Owners Corporation update: The Equal Opportunity Act and owners corporations – Liability expanded!

Jun 28, 2018

In a recent decision of the Supreme Court, Her Honour Justice Richards determined that the Equal Opportunity Act 2010 has a broad application to Owners Corporations. The potential effect of this decision is to compel owners corporations to undertake works to common property that have been sought by disabled lot owners and to pay for those works in various circumstances.

The case

The case, Owners Corporation OC1 & OC3 PS5399033E v Anne Black & Victorian Equal Opportunity and Human Rights Commission involved an apartment complex in Travancore in which a lot owner (Ms Black) who had developed disabilities that affected her mobility forcing her to rely on mobility aids (such as a wheelchair or a scooter) sought various works to be done by the Owners Corporation to enable her to have sufficient access to the common property.

In particular, Ms Black claimed that the ramp to the car park door and the doors to the car park were not suitable for her disabilities and that various modifications were required so that she could use them.

The Owners Corporation refused and/or failed to make those modifications for reasons not disclosed in the judgment.

The law

The case brings into focus an apparent inconsistency in the Equal Opportunity Act 2010 between sections 44 and 45 and section 56.

The important components of these sections are as follows:

  • Section 44 contains a broad prohibition on discrimination in the provision of goods and services.
  • Section 45 imposes a positive obligation on a service provider to make reasonable adjustments for a person who has a disability so that that person can participate in or access the service (unless the person could not participate in or access the service or derive any substantial benefit from the service even after the adjustments have been made).
    In determining whether an adjustment is reasonable, consideration must be given to all relevant facts and circumstances including the persons circumstances (such as the nature of his or her disability), the nature of the adjustment required to accommodate the persons disability, the financial circumstances of the service provider, the effect on the service provider of making the adjustments, the consequences for the service provider of making the adjustments and the consequences for the person of the service provider not making the adjustments.
  • Section 56 specifically addresses the obligations of an owners corporation in that it creates a positive obligation for an owners corporation to allow reasonable alterations to common property in special circumstances.  The section provides that the owners corporation must allow the person to make reasonable alterations to the common property to meet his or her special needs.

Section 56 is significantly different to the obligations in sections 44 and 45 which effectively makes the owners corporation liable to pay for the works.

What does this mean?

In accordance with sections 44 and 45 of the Equal Opportunity Act 2010, an owners corporation is a ‘service provider’ which means that the disabled person would be able to derive a substantial benefit from the services after the adjustments are made.  Under sections 44 and 45, an owners corporation is obliged to undertake and pay for those works.

Conversely, section 56 compels an owners corporation to agree to the lot owner undertaking (and paying) for those works.

According to Justice Richards, the Owners Corporation is a service provider for the purpose of sections 44 and 45 of the Equal Opportunity Act 2010.

The consequences of this decision are significant for owners corporations because an owners corporation may be unwittingly compelled to expend significant monies to undertake alterations to common property if demanded to do so by a lot owner who develops a disability or by a person who purchases a lot in the relevant complex and is disabled at the time of the purchase.

The Supreme Court decision

What is not considered by the Supreme Court decision is how these provisions interact with the application of the benefit principle.

Arguably, the modification works would only benefit the disabled lot owner and therefore applying the reasoning in the Mashane and Boothey decisions, as well as the relevant provisions in the Owners Corporations Act 2006, the owners corporation could theatrically pass the cost for those works on to the disabled lot owner on the basis that he or she is the only lot owner receiving a benefit from those works.

It is also possible that such works would require the owners corporation to obtaining a building and/or planning permit. By the operation of section 53 of the Owners Corporations Act 2006, the modification works to the common property would constitute upgrade works which pursuant to section 52 of the Owners Corporations Act 2006 would require the owners corporation to pass a special resolution authorising the undertaking of those works.

Arguably, the effects of the recent Supreme Court decision is to effectively disenfranchise the owners corporation from making that decision because it is stating that regardless of the outcome of the vote, the owners corporation must undertake those works.

Of course section 53 specifically provides that the lot owner who benefits more from those works must pay a greater share of the costs. Read literarily, this means that the Owners Corporation must levy the disabled lot owner for the full costs of the works. This issue was not considered by Justice Richards in the recent Supreme Court decision.

Now what?

We expect that Justice Richard’s decision will not be the last word on the matter, as the Owners Corporation will most likely seek to appeal the decision. Furthermore, Parliament may consider the matter given the consequences for disabled people as well as for the owners corporations.

For now, it seems that the law is that an owners corporation must undertake reasonable modifications to common property requested to be done by a disabled lot owner. The question of reasonableness depends on the particular circumstances of both the disabled lot owner and the owners corporation.

However, the owners corporation is likely to be able to pass on to the disabled lot owner the cost of undertaking those works by applying the benefit principle.

More information

If you would like to discuss any of the issues contained in this update, or require assistance with any owners corporation-related matter, please contact Anton Block, Principal Lawyer, on (03) 8600 8833 or ablock@kcllaw.com.au.

Author

For information on the author, Anton Block.

Note: This update is a guide only and is not intended to constitute legal advice.

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