Valma Court [2002] QBCCMCmr 413 (25 June 2002)

C G YOUNGREFERENCE: 0526-2001

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	13705
Name of Scheme:	Valma Court
Address of Scheme:	21 Sunset Boulevarde SURFERS PARADISE QLD 4217

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

Maureen Lorraine MANNING, as the owner of Lot 4,

1. C G YOUNGI hereby order that the owner of Lot 4, Maureen Lorraine Manning, must pay to the body corporate within one (1) month of the date of this order, the sum of One Thousand Five Hundred dollars ($1,500) in consideration for the grant of exclusive use over that area of common property given under following Order 2(b).

2. I further order that the body corporate must as soon as possible after receipt of the $1,500 payment from Manning, prepare a new community management statement containing a by-law granting exclusive use to –

a)	each owner, of an equal, or near equal, area of common property from out of that area shown on Sheet 5 as “common property car parking”, in the manner described in Motion 13 tabled at the annual general meeting of 28 June 2001, namely, from west to east, to the owners of Lots 2, 4, 1 and 3 respectively, for the purposes of car parking; and
b)	the owner of Lot 4, that area of ground level common property shown on Sheet 5 of the registered plan for “Valma Court” as “common property laundry”, for laundry purposes,

and that the grants be for the named purposes and the respective benefiting owners must maintain the areas in a clean and tidy condition.

3. I further order that, in consequence of Orders 1 and 2 above, the body corporate must –

c)

remove the pool equipment (pump and filter system) from its present location and relocate it to the area of common property situated just outside the north-western corner of that part of the building containing the car spaces, unless a majority of owners or owners of a majority of contribution schedule lot entitlements (whichever would otherwise prevail as an ordinary resolution) agree on an alternative location,; and

d)

house the pool equipment so as to both protect it from the weather and provide a reasonable measure of soundproofing of the pump motor noise so as not to cause a nuisance to occupiers of lots in the scheme.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0526-2001

“Valma Court” CTS 13705

The applicant, Maureen Manning of Lot 4, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (“the Act”) -

“I am seeking exclusive use of Lot 4 laundry and car parking area continue as granted by body corp A.G.M. 4.2.88. If for whatever technical reason the then body corp manager Aust Unit Admin p/L failed to properly register the exclusive use, then I am seeking consideration and an order to grant exclusive use as intended and acknowledged by all previous owners for past 13 yrs. Given that three of the four current owners also consent, I believe it reasonable that it continue.”

JURISDICTION:
This is a dispute between an owner, the applicant Manning, and the body corporate, the respondent, arising out of –

• the failure of the body corporate to lodge a change of by-laws for the recording of its resolution of 4 February 1988 granting the applicant the benefit of exclusive use of certain areas of common property (see later “Car Space 4” and the “Laundry”); and

• the subsequent failure of a similar (in part) resolution to pass at the annual general meeting of 28 June 2001,

in consequence of which the applicant now seeks an order that the body corporate lodge a request for a new community management statement to be recorded which contains such a by-law.

The parties are recognised disputants provided for in the dispute resolution provisions of the legislation (see section 182(b) of the Act), and the dispute falls within the general scope of those able to be resolved (see section 183(b) of the Act). However, because there are particular references in the dispute resolution provisions to by-laws generally and exclusive use by-laws in particular, I need to consider the question of jurisdiction further before proceeding to a determination of the application.

Section 223(1) of the Act provides a wide jurisdiction for adjudicators to make orders about, amongst other things, the same general matters set out in section 183(b), “the exercise of rights or powers, or the performance of duties, under this Act or the community management statement”. It further provides that an adjudicator “may make an order that is just and equitable in the circumstances...to resolve a dispute (my underlining)”. Subsection 223(3), with the preliminary words “Without limiting subsections (1) and (2)”, then sets out a series of examples from (a) to (v) of the types of orders an adjudicator may make.

Despite the preliminary words, the example in paragraph (i) states –

(ii) if satisfied a by-law (other than an exclusive use by-law) is, having regard to the interests of all owners and occupiers of lots included in the scheme, oppressive or unreasonable, order the body corporate to lodge a request with the registrar for the recording of a new community management statement—

(ii)	to remove the by-law; and

(ii) if it is appropriate to restore an earlier by-law—to restore the earlier by-law;

(my underlining)

There is no other reference in the legislation to an adjudicator being so limited in making an order regarding an existing exclusive use by-law (except in section 140 reserving jurisdiction to specialist adjudicators for by-laws associated with terminating management agreements etc). The example purports to restrict the wide jurisdiction given under the preceding subsections. In determining this application I do not have the difficulty of determining whether or not jurisdiction lies in respect of an existing exclusive use by-law, but example (i) does suggest an intention that the jurisdiction of adjudicators has some limitation in respect to this type of by-law. Perhaps this is because such a by-law adds considerable value to a lot, giving as it does a right to exclusively use part of the common property that, once given, leaving example (i) aside, can only be taken away upon the benefiting owner’s written consent (see section 134 of the Act). Alternatively, the words of limitation may have been an unintended carry-over of the same limitation imposed on a Referee under the specific head of power relating to existing by-laws in section 88(3) of the previous legislation, the Building Units and Group Titles Act 1980. However the new legislation brought in a much wider jurisdiction and such a limitation does not sit well with this change. In this regard, it is of significance that one of the proposed amendments to the legislation is to remove this very limitation in (i).

The particular aspect of jurisdiction I need to consider in this determination, for reasons that will become clear later in these reasons, is whether an adjudicator has the power to require a body corporate to lodge a new community management statement incorporating an exclusive use by-law which has either not been so resolved by the body corporate in general meeting, or was resolved some time ago but not recorded and including where ownership in one or more lots has since changed. This may, or may not, include: the granting of exclusive use to one owner against the wishes of one or more other owners; or the granting of exclusive use to an owner over one area instead of another preferred area (eg one car space over another car space).

Example (j), ie paragraph 223(3)(j), provides –

(j) if satisfied a by-law is invalid—make an order—

(i) declaring the by-law invalid; and

(ii) requiring the body corporate to lodge a request with the registrar for the recording of a new community management statement to remove the by-law;

Example (t) provides –

(t) despite the failure (including because of refusal) of the body corporate to consent to the recording of a new community management statement, order the body corporate to lodge a request with the registrar for the recording of a new community management statement;

Example (u) provides -

(u) 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;

Examples (j), (t) and (u) illustrate a wide jurisdiction in respect of disputes involving by-laws, and contain no words limiting that jurisdiction in respect to exclusive use by-laws. In particular, example (u) permits an adjudicator to overturn a body corporate refusal to pass a resolution without dissent for a new community management statement containing a new exclusive use by-law. This would, for example, empower me to reverse the decision of the body corporate of 28 June 2001 and order that it consent to Motion 13 for a resolution without dissent – just as the applicant has sought. The effect of such an order is that it would grant exclusive use rights to other owners against the wish of a dissenting voter/owner, and in certain circumstances (as with Motion 13) also result in a grant of exclusive use to the dissenting owner against their wishes. That may be the result when exercising the power illustrated in example (u).

I am also of the opinion that an adjudicator’s jurisdiction is wide enough to allow the making of an order to give effect to an exclusive use by-law where the by-law/community management statement (depending on the timing and relevant legislation) was passed by the body corporate but never recorded (for whatever reason), even where there have been changes in ownership. I base this opinion on: the wide nature of an adjudicator’s jurisdiction as set out in subsection 223(1) (“just and equitable” orders); the general terminology of paragraphs (1)(a) to (c); and the tenor of examples (j), (t) and (u) in relation to by-laws. I also consider that, for these same reasons, that the limitation in (i), if indeed that limitation applies in the face of the preliminary words to subsection (3), should not be extended as a legislative philosophy to reduce the scope of an adjudicator’s general powers to deal with by-laws.

I also believe the power extends to imposing reasonable conditions in an exclusive use by-law, reflecting the flexibility provided for in (u) for a “variation of the motion”.

If there is any limitation to the power of an adjudicator in this area, it may be in those instances where owners have never considered a grant of exclusive use over the area in question. That is, it may be that there must have been some consideration of exclusive use by owners, not necessarily by a resolution without dissent in general meeting, before an adjudicator can consider imposing an exclusive use by-law in resolving a dispute. However, I do not need to consider that limitation here as the circumstances include that owners have considered the by-laws at one time or another.

General jurisdiction: 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) of the Act).


APPLICATION AND SUBMISSIONS:
Under section 194 of the Act, copies of the application were provided to all owners, inviting them to make a submission to the matters raised by the applicant. Submissions were received from Emma James, owner of Lot 1, and Lee Jackson, owner of Lot 2.

In order to better understand the dispute and the position of the parties, I visited the scheme on 26 February 2002 and inspected the relevant lot areas and common property in the presence of the applicant, Manning, and the two owners who made submissions, Jackson and James. At a later date, 22 April 2002, I held an information session at the Department’s Bundall office with these same persons and the son of the remaining owner, Gary Bingham of Lot 3 (see later in these reasons regarding discussions).

The broad facts of the dispute are as follows.

“Valma Court” was registered as a building unit plan on 19 July 1974 and comprise four residential lots. The developer resided in Lot 4 (the applicant’s lot) until January 1980 when it and the other three lots were sold to Dennis Annable. Annable resided in Lot 4 and regarded the laundry as being for the exclusive use of the occupant of Lot 4 (see his letter attached to the application). Manning states that, although when purchasing the lot he represented to her that she had exclusive use of the laundry area (the “Laundry”) and the car space adjacent to the western boundary of her lot (“Car Space 4”), her solicitor advised that no formal authority for that claim existed. Subsequently, on 4 February 1988 the body corporate considered motions to:

• (Motion 2) by By-law 22 grant to each owner the exclusive use of a common property car space, as designated in an attached sketch plan (being, from west to east, for Lots 2, 4, 1 and 3 respectively – Lot 4 getting Car Space 4).

• (Motion 3) by By-law 23 grant to the owner of Lot 4 exclusive use of the Laundry, also shown on the sketch plan, being the area situated between Lot 3 and Lot 4 at ground level (Level A on the registered plan).

The minutes show both motions were passed – under section 30 of the Building Units and Group Titles Act 1980 a resolution without dissent was necessary for an exclusive use by-law motion. A voting paper in the body corporate records shows the owners of Lot 3 at the time, the McLeans, voted against Motion 3, however Shirley McLean has confirmed that in fact the voting paper was withdrawn at the meeting and a vote in favour of Motion 3 was made personally. I accept that both motions passed as exclusive use by-laws.

The Body Corporate Manager engaged by the body corporate at the time, Australian Unit Administration Pty Ltd, failed to lodge a correctly worded and described Notification of Change of By-laws with the Registrar of Titles and the lodgement was rejected. Manning claims she was unaware that the by-laws had not been recorded until Jackson brought the matter to her attention upon her purchase of Lot 2 in February 2001. As a consequence, Manning submitted the following motion for consideration at the annual general meeting held on 28 June 2001 –

Motion 13. Exclusive Use Garage Spaces.

That the owners of Lots 1 to 4, for the time being, shall be entitled to the exclusive use and enjoyment of the areas as marked on the attached plan (see attached marked “E”). The owner shall use the said area for the purpose designated and shall keep such area in a neat and tidy condition, and that the Body Corporate prepare a new Community Management Statement to reflect the exclusive use areas.”

Attachment E not only shows the car space for Lot 4 as including Car Space 4 (of the 1988 sketch plan), but also including the Laundry. Despite both the heading reference of the motion being for “garage spaces” and the wording on the attachment, clearly the “car space” comprises both areas and it should have been properly described and captioned this way. However, the essential point is that both Car Space 4 and the Laundry constitute the area designated for the exclusive use of Lot 4. One other point to note here is that the car spaces designated for Lots 1 and 3 have been reversed from that in the 1988 sketch plan. I understand that this change reflects what has been the accepted parking space for these two lots for some years.

The minutes of the meeting show that the motion was lost as a resolution without dissent on the dissenting vote of Jackson, the other three owners all voting in favour of the motion. The failure of Manning’s motion triggered this application by her.


DETERMINATION:
While the applicant has sought an order for the body corporate to lodge a new community management statement to give effect to the exclusive use grants resolved at the general meeting of 4 February 1988, it became obvious early in the dispute that there were other issues involved. This prompted the information session and the solutions suggested and discussed at the meeting.

The dissenting voter to the June 2001 motion, Jackson of Lot 2, submits that when purchasing her lot she took care to undertake comprehensive property searches relating to both Lot 2 and the scheme generally. She established that the applicant as the owner of Lot 4, had no right of exclusive use in respect of either the Laundry or Car Space 4. Also, as the northern wall enclosing Car Space 4 contained a door, and the car space was unrestricted common property, she understood that she had the right to cross over the car space and use the door. The ability to use Car Space 4 and the door was of particular benefit to her (or, more correctly, her tenants) for carrying shopping from the car space she used (that adjacent to Car Space 4) through the door to her lot at the rear of the scheme. She is concerned that if exclusive use is given over Car Space 4, then she may no longer be able to access and use the door. Accordingly, access to the door by the occupier of Lot 2 is one of the “other issues involved” I referred to in my opening paragraph.

The other issue concerns the location of the common property pool pump and filter (“pool equipment”) at the rear of the car space currently used by Lot 2. Its presence would, from my observation, prevent the parking of a long wheel base vehicle.

I shall deal with each of the matters separately, concluding with a summary of the overall position and my reason for adopting the particular course of my order.

LAUNDRY:
There are physical reasons why the owner of Lot 4 should have the exclusive use of the Laundry -

• all lots other than Lot 4 have a built-in laundry as part of their lot.

• there is a laundry chute between the bathroom of Lot 4 and the laundry.

• the hot water system servicing Lot 4 is located in the Laundry.

• the electrical outlets in the Laundry are connected to the power supply for Lot 4.

Additionally: the history of the scheme is generally that only the owner of Lot 4 has used the laundry; the owner of Lot 4 would have had exclusive use of the Laundry if the by-law of February 1988 had been properly lodged and recorded; and, only one owner opposed such a grant in the vote of June 2001.

However, I am also mindful that, firstly, Manning was made aware of the lack of a formal claim to the Laundry by her solicitor at the time of purchase and she should have been more vigilant in ensuring that this right was confirmed by the recording of the by-law in 1988. She might well argue that she thought the resolution itself was sufficient, however, her not knowing of the legal requirement to give effect to the by-law is not an excuse she can rely on. Secondly, from the outset of her purchase Jackson had established the unrestricted nature of the relevant areas of common property and perhaps partly relied on those features in making her decision to purchase. Other owners appear to have been satisfied with the de facto arrangements in place regarding the car spaces and the Laundry, confirmed by their vote in June 2002.

I am satisfied that the owner of Lot 4 should have exclusive use of the Laundry, though I will address the consequences of her failure to ensure recording of the by-law and the situation of Jackson, in my summary.

OWNERS’ CAR SPACES AND THE REAR DOOR TO CAR SPACE 4:
At the June 2001 general meeting, the proposed by-law was for exclusive use car spaces to be given ,from west to east, to the owners of Lots 2, 4, 3 and 1. The granting of these rights of exclusive use is not opposed by any owner, except to the extent that Jackson requires either: access across Car Space 4 to use the door at the rear (northern end) of the space; or alternatively, that a new door be installed into the western end of her (Lot 2) proposed car space, at Manning’s cost if access is not provided for in the grant of Car Space 4.

There is no doubt that the absence of rights over car spaces should be remedied in the interests of all owners. Currently owners park in particular spaces by common consent, however that can change with the advent of a new owner, or an aware tenant, who may wish to park, for example, in an alternative space on a “first come-first served” basis.

I am satisfied that the owners should be given exclusive use of the car spaces as designated in the June 2001 motion, but will defer consideration of the question of access for Lot 2 over Car Space 4 to use the door, under a specific heading in the following summary.

POOL PUMP AND FILTER:
I have already commented on how the pool equipment restricts the parking space in Lot 2 car space. However, of course Jackson purchased her lot in the knowledge that the pool equipment was located in the car space that was designated, albeit informally, for her use.

I shall also take this situation into consideration in the following summary.

SUMMARY OF ISSUES:
At the information session with owners, I suggested a solution to resolve all of the above issues. The suggested solution was as follows –

1. Manning to pay an amount of $1,500 to the body corporate in consideration for the exclusive use of the Laundry. This amount does not represent a real estate valuation of the Laundry area, which would obviously be higher, but a contribution assessed as a balance between her right to the exclusive use (from historical, physical and de facto points of view) and her failure to take reasonable steps to legally secure that right.

2. Owners to be given exclusive use over the car spaces in accordance with the proposal in Motion 13 of June 2001.

3. The pool equipment be relocated from Lot 2 car space to the common property outside of the building. Most present agreed to it being relocated just outside of the northern building wall of the car space for Lot 2. Manning was against this site as the motor noise may travel upwards to her unit situated above – she thought it might be better placed on the other side of the adjacent free standing wall, alongside the pathway leading to the rear of the scheme.

4. In regard to the use of the rear door by the occupier of Lot 2, no solution was suggested. It was seen as a difficult problem. I stated that, if Lot 2 was to have use of the door, then the grant of Car Space 4 would have to be made subject to a right of access by the occupiers of Lot 2 for the specific purpose of using the door. An alternative suggestion by Jackson was for Manning to fund a door being installed in the rear wall of her car space. The owners of Lots 2 and 4 took opposing positions on the matter, with Manning objecting to any use of the door by Lot 2, or paying for a new door. Other owners have no direct interest in this matter. I said that this would be a matter I would have to consider as to what is a just and equitable solution.

Since that time, I have received a number of documents from both Manning and Jackson which merely serve to reinforce the views they have already expressed. Jackson has suggested that another information session be held to consider the door access matter and also the cost of preparation and lodgement of the new community management statement. In regard to the latter, it will be a matter for the Registrar of Titles to decide on whether a survey of the exclusive use areas is necessary or whether the areas can be sufficiently described in the by-law by reference to existing structures. As the exclusive use areas proposed are all internal to the building, and follow the walls of the building except for the dividing lines between car spaces 2 and 4, and 3 and 1. These two divisions, however, can be referenced to pillars and therefore it may well be possible to have by-law(s) recorded without the need for a survey of the areas. This is a matter that the body corporate should initially take up with the Registry as being able to dispense with a survey will save considerable cost.

The order I have made follows my previous suggested solution, without any provision being made for the occupier of Lot 2 to have access to the door to Car Space 4, or for Manning to fund installation of a new door in the rear of Lot 2 car space. I have not made any such provision for the following reasons –

• I am satisfied that the door was only ever meant to be used by the occupier of Lot 4, both for exiting directly to the rear area from the laundry and from the lot via the side door and car space. The occupiers of Lots 1 and 3 have no equivalent door, requiring them to access their lots by exiting their car spaces through the front and taking the path located between the external wall and the eastern boundary fence. A similarly located path on the western side is available for like use by the occupier of Lot 2.

• More importantly, to allow access over Car Space 4 means that the owner of Lot 4 would never be able to secure the space by erecting a mesh fence (or other slim barrier given the limited space) between it and the Lot 2 car space. The erection of a dividing structure to secure their car space is a reasonable improvement that should be available to owners in the scheme. Without it, a vehicle parked in an adjacent car space is vulnerable to theft or damage if the occupier of the first car space does not lock their garage door. In the case of Lot 4, this would also allow access to the side door to the lot.

In regard to the cost of the new community management statement, as each of the owners will benefit from their own exclusive car space it is fair that the cost should fall according to the owners’ lot entitlements (I note Lot 4 pays one-thirteenth more than other owners). In the June 2002 proposal, the grant of the laundry area to Lot 4 was, as already pointed out, done in conjunction with the car space and the whole area was labelled “car space”. While the laundry grant can and should be part of the same by-law, it would be better to describe the two areas separately by their function (or at least by a dual reference). The laundry grant will not cost the body corporate any more in lodging fees or in preparation fees, unless a full survey is necessary in which case the larger contribution borne by Lot 4 will partly compensate.

The payment of $1,500 by Manning of Lot 4 will more than pay for the relocation of the pool equipment from Lot 2 car space. Jackson of Lot 2, who purchased in the knowledge that the laundry was not subject to any exclusive use grant, is therefore indirectly the main beneficiary of the payment. That is, the payment may be regarded as indirectly compensating for the loss of a legal right of access, even though it was a right that should not have existed had the developer in the first instance, and the Body Corporate Manager at a later time, put in place what was obviously intended.

I regret the delay in issuing this order: I had thought the draft amendments which I referred to earlier in respect of jurisdiction would have been released but that did not occur. I have made my order for the reasons set out above. I would point out that my order is the authority for the new community management statement, which can be prepared and lodged by the committee for the body corporate. I have imposed a similar maintenance obligation on owners to that contained in the June 2001 motion. 2n