Surf Sound [2002] QBCCMCmr 11 (10 January 2002)

C G YOUNGREFERENCE: 0501-2001

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	14546
Name of Scheme:	Surf Sound
Address of Scheme:	12 Darwalla Avenue CURRUMBIN QLD 4223

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Cecily Gail CHESTERTON, as a co-owner of Lot 6,

C G YOUNGI hereby order that the resolution passed in respect of Motion 3 at the extraordinary general meeting of the body corporate on 24 July 2001, for the owner of Lot 6 to remove part of a stairway from common property, is invalid and of no effect.

I further order that within three (3) months of the date of this order, the body corporate must have resolved in general meeting to either repair or replace the spiral stairway located at the eastern end of the balcony adjoining Lot 6 with the cost to be borne by the body corporate, unless owners by resolution without dissent have alternatively determined to remove the stairway. 2n
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0501-2001

“Surf Sound” CTS 14546

Process to Date:
This is the final order to an application by Cecily Chesterton of Lot 6 who has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (“the Act”), quote -

1. Overturn/invalidate an ordinary resolution made by the Body Corporate of “Surf Sound” CTS 14546 at an extraordinary general meeting dated 24/07/2001.

2. Have a mediator help the Body Corporate solve the problem which led to the above “ordinary resolution”, and that has caused enough dissension, and distress over the past years.

The applicant also sought the following interim order of an adjudicator, quote -

We wish to stop any part of the dispute stairway being removed until the Body Corporate Commissioner has a chance to rule on the matter.

On 22 August 2001 I issued the following Interim Order 501-2001, quote –

I hereby order that the body corporate must not implement or otherwise act upon the resolution passed in respect of Motion 3 at the extraordinary general meeting held on 24 July 2001, concerning the removal of a stairway to the balcony adjacent to Lot 6, pending determination of the application by final order.

Adjudicator’s Powers:
Section 223(1) of the Act provides that an adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the context of a community titles scheme, about –

(a)	a claimed or anticipated contravention of the Act or the community management statement; or
(b)	the exercise of rights or powers, or the performance of duties, under this Act or the community management statement; or
(c)	a claimed or anticipated contravention of the terms, or the termination of, or the exercise of rights or powers under the terms of, or the performance of duties under the terms of an engagement contract or an authorisation contract.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 223(2)). An adjudicator’s order may contain ancillary or consequential provisions the adjudicator considers necessary or appropriate (section 230(1)).


Preliminary Comments:
From the submissions to the application by other owners, and other documentation, there is common ground between the applicant Chesterton and the body corporate that the stairway in question is in disrepair, is unsightly and probably unsafe. It either needs to be repaired, replaced or removed.

However, before discussing the relative maintenance responsibilities of the applicant and the body corporate in respect of the stairway, and the validity of Motion 3, I believe it will be of benefit to first set out the law in an area which both parties appear to misunderstand, namely the division (re-subdivision) of the applicant’s Lot 6 into two lots. The information will likely have a significant impact on the thinking and future decisions of both parties in respect of the stairway.


Proposed re-subdivision of Lot 6:
Leaving aside the safety and appearance aspects, the applicant has an interest in having the stairway repaired or replaced because, in conjunction with the other balcony stairway, they will provide separate access for each of the two proposed lots. In her application Chesterton also provides another reason why the stairway needs to be retained, when saying that she was “advised by Gold Coast City Council that we would need the staircase” for re-subdivision approval.

In summary, the repair or replacement of the stairway has a significance for the applicant beyond its mere appearance and safety status. However the attitude of owners to the re-subdivision proposal appears to be, from the words and tenor of submissions received, against it. That attitude will be crucial to the success or failure of the proposal proceeding as, contrary to what both parties appear to believe, local authority approval to a re-subdivision proposal is not the only necessary requirement.

Re-subdivision requires that lot entitlements need to be allotted to each of the two lots, thus changing the configuration of the contribution and interest schedules of lot entitlements contained in the body corporate’s recorded community management statement (“CMS”) with the Registrar of Titles. Section 55 of the Act requires that a new CMS must be first authorised by the body corporate and then lodged with the Registrar to replace the existing CMS. Under that section, the authorisation must be by way of a resolution without dissent of the body corporate in general meeting – there are some exceptions listed in the section where a lesser level of authorisation is required, but the alteration of lot entitlements is not one of them. Accordingly, a dissenting vote by even one owner will be fatal to the proposal. Given the current feelings of at least some owners, it would seem that the applicant would not succeed in such a resolution.

I am aware that Lot 6 was in fact originally two lots (Lots 3 and 4) which were amalgamated in 1984. However that was under different legislation, the Building Units and Group Titles Act 1970, and is really irrelevant to a proposed re-subdivision now. Of course the applicant should seek her own private legal advice on all of these aspects of her proposal.

If the proposal does not proceed, then perhaps the attitude of both the applicant and the body corporate to the stairway may alter. However, I think both parties should recognize that one of the three options listed earlier needs to happen soon.


Motion 3 – For owners of Lot 6 to remove part of stairway:
As pointed out by the applicant, this motion is vague and uncertain. It states –

“That the proprietor of Unit 6 remove the part of the stairway constructed on common area for his benefit without the proper approval of the body corporate.”

The motion does not identify the particular stairway being referred to, and then only calls for “part” of it to be removed. Motions must be framed so that they are unambiguous and certain in reference and intention – resolutions that are ambiguous and uncertain are almost certain to being declared void if put in dispute.

As well, the motion casts a duty on an owner to remove an item (stairway) from common property without any compelling evidence that the item is the personal property of the owner. In my opinion, the weight of evidence is that the stairway was either part of the original construction or was constructed soon after registration of the plan by the original owner/developer, J & E Moir, who, being the sole members of the body corporate, were in a position of being able to approve any such improvement, whether formally or by implication. The evidence of Jerry Holden (past owner of Lot 6) and information obtained from V & M Cahill (neighbours of the scheme), support that conclusion. The stairway is not an improvement/personal property of the owners of Lot 6, and it is not shown on the registered plan as being part of a lot, is therefore part of the common property and as a result, the responsibility of the body corporate.

On both grounds the motion fails and my order is therefore that the resolution passed in respect of Motion 3 at the extraordinary general meeting of 24 July 2001, is invalid. This is the only specific order sought by the applicant.


Second Order sought – Rectification of Stairway:
The second part of the order asks that the problem of the stairs be mediated. The stairway, shown to be common property, must be maintained by the body corporate in “good condition” (see section 109 of the Standard Module). Accordingly, the duty of the body corporate is clear and bears no discussion – it must either repair the present stairway or replace it. As to which option is chosen is a matter for the body corporate to determine. There is a suggestion that spiral stairways can no longer be installed, however that would probably not prevent the current one being repaired for continued use – the committee may care to confirm that. In consequence of this duty, I have made a further order concerning the maintenance of the stairway in urgent terms because of its condition. It may be that, in the light of the difficulty in obtaining re-subdivision authorisation, the applicant may now agree with other owners to remove the stairway (especially as she, with her co-owners, will have to meet 40 % of the cost based on the relative lot entitlements) and I have accordingly made provision for this possibility in my order.

One final matter. I understand from submissions that the applicant has already divided Lot 6 into two self-contained dwellings and has for some time been letting the dwellings separately. One owner submitted that this was illegal under the Gold Coast City Council regulations, but it does not seem that the body corporate has made any formal objection about it. This is a matter for owners to decide and is not part of this application, however it appears to me that it is a means of achieving the same result in respect of additional rental income, without having to obtain the approval of the body corporate necessary for a formal re-subdivision of the lot into two such parts.