Horizons [2003] QBCCMCmr 354 (28 January 2003)

Last Updated: 7 September 2007

DJ ReardonREFERENCE: 0593-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	12724
Name of Scheme:	Horizons
Address of Scheme:	1941 Gold Coast Highway BURLEIGH HEADS QLD 4220

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

Gordon Fairlie and Marlene Fairlie, the Owners of Lot 39

DJ ReardonI hereby order that the application for an order that the Body Corporate provide the Owners of Lot 39 with an additional key or keys for access to the common property and Lot 39, is dismissed. 2n

I further order that the application for an order for "reimbursement of expenses incurred over the past four months" is dismissed.
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0593-2002

"Horizons" CTS 12724

1. Orders sought

The Applicants, the Owners of Lot 39, have sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 ("the Act"), quote-

"We require a key, preferably 2 for our apartment 39 Horizons, 1941-45 Gold Coast Highway, Burleigh Heads, Queensland 4220.

Re-imbursement of expenses incurred over the past four months."

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 the Act or the community management statement; or
c)	a claimed or anticipated contravention of the terms of, 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)).

The "Horizons" community titles scheme consists of 62 lots and common property. The community management statement for "Horizons" indicates that the Body Corporate and Community Management (Standard Module) Regulation 1997 ("the Standard Module") applies to the scheme.

2. Application and submissions

This dispute resolution application was made on 26 September 2002. On 30 September 2002, the Commissioner for Body Corporate and Community Management ("the Commissioner") invited the Committee for the Body Corporate to make a written submission about the application.

The Committee and the Body Corporate Manager have each made a written submission about the application. The Commissioner provided the Applicants with a copy of the submissions made about the application, and the Applicants have made a written reply to the submissions.

On 7 November 2002, the Commissioner made an initial case management recommendation that the application should be the subject of departmental adjudication.

3. Matters in dispute

From the material before me, I understand that around May 2002, the Body Corporate for "Horizons" arranged for new locks to be installed on entry doors to lots included in the scheme, and entry doors to the common property for the scheme. It is apparent that the new locks are intended to enhance security of the scheme land.

In a letter dated 30 April 2002, the Body Corporate Manager for the scheme indicated to owners that they would be issued with 3 new keys for the new locks, and invited owners to contact her Office should they require further keys. It appears that initially, the Committee decided that owners would be issued with a maximum of 6 keys per lot, however later resolved to reduce the general maximum number of keys issued to 5 keys per lot.

Having been issued with 5 keys to date, the Applicants are seeking an order that the Body Corporate provide them with at least one additional key to bring the total number of keys issued to them to 6. Ideally, the Applicants would like to be issued with an additional 2 keys, bringing the total keys issued to them to 7. The Applicants indicate that they would like one key each, 4 keys to provide to their letting agent, and a seventh key for the use of their visitors.

After reading the submissions made in relation to the application, I understand that for security purposes, the Committee wish to limit the number of keys issued to owners.

4. Determination

Section 87 of the Act sets out the general functions of bodies corporate. Section 87(1)(a) provides that a body corporate must "administer the common property and body corporate assets for the benefit of the owners of lots included in the scheme". Importantly, section 87(2) of the Act provides that "(t)he body corporate must act reasonably in anything it does under subsection (1)." Section 92 of the Act provides that "a decision of the committee is a decision of the body corporate", with the exception of matters that are described in the regulation module as "restricted issues".

In my view, it is clear that maintaining or enhancing the security of the scheme land can be properly described as an aspect of administering the common property for the benefit of owners. In this regard, I consider that it is appropriate for a body corporate to exercise some control over the issuing of keys accessing the scheme land. The Applicants do not appear to dispute this point. Rather, this application simply relates to the actual number of keys issued to owners of lots included in the scheme.

While the Body Corporate has provided the Applicants with 5 keys, they are requesting an additional 1 or 2 keys, to bring the number of keys issued to the Applicants to 6 or 7. The Applicants claim that they require one key each, one key for their visitors and four keys to provide to a letting agent. While there has been some suggestion that the letting agent can operate with 3 keys, I understand that the letting agent prefers to have 2 keys for tenants, 1 key for contractors engaged to carry out work in the unit, and 1 key to be kept at the letting agent’s office for emergency use only.

I do not intend to enter into a detailed examination and assessment of the Applicants’ stated need for each of the 7 keys that they have requested. It seems to me that such an assessment would be quite subjective, with a potentially arbitrary outcome. Further, I do not intend to make a general determination of the number of keys that should be issued to owners. In my view, there are a large number of possible arguments as to why any numbers of keys are required by particular owners, and it is not possible for me to address each potential argument.

Rather, in seeking an order for additional keys, I consider that the Applicants have an onus to demonstrate that the Committee has acted unreasonably in deciding not to issue the Applicants with a 6^th and 7^th key, such that the Committee’s determination of the matter should be displaced by an order of an adjudicator.

In the circumstances, I am not convinced that the Applicants have shown that the Committee has acted unreasonably. The Committee has explained that the restriction on the number of keys issued to lot owners is an endeavour to limit the number of keys being held by parties with no continuing right to access the scheme land (such as ex-tenants, and tradespeople). I consider that there is significant and obvious merit in this position.

While on the face of it, the Applicants request for a further one or two keys seems relatively minor, I am mindful that if the Committee, or I, grant the Applicants request for an additional key, it will be very difficult for the Committee to reasonably refuse other owners’ requests for addition keys on similar grounds. If each owner is issued with an additional key, there would be an extra 62 keys in circulation, an amount of keys that I consider is significant.

More importantly, I do consider that it is reasonable for the Committee to determine a general limit of the number of keys issued to owners that should only be exceeded in exceptional and compelling circumstances. In fact, there does not appear to be any dispute between the parties that some limitation of the number of keys issued to owners should be imposed. It seems to me that if I issue an order that the Body Corporate provide the Applicants with additional keys, then I undermine the Committee’s ability to make decisions regarding the administration of common property in refusing to issue owners with addition keys in the future. For example, if I require the Body Corporate to issue the Applicants with a 6^th and 7^th key, on what basis could the Body Corporate or I, refuse another owners request for an 8^th, 9^th or 10^th key for similar reasons as outlined by the Applicants.

In the circumstances, I am not satisfied that the Applicants have demonstrated that the Committee has acted unreasonably in refusing to issue the Applicants with a 6^th and 7^th key, or that the Applicants are being prevented from reasonably accessing their lot. Rather, the Committee has presented a rational and reasonable basis for refusing the Applicants’ request, and I consider that the Applicants should make suitable arrangements regarding their 5 keys to ensure appropriate access to their lot.

However, I would also point out to the Applicants that decisions of the Committee are generally subordinate to decisions of the Body Corporate made at a general meeting. Therefore notwithstanding this order, the Applicants could consider submitting a motion regarding keys to the Secretary for consideration by the Body Corporate at the next general meeting.

The Applicants have not provided any detail, or convincing reasons in support of their claim for reimbursement of expenses incurred during the resolution of this dispute, and I also intend to dismiss this part of the application.