Istana [2003] QBCCMCmr 377 (11 February 2003)

Last Updated: 7 September 2007

C G YOUNGREFERENCE: 0548-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	10407
Name of Scheme:	Istana
Address of Scheme:	545 Oxley Avenue, REDCLIFFE QLD 4020

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

Margaret Joan JEPHCOTT, the owner of Lot 3,



C G YOUNGI hereby order that the application for the following orders –
1n

1. The resolution of the Body Corporate at an extraordinary General Meeting held on 1 August 2002, to defeat motion 2 proposed at that meeting, be set aside on the basis that the refusal to approve the motion was an unreasonable decision.

2. The Body Corporate consent to motion 2 ("That the Body Corporate authorise the owner of Lots 3 & 4 to have built at their expense by a suitably qualified tradesperson an awning subject to such lot owners obtaining Council’s approval of the works"),

is dismissed.


STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0548-2002

"Istana" CTS 10407

The applicant, Margaret Jephcott of Lot 3, has sought an order of an adjudicator under the Body Corporate and Community Management Act 1997 ("the Act") that –

3.	The resolution of the Body Corporate at an extraordinary General Meeting held on 1 August 2002, to defeat motion 2 proposed at that meeting, be set aside on the basis that the refusal to approve the motion was an unreasonable decision.

4.	The Body Corporate consent to motion 2.

The motion referred to reads –

Motion 2 – Awning.

That the Body Corporate authorise the owner of Lots 3 & 4 to have built at their expense by a suitably qualified tradesperson an awning subject to such lot owners obtaining Council’s approval of the works. (Defeated: 2 Yes; 6 No; 0 Abstain).

JURISDICTION:

This is a dispute between an owner (the applicant Margaret Jephcott of Lot 3) and the body corporate (the respondent) concerning the exercise of the body corporate’s power to refuse a request from an owner to effect an improvement on common property for the benefit of the owner’s lot. This is a matter that falls within the dispute resolution provisions of the legislation (see sections 182(b), 183(1)(b), 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:
In accordance with the requirements of section 194 of the Act, a copy of the application was provided to the respondent body corporate (committee) and all other owners, with an invitation to respond to the matters raised in the application. Submissions were received from all other owners except Hunt of Lot 6.

The broad facts of the dispute are as follows. "Istana" was registered as a building unit plan (now termed a "building format plan") on 15 March 1982. The applicant is the owner of Lot 3, and under By-law 54 enjoys a grant of exclusive use over that area of common property comprising a deck area extending east from the rear of the lot building.

The applicant wishes to erect an awning over that part of the exclusive-use area immediately adjacent to the rear of the lot building, extending across the width of the building and outwards in a horizontal plane to be fixed to a point near the edge of the sloped wall that is the external wall for the building on the northern side. In simpler words, the applicant wishes to erect an awning immediately outside her backdoor – it is to be the width of the lot and extend out some 2.5 to 3 metres.

At the annual general meeting held on 12 June 2002, a discussion was held directed to an "in principle" approval by the body corporate to the erection of awnings by the owners of Lots 3 and 4 (the awning proposed for Lot 4 is a mirror image of that proposed for Lot 3). The discussion was not in respect of a formal motion; nevertheless the "in principle" approval was put to the vote and agreed to by all 7 owners present. The following comments were added to the relevant minute of the discussion –

"This will be looked at and discussed again at a residents meeting and if owners of units 3 & 4 feel that it will receive a favourable response from the other owners, a motion will be put to the body corporate at general meeting requesting permission for the erection of the awnings together with plans showing style, materials and colours."

The applicant states that in the following weeks there was a falling out between, on the one hand, herself and the owner of Lot 4, Terry McGrory (who has since sold his lot), and certain other owners on the other hand; the matter giving rise to the antagonism is said not to be related to the awning proposals.

At an extraordinary general meeting held some seven weeks later on 1 August 2002, a motion was included in the agenda seeking approval of the awnings. A procedural amending motion adding the words "subject to such lot owners obtaining Council’s approval of the works" was passed with 7 votes in favour and 1 against. The amended motion, as quoted in the opening paragraphs of these reasons, was then put but defeated with 2 votes in favour and 6 against.

The applicant now seeks an order that the body corporate acted unreasonably in refusing the request and that the body corporate consent to it.


DETERMINATION:
To better understand the dispute and the positions of the parties, on 29 January 2003 I visited the scheme, including a visit to two lots relevant to the dispute, Lots 3 and 6. Present were the applicant, the past owner of Lot 4, the Body Corporate Manager (Don Caslick of Redcliffe Body Corporate Management) and several owners of upper floor lots.

At the inspection, I advised the parties present that I intended contacting the new owner of Lot 4 to see whether that person(s) would wish to be a party to the dispute. However, I did not do that for the reason that the interest of McGrory of Lot 4 in the dispute was always an indirect one, only arising because the awning motion encompassed both lots. Had McGrory been a co-applicant, then the interest may have survived for the benefit of the lot (provided the present owner agreed to all aspects), however that is not the case; in any case, as I have not granted the order sought then the matter is academic anyway.



The following are the reasons why I have refused the order sought by the applicant, specifically, for the body corporate to consent to the applicant’s proposal set out in Motion 2 of the extraordinary general meeting of 1 August 2002 ("the meeting").

Firstly, the by-law granting the exclusive use to the owner of Lot 3, By-law 54, does not make any provisions in respect of improvements and therefore the requirement of section 124 of the Standard Module prevails, that is, for improvements valued at over $200 (as in this case) a special resolution of the body corporate is necessary as approval. The legislation requires the more onerous special resolution, rather than an ordinary resolution (simple majority), in recognition of the effect one owner’s improvement can have on other lots. That effect can include an unwelcome change in the external presentation of the scheme building caused by a departure from the building’s colour scheme, materials, style etc., or it may be a physical effect such as noise, vibration, smell, or the blocking of sunlight or breeze.

Sections 87 and 114 of the Act provide that the body corporate administers the scheme for the benefit of owners, but must act reasonably in making its decisions. This includes acting reasonably in its consideration of an owner’s request to effect an improvement on common property for the benefit of the lot, such as the applicant’s request contained in Motion 2. Section 223 of the Act provides that an adjudicator may make orders concerning the exercise of powers by the body corporate, such as in this instance the body corporate’s refusal of the applicant’s request.

While an adjudicator has power to overturn such a refusal, the legislative requirement of the higher order special resolution indicates that the exercise of this adjudicative power must be carefully considered. One aspect that needs to be taken into account is the size of the dissenting vote. In this case all of the other owners voted, and all voted against the proposal. Accordingly, I need to convinced that the owners have acted either capriciously, mistakenly, maliciously or on some other unwarranted basis.

Secondly, those persons most affected by the installation of the awning are those occupying the lots above, namely Lots 5, 6, 7 and 8. In focusing on these occupiers, I am dismissing the argument that the awning will adversely affect the external presentation of the scheme building from any public place. The position of the awning indicates that it will only be seen by persons using the nearby beach area and bay, however it is not a main beach and the area is relatively secluded. Accordingly, the efect of the awning on the appearance of the building from public viewpoints, is minimal.

However, the location and size of the awning means that it will be highly visible to those persons using the balconies (and internal rooms to a slight extent) of the above four lots. Also visible will be a drain pipe running along the deck at the foot of the northern external wall. While the applicant has submitted a draftsman’s plan of the awning (seemingly with a metal roof), and much other information, there are no dimensions given as to its area – my estimate is around 20 square metres, a considerable area when viewed from the above balconies. At the inspection, the applicant, I and the other owners were able to visualise its position from the balcony of Lot 6.

Currently, these occupiers look down onto green "Astroturf" outdoor carpet which covers the entire deck. While the carpet is now a dated artificial representation of grass, it does provide a restful and bland view from above. The applicant states that the awning itself would be matched in colour to the carpet grass on the exclusive deck outside Lots 3 and 4, to ensure the aesthetic from Units5, 6, 7, and 8.

The owners of Lots 5, 7 and 8, ("the relevant owners" – Hunt of Lot 6 made no submission), reject the use of a metal roof on the basis that it would reflect sun onto their balconies, resulting in glare and heat. I agree with this view. What the applicant may have overlooked is that the upper surface of the awning will be only slightly below the level of the balcony floor of Lot 5, and as pointed out by the owners of that lot, the Smiths, "The reality is that visually, this awning would almost be an extension to our balcony". The Smiths have submitted that they are not against the installation of an awning, but it is important that the colour, material and style must be compatible with the building and acceptable to owners.

The Smith’s preparedness to agree to an awning conditional on certain requirements being met, was also present in the comments of other owners, particularly at the inspection. A number of owners, for instance, said that they would be agreeable to the installation of pull-out synthetic material awnings similar to that currently installed on their balconies. These do not extend outwards to anywhere near the length sought by the applicant, however the owners’ responses show that the applicant has not communicated, or negotiated, the matter sufficiently with owners.

That deficiency is reflected in Motion 2 itself which seeks a general approval to install an awning by the words "to have built at their expense by a suitably qualified tradesperson an awning". The motion is not conditional upon the approval of the body corporate committee (as to colour, style, material, dimensions, etc), nor does the motion specify the proposed attributes of the awning. Without either of these protections, it is understandable that owners rejected the motion. Its generality also poses a problem for adjudication: either the adjudicator needs to establish an appropriate awning and its positioning, if the proposal is to be given effect to; or alternatively, the adjudicator could allow the motion subject to the awning’s approval by the committee, a majority of owners, or a majority of the four owners directly affected. I consider that the best course in the circumstances is to refuse the application and allow the applicant to do what should have been done, that is, negotiate her proposal with owners generally and the four affected owners in particular, and then frame an appropriately worded motion for owners to consider. Her ability to make a further application, if the proposal is again refused, is not diminished by this order, however with proper consultation and compromise that should not be necessary.

Before closing, I would mention some other matters raised by the parties.

The lots directly above Lot 3, being Lots 5 and 7 in ascending levels, comprise internal rooms with identical open balcony areas sited at the eastern (rear) of the lot building. Originally, Lot 3 also had a similarly placed "patio" area (distinguished in name because of the adjacent deck) identical to the balcony areas above. Each of these three lots, therefore, had identical open balcony/patio areas, overlooking the bay. The applicant altered her lot by enclosing the patio with glass doors and reconstructing the patio to form an extension of her kitchen and lounge rooms – this involved the removal of windows and parts of walls. Other owners say that, had the applicant not done this, she could have the same open view of the bay as those above, safe from the problems she complains of regarding falling objects and the overflow of water. Of course these would still pose a danger or nuisance but only when she happened to walk out onto her deck (or back) at the relevant time.

Owners also expressed their resentment that the applicant had carried out this renovation work without reference to or permission from the body corporate. The applicant responded that Lot 4 was already enclosed and she had merely followed suit, and in any case no load bearing wall or beams had been interfered with, so there was no interference with the structural integrity of the building.

By-law 3 requires that any structural alteration to a lot must have the prior written permission of the committee. The term structural under the by-law includes any alterations to gas, water or electrical installations and therefore must be ready widely and not restricted to structural matters such as those comprising only the essential framework of the building, such as load-bearing items. The requirement to obtain the permission of the body corporate, through its committee, of course allows for an investigation by the body corporate to determine whether indeed the structural integrity of the building could be jeopardised by the proposed alteration. Accordingly, the applicant should have sought prior approval. However, this does not permit the body corporate to refuse the owner an awning in reprisal, however, I suggest the applicant needs to remedy this omission.

For all of the the above reasons, I have refused the application.