159 School Road [2003] QBCCMCmr 487 (29 April 2003)

Last Updated: 10 September 2007

C G YOUNGREFERENCE: 0706-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	2394
Name of Scheme:	159 School Road
Address of Scheme:	159 School Road YERONGA QLD 41044

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

Alexander FREW and Sarah Jade FREW, as the co-owners of Lot 5,



C G YOUNGI hereby order that the application for the following order –

That approval be given to the owner of Unit 5 to install an air-conditioning compressor unit on the external wall (common property façade) of the building outside Unit 5,

is dismissed. 2y
STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0706-2002

"159 School Road" CTS 2394

The applicants, Alex and Sarah Frew of Lot 5, have sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 ("the Act") -

"That approval be given to the owner of Unit 5 to install an air-conditioning compressor unit on the external wall (common property façade) of the building outside Unit 5."

JURISDICTION:
This is a dispute between an owner (the applicants Frew) and the body corporate (the respondent), concerning the siting of an air-conditioning compressor on the exterior wall of the scheme building. This is a matter falling within the disputes resolution provisions of the legislation (see sections 227, 228 and 276 of the Act, and section 17 of Schedule 5 to the Act).

General powers of an Adjudicator in making an order:
Section 276(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 contractual matter about –

(i) the engagement of a person as a body corporate manager or service contractor for a community titles scheme; or

(ii) the authorisation of a person as a letting agent for a community titles scheme.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 276(2) of the Act). An adjudicator’s order may contain ancillary or consequential provisions the adjudicator considers necessary or appropriate (section 284(1) of the Act).

APPLICATION AND SUBMISSIONS:

Under section 243 of the Act, a copy of the application was provided to the respondent body corporate (committee) and to the other owners, with an invitation to respond to the matter of dispute raised in the application. The committee made no submission; the two dissenting owners made submissions, and the applicants made a reply to those submissions.

The brief facts of the matter are as follows. The applicants already have an air-conditioner installed with the compressor sited on the balcony. They wish to air-condition another room but want to attach the compressor to the external wall outside their lot for the following reasons: avoid the cost of installing a "double-head" system (an additional $1,500) on the balcony to service both air-conditioners; alternatively, in installing a separate system, to avoid the reduction of balcony space and devaluation of the lot by siting the compressor on the balcony; so that the compressor and associated piping will be as inconspicuous as possible so as not to adversely affect the appearance of the building; so that the compressor is sited in the best position for the efficient operation of the system.

Papers circulated to owners resulted in two owners being opposed to the installation, with the applicant being informed that the required special resolution was not achieved. The applicant has now made application for this refusal of the body corporate to be overruled and the installation be approved to proceed.

DETERMINATION:

"159 School Road" was registered as a building units plan (now termed a building format plan) on 30 November 1992, and comprises 7 lots.

The proposal to install an air-conditioning compressor on the exterior surface of a scheme building external wall is regulated by section 114 of the Body Corporate and Community Management (Standard Module) Regulation 1997 ("the Standard Module"), as it involves the installation of an improvement on the common property for the benefit of a lot owner. The section provides -

"114 Improvements to common property by lot owner--Act, s 121

(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.

(2) The improvement must be authorised by special resolution of the body corporate unless--

(a) the improvement is a minor improvement; and

(b) the improvement does not detract from the appearance of any lot included in, or common property for, the scheme; and

(c) the body corporate is satisfied that use and enjoyment of the authorised improvement is not likely to promote a breach of the owner’s duties as an occupier.

(3) An authorisation may be given under this section on conditions the body corporate considers appropriate.

(4) The owner of a lot who is given an authority under this section24--

(a) must comply with conditions of the authority; and

(b) must maintain the improvement made under the authority in good condition, unless excused by the body corporate."

As the installation of the air-conditioning unit is not a minor improvement (the installed cost of the compressor is obviously above $200), the improvement can only be authorised by special resolution in general meeting (see previous section 98 of the Act, and later comments in these reasons).

It seems that no general meeting has been held to consider the proposal. Rather, the opinion of lot owners regarding the proposal has been sought by the Body Corporate Manager, Matthews Body Corporate Management ("MBCM"), by having forwarded what might otherwise be recognised (if lawful) as a "flying minute". The first of these is dated 21 October 2002 and was accompanied by an instructional covering letter stating in part –

"Please find enclosed a request from unit 5, which is self-explanatory.

Should you have any strong objections to this request, please advise our office in writing by 4 November 2002. If we do not hear to the contrary from the majority of owners, we will give permission to Mr Frew accordingly."

This means of determining the proposal was in contravention of the legislation in a number of ways–

• The legislation does not allow for matters to be resolved by attributing approval to owners who do not object – matters can only be resolved by positive voting.

• The circular advises the matter will be resolved in the affirmative if a majority of owners do not object, whereas a special resolution is required. Additionally, in the hierarchy of resolutions provided in the legislation, there is no resolution that is resolved in the manner stated.

• The matter could only be resolved in general meeting. A "flying minute" could only be used to determine committee motions (see section 35 of the Standard Module) or for the approval of owners to allow a committee to spend above its relevant limit (see section 103(1)(b) of the Standard Module).

It appears that at least some of these errors were recognised by MBCM, or brought to its attention, because a further canvassing of owners’ opinions was sought in similar manner by a "flying minute" dated 8 November 2002. This second canvass took the form of a covering instructional letter and an attached voting paper in the conventional form of a "yes/no/abstain" motion, however the motion was not worded as being for the proposal, but rather one for owners to vote on whether or not they supported "Mr Meneely’s objection to the installation of an Air Conditioning Compressor..." (the voting paper also included a motion for another installation proposal that is not relevant to this dispute). Underneath the typed motion were the written words, "Special Resolution".

I cannot understand why this further motion (albeit an unlawful one) was put – the objections of Meneely and Stockdale to the initial canvass were sufficient for a special resolution not to pass. Apart from this, the form of motion unnecessarily and unfairly casts Meneely in a negative manner, though I must say he has not complained about this in his submission, and may even approve it, however if a motion had to be put then it should properly have simply put the proposal for a "yes/no/abstain" vote.

Whatever may have been the origin or reasons behind this motion, this "voting paper" was as unlawful as the previous canvass for the reasons previously given.

I also note in the covering letter that owners were informed that the installation on the external wall would "not act as a precedent for automatic installations of air conditioner units/compressors or any other items of machinery or other articles whatsoever on the outside façade of the building. Each application will be considered on its merits by owners". While I agree that such an installation would not guarantee automatic installations, nevertheless it would create a strong precedent in the sense that another owner could rightly claim discrimination if they were refused a similar installation - there would have to be a significant difference in circumstances for that claim not to be successful brought. The letter should have more rightly emphasised the positive rather than the negative nature as regards precedent.



It is appropriate that I now comment on recent amendments to the legislation that took effect on 4 March 2003. As well as the two circumstances given above when a flying minute may be used, section 111 of the Act now provides for the passing of any motion by way of flying minute but it is very restrictive provision in that the motion passes only if every owner votes in writing in respect of all lots and all votes are in favour of the motion. However, this amendment was not in force at the time (in fact it will only come into force when the regulation modules are appropriately amended for it to apply) and even if this provision was available at the time of the above events, there would be no effective resolution.

Accordingly, as this proposal has not been properly determined by way of a special resolution in a general meeting, I cannot consider the applicant’s argument that the refusal of the body corporate was unreasonable as there has been no proper refusal.

If the applicants wish to pursue the matter then they may request a meeting be called for the specific purpose of considering their request, in which case fairness would require that any additional cost to the body corporate should be theirs, or submit an appropriate motion for the matter to be considered at the next scheduled meeting of the body corporate. Considering the circumstances of this whole matter, the applicants may wish to discuss the matter with MBCM.