Kahoola Court [2003] QBCCMCmr 74 (19 August 2003)

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Elaine Joan WALTERS, as the owner of Lot 1,

I hereby order that the applicant Elaine Joan WALTERS, the owner of Lot 1, and the respondent Patricia BOLT, the owner of Lot 2, having on 6 August 2003 reached a settlement of the disputes subject of the application, and having both agreed on the terms of the settlement and a request that a consent order be made for those settlement terms by an Adjudicator pursuant to section 276(5) of the Body Corporate and Community Management Act 1997, must abide by those agreed terms which are set out below –

1. Elaine and Patricia agree to proceed with the adoption of the Small Schemes Module for Kahoola Court and that the fees be paid from the body corporate funds. Elaine will lodge the forms in person to keep costs down. Patricia will promptly sign and return any necessary papers including the cheque.

2. No order is required in relation to the budget, but Patricia and Elaine recognise that they will need to contribute further funds to the body corporate fund to give effect to the agreements reached today.

3. Elaine and Patricia agree that a new, additional electricity meter box will be installed, including new circuit breakers & safety switch, on Unit one (in a position selected by Elaine) and that new circuit breakers and safety switch will be installed in the current meter box which will become Unit 2’s box. Elaine will obtain 2 quotes for this work and will send copies to Patricia. Patricia will ring Elaine to discuss which quote to accept and to discuss how it is to be paid. The cost is to be shared equally.

4. Patricia and Elaine agree to implement a single termite prevention and/or treatment programme for both the outside and inside of the building. Existing quotes will be updated and exchanged and Elaine will obtain one further quote. Each will advise the other and/or the resident when operators will be attending to prepare quotes or carry out work. Elaine will request operators to e-mail their quote to Patricia. Patricia will phone Elaine to discuss which quote to accept. The cost is to be shared equally for external treatment and prevention. This is to be on an on-going basis, given when they have exclusive use of their respective front and back yards.

5. Elaine and Patricia will allow access to their unit to any person necessary to give effect to 3 and 4 above.

6. Patricia and Elaine agree to pass a by-law allowing each of them exclusive use to the land associated with each unit as determined by the rear dividing fence currently in place and a continuation of that line to the front boundary.

7. The current rear dividing fence is to remain and will be repaired or replaced as required.

8. No order is required in relation to the metal garage owned by Unit 2.

9. Elaine hereby gives consent to Patricia having her dog "Milly" living in Unit 2. If Patricia has another dog instead of "Milly" she will request Elaine’s consent to that dog living in Unit 2. Elaine puts on notice that she is unlikely to give consent.

10. Patricia agrees to pay to Elaine $395 being half the cost incurred by Elaine for external termite treatment. Payment will be sent together with the cheque, Patricia is to sign and return in para 1. Elaine will not require any fee to carry out a management role for the units for the next 12 months. In 12 months time, Elaine and Patricia will discuss whether or not there will be any management fee payable for ensuing years.

11. Patricia will prepare all documents necessary to give effect to para 6.

12. We agree to refer this agreement to an Adjudicator appointed under the Body Corporate and Community Management Act 1997, as a consent order pursuant to section 197 of the Act (actually section 276(5) of the Act).

I further order that the carrying out of the above terms must be in accordance with the Act and the Body Corporate and Community Management (Standard Module) Regulation 1997 ("the Standard Module"), particularly in regard to –

1. The formulation of documentation, and the calling and conduct of a meeting required to: consent to a new Community Management Statement incorporating a change of regulation module to the Small Schemes Module and adding a by-law granting certain exclusive use rights (with appropriate sketch plan); and to determine budgets and contributions to the administrative and sinking funds.

2. Consent for the metal garage belonging to the owner of Lot 2 to remain on common property, whether by specific exclusive use by-law or as an improvement on common property that is part of an area of common property already subject to a grant of exclusive use to the owner of Lot 2.

3. Consent for the owner of Lot 2 to keep a dog on the lot.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0265-2003

"Kahoola Court" CTS 7799

The applicant, Elaine Walters of Lot 1, has sought various orders of an adjudicator under the Body Corporate and Community Management Act 1997 ("the Act"), relating to: adoption of Small Schemes module; body corporate management; budget; electricity meter-box access; termite treatment; keeping of animals; rear dividing fence; and metal garage, Unit 2.

JURISDICTION:
This is a dispute between an owner (the applicant Walters) and another owner (the respondent Patricia BOLT as Trustee re Jimke Bolt, the owner of Lot 2), concerning the failure by the other owner (Bolt), amongst other things, to pay body corporate fund contributions, by breaching the by-laws in keeping an animal without body corporate permission, seek permission for the erection of a metal garage, and generally a failure to participate such that the body corporate properly administered itself in compliance with the legislation. These are matters falling within the disputes resolution provisions of the legislation (see sections 227, 228, 276 and Schedule 5 of 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 –

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 Bolt with an invitation to respond to the matters of dispute raised in the application. The respondent made a written submission. The applicant Walters viewed the submission and subsequently lodged a written reply (see sections 246 and 244 of the Act respectively).

In view of the nature of the orders sought, and that the parties constitute the whole of the body corporate, the Commissioner considered that the most appropriate manner of resolving the dispute was mediation. The parties were advised on 27 June 2003 that the matter had been referred to the Dispute Resolution Centre of the Department of Justice and Attorney-General (see section 248 of the Act). The parties subsequently participated in a mediation session with a Centre mediator on 6 August 2003 and reached an agreement in settlement of a number of the disputed matters.

Had this matter been referred for an adjudication of the dispute rather than mediation, at this point I would have set out a brief summary of the facts of the disputed matters. However, as the matters have been mediated and there are some comments I need to make regarding the terms of settlement, I shall only refer to the relevant facts when considering a particular disputed matter next under "Determination".

DETERMINATION:
The scheme "Kahoola Court" was registered as a building units plan (now termed a building format plan) on 24 July 1986, and comprises two residential lots. As a scheme established under the Building Units and Group Titles Act 1980, under the transitional provisions of the (new) Act the scheme was immediately regulated by the Body Corporate and Community Management (Standard Module) Regulation 1997 ("the Standard Module"). As no new Community Management Statement ("CMS") has been lodged since to alter that regulatory status, the scheme continues to be regulated by the Standard Module.

As foreshadowed, I shall deal separately with those matters and terms which raise legislative issues not addressed in mediation. That is, while parties in mediation may agree to certain terms to resolve a particular matter in dispute, it may be that the settlement term agreed to may in fact contravene a legislative provision or a body corporate by-law. Where that occurs, an adjudicator cannot give a consent order giving effect to such a term. This "review" role by an adjudicator is set out in section 276(5) of the Act, which states –

(5) If the adjudicator makes an order in a form agreed to by the parties to the application following mediation or conciliation, the order –

Where matters involve merely social issues such as noise, harassment, behaviour, even the parking of vehicles, there is usually no bar to issuing a consent order in the settlement terms as agreed. However, where matters concern, for example, the determination of contributions to the body corporate administrative and sinking funds, or the installation of an improvement for the benefit of a lot, then the terms need to be scrutinised for compliance and, also, any instances of ambiguity or omission of legislative steps or information which, in the opinion of the adjudicator, may lead the parties into error. I shall deal separately with each of those instances that arise out of the settlement terms reached between the parties.

I would mention first that a review is not merely an exercise in getting the law right for the sake of the law; it prevents future repercussions for the parties. For example, depending on the extent of encroachment, the nature of the use, and other considerations, a use of the common property may require an ordinary resolution, a special resolution, or a resolution without dissent, or a resolution without dissent authorised by-law. If an owner constructs a pergola, or erects a garage/shed, on common property, then if authorisation was not obtained at all or obtained by other than an exclusive-use by-law recorded with the Registrar of Titles, a future purchaser of the lot may have a right of redress against the present selling owner for misrepresenting that the pergola was properly "authorised".

Adoption of Small Schemes Module:
See requirements under Part 6 of Chapter 2 of the Act (especially section 62).

Exclusive use by-law:
I note that a change in the by-laws recorded by the Registrar of Titles on 27 August 1986, grants exclusive use to both owners over the respective areas of common property that their car port is situated on. Owners have now agreed that they should each be given the exclusive use of that area of common property that lies between the boundary of their respective lots and the side and rear scheme boundaries, divided by a line extending back from the northern common boundary point of their lots to the northern scheme boundary.

Owners need to ensure that the motion for the change in by-laws and the new CMS is properly passed, consented to and lodged with the Registrar with the appropriate sketch plan (surveyed if required by the Registrar) for recording. The by-law may include appropriate conditions as agreed to by the owners, for example, maintenance responsibilities, any specific uses (eg residential/domestic purposes only) or approvals (eg garden shed, swimming pool, etc).

Metal Garage:
Although an owner may have a grant of exclusive use over an area of common property, the Standard Module still requires that the body corporate must authorise any improvements effected on the area for the benefit of the lot. I note that paragraph 8 of the settlement states that no order is required in respect of the garage. I assume this means that the owner of Lot 1 is not going to pursue the matter of its authorisation or removal in view of the exclusive use by-law proposal. I would point out that, even if an owner has the benefit of a by-law granting them exclusive use over an area of common property, the owner still cannot effect an improvement on the area (eg erect a shed) without body corporate permission (see section 120 of the Standard Module). Accordingly, for the owner of Lot 2 (both the present owner and any future purchaser of the lot) to have its installation secure against any future action for removal, its authorisation needs to be resolved and minuted. As to its alleged use as a habitable dwelling, that is a matter for the Gold Coast City Council.

In summary, there is nothing in the terms of settlement that contravenes the legislation, however I am concerned that the general language of the terms gives the impression that the matters can be agreed without the holding of a general meeting to formally draft and pass appropriate motions, and minute the event. In particular, in regard to the exclusive use by-law and change of regulatory module, the legislation requires the body corporate follows certain form to authorise the new CMS incorporating these changes. To ensure that the legislation is followed in the matters agreed to, I have included a further order that the legislation must be complied with in carrying out the relevant settlement terms. If the parties need information in how to accomplish this, they may telephone the Information Service of this Office on Freecall 1800 060 119.

I would also remind the parties of the comments that would have been made by the mediator, namely that a consent order incorporating mediated settlement terms (as modified by the adjudicator if necessary) cannot be appealed as can a normal order, but that the order can be enforced by each party against the other in the Courts (see sections 287 and 289(1)(b) of the Act).

Additionally, even if an owner has the benefit of a by-law granting them exclusive use over an area of common property, the owner still cannot effect an improvement on the area (eg erect a shed) without body corporate permission (see later regarding this particular point).

Number of Scheme:	7799
Name of Scheme:	Kahoola Court
Address of Scheme:	26 Gardiners Place, SOUTHPORT QLD 4215

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.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Kahoola Court [2003] QBCCMCmr 74 (19 August 2003)