attending to malfunctions, taking preventative measures to ensure that there not be a malfunction, and remediation of defects in the original construction of the common property. 28 In the context of the meaning of maintenance in a licence agreement, Bowman J, then Vice President, made the following observation in Gainard v Cavendish Properties PL (Civil Claims) [2006] VCAT 445 (24 March 2006): Common sense should also be applied in relation to what is meant by maintenance. Essentially I agree with the submissions made by Mr Bingham in this regard. The definition of to maintain provided by Shaw LJ in Haydon v Kent County Council [1978] QB 343 is useful. That definition is to keep something in existence in a state which enables it to serve the purpose for which it exists. I also agree with Mr Bingham s submission that maintenance includes the replacement of worn out items or items which no longer serve the purpose for which they exist. 29 The purpose for which the ductwork existed was to deliver cooled air from a separate air conditioning unit to Unit 25. There was no evidence that it failed to perform that function. 2 at p QB Section 62 of the (NSW) Strata Schemes Management Act 1996 which states the obligation as to properly maintain and keep in a state of good and serviceable repair the common property 5 Seiwa Pty Ltd v Owners Strata Plan [2006] NSW SC 1157 at para. 4. VCAT Reference No. OC1230/2012 Page 6 of 15

7 30 Mr Bancroft agreed that he had not made any requests for the ductwork to be repaired or maintained before it pulling down: the only request has been for new ductwork to be installed. 31 His evidence about parts of the ductwork falling down when the plaster ceiling was pulled down suggests that some parts of the ductwork or its fittings may have been worn, which is consistent with its age. But he gave no opportunity to the Owners Corporation to inspect and/or repair the ductwork at that stage. 32 At most, in my view, the evidence suggests that there may have been individual components of the ductwork that required adjustment or replacement to restore it to a good condition. There was no evidence that anything needed to be done to keep it in existence in a state which enabled it to serve the purpose for which it existed There was also no evidence that complete replacement was required to maintain its functionality. The evidence of Mr Smith and Mr Harris who were called as witnesses for the owner, went no further than to conclude that the old ductwork had been undersized, that it was not compatible with the capacity of the Daikin unit and that larger ductwork was required for optimum performance. In other words the air conditioning system functioned but didn t operate at optimum levels. 34 Mr Smith expressed the view that the increased air velocity resulting from the relationship between the capacity of the Daikin unit and the size of the ductwork would over time lead to wear and tear on the components, but there was no evidence that it had done so at the time it was removed. 35 The various observations on the meaning of repair and maintenance set out above are relevant. Although they have not all been made in the context of an owners corporation s obligations, they describe in consistent terms the meaning of repair and maintenance. They lead to a conclusion, in my view, that the proposed works will provide something different to what was in existence. 36 Even if there were aspects of the ductwork that required repair, the owner has denied the Owners Corporation the opportunity to repair, and has instead unilaterally removed all the ductwork. As a result of the actions of the owner the ductwork is no longer in existence in a state which enables it serve the function for which it existed. Even if the old ductwork had remained in place, the proposed works clearly constitute a significant upgrade of the whole of the ductwork system going beyond repair and maintenance. I find that the proposed works are not repair and maintenance within the meaning of s 46 of the Act. 6 the definition of maintenance in Haydon v Kent County Council with which Bowman J agreed in Gainard v Cavendish Properties. VCAT Reference No. OC1230/2012 Page 7 of 15

8 Common property? Was the original ductwork located on common property? 37 In order to come within s 46 of the Act, the owner has to establish that the work is either to common property or to a chattel, fixture, fitting or service related to the common property or its enjoyment. 38 The old ductwork was located in a space between the underside of the roof slab (the ceiling slab) and a plaster ceiling that ran through the hallway areas. The plaster ceiling is no longer there. Mr Bancroft estimated that it was located about 40cms below the ceiling slab. 39 The registered plan contains the following statements about lot boundaries: The lower boundary of each unit lies within the floor of that part of the relevant storey which is within the vertical or near vertical boundaries of the unit as shown on the appropriate diagram The upper boundary of each unit lies within the ceiling of that part of the relevant unit except as to those parts of units 3 and 4 which are shown thus [hatched] on diagram 2 on sheet 2 hereof where the upper boundaries are 8 6 above the respective lower boundaries. 40 Counsel for the owner submitted that the area of the ceiling space in which the ductwork was located was common property: that the upper boundary of the lot in those parts of the apartment that had the lower, plaster ceiling, was the plaster ceiling rather than the ceiling slab. In other words, that the ceiling referred to on the plan of subdivision was the plaster ceiling in those rooms where there was a lowered plaster ceiling and the ceiling slab in rooms where there was no plaster ceiling. 41 I asked Counsel where the upper boundary of the lot would be where, as here, there had been a lower plaster ceiling or false ceiling in the past but no longer. Counsel submitted that the lot boundary would be at the point where the plaster ceiling used to be before it was removed. 42 Ceiling is not defined in the relevant regulations - the Subdivision (Registrar s Requirements) Regulations However, Regulations 10 and 31 provide some assistance, in my view. 43 Regulation 31(3) provides that: On a strata plan the location of any common boundary between a unit and another unit or a unit and common property is the median of any wall, vents, floor or ceiling unless the plan by legend or otherwise indicates that the boundary is in another position. 44 The registered plan in this case does not, by legend or otherwise, indicate that the boundary is in another position. It states that the upper boundary of each unit lies within the ceiling of that part of the relevant unit. 45 Regulation 10(4)(b) provides as follows: Median (floor and ceiling) lies within the middle of the building structure of any floor or ceiling of the relevant part of the building VCAT Reference No. OC1230/2012 Page 8 of 15

9 which defines the boundary. Any elevated floor or suspended ceiling does not form part of the building structure. A drawn example is given in the Regulations. 46 Regulation 10(4) applies where the location of any building boundary is defined as the interior face, the median (floor and ceiling), the median (wall, window, door, balustrade) or exterior face. The registered plan in this case does not define the boundary by reference to the median (floor and ceiling). It defines it by reference to the ceiling. 47 Neither regulation provides a complete answer to the question of which ceiling is meant by the registered plan in this case. In combination, however, they support a conclusion that the common boundary is the median of the ceiling, and in determining where the median of a ceiling is located, elevated floors and suspended ceilings are disregarded. 48 In any event, it makes sense that the lot boundary will be within the ceiling slab, which is a permanent part of the building structure and permanently identifiable, rather than what was effectively a false ceiling that could be moved or removed at will, and is now no longer in existence. 49 I find that the upper boundary of Unit 25 is the median of the concrete slab which on its under-side is the ceiling of Unit 25, and on its upper-side is the roof. Were the ducts common property? 50 Counsel for the owner submitted that, even if the ductwork was not located on common property, it was, in itself, common property. 51 Counsel for the Owners Corporation submitted that the ductwork could not be common property because it was not land. 52 Section 3 of the Act provides that common property means land shown as common property on a plan of subdivision or a plan of strata or cluster subdivision. The plan of subdivision states that the common property is all the land in the parcel except the land in units 1 to Land is defined to include buildings and airspace. 54 Building is defined to include: a A structure and part of a building or a structure; and b Walls, out-buildings, service installations and other appurtenances of a building; and c A boat or a pontoon which is permanently moored or fixed to land. 55 Section 38 of the Interpretation of Legislation Act 1984 defines land to include buildings and other structures permanently affixed to land, land covered with water, and any estate, interest, easement, servitude, privilege or right in or over land. VCAT Reference No. OC1230/2012 Page 9 of 15

10 56 In s 47(3) of the Act, and for the purposes of that section, service includes a service for which an easement or right is implied by s 12(2) of the Subdivision Act Section 12(2) of the Subdivision Act provides that there is an implied easement for the passage of air. The ductwork provides for the passage of air. 57 The ductwork might be regarded as a service installation or an appurtenance of the building and therefore come within the definition of land. But it is unlikely to be common property, in my view, because it is within the lot boundary of Unit 25. The definition of common property in the plan of subdivision excludes the land in units I have found that the ductwork was within the lot boundary of unit 25. Therefore, even if it is land, it cannot be common property. 58 It may, however, be a chattel, fixture or service related to the common property or its enjoyment. If so, it will come within the repair and maintenance obligation of the Owners Corporation under section 46. Was the ductwork a chattel, fixture or service related to the common property or its enjoyment? 59 Counsel for the owner submitted that, even if the ductwork was not common property, it was affixed to the common property being the ceiling/roof slab and therefore forms part of the common property, or otherwise comes within section 46. Counsel also submitted that the ductwork could be regarded as part of a central system of heating and cooling, which operated throughout the building. Counsel referred to the Tribunal decision in Liu & Anor v Owners Corporation No PS P Liu concerned a high-rise apartment building with a central air-conditioning system. The air conditioning in the applicant s unit did not work for a period of approximately 12 months. The applicant made repeated complaints to the Owners Corporation. In May 2008 a technician engaged by the building manager went into the ceiling space above the lot and discovered that the lot s air-conditioning system had never been connected to the central system. He connected it and the air-conditioning worked thereafter. The dispute concerned the extent of the Owners Corporation s responsibility. The Owners Corporation submitted that it was not responsible until the lot s system was connected to the central system.. 61 The air-conditioning technician who installed the system described the system as a central air-conditioning system with coolers on the roof running air-conditioning through a series of pipes throughout the building. Also installed were supplementary air-conditioning systems into each lot, which drew from the central system. He agreed that there had been a minor fault whereby the lot was not properly connected to the central system. 62 In relation to the question of whether the supplementary system was common property or not, the Tribunal noted that neither counsel cited any 7 [2010] VCAT 1441 (6 September 2010) VCAT Reference No. OC1230/2012 Page 10 of 15

11 authorities or legislative bases for their submissions and neither provided a plan of subdivision. Nothing in the OC Rules or contract of sale provided guidance as to division of responsibility. The Tribunal noted that the lot owner had no access to, or knowledge of the operation of the supplementary system other than being able to operate a thermostat on the wall. 63 The Tribunal found that the supplementary air-conditioning was either common property or a fixture related to the common property and its enjoyment. 64 The air-conditioning system in the case before me was different to the one described in Liu. In the case before me, the building originally had a hydronic heating system that operated for the benefit of all lots. According to Mr Harris, who was called by the owner, the original ductwork in Unit 25 was designed for that system. According to Dr Broughton, who owns Unit 26, at some point separate air-conditioning units were installed on the roof to service the penthouses. They were replaced with new units in On the evidence before me, since at least 2010, the two penthouses have had entirely separate air-conditioning systems: individual air-conditioning units (replacing older individual units) connected to internal ductwork. The ductwork originally existed to support a hydronic heating system. 66 Unlike the supplementary system in Liu, the air-conditioning system for Unit 25 is stand-alone. It does not connect to, or depend on a central system; it does not service the common property or other lots in any way. It provided for the passage of air from the air-conditioning unit on the roof into Unit 25 and operated entirely for the benefit of Unit Whether or not the ductwork was affixed to the ceiling slab before being removed, and constituted a fixture, it does not fall within section 46 in my view, because it was not a fixture relating to the common property or its enjoyment. 68 In submitting that the Owners Corporation had an obligation to maintain the ductwork which included an obligation to replace it, the owner also relied upon the 2010 agreement referred to above. Does the 2010 agreement add to the Owners Corporation s responsibilities under s 46 of the Act? What is the relevance of the 2010 agreement? 69 In July 2010, the Owners Corporation entered into an agreement with the then owners of Unit 25 and the owners of Unit 26. The one-page written agreement is headed Replacement of Air-conditioning/heating units to penthouse apartments #25 and # The description of heating/air-conditioning plant lists the condenser (external unit), the fan coil unit (internal) and the thermostat. 71 Paragraph 1 records that the Owners Corporation at its 2009 AGM agreed to advance the cost of the new heating/air-conditioning plant, by a way of special levy, to the owners of units 25 and 26. VCAT Reference No. OC1230/2012 Page 11 of 15

12 72 By paragraph 2, the respective owners of units 25 and 26 agreed to reimburse the cost to the Owners Corporation over a two year period. 73 By paragraph 3, the respective owners agreed to bear the costs of associated electrical works to upgrade the mains supply and switchboards to each apartment. 74 By paragraph 4, the Owners Corporation agreed to be responsible for delivery, installation and securing of the new plant to the roof structure, removal of the old plant and all associated works required to the roof structure. 75 By paragraph 5, the Owners Corporation agreed to bear the cost of annual maintenance and routine servicing of the plant in consideration of the separate arrangements pertaining to the building s heating system. 76 By paragraph 6 the respective owners agreed that the cost of major replacement parts of the described plant will be their responsibility for the life of the equipment. 77 The agreement included a warranty by the owners that their liabilities would become the responsibility of any new owner. 78 In the course of installation, two by-pass ducts were installed into the existing supply duct. 79 According to Mr Fitzpatrick who installed them, he did so in case there were problems: the new Daikin unit had a higher capacity than the unit it replaced, and by-pass ducts when opened can allow a reduced air flow to the ceiling registers. Mr Fitzpatrick said that no problems had been reported and as far as he knew the by-pass ducts had never been opened. 80 Mr Harris, who was called by the applicant, expressed the opinion that the by-pass ducts were installed to allow a reduced air flow to the ceiling registers and to place an artificial load on the coil (increased air flow over) to stop the coil icing up and short cycling the system. Based on his observation of the installation of the by-pass ducts, he formed the view that there had been problems associated with the system short cycling and having high air noise. 81 There was no evidence that any problem of short-cycling or high air noise had been reported by the previous owners of unit 25. The current owner did not live in the unit before starting the renovation works. 82 Counsel for the owner submitted that in agreeing to install the Daikin unit and carrying out a modification of the existing ducts, the Owners Corporation undertook responsibility for maintaining the whole system, including the ductwork and impliedly warranted that that the system would be fit for purpose. 83 The 2010 agreement does not support such a conclusion, in my view. The agreement is expressly confined to the plant, and in relation to the plant is limited in its operation. By paragraph 3, the owners agree to be responsible VCAT Reference No. OC1230/2012 Page 12 of 15

13 for any required electrical works to upgrade the mains supply and each apartment s switchboard. The agreement does not expressly or impliedly, in my view, acknowledge or create any obligation for the whole of the airconditioning system for units 25 and If I had to reach a conclusion about who owned the plant on the basis of the agreement, it would be that it probably belongs to the owners. They are to repay the cost of it and be responsible for the cost of major replacement parts, whilst receiving some assistance from the Owners Corporation in the installation and routine serving of the plant. 85 Counsel for the owner submitted that paying for the unit does not transfer the ownership and referred to section 49 of the Act which entitles an owners corporation to recover as a debt the cost of works to a property or a lot that are wholly or substantially for the benefit of that owner. Section 49 certainly creates that entitlement but the 2010 agreement does not suggest that the Owners Corporation considered itself to be recovering the cost from the owners, but rather advancing the cost to them. 86 In any event, I am not satisfied that a conclusion about ownership of the plant assist the owner in its claim that the Owners Corporation has a repair and maintenance obligation in respect of the ductwork. The plant, like the ductwork, does not relate to the common property or its enjoyment. 87 The 2010 agreement bears all the hallmarks of a compromise, which is consistent with Dr Broughton s evidence that the existing units didn t cope with the very hot days of the previous summers and the owners wanted the Owners Corporation to assist with an upgrade of the units. The Daikin units were not installed as a result of a unilateral decision by the Owners Corporation but by agreement between the Owners Corporation and the owners. I am not satisfied that a warranty of fitness for purpose would be implied in all the circumstances. 88 Did the installation of the by-pass ducts create an obligation on the part of the Owners Corporation to be responsible for maintaining the whole of the ductwork? 89 My impression of the evidence given by Mr Fitzpatrick was that he had recognised that there might be problems in installing a higher capacity unit, and had allowed for those potential problems by installing by-pass ducts which could be opened to reduce air flow to the registers. That decision might lead to some liability to the owner if the by-pass ducts had interfered with the operation of the pre-existing ductwork, but the evidence was consistent that the by-pass ducts would have enhanced the ability of the ductwork to cope with a higher capacity unit. 90 On the evidence I am not satisfied that the installation of the by-pass ducts of itself created an obligation on the part of the Owners Corporation to maintain the whole of the internal ductwork, in circumstances where the 2010 agreement explicitly relates only to the plant, no obligations are VCAT Reference No. OC1230/2012 Page 13 of 15

14 assumed under it in relation to the ductwork; and the ductwork is not otherwise common property, and does not relate to the common property or its enjoyment. Are the proposed works the only reasonable and practical solution? 91 In its Points of Claim and submissions, the owner asserted that installation of replacement ductwork on the roof with roof penetrations to the unit below was the only reasonable and practical solution to allow for optimum performance of the air-conditioning. 92 Counsel for the Owners Corporation submitted that reasonable and practical is not a statutory term, and is unknown to the law relating to the obligations of owners corporations. In the context of implied easements section 12(2) applies the test of necessary in relation to the passage of air, and a comparison of alternatives might become relevant if this were an application for an easement. But the owner has not applied for an easement. Nor has the owner applied for a lease or licence. 93 In any event, Counsel for the Owners Corporation submitted, the installation of ductwork on the roof was not the only solution - by the end of the hearing, all the experts had agreed that the concept drawings and calculations provided by Geoff Watson provided a solution whereby the ductwork can be installed internally without breaching the ceiling height requirement for habitable rooms. The concept drawings allow for ductwork compatible with the capacity of the Daikin unit to be contained within bulkheads, or in non-habitable areas of the apartment, with side registers allowing air into habitable rooms. 94 The owner has based its claim on section 46 of the Act. I have found that the proposed works do not come within section 46. I have not been referred to any other provision of the Act that requires an owners corporation to agree to works on the basis that they are reasonable or practical. 95 Section 165 of the VCAT Act provides that in determining an owners corporation dispute, the Tribunal may make any order it considers fair, but there must still be some basis in law for making an order against a party. What is reasonable might well be a relevant consideration in formulating an order if I were to find that the owners corporation must replace the ductwork, but I have found that it has no obligation to do so. 96 In any event, if I had to decide whether the works are the only reasonable and practical way for ductwork to be installed without breaching BCA ceiling height requirements, I would find that they are not. 97 By the conclusion of the evidence, including cross-examination of the experts, all agreed that Mr Watson s drawings showed a solution that would not breach the BCA ceiling height requirements. The solution may not be the preferred solution for the owner. External ductwork would mean that the full ceiling height would be available in all rooms of the apartment, and VCAT Reference No. OC1230/2012 Page 14 of 15

15 avoid the need for bulkheads. Before making the application, the owner had spent time and money or internal design drawings which did not allow for bulkheads. But the owner s preference is not a sufficient reason for requiring the owners corporation to agree to installation of ductwork on the roof, in circumstances where an internal solution is available. 98 In the circumstances, the application is dismissed. There will be liberty to apply in relation to costs. E Wentworth Member VCAT Reference No. OC1230/2012 Page 15 of 15