Karoonda [2003] QBCCMCmr 434 (25 March 2003)

Last Updated: 10 September 2007

C G YOUNGREFERENCE: 0695-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	15034
Name of Scheme:	Karoonda
Address of Scheme:	8 Mary Avenue BROADBEACH QLD 4218

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

Colin Bertram McMULLIN and Ann McMULLIN, as the co-owners of Lot 6,



C G YOUNGI hereby order that Brian Stanley and Colleen Mary BAKER, being the co-owners of Lot 7, must dismantle and completely remove from the common property -

• the fence (including gate) running from the south-western corner of their lot across common property to the western scheme boundary, and the fence (including gate) running from the north-eastern corner of their lot across common property to the northern scheme boundary; and

• the two sails erected on the northern and western scheme boundaries; and

• the two decks erected on common property north of their lot.

I further order that this order will not operate in respect of any item or items ordered to be removed, if the body corporate has within three (3) months of the date of this order given proper authorisation under the legislation, as referred to in the accompanying reasons, for that item or items to remain.
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STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0695-2002

"Karoonda" CTS 15034

The applicants, Colin and Ann McMullin of Lot 6, have sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 ("the Act") -

"That Karoonda Body Corporate pursue the removal of fencing, decking and sails from common property in front of and the side of Unit 7. Unit 7 has a contract of sale currently on the property and the purchaser may not realise these improvements have been built on common property."

JURISDICTION:
This is a dispute between an owner (the co-owners Colin and Ann McMullin of Lot 6) and another owner (the respondent owners of Lot 7, formerly Benjamin Alan Turner, now Brian Stanley and Colleen Mary BAKER), concerning the following dealings with common property: the erection of fencing and gates so as to enclose an area for the benefit of Lot 7; the erection of a fixed area of decking and adjacent loose decking; and the erection of sails on boundaries adjacent to Lot 7. These are matters falling within the disputes resolution provisions of the legislation (see sections 182A, 183 and 223 of the act).

General powers of an Adjudicator in making an order:
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) 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 following parties: the original respondent, Ben Turner, and later to the successors-in-title to Turner, Brian and Colleen Baker; to the body corporate committee; and to all other owners, with an invitation for all parties to respond to the matters of dispute raised in the application. Both Turner and the Bakers each made a submission, as did one owner, Alma Maloney of Lot 4. The committee did not make a submission, though I notice that Nadja Elliott is shown on the application as the secretary, and she has countersigned Turner’s submission.

While Turner was the respondent owner of Lot 7 at the time the application was lodged, title to Lot 7 has since passed to the Bakers, and, in the circumstances, the application survives the change and it is therefore necessary that the Bakers have the opportunity to respond to the application. That response has been received and has been taken into account.

The brief facts of the matter are as follows. The minutes in respect of a "Body Corporate Meeting" held on 27 January 2002, include the following –

"Fence on northern side of Unit 7 to be continued south to carport area with a gated fence to be erected (quotes to be obtained by Ben Turner for commencement of fence), costs to be met by body corporate.

Approval given for wooden decking on northern side of Unit 7 and gated fence to be erected (north side) on boundary of Unit 6 and 7, costs to be met by Ben Turner.

Motion: Nadja Elliott Second: Jane Smith

In agreement: Joan Venables, David Waight, Alma Maloney, Ben Turner."

The applicants state that the notice of meeting did not include an agenda or voting paper for this matter, and as they were unable to attend the meeting, they were unaware of the resolution as the minutes which were not received for "some time". The applicants said that Elliott had claimed that she was unaware of the fencing being approved and that the fence was erected prior to the meeting. Elliott has countersigned a submission in which this claim is refuted.

The applicants want the items removed from common property. At the time of making application on 13 November 2002, the applicants were aware that the respondent (Turner) was selling the lot and they particularly wanted the incoming owner to be aware of the situation before settling (the Bakers state they settled on 10 January 2003).

The respondent (Turner) states that he requested of the meeting to approve the proposed fencing and decking and everyone present agreed (the applicants were absent). He states that the work began in April 2002 and that the applicants were aware of the work and when it was completed, allegedly commented favourably on the fence and decking.

DETERMINATION:

There is conflicting evidence as to when the applicants became aware of the meeting decision. The evidence of Turner that the applicants were happy with the fence and decking, does not sit with their application, unless the applicants, for whatever reason, have since changed their minds. However, these conflicts are not relevant to my determination of the dispute as there are obvious contraventions of the legislation that I must follow, and these do not affected by or rely on establishing the truth of the conflicting evidence.

Firstly, I wish to explain to the parties certain aspects of the legislation bearing on dealings with common property that are relevant to this dispute.

Section 11 of the Act provides that a scheme comprises lots and common property. Section 37 of the Act provides that the owners own the common property as tenants in common. That is, each owner has proprietary rights in respect of the common property. Sections 87 and 114 provide that the body corporate administers, manages and controls the common property, but must do so reasonably and for the benefit of owners. The body corporate, of course, comprise all owners who make decisions in general meeting in accordance with their valid by-laws and the legislation – daily administration is carried out by an elected committee which has a limited jurisdiction to act on behalf of the body corporate.

The legislation provides a number of ways in which owners may use a particular part of the common property for themselves. Owners have a right to generally use the common property in a manner that does not cause a nuisance or hazard to others, or that interferes unreasonably with another’s use and enjoyment of their lot or the common property (see section 129 of the Act). This gives owners certain non-permanent, non–exclusionary rights to use common property – for example, walking or driving across it to reach their lot, using it temporarily to unload shopping at the front door, using an unobtrusive portion to wash a vehicle, etc. The legislation also allows for an owner to lease part of the common property; to effect an improvement on common property for the benefit of their lot; and to obtain a grant of exclusive use over an identified portion of common property by by-law, with or without conditions (eg an annual fee, to maintain it themselves, etc).

I shall now look at the uses of common property which the previous owner of Lot 7 purported to obtain at the general meeting held on 27 January 2002, namely; the sails, the fencing, and the decking.

The sails: Turner states that he erected the sails in substitution for two aging trees that no longer provided shade. He had first sought permission from Elliott (the secretary) who approved the sails provided they were in keeping with the scheme. He used yellow sails to match scheme colours. He claims that they cannot be seen from outside the scheme, and they provide necessary shade and privacy to Lot 7.

The sails are sited on common property and they are for the benefit of Lot 7, and therefore come within the scope of section 114 of the Standard Module regulations. This section provides –

Improvements to common property by lot owner.

114.(1) The body corporate may, if asked by the owner of a lot, authorise the owner to make an improvement to the common property for the benefit of the owner’s lot.

The section then provides that authorisation must be given by a special resolution of the body corporate, unless the improvement has an installed value of $200 or less, does not detract from the appearance of a lot or the common property, and the body corporate is satisfied the use and enjoyment of the improvement is not likely to promote a breach of the owner’s duties as an occupier. If the latter applies, then approval can be given by ordinary resolution of the body corporate or by a decision of the committee in meeting.

The resolution of 27 January does not mention the sails at all and therefore cannot be said to authorise their presence on common property at all. If the installed value of the sails is over $200 then a special resolution is necessary; if the value is $200 or less then either the body corporate in general meeting approves it by ordinary resolution, or the committee in meeting approves it by majority decision. If the body corporate is to have a meeting for other purposes (see later in these reasons), then it would be preferable if the decision to ratify the erection of the sails is also put to owners for decision, whether by special or ordinary resolution according to the ascertained cost.

The fence: Turner states that the fenced area was to provide Lot 7 with a courtyard, and that every one at the meeting on 27 January 2002 voted in favour of it. He says it is not for his "exclusive" use because he has installed a gate on the southern side of the courtyard (in the fence lying between his lot and the western boundary of the scheme) and another on the eastern side of the courtyard (in the fence lying between his lot and the northern scheme boundary). He says that these gates allow access by other owners to the courtyard common property, if they so wish.

Despite the presence of the gates, the practical effect of the fencing is an excision of an area of common property for the exclusive use of the occupier of Lot 7. The siting of the fence alone is sufficient to characterise the action as one creating an exclusive use area; the placement of the decks and sails only serve to reinforce the purpose of the area, which Turner himself describes as a "courtyard", as being for the benefit of the occupier of Lot 7.

As mentioned earlier, the legislation allows for an owner to be granted the exclusive use of a defined area of common property, however the legislation sets out a prescribed manner in which this must be done. The meeting of 27 January, despite the approval of all persons present, did not comply with those legislative requirements. The legislation, at the time of the meeting, required that a Community Management Statement ("CMS") incorporating a by-law for the proposed exclusive use, had to be provided to voters with the notice of meeting, supporting a specific motion for adoption of the new CMS. The CMS containing the exclusive use by-law then had to be lodged with the Registrar of Titles within 3 months of the body corporate endorsement of the statement to have legal effect. None of that was done, and therefore the resolution is invalid to the extent that it purported to authorise the fencing.

The legislation has changed slightly since this application was lodged. One amendment concerns the method of approval for an exclusive use by-law – basically it allows the motion to contain the exclusive use by-law and for the committee to compile the CMS later to incorporate the change, rather than having to compile the CMS first (which can be expensive, eg surveying the exclusive use area, especially if it fails). If the current owners of Lot 7 wish to pursue the matter, they will need to obtain professional assistance to obtain the necessary by-law/CMS approval.

That part of the fencing which defines the western and northern boundaries of the scheme, may remain. The perimeter fencing for a scheme is the responsibility of the body corporate, and as the fence was funded by the body corporate, then these portions of the fencing can remain (assuming the body corporate wishes them to remain and proper arrangements with the neighbouring property have been made). However the fencing running from the western scheme boundary to the south-western corner of the lot, and the fencing running from the north-eastern corner of the lot to the northern scheme boundary, are not properly authorised to remain (including of course the two gates) – see details of my order later in these reasons.

The decking: The deck appears to comprise a fixed deck, adjacent to the lot building, and a "loose" deck adjacent to the north side of the deck. The decks were built at the expense of Turner and are obviously for the benefit of Lot 7.

Leaving aside that they lie within the fenced "courtyard" for the moment, the decks must be viewed in the same manner as the fence. By their presence, they appropriate an area of common property for the benefit of Lot 7 and therefore can only stand under the authority of an exclusive use by-law for the area of common property they cover. That is, they are not merely an improvement for the benefit of Lot 7 that intrudes minimally into common property airspace (eg as in the case of an awning or window air-conditioner), which can be accommodated by approval as an improvement under section 114 of the Standard Module.

If however the owner of Lot 7 were to have an exclusive use grant for the fenced "courtyard" area, then the decks would be considered differently. They then would constitute an improvement to a lot as they are already within an exclusive use area of Lot 7, and authority as an improvement would need to be obtained under section 124 of the Standard Module.

If the owners of Lot 7 wish to pursue this matter, then as with the fencing they will need to obtain professional assistance.

I would also add that in respect to both the "courtyard" and the decks, the use contemplated for both is the sort of exclusive use which a proprietor makes of his lot; this accords with my view of the application of the principles in the matter Platt v. Ciriello (1997) QCA 33 (14 March 1997) concerning common property and exclusive use (reference Orders 78-2000 and 477-2001).

In summary, none of the three items have been properly authorised by the body corporate and should not be on common property. My order is therefore for all of the items to be removed as sought by the applicants.

I have some sympathy for the incoming owners, the Bakers, who sought assurance from both the seller (Turner) and were supplied with the minutes of the 27 January meeting. They state that the courtyard was a major factor in their purchase of the lot. Because of this, I have stayed the operation of my order for a period of three months to allow time for the Bakers to seek advice, frame appropriate motions and other documentation, and have the matter properly put before a general meeting of the body corporate for decision. As these matters are for the benefit of the Bakers, the body corporate should not have to bear any of the cost.

In regard to the assurances they say they relied on from Turner, I have no jurisdiction to determine matters of misrepresentation an the Bakers should seek their own private legal advice to see if they have any redress against him as the vendor.

I would point out though, that when purchasing they (or their legal representative) should have carried out a search of Adjudicator’s orders and applications at this office (as is mostly now standard practice in lot purchases), when this dispute would have been disclosed and they could have acted accordingly. Additionally, a search of titling records would have showed that there was no recorded exclusive use by-law in respect of the courtyard area. Also, any of the parties could have contacted the Information Service of this office on Freecall 1800-060 -119 regarding the erection of the three items, the resolutions necessary, the CMS, etc.