Gazebo Terraces [2002] QBCCMCmr 394 (18 June 2002)

DJ ReardonREFERENCE: 0206-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	16844
Name of Scheme:	Gazebo Terraces
Address of Scheme:	12 Little Street ALBION QLD 4010

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

Josef Mettler and Esther Mettler, the Owners of Lot 5

I hereby order that within 2 weeks of the date of this order, the Owners of Lot 20 must present the Secretary for the Body Corporate with a motion (“the motion”), seeking approval of the Body Corporate for the installation of windows enclosing the southern balcony of Lot 20.

I further order that the Body Corporate must consider the motion at its next general meeting.

I further order that if the Body Corporate does not approve the motion at the next general meeting by special resolution, the Owners of Lot 20 must within 8 weeks of the date of the general meeting, remove the windows and return the balcony to its previous condition. DJ Reardon2y
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0206-2002

“Gazebo Terraces” CTS 16844

1. Order Sought

The Applicants, the Owners of Lot 5, have sought an order of an adjudicator under the Body Corporate and Community Management Act 1997 (“the Act”), that windows enclosing the southern balcony of Lot 20 be removed.

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 the 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 “Gazebo Terraces” community titles scheme indicates that the Body Corporate and Community Management (Standard Module) Regulation 1997 (“the Standard Module”) applies to the scheme.

2. Application and Submissions

This dispute resolution application was made on 8 April 2002. On 17 April 2002, the Commissioner for Body Corporate and Community Management invited the Owners of Lot 20, the Committee for the Body Corporate, the Body Corporate Manager for the scheme, and all owners of lots included in the scheme, to make written submissions in response to the application.

The Owners of Lot 20 have made a written submission about the application, as have the Owners of Lots 2, 7, 8, 12, 17, 19, and 23.

The Applicants were provided with a copy of the submissions in accordance with section 196 of the Act, and one of the Applicants has made a brief reply to the submissions.

3. Matters in Dispute

This application concerns widows that have been installed to by the Owners of Lot 20 to enclose the southern balcony of Lot 20. I have been provided with photographs of the balcony in question as part of the application and as part of submissions made in response to the application. The Owners of Lot 20 state in their submission that, “(T)he windows have been installed 2 inches in from the façade of the building, onto existing brickwork, enabling them to be positioned under the eaves of our verandah”

In their submission, the Owners of Lot 20 state that the proposed installation of the windows was raised as a matter of “General Business” at the annual general meeting of the Body Corporate held on 5 March 2002. I have reviewed a copy of the minutes of the annual general meeting, however I have not been able to locate any reference to the proposed installation of windows. While this discussion may have occurred at the meeting, in the absence of a proper motion, and recorded minute, it would be insufficient to be described as a resolution of the Body Corporate.

I have also been provided with a copy of the “Minutes of a committee meeting by postal poll” dated 12 March 2002 which includes the following, quote-

“2. CHANGES TO LOT 20
The Committee have approved the following changes to Lot 20, as requested by the owner:-

a) Installation of a carrier split system air conditioner – approval is granted subject to the condensate from the outside condensing unit being drained away in an appropriate manner which, does not cause nuisance to anyone or affect the appearance of the building.

b) Enclosing of Gazebo Verandah – approval is granted subject to the necessary council approval being sought and obtained.”

The minutes record that three committee members were polled. One member approved the resolutions, and one member did not respond. The third member, who is also an owner of Lot 20, abstained from voting, presumably on the basis of conflict of interest.

A letter from the Body Corporate Manager for the scheme to the Owners of Lot 20 dated 15 March 2002 includes the following statement, quote-

“Approval is also granted for the enclosing of the Gazebo Area subject to the necessary council approval.”

In summation, it appears that some form of approval was given to the Owners of Lot 20 to install the windows in question. Therefore, I consider that the issues for me to resolve are twofold. Firstly, I intend to consider whether or not the approval that was given was adequate to properly authorise the improvement. Secondly, I intend to consider whether it would be just and equitable in the circumstances for me to order in the terms sought by the applicant, that is, that the windows be removed.

4. Improvements to Common Property

The “Gazebo Terraces” community titles scheme was originally created under a building units plan of subdivision, and was later further subdivided by a building units plan of resubdivision. Building units plans are now known as building format plans of subdivision.

In a building format plan of subdivision, boundaries of lots are defined on the survey plan by references to the structural elements of a building such as the floors, walls and ceilings. These structural elements can include projections of, and references to, structural elements of the building. 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).

From the photographs and material presented to me, I consider that the windows that have been installed are for all practical purposes located on the boundary of the lot. As such, I consider that the installation of the windows constitutes an improvement to common property.

Section 114 of the Standard Module makes provision for owners to make improvements to common property for the scheme in the following terms, quote-

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 Schedule of the Standard Module to mean “an improvement with an installed value of $200 or less”.)

Therefore, an owner may make an improvement to common property, only if the improvement is authorised by a special resolution of the Body Corporate, unless the improvement meets the criteria set out in sections 114(2)(a), (b) and (c).

On 17 June 2002, I requested a member of the Office of the Commissioner for Body Corporate and Community Management to contact the Owners of Lot 20 for an approximate cost of the purchase and installation of the windows. One of the Owners of Lot 20 advised the member of staff that the windows cost approximately $2700. As this amount is well above the cost of a “minor improvement” within the meaning of the Standard Module, it appears to me that section 114 requires that the improvement be authorised by special resolution of the Body Corporate. While it is not necessary for me to consider sections 114(2)(b) and (c), I will make some brief comments.

The criteria set out in section 114(2)(b) is by its nature subjective, and more difficult to assess. While I personally would not say that the windows detract from the appearance of a lot, or common property included in the scheme, I can see that some owners would consider that the more “open” appearance of the verandahs is preferable. This view becomes more persuasive if consideration is given to the potential impact on the appearance of the scheme if all lots enclosed their balconies with windows. As such I consider that a view that the windows detract from the appearance of the scheme is not unreasonable, and as such, the improvement does not satisfy section 114(2)(b).

In terms of section 114(2)(c), I am satisfied that the use and enjoyment of the improvement described would not be likely to promote a breach of the owner’s duties as an occupier. However, due to fact that the improvement does not satisfy the criteria set out in section 114(2)(a) and section 114(2)(b), I am of the view that the improvement should properly have been authorised by special resolution of the Body Corporate at a general meeting.

5. Other considerations

While I am satisfied that the proper approval of the Body Corporate has not been obtained for the installation of windows enclosing Lot 20, it does not necessarily follow that it would be just and equitable for me to make an order that the windows be removed. I consider that it is of particular importance that it does not appear that the Body Corporate has to date, properly considered the improvements in a general meeting.

The primary object of the Act is “to provide for flexible and contemporary communally based arrangements for the use of freehold land, having regard to the secondary objects” (section 3). One of the secondary objects as set out in section 5(a) is “to balance the rights of individuals with the responsibility for self management as an inherent aspect of community titles schemes”.

I consider that it is vital that the members of the Body Corporate, that is the owners of lots included in the scheme, consider and determine the matter of the improvements to Lot 20 in a general meeting before an adjudicator makes a determination on whether or not it is reasonable for an improvement to be retained. To this end, I intend to order that the Owners of Lot 20 must present a motion to the Secretary for the Body Corporate seeking approval for the installation of the windows enclosing the balcony of Lot 20. This motion must be considered by the Body Corporate at the next general meeting for the scheme. I also intend to order that if the Body Corporate fails to approve the windows, the Owners of Lot 20 must remove the windows and return the balcony to its previous condition.

I would point out to all owners that any decision that the Body Corporate makes in respect of the installation of the windows must be reasonable in the circumstances.