Trinity Place [2003] QBCCMCmr 569 (11 June 2003)

Last Updated: 12 September 2007

REFERENCE: 0440-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	6537
Name of Scheme:	Trinity Place
Address of Scheme:	1 James Street BEENLEIGH Q 4207

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Hysten Pty Ltd, the Owner of Lot 1 and Lot 2:

I hereby order that the application for the following adjudicator’s orders:

"1. That the Respondent pay the Applicant the sum of $7,968.60 being the cost of installation of an air- conditioning unit to service Lot 2 in the scheme.

2. The Respondent remove the constructions on the common property adjacent to the entrance of Lot 5 in BUP 8761 where such construction has encroached upon the common property of the Scheme.

3. The Respondent remove all improvements to the exterior of the building and reinstate the exterior of the building as far as possible to its original condition."

is dismissed under section 270(1)(b) of the Body Corporate and Community Management Act 1997 on the basis that the matters in dispute should be dealt with in a court or tribunal of competent jurisdiction.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0440-2002

"Trinity Place" CTS 6537

1.	Orders sought

The Applicant, the Owner of Lots 1 and 2, has sought the following adjudicator’s orders under the Body Corporate and Community Management Act 1997 ("the Act"), quote-

"1. That the Respondent pay the Applicant the sum of $7,968.60 being the cost of installation of an air-conditioning unit to service Lot 2 in the scheme.

2. The Respondent remove the constructions on the common property adjacent to the entrance of Lot 5 in BUP 8761 where such construction has encroached upon the common property of the Scheme.

3. The Respondent remove all improvements to the exterior of the building and reinstate the exterior of the building as far as possible to its original condition."

The Applicant has identified Big C Investments Pty Ltd, the Owner of Lots 5 and 6, as the Respondent to the application.

Section 276(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 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)). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (section 284(1)).

2.	Scheme details

The "Trinity Place" community titles scheme was originally created under building units plan of subdivision 8761, which was registered on 8 November 1988. Lot 4, and some common property of the scheme, formed the subject of a building units plan of re-subdivision registered on 27 June 1990. The scheme currently consists of 5 lots (Lots 1, 2, 3, 5 and 6) and common property. The building is currently used for commercial purposes.

A new community management statement was recorded for "Trinity Place" on 19 October 1998, and indicates that the Body Corporate and Community Management (Commercial Module) Regulation 1997 ("the Commercial Module") applies to the scheme.

3.	Application details

This is one of two closely related dispute resolution applications concerning the "Trinity Place" Body Corporate currently before this Office. While the other application (reference number 0584-2002) will be the subject of its own order and statement of reasons, at the request of the parties, I have decided to deal with both matters concurrently on the basis that similar issues are raised in both applications.

This application (0440-2002) was made on 23 July 2002. On 28 August 2002, the Commissioner for Body Corporate and Community Management ("the Commissioner") invited the Committee for the Body Corporate, and the Respondent, to make a written submission about the application. The Respondent provided a written submission about the application under cover of a letter dated 16 September 2002.

In accordance with the then section 196 of the Act (recently renumbered as section 246), the Applicant requested and was provided with a copy of the Respondent’s submission. The Applicant has provided a written response to the submission.

On 14 October 2002, the Commissioner made an initial case management recommendation that the application should be the subject of departmental adjudication.

Section 271 of the Act provides adjudicators with particular powers to investigate dispute resolution applications. On 3 June 2003 and pursuant to those powers, I conducted an inspection of the scheme land and met with Mr Douglas McGregor (representing the Applicant), and Mr John Gould of Compass Legal Solutions and Mr Mark Seabrook (both representing the Respondent).

I had three main purposes for my inspection of scheme land and meeting with the parties. Firstly I wished to see the improvements and alterations that are the subject of the application. Secondly, I wished to raise with parties the possibility of mutually acceptable outcomes to the matter in dispute. Finally, I wished to discuss with the parties and attempt to reconcile the significant inconsistencies between the parties’ versions of events as presented in the written material. Regrettably, Mr McGregor decided to withdraw from the meeting prior to these outcomes being achieved in any meaningful way.

4.	Determination

After carefully reviewing the material provided by the parties concerning this application, and following my meeting with the parties, I have decided that this application should be dismissed pursuant to section 270(1)(b) of the Act. Section 270(1)(b) provides that an adjudicator may make an order dismissing a dispute resolution application if "the adjudicator is satisfied the dispute should be dealt with in a court or tribunal of competent jurisdiction." Section 270(2) of the Act goes on to state that an adjudicator may make an order in these terms without investigating the detail of the application, or before an investigation has ended.

As will be outlined in more detail below, the parties to this application have presented significantly inconsistent versions of a range of key events and aspects of the matters in dispute. It seems to me that resolving these issues requires an assessment of the credit of the parties, and perhaps the presentation of evidence by witnesses. In my opinion, the most equitable way of gathering and assessing this information will be via the presentation of evidence on oath, with a facility for cross examination.

While the legislation provides adjudicators with certain investigative powers pursuant to section 271 of the Act, including the power to require parties to provide information in the form of a statutory declaration (section 271(1)(a)(iii)), adjudicators are not empowered to conduct hearings where evidence is presented on oath, and where parties have an opportunity to cross-examine witnesses. In my view, the significant inconsistencies between the parties recollections and versions of relevant events can best be determined in a forum where parties can present information, and be questioned, orally. I consider that it is unlikely that these matters can be effectively resolved by way of written statutory declarations.

I have also had regard to the seriousness of the relief sought by the Applicant. As will be outlined in more detail below, the Applicant is seeking reimbursement of almost $8,000 for the installation of an air-conditioning unit. In addition, the Applicant is seeking the removal of improvements and alterations to the building made by the Respondent, which I understand cost around $120,000 (as indicated by the Respondent at our meeting). In my opinion, the seriousness of the relief sought in the application warrants the evidence being as effectively tested as possible.

As a result, I do not consider that I am in a position to fairly and equitably determine the key issues raised in this application.

I wish to emphasise that my decision to dismiss this application pursuant to section 270(1)(b) of the Act is not based on my views on the merits of the application, but on my view of the most equitable way of determining the matters in dispute. However, notwithstanding the above, I will make some brief comments regarding the key issues in dispute.

4.1 Air conditioning unit

The Applicant alleges that the Respondent caused an air conditioning unit servicing Lot 2 to be removed, without the Applicant’s consent. The Applicant states that while this air conditioning unit was located on common property, it was the property of the Applicant, installed with the prior approval of the Body Corporate. The Applicant considers that the Respondent should reimburse it for costs of purchasing and installing a new air conditioning unit amounting to $7,968.60.

In its submission, the Respondent states that it was advised by an air conditioning technician that the air conditioning unit in question was inoperable. The Respondent also states that it caused the air conditioning unit to be removed, and placed on the footpath for some time before it was ultimately disposed of.

On the basis of the submissions, I consider that the Applicant has a strong claim for reimbursement of at least some of the costs of purchase and installation of a new air conditioning unit. Regardless of whether the unit was defective, it seems most improper for a lot owner to remove and dispose of a lawfully installed asset of another lot owner without the person’s knowledge or consent.

However, notwithstanding the above, while the Applicant’s representative maintained at our meeting that the Applicant had no prior knowledge of the removal of the air conditioning unit, the Respondent’s representatives indicated that the builder who carried out the renovation work described below had walked around the site with the Applicant outlining the proposed improvements. If I understand it correctly, the Respondent believes that the builder discussed the issue of the removal of the air conditioning unit with the Applicant’s nominee prior to the air conditioning unit being removed, and as a result the Applicant was well aware of the proposed removal of the unit prior to the work being carried out.

This issue is one of the inconsistencies described above, and a matter that I consider can only be properly resolved through a formal questioning of parties, and perhaps by calling the builder to present evidence on oath about the extent and content of discussions that he had with the Applicant’s nominee prior to the removal of the air conditioning unit.

4.2 Encroachment on common property outside of Lot 5 and other improvements to common property

The remaining two orders sought by the Applicant concern alterations and improvements to the scheme land carried out by the Respondent. The first matter concerns an area of common property on Level B of the building, between Lots 5 and 6. I understand that the Respondent has made significant alterations to this area, which the Applicant considers may impact on the Body Corporate’s insurance, and ability to access common property utility infrastructure. I would comment that in my opinion, the alterations effectively incorporate this area of common property into Lots 5 and 6, and I note that the Respondent wishes to resurvey the building with a view to formally incorporating the area into Lot 5 or Lot 6.

In addition, I understand that the Respondent has carried out other significant renovations to the external surfaces of the building, some of which form part of the common property for the scheme. As mentioned above, one of the Respondent’s representatives indicated that the renovations cost approximately $120,000.

The Applicant alleges that the renovations were carried out without the approval of the Body Corporate, and is seeking an order that the alterations be removed, and the common property reinstated to its previous condition.

The Respondent argues that the improvements enhance the value of the building and should remain. More importantly, the Respondent alleges in its submission (and at our meeting) that the improvements were carried out with both the knowledge, and consent of the Applicant. The Respondent alleges that the builder who carried out the work walked around the site with the Applicant explaining in detail the proposed work. In addition, and if I understand them correctly, the Respondent’s representatives indicated that the Applicant agreed to paint the exterior of the ground floor lots in a colour matching the improvements proposed by the Respondent.

Clearly, the consent of the Applicant to the improvements is a key aspect of resolving this application, and should be equitably determined before any order is made requiring the renovations to be removed. For the reasons outlined above, I do not consider that I have the power to effectively and equitably assess the evidence in order to make a reasonable determination on the issue.

5.	Conclusion

For the reasons outlined above, I have dismissed this application under section 270(1)(b) of the Act.

However, in my opinion, some of the issues have the potential to be effectively resolved between the parties through negotiation, or perhaps mediation. For example, while I am not advocating that lot owners make alterations to common property without body corporate approval, if the renovations genuinely add value to the scheme land benefiting all owners, there could be some way of addressing the Applicant’s safety and insurance concerns without requiring the removal of all of the renovations.
Similarly, while the area between Lots 5 and 6 forms part of the common property for the scheme, it seems to me that this area is of little use of any other lot owners. The Body Corporate could consider an arrangement such as allocating this area for the exclusive use of the owner of Lot 5 or 6, provided appropriate arrangements were put in place for affected utility infrastructure and access to the lots. I consider that it would be reasonable for the Body Corporate to be compensated for approving the allocation, and note that section 103(1) of the Commercial Module contemplates exclusive use by-laws imposing conditions, such as the owner with the benefit of the exclusive use by-law making a payment or periodic payments to the body corporate.

While the above is certainly not intended to be an exhaustive list of possible solutions for the "Trinity Place" Body Corporate, it seems to me that there are potential mutual benefits for the parties in making genuine attempts to resolve some of these matters internally, prior to pursuing a judicial determination of the matters. This is entirely consistent with the secondary objects of the Act, which contemplate self-management as an inherent aspect of community titles schemes (section 4(a)).