Ocean Beach [2002] QBCCMCmr 209 (18 April 2002)

M.F. MorganREFERENCE: 0703-2001

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	26923
Name of Scheme:	Ocean Beach
Address of Scheme:	Captain Cook Drive AGNES WATER QLD 4677

TAKE NOTICE that pursuant to an application made under the abovementioned Act by

Mr William James Whyte,


I hereby order that the application for orders that resolutions on motions 2 and 5 of the extraordinary general meeting of the body corporate for the Ocean Beach Community Titles Scheme 26923 held on 7 October 2001, be overturned, is dismissed. n
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0703-2001

“Ocean Beach” CTS 26923

The applicant, as owner of lots 1 & 3 on SP 114258 and member of the body corporate for the Ocean Beach CTS 26923, has sought the following orders of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote –

1.	the resolution on motion 2,”Commercial Car Parking” requiring a resolution without dissent, voted on at the extraordinary general meeting held on Sunday 7 October 2001 and recorded in the minutes of that meeting as “not carried”, be overturned pursuant to s223 (3)(u); and

2.	the resolution on motion 5, “Additions to Commercial Scheme Land”, requiring a resolution without dissent, voted on at the extraordinary general meeting held on Sunday 7 October 2001 and recorded in the minutes of that meeting as “not carried”, be overturned pursuant to s.223(3)(u).

Motion 2 was as follows:

“Resolution Without Dissent

That by a resolution without dissent the Body Corporate:

(1)

Approve the subdivision of common property of Ocean Beach CTS (such subdivision to be undertaken at the cost of the original owner, Jim Whyte) for the car parking spaces shown on the attached plan, marked “Attachment A” and the transfer of those car parking spaces to the Body Corporate for Ocean Beach Resort Building CTS (when that scheme is established);

(2)	Execute a plan of subdivision, prepared for and at the cost of the original owner, Jim Whyte to effect the designation and transfer of car spaces so that they become part of the common property for the Ocean Beach Resort Building CTS when it is established;

(3)	Consent to the recording of a New Community Management Statement for the Ocean Beach CTS in the form attached to this motion, marked “Attachment B” (required to be lodged to accompany the Plan of Subdivision);

and that the Body Corporate Manager, BUGT Management (Maroochydore) Pty Ltd is authorised to affix the seal of the Body Corporate to the Plan of Subdivision, Transfer, Form 14 and New Community Management Statement.”


Voting result: Not carried- 9 For, 6 Against, 2 Abstained.


Motion 5 was as follows:

“Resolution Without Dissent

That by a resolution without dissent the body corporate:

(1)

Consents to the recording of a new Community Management Statement for the Ocean Beach CTS to include in Schedule “B” a description of the amalgamation of Lots 1 and 2 on RP 616097 with the Ocean Beach Resort Building CTS (which will be a subsidiary scheme to the Ocean Beach CTS) in the form of the Community Management Statement attached to this Motion marked “Attachment E”;

(2)

execute a Plan of Subdivision (if required to be executed by the Ocean Beach CTS) to effect the addition of the lots to the Ocean Beach Resort Building CTS and any new Community Management Statement required to be lodged as a consequence of the amalgamation forecast in the new Schedule B referred to above being completed;

(3)

BUGT Management (Maroochydore) Pty Ltd be authorised to affix the seal of the Body Corporate, Form 14, the Community Management Statements and Plans of Subdivision referred to in this Motion (if required to be signed by the Ocean Beach CTS) prepared to effect the addition of the lots to the Ocean Beach Resort Building CTS.

On the basis that the Body Corporate’s consent is given subject to the original owner meeting all costs of the amalgamation, preparation of the documents referred to in this Motion and recording of those documents at the Department of Natural Resources and Mines.


Voting result: Not carried- 15 For, 1 Against, 1 Abstained.

Further background and clarification

Since the extraordinary general meeting held on Sunday 7 October 2001, there have been various changes to the circumstances relating to motions 2 & 5.

The Ocean Beach Resort Building Community Titles Scheme has been established. Community Management Statement 26923 (schedule B) for the Ocean Beach Community Titles Scheme states that the scheme land is now made up of a layered arrangement consisting of the principal scheme being Ocean Beach Community Titles Scheme 26923 (“the principal scheme”) and the subsidiary scheme called the Ocean Beach Resort Building Community Titles Scheme. The subsidiary scheme is comprised of lots 25 to 29 on SP147253 plus common property on SP147253 (“the subsidiary scheme”).

The respondent Body Corporate for the Ocean Beach Community Titles Scheme 26923 is the principal body corporate (“the first body corporate”). The body corporate for the subsidiary scheme (“the second body corporate”) is also a member of the first body corporate.

Former lot 30 on SP 114257 (“the former lot 30”) in the principal scheme has been re-subdivided to create both the subsidiary scheme and also lots 30 to 37 and common property on SP 147252. Lots 30 to 37 on SP 147252 remain part of, and are members of, the principal scheme. Lots 30 to 37 do not constitute a subsidiary scheme.

Motion 5 seeks the consent of the principal body corporate to the recording of a new Community Management Statement for the principal scheme to include additional land with the subsidiary scheme by the amalgamation of lots 1 and 2 on RP 616097 with the subsidiary scheme. The plan number is incorrectly described in the motion 5. The correct description of the plan is RP 616907 and not 616097.

Also since the extraordinary general meeting, the applicant has ceased to be the owner of lots 1 & 2 on RP 616907, which adjoin the subsidiary scheme. Lots 1 & 2 on RP 616907 have since been cancelled to create lots 100 (owned by the applicant) and lot 101 on SP 138664. The applicant no longer owns the new lot 101.

The applicant is the original owner and proponent for the development of the principal scheme. He is also the owner of lots 1 & 3 in the principal scheme. The applicant is also the owner of the former lot 30 on SP 114257 in the principal scheme, which has been re-subdivided.

An adjudicator may make an order that is just and equitable

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)).

Resolution 2

Background information to motion 2 is set out in the BCCM 5 notice for the agenda for the extraordinary general meeting. It is stated that development approvals for the Ocean Beach Community Titles Scheme require that car parks be allocated for use by the commercial building, which will become part of the subsidiary scheme. The car parking spaces, located on the common property for the principal scheme, “are required to be allocated to, and controlled by the commercial building following creation of the Ocean Beach Resort Building CTS. To do this the car spaces have to become common property for the Ocean Beach Resort Building CTS”.

In support of the application for motion 2, the applicant has advised that:

“The proposed subdivision of common property for the principal scheme and incorporation of car parks as common property for the proposed subsidiary scheme-Ocean Beach Resort Building Community Titles Scheme- is appropriate to ensure ongoing compliance with the applicable development approvals and to minimize the possibility of future disputes concerning the use of the car parking spaces.”

The applicant advises that the four car parking spaces are intended to be allocated for use by the owners of lots 25, 26, 27 and 29 in the subsidiary scheme.

Multiple owners in the principal scheme provided submissions about motion 2. Certain concerns expressed included the following:

• “...we do not support the original motion and the reason being, that by permitting people using the commercial building to use existing unit car parking, will cause enormous problems for unit holders and their paying guests. Should the commercial building users park in the existing car parks it will not enable the people who own the units reasonable access”.

• “ I think it easily proven that current unit holders will be grossly dis-advantaged if the parking area concerned is allocated away from the body corporate.....We are vehemently opposed to this motion...” A previous use of the commercial building was referred to, which allegedly “deprived rightful owners and guests appropriate parking.”

• “The motion was taken to mean that some of those extra carparking spaces would be allocated to the units in the commercial building (Ocean Beach Resort CTS) for exclusive use, as is in the Ocean Beach CTS by laws, and would therefore be used by persons occupying the units in Ocean Beach Resort CTS. This would create a nuisance to the Ocean Beach CTS unit owners with more cars utilising the area.

The applicant has assured unit owners that he will be providing further carparking spaces in an adjoining allotment (subject to motion 5) which Ocean Beach Resort CTS unit owners are likely to use as it will be closer, however this does not change the fact that the spaces in Ocean Beach CTS are allocated exclusively to units in Ocean Beach Resort CTS and their owners have a right to use them, but more importantly, the use of the parks by persons patronising the restaurant in Ocean Beach Resort CTS.”

We would not object to the allocation of car parks to Ocean Beach Resort CTS if the car parking could be controlled by a boom/security gate, operated by a card or similar.”

The applicant has stated (in summary) that the objections to resolution 2 are substantially misconceived:

“The issues about which the objectors express concern will occur regardless of whether or not the 4 car parking spaces are transferred to the body corporate for the subsidiary scheme. A practical, cost effective solution would be for the body corporate to erect an appropriate sign.”

The applicant has requested that the motion, which was not carried, be overturned.

Section 223(3)(u) of the Act provides that an adjudicator may

if satisfied that a motion (other than a motion for reinstatement,

termination or amalgamation) considered by a general meeting

of the body corporate and requiring a resolution without dissent

was not passed because of opposition that in the circumstances is

unreasonable—make an order giving effect to the motion as

proposed, or a variation of the motion as proposed;

Hence, the issue I am being asked to consider is whether the opposition to motion 2 is unreasonable in the circumstances.

The motion is proposing a change in ownership for part of the common property. If motion 2 were carried, then the car parking spaces as common property would cease to be owned by the body corporate for the principal scheme and would be owned and be controlled by the second body corporate. The principal body corporate will lose the “collective use and enjoyment” of this part of the common property.

By way of clarification, the creation of the subsidiary scheme is a community titles scheme in its own right and if motion 2 were carried, then the subsidiary scheme would own and control the car parks as its common property. But it is not completely independent of the first body corporate. For the purposes of administration and management of a community titles scheme as a whole, the subsidiary scheme is regarded as a lot in the principal scheme.

The opposition expressed in the submissions by members of the first body corporate about the transfer of the common property, in my view, reflects a general concern about the use and regulation of the car parking spaces. Even if, as the applicant states, certain concerns will occur regardless of whether or not the car parking spaces are transferred to the second body corporate, it seems to me that the passing of motion 2, will not necessarily remove or mitigate concerns.

I do not agree that opposition to the motion is unreasonable.

The body corporate of the principal scheme is still required to comply with development conditions of approval for its development and the fact that motion 2 is not carried, does not prevent compliance with applicable development approval for the principal scheme.

Also, there is no mandatory requirement, which compels the first body corporate to transfer the allocation and the control of part of its common property to the subsidiary scheme and there is no automatic entitlement by the subsidiary scheme to the transfer of proposed common property.

Whilst an adjudicator has power to overturn dissenting votes in respect of a motion requiring a resolution without dissent, where such opposition is unreasonable in the circumstances, it has been considered in other adjudications that this power should be used sparingly and in circumstances where there will be a real detriment to all owners, or at least a majority of them, should the motion not be given effect. If this approach were adopted then, I cannot see that there will be detriment to all owners, or at least a majority of them, should the motion not be given effect.

In the circumstances of the current application, whilst I can appreciate benefits of the motion being carried for the subsidiary scheme (and some possible benefit for the principal scheme), I am not persuaded that there is commensurate benefit for the principal scheme and there may in fact be some detriment by the loss of ownership of the proposed common property.

The decision to vote for or against a motion is to be taken by a person based on their opinion and understanding of the circumstances. It has a subjective element to it. In my view the opposition expressed in certain of the submissions, to the vote against motion 2, is not so unreasonable that no reasonable person could have arrived at it.

As the applicant submits, the proposed transfer may be appropriate to ensure ongoing compliance with the applicable development approvals and to minimize the possibility of future disputes concerning the use of the car parking spaces. But this is not the issue, I am being asked to consider. I am not being asked which is the better decision on this motion.

There may be disagreement about whether or not the motion should be carried and this may be a matter on which minds may differ, but I cannot agree that opposition expressed in certain of the submissions, is unreasonable.


For multiple reasons, I do not consider the opposition in the circumstances to be unreasonable and I do not propose to make the order sought by the applicant in respect of motion 2.

Resolution 5

Background information to motion 5 is set out in the BCCM 5 notice for the agenda for the extraordinary general meeting held on Sunday 7 October 2001. It is stated that, subject to obtaining any necessary local authority development approval, the applicant wishes to amalgamate lots 1 and 2 on RP 616907, with the subsidiary scheme. The applicant proposes to construct an underground area for maintenance and equipment items related to the project, a covered out of sight garbage room and a secured under ground car park accessed from in front of the commercial building (all constructed on the amalgamated land). It is also proposed to construct a tennis court above the car park at ground level. Once added the additional land will be part of the subsidiary scheme. It is expected that provision of the tennis court and covered parking facilities will increase the amenities available for residents and their tenants in the principal scheme.

The applicant, in response to one the submissions, states in part, that the local authority “directed that lot 100 be attached to the former lot 30 (now comprising lots 31 to 37 on SP 147252, lots 25 to 29 on SP 147253 and common property of Ocean Beach Resort Building Community Titles Scheme 29819) for the purpose of car parking and other operational uses in connection with the community titles scheme (refer to Minute 1058 in the Minutes of the Ordinary Meeting of the Miriam Vale Shire council held on 1 October 2001).”

As set out in a copy of minutes of the Miriam Vale Shire Council of 1 October 2001, a development application, lodged by the applicant to reconfigure lots 1 & 2 on RP 616907, was approved subject to (amongst other things) the following:

“(d) the applicant/owner undertakes to attach lot 100 to lot 30 for car parking and other associated operational uses within six months and a suitable agreement or guarantee or endorsement on the title of lot 100 be provided to ensure compliance.”

From a perusal of this part of Council minute no 1058, I do not accept that the local authority gave a “direction”. Rather the approval was conditional upon an undertaking by the applicant “to attach lot 100 to lot 30”. The local authority has not “directed that lot 100 be attached to the former lot 30”.

Also, it is noted that plan of survey SP138664 which reconfigures lots 1 & 2 on 616907 into lots 100 & 101 on SP 138664, was approved and sealed by the Council on 8^th October 2001, the day after motion 5 was not carried and despite this. SP 138664 has since registered.

Motion 5, in part, seeks a resolution that the body corporate consent to a new Community Management Statement for the subsidiary scheme to include the former lots 1 & 2 on RP 616907 (now lots 100 & 101 on SP 138664). This is confusing in the context of the applicant’s reliance upon or referral to Council’s approval dated 1 October 2001. Council’s approval requires an undertaking that only lot 100 (and not the former lots 1& 2 on RP 616907 as set out in the motion) attach to the former lot 30, which includes both the subsidiary scheme and lots 30 to 37 and common property on SP 147252 (and not just the subsidiary scheme as set out in the motion).



In any event, multiple owners provided submissions, about motion 5, which included the following comments.

• “I believe that Ocean Beach Resort Building Community Titles Scheme does effect Ocean Beach Community Titles Scheme 26923 and will not benefit owners in the existing scheme. I believe owners should have input into any subsidiary scheme.”

• “We don’t believe that opposition to motion 5 is unreasonable. The addition of an Ocean Beach Resort Building Community Titles Scheme will have a great effect on the current body corporate. If this motion should be carried current unit holders will effectively have no input into what is proposed or intended to be operated from the commercial building.....Mr. White refers to a tennis court and other amenities to be built on this site. I think such ascertains should be clarified and or corroborated with the local council. It is my understanding that Mr.White has been advised by council that he will not be allowed to construct a tennis court where he proposes to do so for safety reasons. ....I do not believe this motion should be carried until Mr. Whites assertions can be confirmed in writing and that they be enforceable”. This submission considered that the principal body corporate should have input into future uses of the subsidiary scheme and that this will not be possible if motion 5 was approved.

• “This proposal is acceptable by us in that it is an appropriate area for car parking & tennis court”

In response the applicant states (in summary) that the objections to resolution 5, are misconceived and have no legal foundation.

The applicant has requested that motion 5, which was not carried, be overturned.

Section 223(3)(u) of the Act provides that an adjudicator may

if satisfied that a motion (other than a motion for reinstatement,

termination or amalgamation) considered by a general meeting

of the body corporate and requiring a resolution without dissent

was not passed because of opposition that in the circumstances is

unreasonable—make an order giving effect to the motion as

proposed, or a variation of the motion as proposed;

As with motion 2, I am also not being asked what is the correct or better decision on motion 5.

The issue I am being asked to consider is whether the opposition to motion 5 is unreasonable in the circumstances.

For development to be approved or to proceed, it is usually required to comply with multiple standards and requirements including for example car parking facilities, overshadowing, density, set-back as may be set out in local government planing policies and schemes. The capacity to provide increased car parking as a result of additional land “attaching” to the former lot 30 or just the subsidiary scheme, is likely to effect the range of development approvals or uses that may be granted or which may proceed, relating to the use of the former lot 30. Increased car parking capacity will also impact on the number of people visiting the commercial building. It is in my view reasonable that a body corporate owner in the principal scheme may have concerns that this may adversely impact on the amenity of the principal body corporate.

In my view, it is not unreasonable to oppose motion 5, on the basis that this will provide the opportunity for indirect input into the range of future uses of the subsidiary scheme. The body corporate owners in the principal scheme are entitled to have concerns about the impact that the amalgamation may have on their amenity by the creation of additional common property for car parking for the subsidiary scheme.

There is support for the motion. One submission stated “the proposal is acceptable to us in that it is an appropriate area for car parking and tennis court”. However, this indicates to me only conditional support dependent upon the future use for car parking and for a tennis court. There is uncertainty relating to this proposed future use including for a tennis court.

The applicant states in the response to submissions provided on 31 January 2002, that the provision of additional amenities for the development is under continuing review with various concepts being explored and implemented if possible. The applicant states as follows:

“Prior to September 2001, it was the Applicant’s intention to investigate the possibility of installing a tennis court in the amalgamated lot 100 for the benefit of the scheme. Plans are depicted in Attachment “E”. This and all such similar proposals are subject to approval by the local authority.”

If consideration of the motion is dependent upon the future use of the area as a tennis court, then I also think it reasonable that there is opposition to the motion until such time as there is more certainty about the proposal for a tennis court.

In the circumstances, I do not consider opposition to be unreasonable.

Also as noted in relation to motion 2, it has been considered in other adjudications that the power to overturn dissenting votes is used sparingly and in circumstances where there will be a real detriment to all owners, or at least a majority of them, should the motion not be given effect.

In the circumstances of the current application, whilst I can appreciate benefits of the motion being carried for the subsidiary scheme, I am not persuaded that there is commensurate benefit for the principal scheme.

The decision to vote against a motion is taken based on opinion and understanding of the circumstances. This has a subjective element to it. In my view the opposition expressed in certain of the submissions to the vote against motion 5, is not so unreasonable that no reasonable person could have arrived at it.

Future revised motions to a general meeting of the principal body corporate may achieve desired outcomes. But I am reluctant to grant an application which seeks that a motion be given effect under section 223(3)(u) of the Act, for this purpose.

For multiple reasons at the current time, I do not consider the opposition to motion 5 to be unreasonable and I do not propose to make the order sought by the applicant in respect of motion 5.