La Porte D'Or [2002] QBCCMCmr 435 (5 July 2002)

RA MeekREFERENCE: 0346-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	12681
Name of Scheme:	La Porte D'Or
Address of Scheme:	3422 Surfers Paradise Boulevard SURFERS PARADISE QLD 4217

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Vito Giorgio, the owner of lot 153

RA MeekI hereby order that, in respect of the application by Vito Giorgio, the owner of lot 153, for an order seeking a declaration that the body corporate letterboxes are common property and therefore, pursuant to section 111 of the standard module, require a resolution without dissent to be removed and disposed of, I declare that the removal and disposal of the letter boxes requires an ordinary resolution pursuant to section 117 of the standard module.

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STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0346-2002

“La Porte D'Or” CTS 12681

The applicant, Vito Giorgio, the owner of lot 153, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

The applicant seeks a declaration (that) the body corporate letterboxes are common property and therefore, pursuant to section 111 of the (standard module), require a resolution without dissent to be removed and disposed of.

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)).

In the supporting grounds, the applicant states that –

A former committee member arranged for the removal and disposal of the body corporate letterboxes (a bank of one letterbox per lot and one for the body corporate). The bank of letter boxes was firmly affixed to an external wall of the building where it was accessible by Australia Post and all residents. There was no committee or general meeting resolution to removal and dispose of the letter boxes. I am not interested in pursuing the person(s) responsible for the disposal of the common property, merely seek confirmation that a resolution without dissent is required to remove and dispose of the letterboxes.

I note that the committee has responded to the notice inviting submissions by advising that it will not be making a submission.

The applicant seeks a declaration that a resolution without dissent is required for removal and disposal of the letter boxes.

Section 110 of the standard module provides that -

ÿMailbox and notice board—Act, s 115
110.(1) The body corporate must—
(a) maintain a mailbox clearly showing the body corporate’s name in a suitable position at or near the street alignment of the scheme land; or
(b) make suitable alternative arrangements for the receipt of mail.
(2) The body corporate may maintain a notice board for the display of notices and other material of interest to the owners or occupiers of lots in a suitable position on the common property.

The applicant relies on the terms of section 111 of the standard module for his belief that the removal and disposal of the letter boxes requires a resolution without dissent. The applicant presumably believes that the letter boxes are common property, and in the event of their being disposed of, a resolution without dissent is required, as per section 111(2)(b) of the standard module.

Disposal of interest in and leasing of common property—Act, s 116
111.(1) This section sets out the way in which, and the extent to which, the body corporate is authorised—
(a) to sell or otherwise dispose of common property; and
(b) to grant or amend a lease over common property.
(2) The body corporate may—
(a) if authorised by resolution without dissent—
(i) sell or otherwise dispose of part of the common property; or
(ii) grant or amend a lease for more than 3 years over part of the common property; and
(b) if authorised by special resolution—grant or amend a lease for 3 years or less over part of the common property.
(3) Also, the body corporate may grant or amend a lease over the whole of the common property if the body corporate is authorised to lease the land by—
(a) for a lease for more than 3 years—a resolution without dissent; and
(b) for a lease of 3 years or less—a special resolution.
(4) Despite subsections (2) and (3), the body corporate may grant or amend a lease over part or the whole of the common property without the authority of a resolution without dissent or special resolution if the community management statement provides for the lease.
(5) The body corporate must not lease common property if—
(a) the lease would interfere with access to a lot, or to a part of the common property over which exclusive rights have been given under a by-law; or
(b) the common property leased is land a person has the right to occupy for the person’s engagement as a service contractor or authorisation as a letting agent.
(6) An instrument lodged for registration under the Land Title Act 1994 to give effect to a transaction under this section must be accompanied by—
(a) a certificate under the body corporate’s seal certifying the transaction has been authorised as required by this section; and
(b) a certificate of the local government certifying the transaction has been approved or noted as required under the Planning Act; and
(c) if the transaction is associated with a reduction in the common property—a request to record a new community management statement for the scheme in the place of the existing statement for
the scheme.
(7) The body corporate may not grant a lease over utility infrastructure that is common property.

In contrast to this, section 117 of the standard module provides -

ÿDealing with (including disposal of) body corporate assets—Act, s 119
117. The body corporate may—
(a) sell or otherwise dispose of a body corporate asset that is freehold land, or a leasehold interest in freehold land, only if authorised by resolution without dissent; or
(b) grant or amend a lease over a body corporate asset that is freehold land, or another body corporate asset capable of being leased, only if authorised by—
(i) if the term of the lease, as granted or as amended, is more than 3 years—resolution without dissent; or
(ii) if subparagraph (i) does not apply—special resolution; or
(c) sell or otherwise dispose of a body corporate asset that is personal property (not including personal property mentioned in paragraph (a) or (b), but including a licence or concession related
to freehold land) only if authorised by special resolution, if the market value of the asset is more than the greater of the following amounts—
(i) $1 000;
(ii) an amount worked out by multiplying the number of lots included in the scheme by $200.

The distinction between the two sections appears to be that one refers to common property and the other to body corporate assets.

“Body corporate assets” are defined in the Act (section 12) as “items of real or personal property acquired by the body corporate, other than property that is incorporated into and becomes part of the common property”.

“Common property” is not defined in the Act, except that in section 11(2) “common property” for a community title scheme is referred to as “other land”, meaning land other than lots included in a scheme.

In my view, it is contemplated that the sale or disposal of common property in section 111 is intended prima facie as a reference to land, or real property associated with the scheme. I acknowledge however that this interpretation does not sit easily with the definition of “body corporate assets” in section 12 of the Act. I consider however that whilst a body corporate asset, can become common property when it is installed as a fixture, I consider that if it is at some time separated or removed from the common property, then it can again become a body corporate asset. It does not for all time remain common property. I consider that it becomes common property so long as it is affixed to the common property, but if it is capable of being removed or annexed from the common property, then at such time, it again becomes a body corporate asset.

In essence, it seems to me that whether an item is common property or a body corporate asset depends upon the extent to which it may be incorporated into and become part of the common property, or part of the parcel.

I conclude that common sense and practicality should be applied to the determination of this matter. In terms of the significance of the item involved, it is my view that letter boxes are not in the league of the disposal of land, or part of the common property.

The full circumstances of the disposal of the letter boxes has not been explained. Is it that the letter boxes have been replaced by new letter boxes. If not, how is it intended that residents of lots receive mail.

I conclude that the disposal of items such as letter boxes should be considered the disposal of a body corporate asset in contrast to common property. If this view is adopted, then there is a sliding scale of the type of resolution required depending on the relative value of the asset one suspects, or alternatively, the relative significance of the item being disposed of (eg. land requiring a resolution without dissent in contrast to an old clothes line which is worth say $200, which would only require an ordinary resolution).

If this view is adopted, then the disposal of a bank of letter boxes would presumably require an ordinary resolution, since presumably the market value of an asset of this nature would be less than the value above which a special resolution would be required – for this body corporate, $37200.

I consider however that the sale or disposal of the letter boxes could not be a matter for the committee as I consider that it would be a restricted issue under section 26 in that it would be a decision affecting a right, privilege or obligation of the owners.

I therefore conclude that an ordinary resolution is required for the removal and disposal of the letter boxes, and have ordered accordingly.
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