Foress-Tay [2002] QBCCMCmr 39 (29 January 2002)

DJ ReardonREFERENCE: 0388-2001

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	1821
Name of Scheme:	Foress-Tay
Address of Scheme:	2 Stephens Street, Burleigh Heads

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

DJ ReardonI hereby order that the application for the following order of an adjudicator

“That the proprietor of unit 10, Mr CJ Webb, remove the following improvements to the common area for his benefit carried out without approval of the body corporate, namely:-

1.	Insulation batts in the roof cavity and
2.	Antenna dish on roof”

is dismissed

I further order that within 10 days from the date of this order, the Owner of Lot 10 must present to the secretary two motions, seeking body corporate approval for the installation of insulation batts on common property, and seeking body corporate approval for the installation of an antenna dish on the common property, respectively.

I further order that the secretary must include the motions on the agenda for the next general meeting for the scheme.

I further order that should the Owner of Lot 10 fail to present motions for consideration of the body corporate in accordance with the terms of this order, the applicant must remove (or cause to be removed) the insulation batts and antenna dish installed on common property without body corporate approval, and must restore (or cause to be restored) the common property to its original condition.

I further order that should the body corporate fail to approve by special resolution either the installation of insulation batts or the installation of antenna dish by the Owner of Lot 10 at the next general meeting for the scheme, then the Owner of Lot 10 must remove (or cause to be removed) the unapproved improvement or improvements, and must restore (or cause to be restored) the common property to its original condition within 1 month of the date of the said general meeting.

I further order that the secretary is to distribute a copy of this order and the accompanying statement of reasons to all owners of lots included in the scheme with the next notice of general meeting for the “Forress-Tay” community titles scheme.
2n
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0388-2001

“Foress-Tay” CTS 1821

The applicant, the Body Corporate for Foress-Tay community titles scheme 1821, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (“the Act”), quote -

“That the proprietor of unit 10, Mr CJ Webb, remove the following improvements to the common area for his benefit carried out without approval of the body corporate, namely:-

1.	Insulation batts in the roof cavity and

2. Antenna dish on roof”

Section 223(1) 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)).

The community management statement for the scheme indicates that the Body Corporate and Community Management (Standard Module) Regulation 1997 (“the Standard Module”) applies to the “Foress-Tay” scheme.

Application, Submissions, Inspection and Meeting

The body corporate made this application on 25 June 2001. On 4 July 2001, the Commissioner for Body Corporate and Community Management invited the Owner of Lot 10 to make a written submission in response to the application. Under section 196 of the Act, the body corporate obtained a copy of the submission, and made a written response. On 31 August 2001, the Commissioner determined that the matter would be the subject of departmental adjudication.

On 24 January 2001, I conducted an inspection of the scheme land. I also met with the Owner of Lot 10, the Chairperson for the scheme and a number of lot owners to discuss issues raised in the application.

Matters in dispute

The issues in dispute are two improvements made by the Owner of Lot 10, the installation of insulation batts and the installation of an antenna dish. The body corporate states that as these improvements have been made to the common property for the scheme, the Owner of Lot 10 should have sought proper body corporate approval before making the improvements. Further the body corporate is seeking the removal of the insulation batts and antenna dish on the basis that the Owner of Lot 10 did not obtain proper body corporate approval for the improvements.

From the material before me, and from discussion with owners on 24 January 2002, it appears to me that the major concerns with the improvements made by Lot 10 are two-fold. Firstly, owners are concerned that in allowing the Owner of Lot 10 to retain the unauthorised improvements, a precedent will be set which will make it difficult for the body corporate to control improvements to common property by lot owners in the future. The other main issue raised by other owners, is that owners are unsure as to whether the insulation batts have been installed correctly in respect of existing cabling and other utility infrastructure and are concerned that there may be a threat of fire caused by the insulation batts.

In his response to the application, the Owner of Lot 10 explains that following a conversation with the body corporate manager for the scheme, he understood that he had approval to make the improvements. Further, in an attempt to address concerns regarding the safety aspects of the insulation batts, the Owner of Lot 10 engaged an electrician to inspect the installation and provide a report. The Owner of Lot 10 has provided me with a copy of the report, which seems to indicate that all wiring and switchboard are in a safe working manner.

Improvements to common property by a lot owner

The “Foress-Tay” community titles scheme was created under a building unit plan of subdivision (now known as a building format plan of subdivision). A building format plan is a form of subdivision that usually occurs within a building. The boundaries of lots are defined on the survey plan by references to the structural elements of a building including, for example, the floors, walls and ceilings. Where a lot is separated from another lot or common property by a floor, wall or ceiling, the boundary of the lot is the centre of the floor, wall or ceiling (Sections 48C and 49C(4) of the Land Title Act 1994).

In this case the owner of Lot 10 has made an improvement to the external surface of the roof (the installation of the antenna) and the area above the ceiling (the installation of the insulation batts). Both of these areas form part of the common property for the scheme.

Section 114 of the Standard Module allows the owner of a lot included in a community titles scheme to make improvements to the common property under certain conditions. Section 114 provides the following:

114.(1) The body corporate may, if asked by the owner of a lot, authorise

the owner to make an improvement to the common property for the benefit

of the owner’s lot.

(2) The improvement must be authorised by special resolution of the

body corporate unless—

(a) the improvement is a minor improvement; and

(b) the improvement does not detract from the appearance of any lot

included in, or common property for, the scheme; and

(c) the body corporate is satisfied that use and enjoyment of the

authorised improvement is not likely to promote a breach of the

owner’s duties as an occupier.

(3) An authorisation may be given under this section on conditions the

body corporate considers appropriate.

(4) The owner of a lot who is given an authority under this section —

(a) must comply with conditions of the authority; and

(b) must maintain the improvement made under the authority in good

condition, unless excused by the body corporate.

The term “minor improvement” is defined in the Dictionary of the Standard Module to mean “an improvement with an installed value of $200 or less”.

Therefore, owners who wish to make improvements to common property must obtain approval by special resolution of the body corporate unless the improvement satisfies each of the three criteria outlined in section 114(2).

It is clear from the information before me that the improvements do not fall within the categories in section 114(2). The Owner of Lot 10 has provided me with a copy of an invoice in relation to the installation of the insulation batts, which states that the cost of installation was $650.00. As a result, the installation of the insulation batts could not be described as a “minor improvement” within the meaning of section 114(2). While personally, I found the antenna to be quite unobtrusive, it would be arguable that the antenna does detract from the appearance of the common property. For this reason I also consider that the antenna does not fulfill the criteria set out in section 114(2).

As a result, I consider that the legislation requires the Owner of Lot 10 to obtain approval by special resolution for each of the improvements described in the application.

Body corporate consideration

It is apparent from the material before me that the Owner of Lot 10 has not obtained body corporate approval for the improvements described in the application. Further, it was confirmed by the parties that met with me on 24 January 2002 that the Owner of Lot 10 has not sought approval of the body corporate at a general meeting for the improvements.

In the response to the application, the Owner of Lot 10 explains that he thought he did have approval to make the improvements following discussions with the body corporate manager for the scheme. It is impossible for me to review or assess the content of the conversation between the Owner of Lot 10 and the body corporate manager, therefore I do not intend to make a finding regarding the conversation. In any event, it is the body corporate at general meeting and not the body corporate manager who decides whether or not to approve improvements to common property as described in this application. However, I do wish to state that after reading the material and meeting with some of the owners, I am satisfied that the Owner of Lot 10 has not deliberately avoided seeking proper approval and genuinely considered that he had acted reasonably.

The primary object of the Act is set out in section 3 of the Act in the following terms

“3. The primary object of this Act is to provide for flexible and contemporary communally based arrangements for the use of freehold land, having regard to the secondary objects.”

The secondary objects of the Act are set out in section 5 of the Act. Of particular relevance in this case is section 5(a) of the Act which provides that one of the secondary objects of the Act is “to balance the rights of individuals with the responsibility for self management as an inherent aspect of community titles schemes”.

I consider that this concept of “self management” requires the body corporate at first instance to consider and make decisions about issues that arise regarding the administration and management of the community titles scheme. While the Act allows these decisions to be reviewed and altered by an adjudicator, I consider that it is essential for the body corporate as a self-managing entity to make the initial decision regarding these matters.

In this application, the body corporate is seeking an order that the improvements installed by the Owner of Lot 10 be removed. I am of the view that it would be pre-emptive for me to make an order in these terms given that the members of the body corporate have not had the opportunity to consider, vote and decide on whether or not to approve the improvements. For this reason, I decline to make the order as sought by the body corporate.

However, to ensure that this matter progresses to a resolution, I intend to order that the Owner of Lot 10 present to the secretary for the scheme two motions for consideration at the next general meeting for the scheme. One of the motions is to seek body corporate approval for the installation of the insulation batts, the other is to seek body corporate approval for the installation of the antenna dish. At this point I would like to point out to all parties, particularly the owner of Lot 10, that pursuant to section 45(4) of the Standard Module, an owner may submit an explanatory note of up to 100 words to accompany a motion, which must accompany the agenda. An explanatory note is a good a way for a person submitting a motion to address concerns about the motion that owners may have.

If the Owner of Lot 10 fails to present these two motions, the Owner of Lot 10 will be required to remove the improvements and restore the common property to its previous condition.

At the next general meeting for the scheme, owners will have the opportunity to vote on whether or not to approve the improvements made by the Owner of Lot 10. It is important in any decision that the body corporate acts reasonably. I am of the view that if the body corporate refuses approval for the improvements, the refusal should be based on realistic and substantiated objections to the improvement that is being proposed. If the body corporate refuses to approve the improvements, the Owner of Lot 10 is required to remove the improvements and restore the common property to its previous condition. However, if the Owner of Lot 10 considers that the body corporate has unreasonably withheld permission, then he would be entitled to lodge a further application with this office seeking a determination of the matter.

In the interim, I do not intend to order that the Owner of Lot 10 remove the improvements in question. At the meeting on 24 January 2002, the chairperson indicated to me that she thought a general meeting could be called and held reasonably promptly. Further, given the report obtained from the electrician indicating that the wiring is in a safe working condition, I am reluctant to impose the additional expense on the Owner of Lot 10 of removing the items, given that the body corporate will be considering approving the improvements in the near future. I would point out to owners, particularly the committee that if there are concerns regarding safety issues, the committee could engage a tradesperson of their choice to inspect and report on safety concerns regarding the insulation batts and wiring. Similarly, if the committee is concerned about insurance ramifications of the improvements, the committee could contact the insurer directly, or through the body corporate manager to discuss their concerns.