City Industrial [2003] QBCCMCmr 322 (13 January 2003)

Last Updated: 7 September 2007

C G YOUNGREFERENCE: 0526-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	15839
Name of Scheme:	City Industrial
Address of Scheme:	Plath Close PORTSMITH QLD 4870

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

Rodney John HANSFORD, as a co-owner of Lot 7,

C G YOUNGI hereby order that within two (2) months of the date of this order, the tenant of Lots 5 and 6, Didge Boyz International Pty Ltd, must dismantle and remove the fence and gate erected to enclose an area of common property adjacent to the tenanted lots, and carry any necessary repairs to restore the common property to its former state.

I further order that in the interim two months Didge Boyz Pty Ltd must take all reasonable steps to –

(a) prevent employees and clients from parking in the exclusive-use car spaces belonging to the owners of Lots 2 and 7; and

(b) provide ready access to the common property disabled toilet and the fire-fighting equipment sited within the enclosure. 2n

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0526-2002

"City Industrial" CTS 15839

The applicant, Rodney Hansford of Lot 7, has sought the following order of an adjudicator under
Body Corporate and Community Management Act 1997 ("the Act") -

1.	An order that the respondent, or the owner of Lot 6, dismantle and remove the fence and gate constructed around the carpark on the common property, and make good any damage caused to the common property in doing so, within 7 days.

2.	An order that the respondent ensure that its employees and customers cease to park their vehicles in car spaces the exclusive use of which is allocated to other lots within the scheme.

3.	An order that the respondent cease to obstruct full and free access by all occupants of the scheme to the disabled toilet facilities and fire fighting equipment for the scheme.

JURISDICTION:

This is a dispute between an owner (the applicant Hansford of Lot 2) and the occupier of a lot (the respondent Didge Boyze International Pty Ltd being the lessee of both Lots 5 and 6) concerning the following: the erection of a fence to enclose both a number of exclusive-use car spaces for Lots 5 and 6 and an area of adjacent common property (also thereby obstructing general use of a disabled toilet and fire-fighting equipment); and the parking of vehicles by the respondent’s employees and customers outside the enclosure in the exclusive use car spaces of other owners. These are both matters that come within the dispute resolution provisions of the legislation (see sections 182, 183 and 223 of the Act).

General powers of an adjudicator in making an order:

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) of the Act). 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, a copy of the application was provided to the body corporate (committee), all owners and the respondent, Didge Boyz Pty Ltd (hereafter "DB"), with an invitation to respond to the application. Submissions were lodged by the owner of Lot 2 (Smuggler’s Cove(Qld) Pty Ltd) and jointly by the owners of Lots 5 and 6, Solva Pty Ltd and The Development Company Pty Ltd ("TDC") respectively. DB did not make a submission, however the joint submission just mentioned presents comprehensive argument on behalf it, based on both their knowledge from having been directly involved with the fencing issue, and evident dealings with DB principal, Glen Geerlings.

The general facts relevant to the dispute are as follows. DB erected the fence in early 2002 without authorisation of the body corporate. It did so to discourage thieves who had broken into the lots (5 and 6) several times and stolen goods. The release of a dog in the fenced enclosure is a further security measure.

A motion put to an extraordinary general meeting on 27 September 2001 was ruled out of order on grounds recorded in the minutes as being that "it contravenes City Industrial By-laws". The fence was discussed under "General Business" at the annual general meeting held on 9 November 2001 – the minutes record that those present "acknowledged that this is contrary to the by-laws", but nevertheless gave approval for the fence to remain on the conditions that no manufacturing took place outside the lot buildings and parking be as designated. The conditions were set out in a document dated 20 November 2001 which was signed by DB – the document allowed for access to the fire equipment and the disabled toilet during business hours.

A letter dated 26 June 2002 from the Body Corporate Manager, Cairns Body Corporate Management Pty Ltd (Property North), referred to numerous complaints from other owners that: the fence was inconvenient; a representative of DB had threatened an owner over children annoying the security dogs; access to the fire equipment and disabled toilet was unavailable; representatives of DB were parking in other owner’s bays; and that a WPH&S survey had confirmed these and other matters as constituting breaches. The letter ended with a request that: the fence be removed; only designated parking be used; certain insurance requirements be met; and the dogs be removed. TDC (the owner of Lot 6) referred the letter on to DB which responded by mostly denying the complaints, adding that it believed the complaints emanated from Julian Thomas of Lot 2 who appeared to have a personal dislike of the business. Its response was conveyed by TDC by letter dated 24 July 2002 to the Body Corporate Manager. TDC added that it had no prior knowledge of the complaints and that it seemed the complaints were only minor infringements of the arrangement which could be remedied. The matter was discussed at the annual general meeting on 23 October 2002 but at least the applicant and Thomas (representing Lot 2) want the common property restored to its original state.

TDC and the owner of Lot 5 (Solva) propose, as a compromise, that –

•	they fund a remodelling of the toilet for Lot 7 (seen as the main complainant) for disabled use, or relocate the fence in a metre from the scheme boundary to give direct access to the present disabled toilet.
•	they fund a relocation of the fire equipment or provide additional necessary equipment outside of the fenced enclosure.
•	an order should issue against DB not to permit parking on spaces not part of its leased areas.

They add that Lots 5 and 6 are badly located and removal of the fence may cause the tenant to leave, resulting in economic loss to both owners as well as the tenant. They acknowledge the tenant has breached the agreed parking conditions, but should be given an opportunity to address the complaints and have the tenant better adhere to the agreed conditions.

After having inspected the submissions, the applicant lodged a written reply stating that the proposal was not acceptable as the enclosure will continue to cause employees and customers of DB to park in other owners’ car spaces outside, namely those of Lot 2 and Lot 7. Attempts to prevent this type of parking by erecting bollards at the entrance of car spaces have failed through them either being damaged or removed.


DETERMINATION:
The core of this dispute lies with the erection of a fence by the occupier of Lots 5 and 6, which generally encloses both the exclusive-use car spaces for those lots and the area of common property lying between the car spaces and the lots. The determination of this dispute concerns whether the applicant owner, and at least one other owner, can require the occupier (or alternatively the owners of Lots 5 and 6) to remove the fence or, if not, whether there are circumstances which an adjudicator can and should consider in ordering the fence removed.

My determination is that the fence is not properly authorised under the legislation and that the applicant should be given the relief sought in having the fence removed. The reasoning for that decision follows. I have given the occupier company a reasonable time to comply with the order, in order to allow it to make some alternative arrangement for securing its premises against break-ins.

Section 37 of the Act provides as follows -

Ownership of common property.

37.(1) Common property for a community titles 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 entitlements of their respective lots.

That is, all owners have a proprietary right in the common property as tenants in common. The Act further provides at sections 87 and 114 of the Act, that it is the body corporate which administers the common property.

Section 129 of the Act provides a general rule for the use of common property –

Nuisances

129. The occupier of a lot included in a community titles scheme must not use, or permit the use of, the lot or the common property in a way that--

(a)	causes a nuisance or hazard; or
(b)	interferes unreasonably with the use or enjoyment of another lot included in the scheme; or

interferes unreasonably with the use or enjoyment of the common property by a person who is lawfully on the common property

The legislation makes provision for different ways in which owners, or others, may use identified areas of common property to the exclusion of other occupiers –

• by lease for 3 years or less, authorised by special resolution (section 111 of the Standard Module regulations);

• by lease for over 3 years, authorised by a resolution without dissent (ditto);

• by effecting an improvement on common property for the benefit of a lot, authorised by special resolution (sections 114 or 124 of the Standard Module – unless valued at $200 or less);

• by by-law granting exclusive use, authorised by resolution without dissent (section 134 of the Standard Module).

Of course, as with all decisions of the body corporate concerning common property, any such right to use part of the common property must be reasonable in the interests of all owners. For example, it would not be reasonable for a body corporate to give a 2-year lease over an area of common property that will interfere with access by an owner to their lot or car space (a lease of over 3 years could be voted down by the affected owner as it requires a resolution without dissent).

There can be no doubt here, and I do not think it has been contested by the respondent or the relevant owners (Lots 5 and 6), that the fence has totally alienated the use of an area of common property from other owners, tenants and lawful users of the common property. The effect of the enclosure is not temporary but a continuing exclusive-use of the area for the benefit of the tenant DB, and is also an unreasonably interference with use by the owners of Lots 2 and 7 of their car spaces.

Apart from the exclusive use aspect of the enclosure, the erection of the fence itself required additional authorisation as an improvement to common property for the benefit of particular lots (see section 114 of the Standard Module).

The only aspect of the matter favouring the respondent tenant is that initially the other owners agreed to allow the enclosure to remain on certain conditions. It was an unusual arrangement without legislative basis, and I assume owners were cautioned by the Body Corporate Manager as to this. However, where bodies corporate allow an otherwise unlawful situation to exist, such acquiescence by the body corporate, depending on the period of acquiescence and the nature of the event, calls for an adjudicator to consider whether equitable consideration should be given to allowing the situation to remain by ordering the body corporate to give the appropriate authorisation. However that is not the circumstance here – the arrangement was voided upon the failure of the tenant to take steps to ensure that employees and clients did not park in breach of the conditions. Apart from this, the necessity for exclusive possession requires that either the tenant seeks a formal lease of the common property area or the owners have exclusive use grants of the respective adjacent areas by by-law. Neither of those exist nor been sought, and I doubt that either is obtainable given the opposition of the applicant (who owns two lots) and the owner of Lot 2.

The relevant owners have raised the possibility that the tenant may not renew his lease of the lots without the security of the fence, and they will suffer financial loss as a result. That is not a consideration that would change my decision in the circumstances – the facts are that, at the outset advice should have been obtained and either proper rights to use the enclosed areas of common property obtained, or other means of security (alarms, meshed doors and windows etc) put in place to make a lease attractive to the tenant.














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