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Owners Corporation case study: VCAT application using Section 34D of the Subdivision Act to amend a plan

Dec 13, 2012

Amending Plans of Subdivision

A ‘defective’ plan of subdivision generally can only be fixed by amendment of the plan of subdivision.

To amend a plan of subdivision a unanimous resolution of the members of the owners corporation is required.

Often, owners corporations and their managers are faced with defective plans of subdivision but are unable to secure the necessary unanimous resolution of members of the owners corporation to amend the plan of subdivision.

There is however a solution.

S34D Subdivision Act

Owners corporations can use Section 34D of the Subdivision Act to obtain from VCAT an order consenting on behalf of a member or a group of members of an owners corporation to the doing by the owners corporation of any of the things set out in Section 32 or Section 33 of the Subdivision Act which includes the amendment of the plan of subdivision.

In the recent case of Owners Corporation PN21615 v Rayina Pty Ltd and Others, Senior Member Vasey went through the exercise of determining whether it was appropriate to grant the owners corporation an Order under Section 34D(2).

The facts

The plan of that property consisted of 147 units. Of the 147 units, 19 were accessory units i.e. intended for garden or car parking space or storage space. Most of the accessory lots shown on the plan had a concreted surface and were at the time of the application being used as carriageways for vehicular traffic.

All 19 units were held in the name of 1 company, Jonabe Pty Ltd which had been deregistered on 10 July 1992. As a result of the deregistration of Jonabe Pty Ltd, the 19 units had vested in ASIC.

In May 2010, the owners corporation conducted a postal ballot to pass resolutions to amend the plan so as to include the 19 lots into common property and to extinguish lot entitlement and liability for the 19 accessory lots. If successful the owners corporation would have purchased the 19 lots from ASIC and attended to amendment of the plan to include the 19 lots in the common property. An unanimous resolution was not obtained as a result of the postal ballot.

The result of the ballot was:

  • Votes For — 63.37%
  • Votes Against — 8.06%
  • Did Not Vote — 28.57%

The owners corporation then made an application under Section 34D for an Order consenting on behalf of all members who did not consent, (those who voted against and those who did not vote), to the action proposed in the motion that was the subject of the ballot.

If successful, the resolution that resulted from the ballot would become a unanimous resolution and under Section 32 of the Subdivision Act and the owners corporation would then be able to amend the Plan of Subdivision.


The owners of Lot 124 – Rayina Pty Ltd (Rayina) and Lot 148 – Mr and Mrs Mijac (Mijac) objected to the motions. These two owners held four units of lot entitlement.

Rayina objected to the inclusion of Lots 126 and 141 in the 19 lots to be added to the common property.

Mijac objected to the inclusion of Lot 141 in the 19 lots to be added to the common property.

Nature of the disputed lots

Lot 126

Lot 126 is sandwiched between Lot 124 and the Frankston-Mitcham Freeway with no point of entry from the freeway. Accordingly, the only means of access to Lot 126 was through Lot 124 (owned by Rayina).

In 1992, Rayina had entered into a contract of sale to purchase both Lots 126 and 141 from Jonabe Pty Ltd. Settlement was effected but the transfers of land were never lodged for registration and could not be located.

Rayina objected to the proposed inclusion of Lot 126 and Lot 141 as it wished to complete its purchase of these lots from ASIC if it could.

Lot 141

In May 2012, Mijac registered a plan to subdivide Lot 148 into 3 lots. Lot 141 lies across what Mijac had planned to be a driveway to a loading bay for a proposed new warehouse on Lot 148. There would be no vehicular access to that driveway other than across lot 141.

Rayina has previously tried to purchase it to use as a car park.

Power of VCAT — What can the Member order?

The Tribunal in going through the application of Section 34D(2) noted that the Tribunal’s power under that section is to make an order consenting to the resolution on behalf of those members who did not consent (those who did not vote and voted against).

There is no power to consent to something different from what was proposed to be resolved. In other words VCAT does not have power to give consent to an amended version of the resolution.

However by virtue of Section 130(1) of the Victorian Civil Administrative Tribunal Act, the Tribunal has the power to make an order subject to any condition that it sees fit to make.

Applying Section 32 and Section 34D the Tribunal noted that to meet the requirements of Section 32 and Section 34D of the Subdivision Act and to obtain an order under Section 34D(1)(b) the Owners Corporation must prove 4 things:

  1. There has been a resolution out to the members for it to do one or more of the things set out in paragraphs (a) to (m) of Section 32;
  2. A member has or members have refused to consent (voted against and did not vote) to the action proposed in the resolution (Section 34D(3)(c));
  3. More than half of the membership of the owners corporation, having total lot entitlements of more than half of the total lot entitlement of members, consent to the proposed action (Section 34D(3)(c)(i));
  4. The purpose for which the action is to be taken is likely to bring economic or social benefits to the subdivision as a whole greater than any economic or social disadvantage to the members who did not consent to the action.

In the present case, points 1-3 had been satisfied.

If satisfied that the action would bring economic benefits to the subdivision greater than any disadvantage to the non-consenting members, the Tribunal may make an order granting the application. The Tribunal is not required to do so.

The Tribunal will exercise its discretionary powers to determine the balance of economic or social advantage/disadvantage.

Applying the benefits vs disadvantage test

The other 17 lots

Applying the benefits and disadvantages test, the Tribunal noted that leaving aside Lots 126 and 141, there was a clear economic and social benefit to the subdivision as a whole greater than any economic disadvantage to the members who did not consent to the proposed action to include the 17 lots in the common property.

The economic and social benefit that all members would derive from the inclusion of the 17 lots and the common property is that the members having become the beneficial owners of the 17 lots as tenants in common share in shares proportionate to their respective lot entitlements will gain in law the ability which they had in equity to use the 17 lots as carriageways.  Individual ownership of the lots as accessory lots involves a risk at least in theory that individual owners might exclude others from use of the lots as carriageways.

Lot 126

As Lot 126 was accessible only through Lot 124, the other members will not gain any economic or social benefit from the inclusion of Lot 126 in the common property. There would however be a distinct disadvantage to Rayina if Lot 126 were to be included in the common property.

Rayina would lose its potential right to secure and enforce an equitable interest in the lot. This distinct disadvantage was a powerful reason for the Tribunal to make the Order granted subject to the condition that the amended plan must not include Lot 126.

Lot 141

The Mijacs were keen to protect their right of way over Lot 141.

The Tribunal noted that from the Mijacs point of view the best outcome would be for matters to remain the way they were before the proceeding because the deregistered company was incapable of resisting their right of way.

The second best outcome would be the inclusion of lot 141 in the common property as the owners corporation does not dispute the right of way.

The worst outcome would be for someone to become the legal owner of Lot 141 as an accessory lot and be in a position to deny the Mijacs’ right of way.

On balance the Mijacs would be less disadvantaged by an order consenting to the proposed inclusion of Lot 141 in common property.

Orders made

Accordingly, the orders granted by the Tribunal were that the Tribunal consented on behalf of the members of the owners corporation who have refused consent so that there is now a unanimous resolution of all members of the Owners Corporation including in common property in plan of strata subdivision no. 21615Q the lots and extinguishing lot entitlement and lot liability of each of those lots.

The orders were made on condition that the Owners Corporation shall not lodge for registration any plan of subdivision or amended plan of subdivision which includes Lot 126 or which includes an alteration of lot entitlement and lot liability for Lot 126.

Accordingly, the Tribunal gave consent to the resolution proposed with no amendment but by using its power under Section 130(1) of the VCAT Act it set a condition relating to an activity that is to be undertaken as a result of the resolution, i.e. the preparation and lodgement for registration of an amending plan of subdivision.


Provided the owners Corporation satisfies s34D(3)(a),(b) and (c)(i), the Tribunal has a discretion to grant the orders listed in s34D(1).

The Tribunal in exercising its discretion will look at the balance between economic or social benefit to the owners corporation as against any disadvantage to the objecting (voted against or did not vote) lot owner advantage/disadvantage.

The Tribunal is unlikely to grant the orders sought if the disadvantage to a party grossly outweighs any advantage to the rest of the owners corporation or if there is a disadvantage to a non-consenting lot owner and no corresponding benefit to the other members of the owners corporation.

Sometimes to resolve practical difficulties the Tribunal may even exercise its rights to set suitable conditions to orders as it did in the case noted above.

As you can see from above using s34D is not straightforward.

More information

For more information, please contact Anton Block, Principal Lawyer and Head of Owners Corporation, on (03) 8600 8833 or ablock@kcllaw.com.au.

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