Lake View Park [2002] QBCCMCmr 669 (12 November 2002)

P J HANLYREFERENCE: 0240-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	20751
Name of Scheme:	Lake View Park
Address of Scheme:	Lake View Park Waimarie Street KELLYS BEACH BARGARA QLD 4670

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

Ian Ronald McColl and Jillian Rae McColl, the owners of lot 26


I hereby order that the application for an order that the body corporate be directed that –

a) motion 3 considered at the extraordinary general meeting held on 4 May 2002 required a resolution without dissent and that if it was not passed in that manner it cannot be implemented; and

b) in the absence of motion 3 being passed by resolution without dissent, motion 4 be ruled out of order and that no voting on or further action in respect of motion 4 proceed.

is dismissed.


The above order was appealed to the District Court, Brisbane. On 23 Septebmer 2003 Judge McGill QC, delivered the following order:

“THE ORDER OF THE COURT IS THAT:

1.	Appeal dismissed with costs.”

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0240-2002

“Lake View Park” CTS 20751

The applicants, Ian Ronald McColl and Jillian Rae McColl, have sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote -

1. Motions 3 and 4 proposed for the extraordinary general meeting of the body corporate to be held on 4 May 2002 be ruled out of order and that no voting on, or further action in respect of, the motions proceed.

In the alternative, that:

2. The body corporate be directed that –

(a)	proposed motion 3 requires a resolution without dissent and that if it is not passed in that manner it cannot be implemented; and
(b)	in the absence of motion 3 being passed by resolution without dissent. Motion 4 be ruled out of order and that no voting on or further action in respect of motion 4 proceed.

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)).

In the supporting grounds, the applicants contend, in relation to motion 3, that the existing by-law 17 is not an exclusive use by-law, but that the proposed by-law 17A is such a by-law. The applicants state that to the extent that by-law 17A purports to grant special rights about common property to an owner or occupier of a lot, it is required to be passed by resolution without dissent. The applicants further state that to the extent that it purports to grant special rights about common property to a non-owner or non-occupier, the body corporate has no power to enact such a by-law. The applicants further state that motion 4 is a proposed variation to the current letting agreement purporting to grant to the letting agent under it special rights about common property of the nature contemplated by by-law 17A. The applicants further state the changes to the letting agreement actually go further than what is contemplated in the proposed by-law changes. The applicants refer to various authorities in support of their contention that the proposed changes require the support of an exclusive use by-law passed by resolution without dissent.

The body corporate committee and all owners were invited to respond to the application. A number of submissions were received from owners. The body corporate committee, through its solicitors, responded in some detail. Many of the submissions dealt with what I regard as issues peripheral to the subject matter of the application, such as the on-going disputation between the applicants, as the former letting agents, and the present letting agents, in respect of signage.
Whilst this background information provided some insight into the applicants’ relationship with the new letting agents, it has not assisted me in making my determination, and to that extent, I have disregarded it.

The committee addressed the applicants’ grounds, and in its concluding statement, submitted that :

1) Motion 3 is a motion that requires only to be passed by special resolution as it does not relate to a change in an exclusive use bylaw;

2) Motion 4 does not grant any special rights about common property nor preclude any unit owner from engaging an agent other than the letting agent; and

3) The application is a continuation of the dispute between the applicants and the committee and in relation to proposed bylaw 17A, the applicants are concerned the bylaw will give the committee the power to require the applicants to remove signage painted on the applicants’ lot within the scheme land.

The committee also noted the applicants’ contention that the current bylaw 17 is not an exclusive use bylaw, and expressed the view that, if that were so, it is difficult to then distinguish the proposed bylaw 17A, and accept that it is an exclusive use by-law, if one examines the wording of both by-laws, and in particular the last sentence of the existing by-law.

Bylaw 17 provides:

“Should the caretaker/letting manager engaged by the body corporate at any time own or lease a lot in the development then same may be used for both residential purposes and for the purposes of management of the development and for the sale and letting of lots in the development on behalf of the proprietors, and the rendering of services to occupiers of lots in the development. He may with the prior consent of the committee of the body corporate display signs or notices for the purposes of offering for sale or provision of services. For the purpose aforesaid the body corporate shall have the power to grant to him the business of lettings of lots in the development and for that purpose to enter into appropriate agreement on such terms and conditions as the body corporate may deem fit. The body corporate shall not permit any other person to provide such letting or reception services in or about the common property” (emphasis added by adjudicator)

and proposed bylaw 17A(2) provides:

The body corporate will not, to the extent that it can lawfully so covenant, when there is a letting agent:

a)	perform any or all of the letting agent’s services; nor
b)	grant to any other person or entity any right to conduct any or all of the letting agent’s services in, or on, or from the scheme land; nor
c)	permit any person or entity to perform any or all of the letting agent’s services in, on or from the scheme land.

Section 133 of the Act provides:

133 Meaning of “exclusive use by-law”

(1) An “exclusive use by-law”, for a community titles scheme, is a

by-law that attaches to a lot included in the scheme, and gives the occupier

of the lot for the time being exclusive use to the rights and enjoyment of, or

other special rights about—

(a) common property; or

(b) a body corporate asset.

(2) If an exclusive use by-law attaches to a lot that is another community

titles scheme, the exclusive use or other rights are for the benefit of the

other scheme.

Section 134(1)(a) of the Act provides:

134 Requirements for exclusive use by-law

(1) The common property or body corporate asset to which an exclusive

use by-law for a community titles scheme applies must be—

(a) specifically identified in the by-law; or

(b) ......

The authorities cited in the applicants’ statement of grounds were all decided prior to the commencement of the Body Corporate and Community Management Act 1997. Notwithstanding, the principles enunciated in those cases in respect of exclusive use and special privileges are equally relevant to the present situation. The validity of the letting agreement has not been questioned, and that aspect of the authorities is therefore not applicable. Furthermore, section 107 of the Act and section 87 of the Standard Module specifically provide the mechanism by which a letting agent might be engaged, whereas the previous Building Units and Group Titles Act 1980 was silent on the subject, and it was that lack of legislative authority which gave rise to some of the problems addressed in the cases in question.

The central issue in this application, therefore, is whether the motion whereby the body corporate consented to the recording of the new community management statement was required to be a resolution without dissent or a special resolution. The answer to that, in turn, hinges upon whether by-law 17A is an exclusive use by-law. In order to make such a determination, one must firstly examine the requirements of sections 55(1), 55(2) and 55(3) of the Act, which are:

55 Body corporate to consent to recording of new statement

(1) This section provides for the form of the consent of the body

corporate for a community titles scheme to the recording of a new

community management statement for the scheme in the place of the

existing statement for the scheme.

(2) The consent must be in the form of a resolution without dissent.

(3) However, the consent may be in the form of a special resolution if

the difference between the existing statement and the new statement is

limited to the following—

(a) differences in the by-laws (other than a difference in exclusive

use by-laws);

(b) the identification of a different regulation module to apply to the

scheme.

In this instance, the existing community management statement and the new community management statement differ only in respect of certain by-laws. By-law 8(3) has been expanded by the insertion of a complete definition of the exceptions to sections 8(1) and 8(3), which appeared to have been omitted in the existing community management statement. By-law 10(1) was amended slightly by the insertion of the words “subject to section 143 of the Act”. All by-laws, which made any reference to “proprietors”, were amended to refer to “owners” in line with the terminology used in the Act. Finally there was the replacement of by-law 17 with by-law 17A.

By-law 17A is, in my view, a more comprehensive statement of the provisions of by-law 17. The applicants contend that by-law 17 is not an exclusive use by-law, but that by-law 17A is such a by-law. Noting such a contention, the committee submits that if by-law 17 is not an exclusive use by-law, then neither should by-law 17A be so classified, because the intent of both is essentially the same. It was in this regard that reference was made by the committee to the last sentence of by-law 17, discussed earlier in these “Reasons”, restricting any other person than the letting agent from providing letting or reception services in or about the common property.

In my view, by-law 17 is an exclusive use by-law, and so too is by-law 17A, on the basis that each has given the letting agent, as an occupier of a lot included in the scheme, special rights about the common property. One of the objections raised by the applicants was that by-law 17A purports to grant to the letting agent special rights about common property, which makes it an exclusive use by-law under section 133(1)(a) of the Act, but that, because it does not state how the letting agent’s lot number is to be determined, it is in fact invalid. I do not accept this argument. I consider that the lot occupied by the letting agent does not need to be identified by reference to the number of the lot. I am satisfied that the definition of “letting agent’s lot” in by-law 17A, being “the lot or lots occupied by the letting agent”, is sufficient identification for the purposes of section 133 of the Act, particularly as there will only ever be one letting agent engaged by the body corporate at any given time. In by-law 17 the identification of the lot was similarly apparent, and although occupation of a lot was not obligatory on the face of the by-law, the fact is that the current letting agent does occupy a lot within the scheme, as did the previous letting agent. In each instance, such lots could therefore correctly be described as the “letting agent’s lot”.

The applicants’ concern that by-law 17A also purports to confer special rights about common property to a non-owner or non-occupier, and that the body corporate has no power to enact such a by-law, is unfounded in my view. The letting agents are occupiers of a lot within the scheme, which they are required to be in order to satisfy the statutory licensing requirements under the relevant Act.

The question then arises: Is there a difference between the two by-laws such as to require that the consent of the body corporate to the new community management statement be by way of a motion passed by resolution without dissent?

I do not consider that there is a difference in the meaning or the intent of both by-laws, merely a difference in the words used to convey that meaning and intent. Certainly by-law 17A is more detailed, but that detail is in the form of definitions and a more comprehensive recitation of duties and restrictions. Furthermore, I consider that by-law 17A(4) and by-law 17A(5) could just as easily have been designated as a separate by-law altogether, under the heading of “External Appearance”. Neither of these subsections of by-law 17A is an exclusive use by-law. In addition, both subsections apply equally to all occupiers, and require the prior written consent of the body corporate for the display of signs.

I further note that by-law 17A(2)(a) states: “The body corporate will not, to the extent that it can lawfully so covenant, when there is a letting agent, perform any or all of the letting agent’s services:.” Although this is an addition to, and therefore a difference between, by-law 17, I do not regard it as material, for the reason that section 89(1) of the Act provides that a body corporate must not carry on a business, and specifically a business as a letting agent. I therefore regard this addition as doing no more than stating what is already a statutory prohibition on the body corporate. It is therefore not a meaningful addition, or difference.

Finally, I note that by-law 17 provides special rights about “common property”, whereas by-law 17A refers throughout to “scheme land”. Scheme land is defined in section 11(2) of the Act as comprising of 2 or more lots, and common property. Clearly by-law 17A cannot, and does not purport to, confer special rights about lots, so the reference to “scheme land” can quite properly, in my view, be taken to be a reference to common property to the extent that special rights are conferred. In that respect, therefore, I consider that there is no difference between by-law 17 and by-law 17A.

In these circumstances, I reject the applicants’ claim that motion 3 required a resolution without dissent.

Turning now to motion 4, the applicants have sought an order that in the absence of motion 3 being passed by resolution without dissent, motion 4 should be ruled out of order and no further action should be taken in respect of that motion.

As stated above, motion 3 did not require to be passed by resolution without dissent. However, the applicants’ point in that regard was that the changes sought to be made to the letting agreement required the support of an exclusive use bylaw so that the changes were valid and enforceable. The applicants once again referred to the various cases cited in their supporting grounds to sustain this argument. In any event, as explained earlier, bylaw 17 and bylaw 17A are both exclusive use by-laws, so the applicants’ argument must fail.

In addition, motion 4 related to an amendment to the letting agreement. Section 87(3) of the Standard Module provides that the body corporate may agree to the amendment of a letting agent’s engagement only if the amendment is approved by ordinary resolution of the body corporate. The committee, in proposing the motion for amendment, not only proposed that the motion be by way of ordinary resolution, it also circulated with the notice of meeting, a copy of the letting agreement and the proposed amendment, in accordance with section 87(1)(b) of the Standard Module. I am satisfied that the committee has observed the requirements of the legislation to have the amendment validly authorised.

In all of the circumstances, I do not propose to make the orders sought by the applicants, and I have dismissed the application in its entirety.2y