Admiralty Towers II [2003] QBCCMCmr 583 (18 June 2003)

Last Updated: 12 September 2007

REFERENCE: 0692-2002

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	15344
Name of Scheme:	Admiralty Towers II
Address of Scheme:	501 Queen Street BRISBANE QLD 4000

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

Ian Roanld Gough and Ruth Gough, the owners of lot 66

I hereby order that the application by Ian Roanld Gough and Ruth Gough, the owners of lot 66, for orders of an adjudicator under the Body Corporate and Community Management Act 1997, is approved.

I further order that the owners of lot 66, Ian Ronald Gough and Ruth Gough, are entitled to retain the enclosure of a storage unit on common property adjacent to their car parking space approved pursuant to a special resolution carried at the AGM of the body corporate held on 20 February 2002.

I further order that the owners of lot 66, Ian Ronald Gough and Ruth Gough, are entitled to retain the enclosure of their car parking space pursuant to an approval given by the committee chairperson in a telephone conversation on 20 August 2002.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0692-2002

"Admiralty Towers II" CTS 15344

The applicants, Ian Roanld Gough and Ruth Gough, the owners of lot 66, have sought the following orders of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) quote –

We request orders to:

1.	Ratify the special resolution passed at the AGM regarding construction and preservation of a storage unit for our use on common property adjacent to our carpark 66, and
2.	Ratify the construction and preservation of the enclosure of our carpark.

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)).

This application requests two separate matters. I intend to deal with these separately.

The enclosure of the storage unit

The first matter sought by the applicants is ratification of a body corporate resolution of 20 February 2002 authorising the applicants "to improve the common property for their use, at their expense (by constructing) an enclosed storage unit in the car park on level B2 within the area by existing concrete pillars ... The unit will be 2100 mm wide, 600 mm deep and 2250 mm high ...".

There is no dispute that this resolution was duly carried. Further, the applicants have constructed the storage unit in accordance with the terms of the approval. In a letter dated 5 October, 2002, the body corporate states that "the right to use the common property provided to you at the AGM should be revoked and any structure you have erected in this space should be dismantled". The reason for this change in the body corporate position regarding the storage unit was apparently the request by the applicants to enclose their adjacent car parking space (which is the second issue the subject of this application). The body corporate initially argued that approval for the enclosure of the storage unit was given on the basis of the applicants then assertion that their car parking space "and the adjoining car park do not lend themselves to enclosure of the entire car park ...", and that the subsequent enclosure was an "outcome not envisaged by the owners" at the time of "deliberating" on the storage unit.


The applicants have submitted in their application that –

When we were obtaining quotes for the construction of the storage unit we began to consider the enclosure of our car park for security reasons. The previous concerns about limitation of access to the adjacent car park had been solved so that that enclosure of our car park would not compromise the access to that car park. ...

The applicants conclude –

We have acted in good faith in regard to obtaining professional advice and then approval by a special resolution at an AGM of all proprietors.

The body corporate committee submission in response is lengthy. The body corporate now contend that approval given on the basis of a special resolution under section 114 of the standard module (improvement to common property by lot owner) was incorrect, and that the enclosure of the storage unit "gives exclusive use of that part of the common property to the owner" requiring a resolution without dissent under section 134 of the Act.

The body corporate is in fact contending that the approval given for enclosure of the car park "was invalid". The full context of the body corporate’s argument in support of its contention is set out on pages 5 and 6 of its submission. The body corporate concludes that –

... the owner of lot 66 should not be entitled to the order sought and should be ordered to remove the enclosure until such time as a resolution without dissent is passed.

The body corporate submission is without merit. The applicants were informed in writing by the then "secretary" of the body corporate (4 July 2001) of "two (2) ways of obtaining approval for the installations" being the storage unit; the first being exclusive use requiring a resolution without dissent and the second being "improvement" requiring a special resolution. The second means was said to be cheaper and easier to pass, but lacking the security of exclusive use. By letter dated 3 August 2001, the applicants requested the inclusion of a motion on the agenda proposing approval on the basis of the "improvement" method. This motion was included, and subsequently carried by special resolution at the AGM held on 20 February 2002. The applicants thereafter arranged for the enclosure of the storage unit on the basis of the approval given.

I conclude that the body corporate is now estopped from denying the authority given to the applicants to enclose the storage unit. The distinction between "improvement" on the one hand and exclusive use on the other can be a very technical one. In this instance there is a fine line in my view, with both possibilities being arguable. In any event, the body corporate gave approval by way of a special resolution (a not insubstantial basis for approval given that it required the approval of owners in general meeting at a level higher than simple majority). The applicants, in reliance of that approval, expended monies on the enclosure of the storage unit. In the circumstances, it would not be just and equitable to allow the body corporate to now resile from it original approval on the technical basis now argued by it. I conclude that the applicants are entitled to an order confirming the validity of the original approval given by the body corporate, and validating the enclosure of the storage unit.

The body corporate submits that the advice which the applicant’s obtained and relied upon was "from the body corporate manager who is not a qualified legal advisor and entitled to give legal advice". The body corporate further content that the advice received from the body corporate manager "is wrong to the extent that the storage area could be allowed by the passing of a special resolution".

As I pointed out earlier, the "advice" given was signed as "secretary", and therefore, a person holding themselves out as a member of the committee. Moreover, a body corporate manager (as the secretary also was) is a person who holds themselves out as having specialist knowledge in body corporate matters, including procedures. In view of such clear information as to procedure being provided by the body corporate secretary, there is no reasonable basis in my view for expecting an owner to seek their own legal advice.

The enclosure of the applicant’s car parking space

The applicants sought approval from the committee to enclose their car parking space, which forms part of the applicant’s lot (in contrast to being common property allocated by way of exclusive use) and state –

... (we) expected this to be readily obtained because 16 car park spaces had already been enclosed on the property.

The applicants state that they received from the chairperson proposed conditions or guidelines which all enclosures had to conform to. The applicants further allege that they were given certain other assurances by the chairperson. They applicants then state –

The chairman of the body corporate committee telephoned on 20.08.02 and advised (see diary note (B9)) that the inspections and reports had been completed and there was no impediment on either fire safety or insurance grounds to the enclosure of the car park and therefore "it would be approved by the body corporate committee". On this advice we arranged for the construction of the storeroom and car park to commence in late September 2002.

The applicants rely, in particular, on two diary notes as evidence of the alleged approval. The first was on 5 July, 2002 and reads –

Telephoned Mr Chris Smith. He said the committee are still waiting on reports from Fire Services and Insurance. He said other owners were also requesting to enclose their carports. He said the secretary would pursue the above reports. If the reports are favourable, our car park "will happen".

The second telephone conversation is critical to the applicant’s claim of approval, quote -

20/8/02 Mr Chris Smith telephoned and said there was no impediment from the fire service or the insurer for our car park enclosure and that therefore "it would be approved by the body corporate committee".

Whilst document "B9" is not the original diary note as recorded by the applicant, in subsequent material I have been provided with a document which I conclude to be a true copy of the contemporaneous diary notes made by the applicant of two telephone conversations held on 5 July, and 20 August 2002, respectively.

The (then) applicable by-law (20(c)) relevantly provided that –

An owner shall not alter the outside appearance of its lot or cause to be constructed or placed upon any part of the lot which can be viewed ... external to the lot, any materials or items unless such works or such act is first approved by the committee ...

The body corporate submits that –

... as there was no consent granted by the committee to the construction, that the lot owner should not be entitled to the order they seek and should be ordered to remove the enclosure which has been erected contrary to the by-laws. ...

Specifically, the body corporate states –

The owners of lot 66 submit that the chairman of the body corporate advised them on 5 July 2002 if their concerns allayed in relation to the car park enclosure that the enclosure "will happen". We are instructed that the chairman emphatically denies that such advice was given. Further, the chairman of the body corporate denies emphatically that he stated to the owners that the enclosure would be approved by the body corporate committee on receipt of the reports in relation to fire safety and insurance issues.

In any event the lot owner is not entitled to proceed to construct any improvement on their lot without the consent of the committee pursuant to by-law 20(c). Accordingly, the lot owner cannot rely on any representation (it is denied that any such representation has been made) of any person other than a written consent granted by the body corporate committee.

There are two issues to be determined in my view. The first is whether the telephone conversation between Gough and Smith on 20 August 2002 could be construed an approval for the purposes of by-law 20(c), and secondly, if it in fact constituted an approval, were the applicants entitled to rely on it and proceed with the enclosure of their car park given that it was given by one member of the committee, and that it was not in writing.

In the circumstances, where the evidence provided by the parties on the pivotal issue of approval is contradictory, I convened a teleconference in an endeavour to determine the position of which of the parties was to be preferred. This teleconference was held on Wednesday 4 June 2003, and involved the applicants, and for the body corporate, the chairperson Christopher Smith, the secretary Philip Healy and the body corporate solicitor, Robert Herd. The teleconference focused on the issue of the alleged approval.

In the teleconference Smith confirmed that the two telephone conversations diarised by Gough did occur on the dates specified. However, he did not agree with Gough as to the content of those telephone conversations. In the circumstances, I requested that Smith provide to me a Statutory Declaration as to the content of the conversations. This was provided and reads as follows –

I recall both the conversations with Ian Gough mentioned in document B9 of the submission.

I do not agree that in the first conversation I made a blanket "will happen" inference that approval would be given.

The second phone call was a courtesy call to Ian Gough. The call was to say that no decision had been made relating to the application for the car park enclosure.

I conclude that Smith’s declaration regarding the content of the first conversation is evasive of the issue I am seeking to determine. Smith gives no indication of the content or purpose of the call. Smith declares only that the conversation did not give a "blanket "will happen" inference". This in my view is well short of the chairperson’s earlier statement of emphatically denies that such advice was given.
It suggests to me that possibility something less than "blanket" confirmation was given. Did the chairperson given tentative confirmation for instance. Did he suggest that approval was likely, subject to satisfactory fire safety and security checks. These questions remain unanswered, since the chairperson failed in his declaration to elaborate positively on what was the content or purpose of the call. However, in my view, both these outcomes are possibilities which are not precluded by the terms of the chairperson’s statutory declaration.

The chairperson’s response in respect of the second call is more definite. Smith states that he made the call and that it was a courtesy call "to say that no decision had been made relating to the application for the car park enclosure". In contrast, Gough’s diary note, presumably made contemporaneously with or shortly after the telephone conversation quotes Smith as stating that the enclosure of the car park "would be approved by the body corporate committee".

I consider there is evidence before me which tends to refute the chairperson’s statement that "no decision had been made". Generally the whole course of conduct between the parties suggests approval would be given. Shortly after the request was made to enclose the car park (11 March 2002), the chairperson wrote to Gough advising that the request would be tabled at the next committee meeting but stating that "the usual conditions the committee place on enclosures are as follows ...". At a committee meeting on 1 May 2002, it is resolved that the applicants be requested to provide a plan of the proposed enclosures. On 31 July 2002, the committee minutes note that advice is awaited from the Queensland Fire and Rescue Authority "regarding a number of matters". However the committee did nevertheless resolve that the manager send to Healy conditions of previous approvals and that these conditions be used as a basis for all future approvals. It was further resolved that –

David McVeagh approach Mr and Mrs Gough to discuss the committee’s conditions for approval once these criteria are finalised.

Presumably committee minutes were circulated to owners as the legislation requires. I suggest that the applicants reading such minutes would have justifiably felt that approval was imminent, subject only to a satisfactory Queensland Fire and Rescue Authority report regarding car park enclosures. Information provided in the teleconference confirmed that the outcome of the Queensland Fire and Rescue Authority checks were satisfactory.

One other aspect was raised by the body corporate in the teleconference; namely the starting time for construction of the applicant’s car park enclosure. I recollect that it was alleged by the body corporate that the construction was not commenced at the time initial correspondence was received by the applicant’s from the body corporate solicitor. Clearly this can’t be the letter of 15 October, 2002 which refers to the fact of enclosure. However it was raised in the context of suggesting that the applicants would have been aware of the committee’s refusal prior to the commencement of construction. The start date of construction became relevant, and I requested from the applicant’s any correspondence or other evidence relating to this aspect.

In response, the applicants did provide certain information. They state –

We have located the document from Brisbane Mini Sheds relating to our arrangement for construction of the enclosure of the car park and the storeroom. This is a variation of a quote that was provided initially on 25^th March 2002. It is dated 21^st August 2002 and follows a telephone discussion with them in the light of the assurances given by Mr Smith the previous day. ... we accepted this on 26^th August 2002. ... There were some delays but the work was substantially completed by early October. ...

The applicant’s have attached a document by Brisbane Mini Sheds which is stated to be a variation of quotation. This document is dated 21^st August 2002 and was faxed to the applicants on that date. This date is the day after the applicant’s allege they were advised by Smith that their car park enclosure would be approved.

Where the applicants had waited a period in excess of five months for committee approval, and had shown no intention of proceeding without the necessary approval, it seems very improbable to me that the day after a telephone call which they allege gave then the necessary approval but which the body corporate chairman states informed them that "no decision had been made", the applicants would simply elect to proceed anyway. This is completely inconsistent with the applicants method of approaching the whole transaction. I conclude that it is far more likely, and consistent with the evidence, that the applicants believed that on 20 August, they had been given the necessary approval to proceed, notwithstanding what the chairperson now believes he indicated to the applicants in that telephone conversation.

I further consider that there is one more piece of evidence which supports a conclusion that approval was in fact given on 20 August 2002; namely a letter to the applicants by the secretary of 5 October, 2002. This letter acknowledges the construction of the car park enclosure, however it does not raise objection to this fact, or alleged that it was done without the necessary committee approval. Rather, it refers to the enclosure of the car park in the context of suggesting that owners generally were not fully informed of all matters pertinent to them in deliberating on whether or not to approval the motion requiring a special resolution to erect a storage unit on common property. I consider the failure to object to any alleged lack of consent to the car park enclosure in the letter of 5 October 2002 is inconsistent with the subsequent allegation in the solicitor’s letter of 15 October 2002 to the applicants, where it is then alleged that the "enclosure of your car parking space has not been approved by the committee".

On the first issue to be determined; namely, whether the telephone conversation between Gough and Smith on 20 August 2002 could be construed an approval for the purposes of by-law 20(c), I conclude that notwithstanding what the chairperson believes he indicated to the applicants in the telephone conversation on 20 August 2002, whatever he did say led the applicants to conclude, and reasonably believe, that they had been given approval for the enclosure of their car park under by-law 20(c) and to proceed accordingly.

The second issue I set out was if it in fact constituted an approval, were the applicants entitled to rely on it and proceed with the enclosure of their car park given that it was given by one member of the committee, and that it was not in writing.

Firstly, on the question of writing, it is not part of the applicant’s grounds that they ever received written approval of the committee. Moreover, the by-law does not refer to any requirement of "written", approval. Rather, it refers to approval "by the committee".

On the question of approval by the committee, the applicants do not profess to be experts in the procedures required of bodies corporate. Rather, the evidence suggests that they sought advice on such procedures from time to time.

Following their request for committee approval to enclose their car park, the chairperson Smith wrote to them advising that the request would be tabled at the next committee meeting for consideration. He concluded –

I shall advise you in due course of the committee’s decision on this matter.

I suggest that such a statement made in written correspondence by the chairperson would lead a person to reasonably conclude that the chairperson could convey the committee’s decision on a particular request. It certainly creates an inference to this effect. Subsequent correspondence is also signed by Smith as chairperson, who the applicants might reasonably have believed was acting at all times in accordance with committee directions or instructions. Likewise, Healy as Secretary on in correspondence on 29 May 2002 requesting the sketch plan. Further, the committee minutes of 31 July 2002 confirm the committee authorising David McVeagh to approach the applicants to discuss the committee’s conditions for approval.

The applicants were aware that their request had been the subject of consideration by the committee at a number of meetings. Consequently, when the telephone call was made by Smith on 20^th August, 2002, I consider that the applicants were reasonably entitled to conclude that the committee had made its decision, and that Smith’s call to them was the means of conveying that decision.

In all the circumstances, I intend to order in terms as sought by the applicants.