Ti-Tree [2004] QBCCMCmr 1 (5 January 2004)

Last Updated: 19 November 2007

No. 352 and 524 of 2003 Applicant: JEAN-FRANCIS SCHAEDLER and KEITHEA SCHAEDLER- HILDEBRAND and ELLIMOUNT PTY LTD ACN 068 474 144 Respondent: THE BODY CORPORATE FOR "TI TREE" CTS 848 No.450 of 2003 Applicant: THE BODY CORPORATE FOR "TI TREE" CTS 848 Respondent: JEAN-FRANCIS SCHAEDLER and KEITHEA SCHAEDLER HILDEBRAND and ELLIMOUNT PTY LTD ACN 068 474 144

ORDERS

In 352/03, I

(a) dismiss the application of Ellimount Pty Ltd as against the body corporate;

(b) enjoin the body corporate from giving effect to resolutions numbered 3, 4(c) and 6 passed at an extra-ordinary general meeting of the body corporate on 10 June 2003;

(c) direct the body corporate to file a new Community Management Statement which provides for each proprietor in the scheme the exclusive use of the car park and the patio area (if any) adjacent to that lot which that lot owner has been hitherto accustomed to use;

(d) direct the applicants to pay the body corporate the sum of $2,400 by 20 December 2004;

(e) absent any submission in writing received by me on or before 20

December 2003 direct:

(i) the applicants to pay as costs of the adjudication the sum of $7,000 to the adjudicator in accordance with the tax invoice delivered to the applicants’ solicitors;

(ii) the respondent to pay as costs of the adjudication the sum of $17,000 to the adjudicator in accordance with the tax invoice delivered to the body corporate’s solicitors;

(f) direct that any party or lot owner wishing to make any submission about costs (or any obligation to pay or contribute to the body corporate obligation to pay costs) should make such submission by 4.OOpm 20 December 2003 to the office of the Commissioner;

(g) direct the body corporate send to each lot proprietor at the address shown in the roll a copy of these orders and reasons.

In application 0352.03 I order

1. a) the respondent pay $17,000

b) the applicant pay $7,000

being the costs of the adjudication by 23 January 2004.

2. The respondent is not to levy the applicant any sum

a) to meet the costs payable by it under 1 (a) or the body corporate’s costs of the adjudication either directly or indirectly.

In 450/03, I:

(a) declare that no management or letting agreement subsists between the applicants or any of them and the body corporate in 352/03;

(b) make no order as to the costs of the adjudication.

In 524/03, I direct the parties to file submissions concerning the further determination of this application by 8 December 2003. In application 0524-2003 make no order. I note there are no costs of this adjudication. The above order was appealed to the District Court at Brisbane on 9 January 2004. The appeal was discontinued on 2 April 2007. .

REASONS

The Applicants

1. Jean-Francis Schaedler and Keithea Schaedler-Hildebrand are the proprietors of Lots 48 and 49 in Community Title Scheme 848 situated at Port Douglas in far north Queensland.

The Scheme

2. The Community Title Scheme consists of 49 lots and common property created on the registration of a plan of sub-division under the Building Units & Group Titles Act 1980 ("BUGTA") - the applicable Act at the time of registration of the plan.

The Registered Plan

3. At the time of registration of the plan various provisions of BUGTA regulated the scheme.

4. Section 8(3) BUGTA provided inter alia:

"8(3) When a plan has been registered -

(a) each lot comprised therein may devolve

... or otherwise [be] dealt with;

(b) ...

in the same manner and form as any other land held under the provisions of the Land Title Act 1994."

5. Section 8(4) BUGTA provided:

"8(4) Upon the recording of particulars of the plan in the register the plan shall for the purposes of the Land Title Act 1994 be deemed upon registration to be embodied in the register; and notwithstanding the provisions of that Act, a proprietor shall hold the proprietor’s lot and the proprietor’s share in the common property subject to any interests affecting the same for the time being notified on the registered plan and subject to any amendments to lots or common property shown on that plan."

6. Section 9(1) BUGTA prescribed the requirement for (in the instant case) a building units plan.

7. Section 9(7) BUGTA required that the plan of sub-division when lodged for registration should be endorsed with or accompanied by a certificate of the local authority showing that the plan had been approved by the local authority and complied with the requirements of the (then) Local Government (Planning and Environment) Act 1990.

8. The Plan here meets the requirements of BUGTA. The registered plan is accompanied by the requisite certificate.

The Registered By-laws

9. Sub-section 30(1) BUGTA provided that the by-laws set out in the third schedule to that Act "shall be the by-laws in force in respect of each plan".

10. Sub-section 30(2) BUGTA empowered a body corporate to amend its by-laws.

11. Sub-section 30(3) BUGTA provided that an amendment of by-laws had no force or effect until the amendment had been notified by prescribed form to the Registrar of Titles (Regulation s 15 and Form 17 - Building Units and Group Titles Regulations 1980).

By-law 1 of the Scheme By-laws

12. By-law 1 of the body corporate by-laws in force in respect of the plan was enacted pursuant to a resolution without dissent passed 29 May 1995 lodged in the Land Title Registry under dealing no: 700675019.

13. There was no submission made to me that the by-law 1 was not within the power of the body corporate to make (when made) - nor that the notification of the amendment had not been notified to the Registrar of Titles on the registered plan such that by-law 1 in its present form took effect in 1995 prior to the events which concern this application.

14. By-law 1 provides:

"By-law 1 Caretaking and Letting Arrangements

1.1 The Body Corporate has the power to enter into agreements with the Proprietor from time to time of Lot 49 or a corporation not less than fifty one per centum (51%) of which is beneficially held or controlled by the Proprietor from time to time of Lot 49 grating such Proprietor or Corporation, as the case may be the right to -

(a) maintain, administer or keep in good repair fixtures and fittings on it and the Common Property and monitor the provision of security to the parcel; and

(b) conduct from Lot 49 the business of providing to Proprietors of other Lots, by independent arrangement with them, a service as letting agent of their Lots.

1.2 The Body Corporate cannot grant the rights specified in by-law 1.1 to anyone except the Proprietor from time to time of Lot 49 or to a corporation not less than fifty one per centum (51%) of which is beneficially held or controlled by the Proprietor form [sic] time to time of lot 49.

1.3 The Body Corporate may include in agreements entered into under by-law 1.1 any provisions which are consistent with this by-law 1.

1.4 Proprietors or Occupiers must allow the Proprietor or the corporation (and in the case of a corporation the corporation’s contractors, servants, agents and employees) appointed pursuant to by-law 1.1 reasonable access to the Lot to carry out any of the Manager’s duties."

15. By-law 1.1 ex facie empowers the body corporate to enter into an agreement with the proprietor of Lot 49 or an associate corporation of that proprietor for provision of services of two types:

(a) maintenance and administration - by-law 1.1(a); and

(b) letting - by-law 1.1(b).

The Proper Construction of By-law 1(a)

16. The type of agreement envisioned by by-law 1.1(a) comprehends the proprietor of Lot 49 or an associate corporation carrying out duties then cast upon the body corporate itself under s37(1) BUGTA see particularly the duties of the body corporate under ss37(1)(a) - (c).

17. Since the body corporate had at relevant times pursuant to s 27(3) BUGTA "the powers ... conferred or imposed on it by or under" the BUGTA including the powers "imposed on it" under s 37(1) BUGTA to maintain and administer the body corporate by-law 1.1(a) was not necessary to enable such an agreement to be made.

18. Conversely whether or not such an agreement as envisaged by by-law 1.1(a) was in fact made with the proprietors of Lot 49 or an associate corporation the body corporate was, at the time of the making of the by-law and thereafter, obliged to fulfill the obligation imposed upon it by s 37(1) BUGTA and its analogues in later legislation.

19. To the extent the body corporate disempowered itself from fulfilling its statutory duty by by-law the by-law would be bad as contrary to s 30(2) BUGTA. The by-law would not be for the statutory purpose there set out. The by-law should not be construed in this way albeit construed as above it is merely otiose.

The Proper Construction of By-law 1.1(b)

20. The type of agreement envisioned by by-law 1.1(b) is different to that in by-law 1.1(a) for 5 reasons.

21. First, by-law 1.1(b) envisages services provided not to the body corporate but to proprietors of lots within the scheme. At the time this by-law was enacted the body corporate did not have power to (at least) pay for provision of such services (at least) where there was no by-law. See Surfers Palms Humphries v North [1994] HCA 21; (1994) 179 CLR 597. The body corporate could not itself then conduct a letting business and nor can it today operate such a business.

22. Secondly, the by-law envisages those services will be provided to proprietors of units by or under agreements with proprietors who wish to avail themselves of such services. Whether or not the service was availed of was a matter for determination by a proprietors rather than by the body corporate.

23. Thirdly, an agreement sanctioned by by-law 1.1(b) might readily be assumed to include provision for payment by the body corporate for maintenance and administration services. The provision of letting services to proprietors is to be paid by proprietors rather than by the body corporate - see Humphries (supra).

24. Fourthly, the services of "letting" are services self-evidently regulated by other legislation applicable to real estate agents. To provide the service the provider would require a real estate agents licence.

25. Fifthly, (but perhaps not necessarily different than envisaged by by-law 1.1(a)) such an agreement most probably involves conducting a business from Lot 49 which itself requires permission from the relevant local authority under applicable planning legislation.

26. The above differences are important in the instant case because:

(a) whether there is an agreement in place with a lot owner to maintain common property the body corporate must itself maintain that property; whereas

(b) whether or not there is an agreement in place for letting between the body corporate and another person a proprietor subject to compliance with other legislative provisions may (and the body corporate may not) carry on a letting business from a lot.

27. It was not submitted to me that by-law 1.1(b) was not a valid by-law of the body corporate when made. It is however of little importance since subject to compliance with other legislative provisions and with other by-laws mentioned below the proprietors here could do what they wished in regard to conducting a letting business. None of the lots was by by-law required to be used for residential purposes.

Rights Accorded Under By-law 1.1

28. By-law 1(a) & (b) are registered in the land title registry. No party made any submission concerning whether the indefeasibility provisions of the Land Title Act operated so as to validate the by-law absent compliance with the provisions of BUGTA.

29. I do not consider the by-laws part of the plan, or particulars of the plan nor an interest notified the plan. By-law 1 takes effect as if a covenant in a deed between each proprietor and the body corporate - see s 30(6) BUGTA.

30. By-law 1.1(a) does not give to the proprietor of Lot 49 any special right or privilege. The right or privilege set out is no more advantageous than the rights of proprietors (or indeed of anyone else) absent such a by-law. The body corporate might without a by-law appropriately contract with anyone (and whether as an employee of the body corporate or as an independent contractor) to maintain the common property.

31. By-law 1.1(b) does give a special right or privilege to the proprietor of Lot 49. Absent that by-law the body corporate did not have power to make agreements with a proprietor for the conduct of a letting agency. But any such special privilege was not one in respect of common property.

32. The consequence is that neither by-law 1(a) or 1(b) required a resolution without dissent under s30(7) BUGTA (nor under the BCCMA) before such a by-law was or is repealed.

By-law 1.2

33. By-law 1.2 ex facie creates a special privilege in respect of common property in the proprietors for the time being of lot 49. It expressly prevents the grant of similar rights to that authorised by by-law 1.1 to proprietors other than the proprietor of lot 49.

34. The consequence of the above conclusion here is that if valid by-law 1.2 is prima facie a by-law:

(a) which cannot be amended save by a resolution without dissent, i.e. with the concurrence of the proprietors of lot 49; and

(b) which prevents the body corporate (or renders the body corporate liable in damages for) entering into management or letting arrangements with parties other than the proprietor of Lot 49 or their associates.

The Proper Construction of By-law 1.2

35. The proprietors of lot 49 and the body corporate contend for different constructions of by-law 1.2.

36. The body corporate submits (by the submissions dated 1 August 2003 received by me with letter dated 3 July 2003 - which I leave with the file herein) that:

"13.7.a) As per its application number 450 of 2003, the Body Corporate asserts that the ordinary meaning of by-law 1.1 is that lot 49 may only be used for the purpose of conducting a letting service or caretaking service provided that the owner of lot 49 holds a valid and subsisting caretaking agreement and letting agreement with the Body Corporate. The restriction in by-law 1.2 only operates where the owner of lot 49 has entered into a valid and subsisting letting agreement and or caretaking agreement with the Body Corporate."

37. The references to application no. 450 of 2003 - a related proceeding wherein the body corporate raised the proper construction of by-law 1.1 and 1.2 was a reference to the following contention made by the body corporate in that application.

"23 The ordinary meaning of by-law 1.1 is that:

(a) Lot 49 may only be used for the purpose of conducting a letting service provided the owner of Lot 49 holds a valid and subsisting Letting Agreement with the Body Corporate; and

(b) the restriction preventing the Body Corporate from granting a Letting Agreement to a person other than the owner of Lot 49 only has effect at a time at which the owner of Lot 49 has entered into a valid and subsisting Letting Agreement with the Body Corporate;

(c) No letting service may be conducted from Lot 49 in the absence of a valid and subsisting Letting agreement between the owner of Lot 49 and the Body Corporate;

(d) In the absence of a valid and subsisting Letting Agreement between the Body Corporate and the owner of Lot 49, the Body Corporate may grant a Letting Agreement to any other person."

38. The body corporate developed the above contentions in its oral submissions at the final hearing of this application.

39. The proprietors of lot 49 denied this construction.

40. Ex facie by-law 1.1 does not contain a proviso to the effect that the restriction in by-law 1.2 applies only if an agreement of a type authorised by by-law 1.1 had already been made or subsists.

41. By-law 1.1. is framed with a verb in the future imperfect tense and infinitive mood - "has the power to enter into agreements". By-law 1.2 is similarly framed.

"The body corporate cannot grant the rights specified in by-law 1.1".

42. By-laws 1.1 and 1.2 are not concerned merely with the present but with the future possibility of action.

43. By-law 1.1 is not concerned with the body corporate empowering the proprietor of lot 49 to conduct a business. The body corporate has no such authority. That by-law is concerned with the body corporate itself being empowered to make a contract. Similarly by-law1.2 is concerned with the disempowerment of th body corporate.

44. It follows from these considerations that under by-law 1.1 the body corporate would not necessarily have had in place and perhaps could not have had in place an agreement with the proprietors of lot 49. The purpose of the by-law is to enable the body corporate to negotiate such an agreement.

45. To construe by-law 1.2 as if the rights given in it were defeasible upon the body corporate declining to make an agreement with the proprietor of Lot 49 would make the provision illusory.

46. So too, to suppose that the parties intended that (say) a letting business conducted by the proprietors of Lot 49 might cease (perhaps in breach of obligations owed directly by the proprietor of Lot 49 to other lot owners) simply because of a failure to make a further agreement is not justified by the language of by-law 1.2.

47. I agree with the applicants that by-laws 1.2 should be construed by giving the plain language there its ordinary and natural meaning and without implications not obviously derived from those words.

48. I therefore find that bylaw 1.1 does not on its proper construction provide anything other than that the body corporate may make agreement of the type described there and that by-law 1.2 similarly provides that the body corporate must not make any similar type of agreement with persons other than the proprietors of Lot 49 or corporate associates - whether or not there subsists any agreement with the proprietors of lot 49.

Can By-law 1 Stand With the Body Corporate and Community Management Act 1997?

49. Envisaging the above construction of by-laws 1.1 and 1.2 the body corporate submitted that on that construction by-law 1.2 was invalid after the enactment of the Body Corporate and Community Management Act 1997 "BCCMA").

50. The body corporate submitted in application no 450 of 2003:

"24. Subject to the provisions of the Body Corporate and Community Management Act 1997 ("BCCM Act") and the Body Corporate and Community Management (Standard Module) Regulation 1997 ("standard module"), the Body Corporate may enter into a Letting Agreement or Management Agreement without restriction excepting as provided by legislation.

25. S.318 BCCM Act provides:-

318. Prevention of Contracting Out

A person cannot waive, or limit the exercise of, rights under this Act or contract out of the provisions of this Act.

By-law 1.2 limits the Body Corporate’s exercise of rights under the BCCM Act in connection to entering into a letting Agreement.

26. To the extent that By-law 1.2 purports to limit the Body Corporate’s exercise of rights for the granting of the Letting Agreement, By-law 1.2 is invalid and of no force or effect, as it is in contravention of section 318 of the BCCM Act."

51. Similarly in the present dispute 352 of 2003 the body corporate submitted:

"13.7.b) By-laws 1.1 and 1.2 were enacted at a time when there was a legal controversy concerning the authority of Body Corporates to enter into letting agreements. This controversy was resolved with the enactment of the BCCM Act which specifically provides in chapter 3 part 2 for the Body Corporate’s power to enter into such an agreement. By-laws 1.1 and 1.2 are now unnecessary and inconsistent with the Act.

13.7.c) In the alternative, by-laws 1.1 and 1.2 purport to limit the Body Corporate’s exercise of rights for the granting of letting agreements and contravene s 318 of the BCCM Act. Consequently by-law 1.2 is invalid and of no force or effect.

13.7.d) In response to Ellimount’s submissions in paragraph 20, the Body Corporate submits that while s.340 of the BCCM Act provides that such a by-law continues to have effect, this does not in itself make the by-law valid."

52. BCCMA (originally ss 270 - 293) now ss 324 - 347 (the terms of which are identical) provided for transition from the BUGTA to the BCCMA.

53. That transition was provided for by establishment of community title schemes in place of (as here) an existing building units plan (s 325(1) BCCMA).

54. Section 330 BCCMA provided that on commencement of Chapter 8 BCCMA a community title scheme was established for an existing building unit title scheme which by s 331 BCCMA (in instant circumstances) became a building format plan of subdivision under the Land Titles Act (see ss 48A, 48C and 49 of the Land Title Act 1994).

55. Section 332(1) BCCMA provides:

"332 (1) Each action validly taken under the 1980 Act Part 4 for the existing plan before the commencement continues to have effect for the management of the new scheme as if the action was taken under this Act and as if this Act had been in force when the action was taken.

(2) Sub-section (1) has effect subject to a provision of this part specifying differently."

56. The enactment of by-law 1.1 and 1.2 was for the purposes of s332(1) BCCMA an action validly taken under the 1980 Act Part IV i.e. ss 27 - 68 BUGTA for the then existing plan. The enactment of the by-law was pursuant to s 30(2) and s 30(7) respectively of BUGTA in respect of that plan. No provision of the BCCMA specifies differently.

57. Section 337 BCCMA provided that on its establishment (i.e. as provided inter alia by s 330) the new scheme is taken to have a community management statement (termed an interim statement) taken (by subsection 337(6)(a) BCCMA) relevantly here to include by-laws that are identical to the by-laws that immediately before commencement of the BCCMA were the by-laws in force for the building units plan.

58. The interim statement was provided to be the community management statement for the new scheme until (under the provisions of the BCCMA) a new community title scheme was recorded or a period of 3 years from commencement (s 337 BCCMA) whereupon the Registrar was empowered to thereafter record a standard community management statement (s 339(2) BCCMA) not including any by-laws.

59. Section 339(5) BCCMA however provided where (as here) there was a new community title scheme for which a standard statement is recorded which was (as here) a new scheme for an existing 1980 plan that the by-laws for the new scheme are taken to be the by-laws that were the by-laws in force immediately prior to the 3 years transitional period (ss 337(2)(g)(i), 337(4) BCCMA).

60. Thus by-law 1.1 and 1.2 continue in force in respect of this body corporate.

61. Section 340 BCCMA requires that a by-law continued in force by the statutory scheme set out above "continues to have effect" and may be included in a subsequent community management statement.

62. It follows that by-law 1.1 and 1.2 continue to have effect under the present community title scheme.

63. By-law 1.2 (and its reference to by-law 1.1) is a by-law attached to a lot included in the scheme giving the occupant of the lot special rights about common property. By-law 1.2 is thus an "exclusive use by-law" pursuant to the statutory definition contained in s 170 BCCMA.

64. By-law 1.2 is subject to the review provisions contained in s 178(1) BCCMA in circumstances where (as here) the owner of the lot to which the exclusive use by-law attaches stops being a body corporate manager or letting agent for the scheme. The applicants have stopped being the body corporate manager and letting agent for the scheme (cf and cn s 16 BCCMA). There was however no application before me to consider as an adjudicator orders avoiding the exclusive use by-law cf and cn s 178(2) and (3) - orders which a specialist adjudicator is otherwise empowered to make - s 178(4) BCCMA.

65. Section 318 of the BCCMA appears under Chapter 7 "Miscellaneous", Part 2 "Other Matters". It expressly provides:-

"318 A person cannot waive or limit the exercise of rights under the Act or contract out of the provisions of this Act."

66. It might be assumed for present purposes that person includes the body corporate and that the body corporate exercises a right under the BCCMA when it contracts for management or letting services (albeit that is far from clear).

67. For the reasons above the proprietors of Lot 49 are in fact exercising rights arising under the BCCMA not contracting out of (or waiving or limiting) the exercise of rights under the provisions of that Act (as same apply to what are termed existing 1980 Act plans). And in fact had there been an exercise of the option contained in a previous agreement between the applicants and the body corporate the body corporate could not have made another agreement albeit on its submission it must also logically follow that to do so would have limited the right to contract with others. That cannot be the meaning of the provision.

68. A number of other matters were put forward by both principal parties to the dispute which can be dealt with summarily.

69. It is irrelevant to the validity and continuing force and effect of by-laws 1.1. and 1.2 whether or not the proprietors of Lot 49 or an associate corporation are appropriately licensed or whether or not the business of (for example) letting can be carried out from Lot 49 in the community title scheme or elsewhere under any other statutory provision.

70. By-laws 1.1 and 1.2 do not presuppose there is any letting agreement with the proprietors of Lot 49 nor does it purport to authorise the unlawful performance of any such agreement.

71. Lot 49 may be used for commercial purposes. The proprietor of that lot holds a real estate agents licence which allows for the conduct of a letting business. There are valid contracts in place between proprietors and the agent to allow letting to take place and appropriate local authority permission obtained so as to conduct such a business. The proprietors of lot 49 are acting lawfully in conducting the business of letting at lot 49.

72. The body corporate, in my view, has no power in the above circumstances to interfere with letting agreements between the applicants in 352/2003 and proprietors of lots in the scheme. The applicants in 352/2003 do not require the consent of the body corporate to carry on any business of letting from Lot 49 otherwise lawfully on their premises. I was not referred to any statutory or other provision that suggested such a requirement. I do not accept the submission that the requirement arises merely from the by-law which empowers the body corporate to make such agreements.

73. It follows that neither motion 6 nor motion 7 as proposed by the body corporate at its general meeting the subject of the application 352/2003 can be lawfully passed or implemented if to do so would give the "rights" mentioned in the by-laws 1.1(a) and (b) to persons other than the present proprietors of Lot 49 or a nominated associated corporation. That is not to say the body corporate could not merely employ persons to maintain the common property of the body corporate rather than contract out that obligation to others. It is to say that no further letting agreement could be contracted by the body corporate. The agreements proposed by the impugned motions controvert the legal entitlement of the proprietors of lot 49. I will therefore enjoin the body corporate from giving effect to these motions.

74. It also follows that the relevant by-laws cannot be amended to remove by-law 1.2 by filing a further community management statement without the concurrence of the applicants in 352/2003.

Exclusive Use of Parking and Patio Areas

75. The body corporate disputes the entitlement of the applicants to exclusive use of areas immediately adjacent to lots 48 and 49 which were described in the evidence and addresses as the patio and carpark areas.

76. When local authority approval was sought and obtained for the construction of the improvements on the scheme land a requirement for approval was the provision of a carpark for each one of 49 lots, together with a certain number of visitors’ carparks. There was no requirement for any one carpark to be exclusively provided for any one lot on any fair reading of the planning approval. The approval requires 49 spaces for 49 lots not one identified space for every identified lot as the applicants submitted.

77. The design of the improvement on the scheme land incorporated various balconies for lots above ground level and patio areas for lots at ground level. Each lot either had a patio area or a balcony immediately adjacent to the lot but (at least) the patio areas were not part of the title to each lot upon registration of the plan for the scheme. Each lot was nearby or adjacent to a car park space but that space also did not form part of the lot. This was the plan approved by the local authority and registered.

78. On the day after registration of the building units plan the body corporate met and amended the then third schedule by-laws (the by-laws in respect of the plan as created under BUGTA) to provide for exclusive use of patio areas and carparks. Those exclusive use areas were designated blue and green on a plan attached to the relevant by-law.

79. No evidence was called from either party from any person who may have had direct knowledge of this plan.

80. The by-law took effect when registered. The by-law was in fact registered. I infer that when it was registered it included a plan with exclusive use areas marked in blue and green.

81. The Land Titles Registry does not hold originals of these coloured documents. The documents that are held on the register are black and white copies. It is not possible to tell from the document tendered in evidence by the applicant in these applications, itself a copy of a copy document contained in the Land Titles Registry, whether or not all or any of the patio areas and carparks adjacent to individual lots were marked in blue or green. Relevant to the present application I am unable to find that the carpark area or the patio area adjacent to lot 48 or lot 49 was so marked.

82. I was pressed with the argument on behalf of the applicants that I should find that those areas were so delineated on the basis of (in essence) five contentions:

(a) Mrs Schaedler swore that she had seen a document which otherwise resembled the document held in the Land Title Registry but with those areas adjacent to lots 48 and 49 relevantly marked in blue and green; and

(b) such markings are consistent with the terms of the local authority approval for the construction of the improvements on the scheme land including lots 48 and 49; and

(c) the body corporate’s records (showing as same did a plan marked with blue and green for every other lot other than lots 48 and 49) could not be relied upon since the body corporate’s solicitors had acknowledged more than one plan had come into existence over the years and at least on an occasion a person with knowledge of and access to the records of the body corporate Mr Broad could not find a plan or find the plan later produced in evidence as the relevant plan; and

(d) upon perusal of a magnified section of the copy plan tendered in evidence I should find lineage consistent with the applicant’s case; and

(e) there was no apparent purpose in failing to recognise the applicants entitlements as compared with any other lot owner when the plan was filed in the land title registry.

83. I am not persuaded after consideration of those submissions and the evidence adduced in support that I should accept those submissions or if I accepted them that I should make the relevant factual finding.

84. First I am not persuaded that I should accept Mrs Schaedler’s evidence as to the point without question albeit it was not expressly put to her that her evidence concerning the matters was false or mistaken or incomplete. The body corporate was not required to put those matters since its case was contained in affidavit material delivered to the applicant which raised the point and in any event the point arose from the application and response filed.

85. Mrs Schaedler was cross-examined by the body corporate’s counsel about a number of matters relevant to the instant application. I found her to be a combative and evasive witness. I thought a number of her answers were plainly false. For example Mrs Schaedler was questioned concerning the importance to the applicants of a change in regulation module for the scheme from a standard module to an accommodation module. She professed to have no understanding of the importance of that proposed change. In fact, the change was to allow for management and letting rights of up to 25 years (allowed under the accommodation module but not under the standard module within the BCCMA), those being the rights that Mrs Schaedler was intent to procure for a purchaser of the applicants’ business. The proposed change would plainly have increased by a significant sum the asking price for the so-called "management and letting rights" the applicants sought to sell. Mrs Schaedler’s assertion to the contrary I found to be disingenuous, if not intentionally false.

86. In the above circumstances notwithstanding the absence of express challenge in cross-examination where the assertions are not plainly right or undoubtedly without question some corroboration as to the existence of the document and (as importantly) that the document sighted was the document filed in the Land Title Registry is of some importance. I can find neither in the evidence. I have looked at the blown up version of the document on the Land Title Registry file. I cannot determine one way or the other whether there are lines there consistent with the applicant’s case. I have looked at the body corporate’s copy document. It does not seem to me that that document is self-evidently the same document as the document in fact filed. Even if it were it does not appear to me to be obvious that the coloured markings would necessarily be the same. The presence of other factors such as the body corporate’s solicitors contention that there have been several such documents when only one such document could ever have been filed leads me to doubt that there is presently any document which could accurately prove either side’s case.

87. The consequence of the above is that the applicants have failed to satisfy me they in fact do have exclusive use of the areas adjacent to their premises currently used as carparks and patio areas under any registered by-law.

88. The carpark and patio area relevant to the instant application are immediately adjacent to lots 48 and 49. Both such areas are under the existing roof structure of lot 48 and 49. Lot 48 and Lot 49 occur in the same building, remote from other buildings containing other lots. Over a very substantial period of time, the carparks and patio areas in lot 48 and lot 49 have been used exclusively by the proprietors of lot 48 and 49. Similarly a carpark and patio area or balcony has in fact been used exclusively by the proprietors of every other lot in the scheme.

89. It is plain to see that irregular usage of carparking places is apt to occasion inconvenience or enmity between registered proprietors. But for regulation of carparking facilities by exclusive use provisions within the present Community Management Statement a proprietor with more than one car could in effect exclude neighbouring proprietors from any carparking simply by bringing two or more motor vehicles and parking one in the space next to the adjacent lot owner.

90. To avoid the result that no proprietor had no self-evident demonstrable exclusive use of patio and carpark areas (which is in fact what the evidence dictates) the body corporate submitted that I should find that each of the proprietors, other than the proprietors of lot 48 and 49, had exclusive use to their carparking space but only the proprietors of lot 48 and 49 had non-exclusive use, i.e. that every other lot proprietor could park their motor vehicles in the areas immediately adjacent to the residential dwellings at lot 48 and 49 but that the proprietors of lot 48 and 49 in fact had no rights to park anywhere on the premises other than next to their lots if not occupied by other lot owners resident elsewhere in the scheme.

91. One can immediately appreciate the degree of aggravation which such a state of affairs will likely occasion proprietors (including the applicants) especially if absentee proprietors (of which there are many) were entitled to leave motor vehicles parked for lengthy periods of time immediately adjacent to the residential premises of the applicants or other proprietors putting the applicants or others who reside in the premises to the difficulty of parking either on the public roadway or, in any event, at a remote location to their residence and in carparking not designed for lot proprietors (i.e. the only other carparking - visitor carparking).

92. I was concerned to discover from counsel for the body corporate what reasonable purpose might be effected by the case for which the body corporate contends. The only purpose suggested by the body corporate’s counsel was that people attending at lot 49 for the purposes of making enquiries concerning rental of units might find it convenient to park at the lot 48 or lot 49 carparks whilst making those enquiries. If such persons had legitimate business, those persons would equally find it convenient to park in the visitors’ car parking area. If any such person rented any unit a convenient car parking space designed exclusively for that unit already exists. In any event it seems more than likely that the carparking would already be taken by at least the proprietors of lots 48 and 49. No similar explanation was proffered concerning the patio areas.

93. The history of this body corporate demonstrates the capacity for what, in other circumstances might be described as minor irritations, to lead to regrettable incidents. During the course of these applications the chairman of the body corporate has attended upon the applicant’s premises to remove signs and in the course of a fracas concerning that made a complaint to the Queensland Police regarding the female applicant.

94. To my mind, all of the above factors demonstrate the need in resolving the present dispute to make orders designed to identify and settle the rights of the proprietors of lots without further supervision by the commissioner appointed under the BCCMA and in a way which would lead to a fair and reasonable result and one not likely to lead to further dispute or physical violence. I would not achieve that result if I were to make orders such as that urged upon me by the body corporate which would I think in the end result only lead to an exacerbation of the tensions between various members of the body corporate and these applicants. I propose to order that each proprietor of a lot have particular exclusive use to carpark and (if relevant) patio areas by the filing of a further Community Management Statement. I am not persuaded that the alteration of the specific relief sought should require further adjournment or notification to lot owners.

The Gateway to the Exclusive Use Area

95. There is within the exclusive use area for which the applicants contend at lot 49 a lattice gate. The gate admits entry into the carpark area adjacent to that lot. Its purpose is, amongst other things, to secure the carpark area.

96. The lattice gate was constructed by employees of the applicants many years ago. The applicants charged the labour for the construction of the gate by its employees to the body corporate. The body corporate paid that amount. It paid the amount as a result of a resolution of one or more members of the committee. The body corporate did not construct the lattice gate.

97. At the time the improvement was constructed the applicants were required to comply with the provisions of s 37A BUGTA in authorising expenditure of body corporate funds for such purposes. On their own admissions they did not. The improvement (for that is what it undoubtedly is) is unauthorized pursuant to the terms of the BUGTA. The question is, what flows from that conclusion. I do not think it reasonable for the body corporate to require the applicants to remove the gate and reinstate the common property of which they otherwise will have exclusive use at the whim of the body corporate and for no obviously legitimate reason. The reason the body corporate seeks removal of the gate goes hand in hand with its contention that the applicants had no right to exclusive use or possession of the carparking space. Once that is not to be seen to be so, the reason for removal of the gate remains less obvious.

98. I do not think that retention of the gate would disadvantage the body corporate or other proprietors in any substantial way. The area where the gate stands is as I propose to order an exclusive use area. The applicants are obliged to maintain the exclusive use area (which includes the gate) in good condition. That maintenance should ensure the exterior appearance of the lattice work remains similar to similar lattice work used in other parts of the scheme land.

99. I considered ordering the body corporate at its own expense to remove the lattice gate and make good the area. In the end result I think that would be a futile further expense cast upon the body corporate.

100. I find that the body corporate, in seeking to have the lattice gate which it paid to install removed is acting unreasonably in contravention of the BCCMA which obliges the body corporate to act reasonably in enforcing the provisions of that Act and any relevant by-laws. That itself is a contravention of the BCCMA. Since the gate only affords access to the exclusive use area I propose to order the gate is otherwise in accordance with the aesthetics of the scheme. No disadvantage or prejudice is demonstrated by reason of the proposed orders to members of the body corporate other than the applicants in maintaining the gate.

Signage

101. By-law 8 of the Body Corporate by-laws prohibits display of signs absent consent of the body corporate where signs (which are not on common property) can be seen from outside any relevant building. In the instant case various signs have been placed on lot 49 which can be seen from outside lot 49. The signage is therefore in prima facie breach of by-law 8.

102. The applicants seek to maintain the signage which is relevant to the business of letting agents that they maintain by their corporate associate Ellimount Pty Ltd on the basis that there is implicit consent for the display of signage for the promotion of the business which (as I have found) the applicants are entitled to conduct at lot 49.

103. On 5 May 1993, an amendment of by-laws was registered to include as a by-law the following:

"The Proprietor or Occupier of Lot 49 in the building may use the office for the purposes of Management of the building and for the sale and letting of lots in the building on behalf of the proprietors, and the rendering of such services to occupants of lots in the building, and may without the consent of the Committee of the Body Corporate display signs or notices for the purposes of offering for sale or for lease or for letting any lot in the building. For the purpose of the aforesaid the Body Corporate shall have power to grant to the proprietor of Lot 49 in the building the right to carry on in the building, the business of lots in the building and for that purpose to enter into an appropriate agreement on such terms and conditions as the Body Corporate may deem fit.

The proprietor for the time being of Lot 49 shall be entitled to the exclusive use of the office being part of the ground floor level of Lot 49 in the building for as long as the proprietor is nominee shall be the manager and letting agent of the building appointed for that purpose by the Body Corporate or by its Committee."

104. It is not possible to determine from this (or indeed any other) by-law in evidence before me the area of exclusive use given for the ground floor level of lot 49, which is not itself a part of that lot. It may be in consequence that the second paragraph of that by-law is otiose. The first paragraph of the above by-law however plainly allows for the display of signage absent consent.

105. The notification of change of by-laws, which introduced by-law 1, the subject of the discussion earlier in these reasons, provides additionally for the body corporate’s power to enter into agreements of the type mentioned in this by-law. By-law 1 was registered on 1 June 1995. It sought to replace an existing by-law W and a by-law "passed at an extra-ordinary general meeting of the body corporate held on 20 July 1992".

106. By-law W of the by-laws of this scheme was entered on the register of the Land Titles Registry on 22 January 1990. It provided:

"W. Use of lot as Managers office save and except for the proprietor or occupier from time to time of Lot 49. The proprietor or occupier of Lot shall not use his Lot for the purposes of managing the Body Corporate or for managing the conduct in the letting of the units."

107. It is not obvious to me which by-law was passed at an extraordinary general meeting of the body corporate held on 20 July 1992. The by-law registered in May 1993 has the Body Corporate seal placed upon the "notification of change of by-law" form on 18 August 1992 by authority of a resolution of the body corporate made at some earlier unidentified date. It appears to me from the evidence that the body corporate has resolved to rescind the by-law above albeit the register is not clear. By-law 8 thus applied after revocation of the by-law above.

108. It does not seem to me to be incidental to the conduct of a business in a lot within a scheme building that the proprietor of that lot has an unfettered discretion to display signage contrary to by-laws in place at the time the business was commenced.

109. Furthermore, I think, as the body corporate submits, the issue of whether or not the applicants were in fact managers retained by the body corporate or the letting agents authorised by the body corporate, is a matter not irrelevant to whether or not the body corporate can withhold consent to the forms of signage which the applicants presently display.

110. In my view, the signage now displayed by the applicants offends by-law 8. I find there is no implied consent to that signage. That signage should be removed.

111. I do not think that the body corporate is acting unreasonably in seeking to enforce its by-laws in this respect. There is thus no contravention of the BCCMA in the body corporate resolving to remove the signage. My view would be different if the signage itself was different.

112. The present signage seems to me to represent the applicants as the only person concerned in the management of the scheme of letting of units within the scheme. This is an entirely false impression.

113. A number of the unit holders let their units and let them through agents other than the applicants. The applicants are not employed as the manager of the scheme lands. In my view it would not be reasonable for the body corporate to seek to remove signs displayed consistent with the applicants entitlements as I have found them and which were otherwise suitably in keeping with the scheme. Signage, for example, identifying the applicants as the exclusive on-site letting agent; advertising the fact that there were units for letting and the rates for rental of those units and other matters incidental to the proper promotion of letting of those units seem to me perfectly acceptable if contained within reasonable limits. That is however not what has been achieved.

114. The applicants have a registered business name closely similar to the body corporate name. By the use of advertisements with this name, coupled with the denotation of the applicants’ Unit 49 as the office or reception, leads as I have said above, to the false impression that the applicants are, or may be, the managers of the scheme land and that they are the letting agents in respect of the scheme. I think the body corporate is entitled to prevent the applicants continuing that conduct.

Surveyors’ Fees

115. The body corporate alleges it and the applicants agreed that the applicants would be responsible for surveyors fees incurred by the body corporate prior to the body corporate making recent application for a new regulation module for the body corporate.

116. There is in fact no written agreement executed by the parties or even an exchange of correspondence which contains (by way of offer and acceptance) such an agreement.

117. The body corporate submits that the agreement arises by reason of statements made on behalf of the body corporate to the effect that the body corporate would only proceed to seek a new regulation module apply to the scheme if the applicants agreed to bear the costs of that (inferentially because the only persons who benefitted from that course of action were the applicants who were attempting to sell their so called "management" and "letting" rights to another who would be interested in paying a higher price by reason of the change of module giving a longer possible term to the rights to be procured).

118. I accept that the applicants were told and understood this. I find this was an offer by the body corporate to the applicants in 352/03 to compromise a dispute which then existed between them.

119. It is said that the applicants accepted this offer by their conduct. The conduct relied upon is (first) standing by and failing to alert the body corporate to the fact that the applicants would not pay the costs of the body corporate or would only pay if the costs produced a result amenable to them and (second) by encouraging the body corporate to believe that there had been an acceptance of the offer (as I have found it) by the applicants attending the body corporate’s solicitors and executing a client cost agreement in which there was a reference to paying various costs.

120. It was not submitted that if that conduct was made out it could not constitute an acceptance of the alleged offer. The point relied upon by the applicants is that their conduct did not fall within either category alleged.

121. As to the execution of the client cost agreement with the body corporate’s solicitors, Messrs Greer & Timms, the applicants point out that in fact the cost agreement was honoured by them and on its face did not purport to include the fees which are the subject of the present claim. Although I think that that point is right, the client agreement itself makes obvious the fact that the body corporate is to retain or might in the course of preparing the new regulation module application obtain a survey. There would be no point in agreeing in the client cost agreement to pay the costs of the solicitors consulting with the surveyor retained if no survey was to be obtained. This however is not decisive of whether or not the survey was to be obtained at the applicant’s expense.

122. The applicants on a number of occasions disputed the necessity for a survey. I accept that properly advised the applicant saw no need for the survey. That however is not the point. If the agreement was one that provided to the body corporate an indemnity for costs that it had incurred or that it had honestly incurred, or even that it had reasonably incurred (given the advice of solicitors that a survey was necessary) it would not matter that the applicants in fact contended that they did not wish to pay those fees unless they could establish (which they did not seek to do) that the fees were not honestly and reasonably incurred. I find that the fees were reasonably and honestly incurred.

123. The complaint advanced by the applicants to the body corporate was merely a submission that those costs should not be incurred, not that if same were reasonably and honestly incurred the fees would not be payable under an agreement.

124. I find that the body corporate’s offer was accepted. I find that the fees in the sum of $2,400 are payable pursuant to the contract formed by acceptance of the offer. The body corporate is entitled to recover that sum from the applicants.

Can the Money Owed Be Recovered as a Levy?

125. The body corporate sought to recover the surveyor’s fees by levy as against the applicants. The applicants attack the motion concerning the levy of fees. I think that attack is rightly made. The fees claimed are not the subject of levies under the BCCMA. The fees are merely a debt owed pursuant to a contract arrived at between the applicants and the body corporate, which debt has nothing to do essentially with the applicants being a lot owner or occupier but rather with the lot owner and body corporate attempting to settle a dispute between them as to a continuation of a commercial arrangement. Any motion put up by the body corporate to levy is therefore bad. The body corporate should be restrained from giving effect to such a motion. I do not think that the body corporate’s objection to this issue being agitated on the basis of late notice should be upheld. Sufficient notice of the issue was given. There has been an adequate opportunity to be heard.

The By-law Contravention

126. Chapter 3 BCCMA ss 94-192 provide comprehensively for the management of a community title scheme.

127. Section 94(1) BCCMA requires the body corporate to "administer the common property ... for the benefit of the owners of lots included in the scheme".

128. Section 94(2) BCCMA requires the body corporate to act reasonably in anything it does under ss 94(1).

129. In the instant case there is a dispute about whether the body corporate is acting reasonably in administering the common property and doing so for the benefit of the owners in attempting to enforce as against only 2 proprietors use and access to carparking and patio areas in the circumstances mentioned above and in attempting to prevent the display of signage advertising he applicants’ business.

130. I have no doubt that the body corporate is not acting reasonably nor in the interests of the lot owners as a whole in either respect.

The Powers of an Adjudicator

131. Having been satisfied there is a dispute about the body corporate’s conduct and that the body corporate has contravened the obligations in s 94 BCCMA an adjudicator may make an order under s 276 BCCMA that is just and equitable in the circumstances to resolve a dispute about a claimed contravention - see 276(1)(a) BCCMA.

132. Justice and equity in that regard merely mean "according to law". Section 276 BCCMA does not, in my view, empower an adjudicator to make orders notwithstanding the lawful rights and entitlements of the parties to the dispute. That would be neither just nor equitable. It would merely be a power exercised on the personal whim of any one adjudicator unaided by principle.

133. Examples of orders that might be made to resolve disputes are included in schedule 5 BCCMA. But the mere existence of such orders does not show that the orders should be made save to remedy a contravention of some right or entitlement. The relevant contravention in every relevant case here is the failure of the body corporate (as I find as a fact) to have acted reasonably for the benefit of the proprietors as a whole (rather than any one or even a majority of them) in enforcing the provisions of the BCCMA and the by-laws.

Orders

134. In application number 352 of 2003 the applicants which included the proprietors of Lot 48 and 49 in the scheme and their associated body corporate Ellimount Pty Ltd sought to restrain the body corporate from considering motions to be considered in an extraordinary general meeting of the body corporate to be held on 10 June 2003 together with declarations that motions 2, 3, 4, 5, 6, 7 and 8 were "invalid". A separate declaration was sought as to the matter of surveyors fees, see generally paragraph 10 of the application.

135. It is convenient in those circumstances to set out each motion that was considered by the meeting of 10 June 2003 together with the appropriate relief to be granted in accordance with these reasons.

Motion 2

136. Motion 2 was entitled "Common Property Adjacent to Lots 48 and 49". The motion was proposed by the committee of the body corporate. It was proposed to pass the resolution by ordinary resolution in the following terms:

"The Body Corporate resolves as an Ordinary Resolution that:

(a) any consent of the Body Corporate (whether express or implied) to the use of the covered areas of Common Property adjacent to Lots 48 and 49 by the owners of those lots as car spaces or for any other purpose, is hereby revoked, effective immediately;

(b) the Body Corporate Manager advised the owners of Lot 48 and 49 in writing that they are to cease using those areas of Common Property for any purpose, including as car spaces;

(c) if the owners of Lots 48 and 49 do not permanently cease to use the covered areas adjacent to those lots as car spaces within three (3) days of being requested in writing to do so, the Body Corporate Manager should apply to the Commissioner Office of Body Corporate and Community Management for an order that they do so."

137. This motion was not passed. It is self-evident that on the body corporate’s own argument viz that the areas were areas of common property that the proprietors of lots 48 and 49 could not be so prejudiced in the use of the area.

138. It was submitted by the body corporate that given that the motion was not passed there was no issue to be determined. I do not think that is so. Much of the evidence at the hearing of this adjudication dealt with this very issue. I therefore direct the body corporate to file a new Community Management Statement which grants each proprietor of each lot in the scheme exclusive use and possession of the carpark and patio area (if any) adjacent to that lot and which that lot owner has been hitherto accustomed to use.

Motion 3

139. Motion 3 was entitled "Lattice Gate Adjacent to Lot 49". The motion was proposed by the committee to be passed by ordinary resolution in the following terms:

"The Body Corporate resolve as an ordinary resolution that:

(a) the lattice gate erected without Body Corporate consent across the covered area of Common Property adjacent to Lot 49 (currently used by the owners of that lot as car space) be removed forthwith;

(b) the Body Corporate Manager give notice in writing to the owners of Lot 49 requiring removal of the lattice gate forthwith;

(c) if the lattice gate is not removed within fourteen (14) days of the giving of such notice the Body Corporate Manager should apply to the Commissioner Office of Body Corporate and Community Management seeking an order for its removal by or at the cost of the owner of Lot 49."

140. Motion 3 was carried 27 votes to 4 with 1 abstention. I enjoin the body corporate from giving effect to the resolution so passed for the reasons given above.

Motion 4

141. Motion 4 was entitled "Signage". It was proposed by the committee to be passed by ordinary resolution in the following terms:

"Resolve as an ordinary resolution that:

(a) the actions of the Committee and the Body Corporate Manager in removing certain signage from Common Property and directing Ellimount Pty Ltd to remove signage located on Common Property or displayed in breach of by-law 8 be ratified and approved;

(b) the Body Corporate confirms that any consent previously contained in the engagement of Ellimount Pty Ltd as Caretaker and Letting Agent for the Scheme ceased on the expiration of those appointments on 8 June 2002;

(c) the Body Corporate does not consent to the display by Ellimount Pty Ltd or its directors of any signage, advertisement, placard, banner, pamphlet or like matter on the Common Property or on any Lot so as to be visible from outside the building and requires that any such signage or material currently displayed be forthwith removed."

142. Motion 4 was passed by 27 to 4 with 1 abstention.

143. For the reasons given above I decline to enjoin the body corporate from giving effect to paragraphs 4(a) and 4(b) of the resolution. I enjoin the body corporate from giving effect to paragraph 4(c) of the resolution. The body corporate must wait until an application is made to it by Ellimount Pty Ltd to properly consider an application for the display of signage. The body corporate must be reasonable in its consideration. It would not be reasonable for the body corporate to decline to approve any signs which had the effect of advertising the applicants’ business.

Motion 5

144. Motion 5 was entitled "By-Law Adherence". It was proposed by the committee to be passed as an ordinary resolution. The committee proposed:

"The body corporate resolves as an ordinary resolution that:

(a) in the event that Ellimount Pty Ltd fails to comply with by-law 8 and the directions of the Body Corporate Manager to remove signage and other material displayed in contravention of that by-law or any other by-law relating to the use and occupation of Common Property the Body Corporate Manager is authorised to commence appropriate proceedings under the Body Corporate and Community Management Act in respect of such contravention;

(b) the Body Corporate Manager is further authorised to instruct the Body Corporate solicitors to prepare and conduct such proceedings as required and to take necessary steps for recovery of reasonable costs for same."

145. Motion 5 was carried 25 votes to 5 with 2 abstentions.

146. The dispute concerning relief to be accorded as against this resolution demonstrates the petty-fogging instructions which prevented a consensual resolution of this dispute.

147. The applicants contend that resolution 5 is invalid as inappropriately authorising the commencement of legal proceedings other than by way of special resolution in respect of the alleged by-law contravention which arises by display of signage. The applicants submit that the authority given by the resolution is directed to something other than the body corporate engaging in the present adjudication before me.

148. The body corporate submits that it has no such authority nor does it have nor did it ever have any such intention. There was mention made of proceedings for by-law contraventions in a court in Victoria. There was however no evidence tendered as to those matters. I do not find that the body corporate has pursuant to this resolution taken any such proceedings.

149. The Body Corporate and Community Management Act makes provision for proceedings in respect of by-law contraventions.

150. Chapter 6 BCCMA deals with dispute resolution. Section 227 BCCMA defines "dispute" to include, as here, a dispute between the body corporate for a scheme and the owner of a lot.

151. Section 229 BCCMA under the heading "Exclusivity of Dispute Resolution Provisions" provides that the only remedy for a dispute of the nature defined is the resolution of that dispute by dispute resolution process or of an order of the District Court on appeal from an adjudicator on a question of law save in circumstances not here relevant.

152. The reference to dispute resolution process is a reference to processes envisaged by Parts 4 to 8 of Chapter 6 BCCMA.

153. Section 312 BCCMA within Chapter 7 provides:

"312 Proceedings

1. The body corporate for a community title scheme may start a proceeding only if the proceeding is authorised by special resolution of the body corporate.

2. However, the body corporate does not need a special resolution to -

(a) ...

(b) ...

(c) start a proceeding for an offence under Chapter 3 Part 5 Division 4; or

(d) ..."

154. Chapter 3 (Management of Community Title Schemes), Part 5 (By-laws), Division 4 (By-law Contraventions) provides the process by which by-laws can be enforced in a court by proceedings. See, generally, ss 182 to 188 BCCMA.

155. Those provisions provide that after an appropriate contravention notice has been given a body corporate may apply for resolution of the dispute under the dispute resolution provisions or may commence proceedings in the Magistrates Court, see, for example, s 182 (4)(e)(i) and (ii) and s 183(4)(e)(i) and (ii). The body corporate has done neither because of the interlocutory injunctive order I made in application 352/03.

156. In fact the body corporate could not take any valid action for contravention of by-law 8 other than within these applications or in an appropriate Magistrates Court proceeding in Queensland. In neither of those events is a special resolution required. If the body corporate relies on resolution 5 to authorise commencement of some other proceeding to that extent the resolution is merely contrary to law.

157. I do not propose to make any order concerning those matters on the basis of the evidence before me.

Motion 6

158. Motion 6 was entitled "Appointment of Caretaker and Letting Agent Option 1". That was proposed by the committee to be passed as an ordinary resolution. The committee proposed that the body corporate resolve as an ordinary resolution that:

"(a) Calibre Management International be engaged as Caretaker and Manager for the Community Title Scheme for an initial period of two (2) years commencing on 17 June 2003 in accordance with the Caretaking and Management Agreement forwarded with the notice of meeting, and that the Body Corporate Manager be authorised to execute such an agreement using the common seal of the Body Corporate;

(b) Calibre Management International be authorised to act as the Letting Agent for the Community Title Scheme for an initial period of two (2) years commencing on 17 June 2003 in accordance with the Letting Agreement forwarded with the notice of the meeting, and that the Body Corporate Manager be authorised to execute such an agreement using the common seal of the Body Corporate."

159. Motion 6 was carried 19 votes to 6 with 7 abstentions.

160. For the reasons I have given earlier by-law 1 of the body corporate by-laws prohibit the body corporate from making such an engagement. Engagement as caretaker as comprehended by that motion is not simply the employment of the company as an employee of the body corporate to conduct the statutory duties of the body corporate.

161. I therefore enjoin the body corporate from giving effect to resolution 6.

Relief in Application 450/03

162. The body corporate applied in application 450/03 to resolve disputes between it and the applicants in 352/03. There were two disputes identified namely whether or not any letting agreement or management agreement of a type comprehended by the BCCMA exists between the body corporate and any one or other of the applicants in 352/03 (Order 1) and secondly for like relief to that which formed the basis for the body corporate’s contention in 352/03 (Order 2).

163. For the reasons I have mentioned above in deciding the dispute in 352/03 it is not appropriate to make Order 2.

164. It seems to me that it is entirely appropriate to make declarations in respect of Order 1 sought in that application. There is plainly a dispute concerning whether or not any management or letting agreement exists. That is plain from exhibit 5 at the hearing of this application. It is also plain from paragraphs 13.1 and 13.13 contained in the applicants’ application 352/03.

165. I therefore declare that there is no subsisting letting agreement or management agreement between the applicants or any of them and the body corporate.

Application 524/03

166. By reasons of consideration of notice having to be given to each member of the body corporate prior to this application being heard and determined and by reason of the fact that the issues which generated this dispute are the issues in the two previous applications and by reason of the fact that resolution of those would, in my preliminary view, have led to a resolution of this dispute no orders were made as to proceedings in this dispute.

167. It is, however, self-evident by reason of the issues having now been determined that this dispute must be resolved in accordance with these reasons. I invite the parties and any members of the body corporate to make submission to me about appropriate orders on that application within 21 days of publication of these orders to them. It appears plain to me that the appropriate order would be to declare that the body corporate cannot amend its by-laws to remove by-law 1.2 save by resolution without dissent.

Costs

168. All the material filed in application 450 was relevant to application 352/2003. There was no separate hearing of any of the applications other than the hearing of application 352/2003. The applications other than 352 achieved little for either side. In the normal course I would have ordered that each side contribute equally to the costs of both those applications. No costs were incurred in the adjudication of the applications other than 352/03 since all the costs were properly incurred in 352/2003. I however bear in mind the results of those applications in deciding the overall cost issue.

169. The case is one in which the applicants have won on some issues and have lost on some issues. The applicants have won some of those issues on different grounds than set out in the original application. The applicants have also won on issues which required an application in any event and a grant in the nature of an indulgence (by according to them something they did not have and could not have other than by application under the BCCMA). Those are important considerations bearing on the question of costs.

170. There is a degree of ill-will between the body corporate and the applicants, which I cannot attribute in whole to either of them. This enmity prolonged the dispute and increased the cost of resolution.

171. I have found that the body corporate has acted unreasonably in respect of some of the matters where I have otherwise characterised the relief obtained by the applicants as an indulgence. I have also found that both parties unreasonably litigated various unnecessary questions.

172. In many respects I share the sentiment of persons unconnected directly with either principle adversary that the proceedings have cost a very large amount and achieved very little. It is indeed unfortunate that more careful considerations of the reasonableness of the position of either party could not have led to an earlier settlement of this dispute. I record that I have no doubt at all that the absence of a settlement of the disputes prior to hearing was not the fault of either firm of solicitors involved or counsel on behalf of either party. In fact, without the assistance of solicitors and counsel (which was considerable and very helpful), the application would for the purposes of hearing and determination have taken much longer.

173. On balance, the applicants in 352/03 have fared better in the applications overall than the respondent body corporate. This should be reflected in the order I make as to the costs of the adjudication.

174. I fix the costs of the adjudication at the sum of $24,000.00 in accordance with the fee note which I shall send separately to the parties. I direct that the body corporate pay those fees fixed in the sum of $17,000.00 by 20 December 2003. I direct that the applicants pay those fees in the sum of $7,000.00 by 20 December 2003 subject to either of those parties making submissions to me in writing within 14 days in respect of a different order. If such submissions are made I shall consider those matters and make such other order as appears to me to be just.

175. That however is not the end of the costs issue. The applicants of course should not be required to pay any part of the sum payable by the body corporate as to costs. Nor should the body corporate simply by paying money out of its accounts be entitled to raise a similar replacement sum from the applicants.

176. Further, I do not think that the proprietors who did not join with or support the body corporate in the various motions which the applicants attack should have to meet the costs order. It is difficult to identify each of those lot proprietors. There are some 27 proprietors out of 49 who voted for or abstained from each impeached resolution 3, 4, 5 and 6. I shall therefore merely accord to any lot proprietor who did not vote in favour or abstain on the motions in contest in application 352/2003 until 20 December 2003 to make application for orders as to contribution to the meeting of the costs ordered to be paid by the body corporate. I also give to each proprietor and each party until that date to make any submission about any other feature of the cost order.

177. Lastly I give each party and any lot proprietor liberty to apply to me in writing for any additional order that should be made in accordance with these reasons until 4.00pm on 20 December 2003.

Application 0352/2003
Application 0524/2003

Ti Tree Body Corporate

ORDER

1. In application 0524103g make no order. I note there are no costs of this adjudication.

2. In application 0352.03 I order
1. a) the respondent pay $17,000

b) the applicant pay $7,000

being the costs of the adjudication by 23 January 2004.
2. The respondent is not to levy the applicant any sum
a) to meet the costs payable by it under 1 (a) or the body
corporate’s costs of the adjudication either directly or indirectly.

REASONS

3. For the reasons I gave in 0352/03 I have made the above orders.
4. I accept the submission of the respondent (and others who made similar submissions) that I should not make orders resolving any possible dispute between lot proprietors other than the applicants and respondent about the application of the funds of the body corporate for payment of legal fees or the costs of adjudication. To do so in present circumstances would unfairly prejudice honest proprietors fairly exercising their right to vote at a properly convened meeting of the body corporate. I am not in a position nor should I be able to review those reasons. It is thus a regrettable but necessary result that the proprietors other than the applicants should meet the costs in such proportion as the body corporate properly determines.

5. I reject the respondent’s submission that I have no power in resolving the dispute to make orders as above. The costs of the adjudication are within the discretion of a specialist adjudicator. There is no reason in principle or practice to suggest those costs cannot be apportioned to recognise the success and failure of each party. To do otherwise would be manifestly unjust in present circumstances. Further to the extent the order deal with the application of the body corporate’s funds the orders are not ‘cost orders" but orders resolving the dispute. The distinction drawn in the body corporate’s submission between the powers of a specialist adjudicator and the powers of a court are explained by the fact that a specialist adjudicator does not have power to award costs in favour of or against a party. That is not the purpose of the orders as to application of funds that I have made. If however I am wrong about my powers it would still be a relevant consideration on the question of the costs of the adjudication that the applicants would be levied for part of the body corporate’s costs. In those circumstances if I was in error I would have ordered the body corporate to have paid a higher proportion of the costs of the adjudication.
6. Last by reason of the reasons in 0352/03 application 542/03 has become moot. The result in 0352/03 stops the parties in that regard. I have therefore made no order.

D. A. Savage SC
Specialist Adjudicator.