Northcliffe [2003] QBCCMCmr 318 (8 January 2003)

Last Updated: 7 September 2007

RA MeekREFERENCE: 0520-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	10255
Name of Scheme:	Northcliffe
Address of Scheme:	50 Duporth Avenue MAROOCHYDORE QLD 4558

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

Andrew James Philip, the co-owner of lot 26



RA MeekI hereby order that the application by Andrew James Philip, the co-owner of lot 26, for an order that a resolution carried by the body corporate regarding the erection of a sign is invalid, is dismissed.
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STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0520-2002

"Northcliffe" CTS 10255

The applicant, Andrew James Philip, the co-owner of lot 26, has sought an order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act), relating to new signage recently approved for the scheme. The applicant queries whether the body corporate has the right to purchase a sign which is clearly a business venture. The applicant raises a further query about a statement in the proposed by-laws for a new CMS proposed to be recorded to the effect that the owner will promptly replace with fresh glass of the same kind and weight as at present if broken or cracked or upgraded in accordance with the current Australian standards. The applicant queries this requirement on the basis that he believes that the responsibility for replacment of the windows lies with the body coprorate.

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 advises that the quote from Signworks was approved at the AGM held on 17 August 2002. He then states –

As per the attached signage detail the approved sign is clearly a business sign and not just a sign giving the name "Northcliffe". As a resident owner I strongly object to body corporate funds being used to purchase a sign which is of no use to the resident owners. Question "does the body corporate have the right to purchase a sign which is clearly a business venture".

The body corporate committee has responded to the application by way of submission. That submission advises that a "landscape" sign originally on the awning of lot 1 was removed during renovations. The submission states that the matter of signage was placed on the Agenda of the recent AGM "to gauge owners opinions" and further that "no decision was made at the AGM as to the wording". Further that the resolution was passed "with a substantial majority".

At a committee meeting subsequent to the AGM, the submission states that "the general consensus of the committee favoured a simple message ie. "NORTHCLIFFE APARTMENTS [NO] VACANCY". The submission further advises that it is "unlikely" that a free standing sign like that proposed would be approved by the local authority, but that the "re-establishing of the sign in its original position on the awning of lot 1 would be acceptable without further approval".

To summarise the position of the body corporate, it seems that the body corporate has, by ordinary resolution, approved a sign submitted by a particular contractor. No final decision has been taken on the wording to be included on the sign, and the committee in fact favours a more simple message. Independent of this, it is unlikely that the proposed sign would not approved by the local authority, whereas signage like that previously in place (on an awing of lot 1) would be allowed.

Given the fact that the sign might not proceed at all given the requirement of council approval which is unlikely, the question posed by this application might be academic. However given that the resolution has been carried, it is still necessary for me to determine its validity.

In essence the body corporate is proposing to erect new signage on part of the common property. The signage is substantially different from that previously in place. Given this, I conclude that the proposed signage is an improvement to common property by the body corporate (see section 113 of the standard module). Such an improvement requires a special resolution and not simply an ordinary resolution. I note that though carried as an ordinary resolution, the result would have meant that the requirements for a special resolution (see section 98 of the Act) were satisfied.

The second issue is one of benefit. The applicant alleges that the proposed sign advertises a business and is of no benefit to him as a resident, and non-letting, owner. The body corporate has a duty to administer, manage and control the common property reasonably and for the benefit of lot owners. The essence of the applicant’s argument as I understand it is that he would get no benefit from the sign, as it advertises a business, so why should he, or for that matter the body corporate, pay for it.

Notwithstanding that some owners might object to a proposal, a body corporate is still able to implement a proposal, subject to the right of an adjudicator, pursuant to an application made to invalidate the resolution, to find that the resolution is for some reason, invalid. More specifically, a single owner or minority of owners are not able to prevent a proposal being implement simply because the owner or owners claim to receive no benefit from the proposal. There are numerous examples where particular owners receive no benefit from the expenditure of body corporate monies they are required to contribute but which are nevertheless valid items of expenditure of the body corporate eg. maintenance of the lifts, for the owner of a ground floor unit.

Community title schemes are precisely that: schemes, made up by a group of owners. For the very reason that they are made up of a number of owners, matters affecting the body corporate are made on the basis of majority decision. The extent of that majority is sometimes altered in the legislation by the requirement of a higher form of resolution than simple majority.

For a single owner or minority of owners to overturn the validity of a resolution on the basis that it is not a decision made "reasonably and for the benefit of owners", the owner or owners must establish not simply that they receive no benefit, but that in fact the detriment to the owner or minority of owners arising from the decision is such as to override the benefit of the proposal generally. The example often cited of this is the large tree located on common property, which the body corporate wants to remove only for aesthetic reasons, but which provided both privacy and shade to one particular lot, or group of lots. This decision might be different again if the reason for removal of the tree is more that aesthetic eg. the tree is seriously interfering with pipes, or affecting utility infrastructure, or is a declared prohibited plant.

I conclude that the applicant has failed to establish that the proposal to erect the sign is so detrimental to him that it outweighs the benefits to others of erecting the sign. The cost to the applicant is approximately $81 (based on the assumption of equal lot entitlements). I do not consider this expenditure unreasonable. Moreover, such signs are not unusual in buildings of this nature which are heavily let. Perhaps it could be argued that such a sign is necessary to attract holiday makers to the building. Indirectly this might beneficially affect the value of all lots in the building in that the value of units might be increased or sustained by good rental returns.

In the circumstances, I am not prepared to invalidate the resolution proposing the erection of the sign on the basis argued by the applicant. I intend to dismiss the application to this extent.

The second issue raised by the applicant is the validity of the inclusion in the proposed by-laws for the new CMS of an obligation on owners to "promptly replace with fresh glass of the same kind and weight as at present if broken or cracked or upgraded in accordance with the current Australian Standards". The applicant considers this to be a body corporate responsibility, and claims that the chairman stated that owners would have to claim it on their insurance.

The body corporate submission suggests that this issue may have been confused with the responsibility for replacement of shower screens and patio doors, and that the intent of the by-law was simply to establish a standard in the case of where an owner is responsible for the replacement of the glass.

In his reply the applicant has clarified that his query related only to "glass on the outside of the building". Section 109 of the standard module provides that the in the case of a scheme created under a building format plan of subdivision (as here) the body corporate is responsible to maintain in good condition all doors, windows, and associated fittings situated in a boundary wall separating a lot from common property.

I do not intend to elaborate further, as I consider the parties may be arguing at cross purposes. I consider that I have answered the query the applicant proposed, and do not intend to go into nuisances of meaning.




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