Ningi Plaza [2003] QBCCMCmr 217 (12 November 2003)

Last Updated: 17 May 2005

REFERENCE: 0243-2003

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	25853
Name of Scheme:	Ningi Plaza
Address of Scheme:	1224 Bribie Island Road NINGI QLD 4511

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Susan Crittenden, the owner of lots 1, 4, 5, 6 and 8 and Clifford Crittenden, an occupier

I hereby order that the application by Susan Crittenden, the owner of lots 1, 4, 5, 6 and 8 and Clifford Crittenden, an occupier, for an order that the body corporate manager be directed to remove the five shop owners signs from the street including the Four XXXX beer sign on the top, and then order branch sign company to equally divide the spaces so that each and every owner be given equal space on the sign, is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0243-2003

"Ningi Plaza" CTS 25853

The applicants, Susan Crittenden, the owner of lots 1, 4, 5, 6 and 8 and Clifford Crittenden, an occupier, have sought the following orders of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), quote –

That the body corporate manager be directed to remove the five shop owners signs from the street including the Four XXXX beer sign on the top. Then order branch sign company to equally divide the spaces so that each and every owner be given equal space on the sign.

Section 276(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 contractual matter about-

(i) the engagement of a person as a body corporate manager or service contractor for a community titles scheme; or

(ii) the authorisation of a person as a letting agent for a community titles scheme.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 276(2)). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (section 284(1)).


APPLICATION

Whilst the order sought by the applicants does not directly state it, the order which the applicants are seeking is the validation of motion 5 considered but not carried at the EGM of the body corporate held on 24 March 2003. Motion 5 was submitted by the applicants and is as follows -

REFURBISH MAJOR ILLUMINATED SIGN TO ALLOW ONE LINE ON SIGN FOR ALL BUSINESS AT THE CENTRE ORDINARY RESOLUTION

A. That the body corporate refurbish the major sign to allow one line for all businesses at the Centre (approx. 200 wide ... ) as per quotation from Branch Signs for $3388.00. (or)
B. That the body corporate refurbish the major sign to allow one line for all businesses at the Centre (approx. 200 wide ... ) as per quotation from Sign & Design for $ 4158.

The minutes indicate that motion 5 was resolved lost in respect of both options. Motion 5A was lost on the basis of 5 for, 13 against and 1 abstention. Motion 5B was lost with a vote of 18 against and 1 abstention.

The applicants provided the following statement intended to accompany the motion.

All owners and operators are entitled to equal space on the sign. This out right discrimination must end. We all own that sign equally, and we must share it equally.

The minutes include the following note -

GENERAL COMMENT – was that to allow all tenants to have a small space on the sign (approximately 200mm wide) would be difficult to read by passing traffic on the busy main road, and therefore would be counter productive on getting patrons to the centre.

In addition, the motion was "introduced" with the following –

Background
When complex was built ... agreement was reached that Bottle Shop and XXXX sign would go above existing sign and paid for and maintained by the Piva Family. On the strata of the complex in 1998, when lots were sold, no objection was recorded in relation to this sign and has remained as an integral part of the sign ever since.
GENERAL COMMENT – was that this sign provided an identity to the complex (similar to an anchor tenant) which enticed patrons to the centre and hopefully they would shop at other stores within the centre.

THE SCHEME

Ningi Plaza community titles scheme consists of 19 lots and common property. The community management statement for Ningi Plaza indicates that the Body Corporate and Community Management (Commercial Module) Regulation 1997 applies to the scheme.

SUBMISSIONS

Under section 243 of the Act, a copy of the application was provided to the respondent body corporate and to all owners, with an invitation to the committee and all owners to respond to the matter of dispute raised in the application. Submissions were received from 5 of the remaining owners, however certain of these owners represent more that one lot. It is relevant to set out clearly the ownership of the 19 lots in the scheme -

Lot no. Owner Submission (Y/N)

Lot 1 Susan Christen Crittenden*
Lots 4, 5, 6 and 8 Susan Belfanti Crittenden
Lots 2, 7, 9, 14 and 19 Raghe Pty Ltd Yes
Lot 3 RA &DL Sinclair No
Lot 10 ML Jackson & MP Furphy No
Lot 11 David Brandon Pty Ltd and S M Lockhart Yes
Lots 12 & 13 Graeme Barry Sandford Yes
Lots 15, 16 and 17 Piva Enterprises Pty Ltd Yes
Lot 18 Whitepatch Medical Pty Ltd Yes

* I assume that this owner is one and the same as "Susan Belfanti Crittenden".

Excluding the applicant’s 5 lots, owners of 12 of the remaining 14 lots have responded to the application. The submission of each of these owners opposes the application.

INSPECTION

In correspondence subsequence to the close of submissions, the applicants stated –

As this is a very serious matter that will spark a war between us and the other owners if a proper decision is not made, it is our very insistent request that the party(s) that will be making this decision must meet with us and all of the other interested owners at the sign site itself so that there can be no doubt in their mind(s) that they must make a legal and proper decision once and for all.

It is for me as the adjudicator to determine how I will undertake the investigation of an application. In doing so, I must comply with the requirements of section 269 of the Act. Whilst the applicant has sought an inspection of the sign in question, I do not consider that such an inspection is necessary or warranted in the circumstances. I have been provided with photographs of the current sign, and an example of the proposed or intended sign. As well, I have the application, submissions from the owners of 12 of the remaining 14 lots, and a lengthy reply from the applicant. In all the circumstances, I conclude that no site inspection is necessary.

I will add that I am quite well aware that I must make a decision. Section 276 of the Act provides that I "may make an order that is just and equitable, in the circumstances ... to resolve a dispute, in the context of a community titles scheme". Clearly the terms of the section invest in me a certain discretion. I suspect however that the term "legal and proper decision" to the applicants is a decision in accordance with their proposal or application. I will make an order in accordance with my jurisdiction under section 276 of the Act.

DETERMINATION

In their grounds, the applicants state when the scheme was subdivided by the plan of subdivision, "it is our contention, that the street shop advertising sign became the common property of the body corporate with equal and undivided rights and interest vested in all of the shop owners equally but not individually".

The applicants further state –

As it now stands only five shops have the use of this common sign and refuse to share it with all of the other owners. ...

We ourselves own five (5) food shops in the centre and are represented on the sign with only the grocery store sign on it. All of our other four food shops are denied space there by the other owners. This is outright illegal discrimination!!

... we are herewith asking the proper person(s) within the Management Act to order an end to this unfair control of the community sign and to order that equal space on the sign is to be given to each shop owner.

This present condition not only breaches Body Corporate Act regulations, but additionally breaches Australian law on discrimination and fair play.

... an ordered decision that all shop owners are to have equally space and that the beer sign is to be removed so that all owners will all have equal sign space. We cannot have equal space if that beer sign is not removed and it must happen. ... food is much more important to the Australian public than alcohol.

A further basis raised by the applicants is that –

Additionally, we have now found out that the sign is lit at night by the body corp common electric power, and that the yearly sign licence fee to the Council is also paid from common body corp. funds. ... We therefore request that all the owners now represented on the sign be made to repay the body corp. for all money taken from the common purse to their benefit of their exclusive use of the sign over the years to the disadvantage of the other owners.

The question I must determine is the reasonableness of the applicant’s position. The dispute relates to the sign. There is no question as to the sign being common property. It is the duty of the body corporate to administer, manage and control the common property and body corporate assets reasonably and for the benefit of lot owners (see section 152(1) of the Act). The question is whether, in not carrying the applicant’s proposal in motion 5 at the EGM, the body corporate has failed in its duty to administer, manage and control the common property and body corporate assets reasonably and for the benefit of lot owners.

In a recent determination (0191 of 2003) I stated –

It is not my role to determine whether or not a body corporate should have a security system, or whether it can afford to install such a system. Bodies corporate are functioning legal entities, entitled to make decisions provided that certain procedures for those decisions are followed correctly. Although a minority of owners might not consider that a proposal is an appropriate one for a body corporate, this will not mean that that minority can overturn a valid resolution, or prevent that proposal being implemented, except in very limited circumstances; namely where it can be shown that a body corporate has not acted "reasonably and for the benefit of lot owners" in administering, managing and controlling the common property (see section 152(1)) of the Act). This question will be determined in all the circumstances relating to the issue in dispute. In circumstances where bodies corporate are functioning entitles making determinations on the basis of majority resolutions (for the most part), then the onus of showing that the body corporate has not acted reasonably is not an easy one for an individual owner, or minority of owners, to displace.

The position is reversed here; namely the applicant’s proposal regarding part of the common property has been refused by the body corporate in general meeting, and the applicants seeks that I order that effect be given to their proposal, notwithstanding that a majority of owners oppose such proposal. I consider the test to be applied is very similar to that as stated above.

The applicants state, or imply, on several occasions that it is the law (referring to both body corporate laws and other more general laws (ie. Australian law on discrimination)) that the current arrangement is in breach of legal requirements. The applicants never specifically identify the provision or provisions of the BCCM legislation on which they basis this assertion as to the law. To my knowledge there is no such provision. Section 35 of the Act provides that –

Common property for a ... scheme is owned by the owners of the lots included in the scheme, as tenants in common, in shares proportionate to the interest schedule lot entitlement of their respective lots.

The interest schedule lot entitlement is not necessarily equal, and may vary from lot to lot. The applicants’ assertions regarding the law are not supported by any legislative provision of which I am aware. It is simply not the case that every aspect of common property must be divided "equally" between all owners.

Therefore, the only basis on which the applicant’s are able to succeed in this application is to establish that the body corporate in refusing to carry their proposal, is acting unreasonably.

On this question, I have considered the views of other owners provided in submissions. However, a few points on the motion to begin with. Firstly, all owners were represented at the meeting. This is an exceptional outcome for body corporate meetings, where owner representation at meetings is often as low as 25% or less. The applicant’s motion was lost by a majority of 13 to 5 against the motion. In relative terms this outcome is not close. Of 8 different owners, 6 opposed the proposal, one abstained, and one (the applicants) supported the proposal.

It is clear from submissions that many owners believe that their majority view expressed in their refusal to carry the motion should be upheld. In the circumstances, I do not propose to canvass the views of others owners made in submissions in detail. It is clear that the applicants are fully acquainted with the contents of submissions and have described them as "poppycock, hogwash and bull dust". I do not agree with the applicants. I conclude that the arguments advanced by other owners in submissions are of such weight and reasonableness that in their totality they evidence to me that the body corporate has not acted unreasonably in this matter in refusing the applicant’s proposal. Accordingly, I intend to dismiss the application.

By way of observation, I note that certain shop owners have elected to place their own signs on common property. In the photograph provided, there is a separate sign for "Quality Butcher". Obviously this is a movable sign which is presumably wheeled out on a daily basis. From this I assume that the body corporate would not be adverse to an application by the applicants (or the occupiers of their premises) to erect their own removable signage on the common property. By this, I am not suggesting that the applicants could reasonably expect approval to erect a separate signage board on common property for signs for each of their 5 lots, but rather might reasonably expect to by allowed certain signage rights on common property consistent with other signs already displayed there. This is a matter for the body corporate to approve.

On the other issue raised by the applicants; namely the council licence fee for the sign and the cost of electricity, I note that one owner has responded that –

The additional complaints of power usage has not been the subject of discussion and I would think should be discussed in-house by the remainder of owners and the body corporate manager before being ruled on by an outside body.

... His additional complaints of power usage have had no body corporate or member discussion and should be handled at body corporate level.

I agree with this submission. The jurisdiction of an adjudicator is limited to there being "a dispute". Given that the applicants have not raised this particular issue with the body corporate, and a determination made, I consider that I do not have jurisdiction to deal with this issue at this time, and consequently intend not to consider it further.

Finally, the applicants have made it quite apparent that they believe that there is only one possible outcome to this application; namely that their application be approved. They state in their reply –

If you are not wise and prepared to do the proper thing then you leave us no other choices but to fight this war down and dirty in any way and every way that we can. Our first approach will be to take this issue both to the Premier and the media and into the courts if necessary. My second approach will be to commandeer the sign and either paint everyone’s sign completely out or remove some of the signs on the sign and install our signs in place of theirs. I am certain that you will understand the war this will create because you did not do your job properly and it will rest squarely on your shoulders as well in every respect.

I point out to the applicants that this is a decision of an adjudicator made pursuant to legislation which outlines clearly the appropriate rights of review by an aggrieved party. In the circumstances, the applicants would be better to expend their resources on an appeal of this decision to the District Court. I have no view on the involvement of the media – except that it will not change this decision. As for the proposed remedy of self help, I recommend against this, as it may lead to serious legal consequences for the applicants.