Grande Corniche [2004] QBCCMCmr 10 (8 January 2004)

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Trevor Klingner, the owner of lot 12

I hereby dismiss the application for an order for approval to install an inverter split system air conditioning system in lot 12.

I further order that resolution 8 purportedly passed at the annual general meeting of 3 June 2003, to rescind the resolution 12 of the annual general meeting of 19 May 1998, was at all times invalid and of no effect.

I further order that Trevor Klingner shall make a detailed written request to the body corporate committee for approval for an air conditioner in lot 12, as outlined in the fourth last paragraph of my accompanying statement of reasons. Within twenty one (21) days of receipt of this request, the body corporate committee shall advise Trevor Klingner whether this request is approved or refused, as outlined in the third last paragraph of my accompanying statement of reasons. The committee response shall be in writing, with reasons and include details of the conditions of any approval.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0397-2003

"Grande Corniche" CTS 16288

APPLICATION

This application was made by Trevor John Klingner, owner of lot 12 (applicant) on 16 June 2003 under the Body Corporate and Community Management Act 1997 (Act). The applicant sought an order against the Body Corporate for Grande Corniche (respondent) for:

Grande Corniche community titles scheme (Grande Corniche) consists of 19 lots and common property. The community management statement for Grande Corniche indicates that the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module) applies to the scheme.

PROCEDURAL MATTERS

Under section 243 of the Act, a copy of the application was provided to the respondent body corporate and to all owners, with an invitation to the committee and all owners to respond to the matters raised in the application. Written submissions were received from two owners and on behalf of the committee. The applicant inspected the submissions received and made a written reply (see sections 246 and 244 of the Act respectively).

A dispute resolution recommendation was made referring the dispute to departmental adjudication. On 18 December 2003 I conducted a teleconference between representatives of the parties.

JURISDICTION

This is a matter which falls within the dispute resolution provisions of the legislation (see sections 227, 228, 276 and Schedule 5 of the Act).

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:

(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)).

MATTERS IN DISPUTE

This application relates to the applicant’s request to install an air conditioner in his lot, and the defeating of his proposals to permit air conditioning units at the annual general meeting (AGM) on 3 June 2003. The facts of the dispute, as outlined in the application, submissions, and reply to submissions, can be summarised as follows.

On 28 February 2003 the applicant faxed a notice of two proposed motions for the next general meeting, to: "Rescind the motion (Resolution, Item 12) of the AGM of Tuesday 19 May 1998" and "Permit the installation Split System Air Conditioning Units, after the approval of the Body Corporate Committee, providing the Unit conforms to the Visual and Noise requirements of the current Industry requirements. NB. The visual and noise requirements, should be clarified and advised to all owners." At the AGM of 3 June 2003 the first motion (8) was defeated by 3 votes for, 10 votes against, 1 abstention. As a consequence, the second motion (9) was ruled out of order.

The first motion related to a 1998 resolution regarding air conditioners. The motion at the 1998 AGM was submitted by the committee at the time, and sought to allow the installation of air conditioners on the condition that committee approval was sought for each air conditioner, that installation was workmanlike and in compliance with any conditions stipulated by the committee, including the position, type and maximum decibel reading of the proposed air conditioner. This motion was defeated by 2 votes for and 11 votes against.

The applicant’s motions were not initially included in the notice of meeting for the June 2003 AGM, apparently because of an oversight. An additional voting paper including the applicant’s submitted motions was then distributed. The agenda papers did not include a letter from the applicant outlining his proposal, but this letter was then read out at the meeting. Nine votes were made in writing and the applicant asserts that these were made without the benefit of the information in his letter. The respondent notes that the applicant’s letter was not in the form of an explanatory note and was not sent until 26 May 2003, after the notices had been distributed. The applicant refers to his letter of 26 March 2003, but the letter he provides is dated 26 May 2003.

The applicant also asserts that some voting papers were submitted after the advertised starting time. The respondent asserts that while the scheduled meeting time was 5.00pm, all voting papers were received by 5.05pm and the minuted starting time of the meeting was 5.10pm. The respondent also indicates that owners are permitted, and were given the opportunity to, alter their vote.

Although the motion was for general approval of air conditioners, the application indicates that the applicant is specifically seeking approval for a small external air conditioner located on the southern balcony adjacent to the dining room of the unit. The applicant asserts that this air conditioner will be within acceptable noise limits, not visible from other units, and not "unduly" visible from the exterior of the building. The application refers to the medical condition of the unit occupier and advice that a portable or internal air conditioning unit would not be feasible in the circumstances. The applicant also claims that there is a precedent for the approval of air conditioning, as a unit for lots 18 and 19 was installed in a common property area on the roof by the developer. It seems that several requests to install air conditioners (apparently, some 3 in 5 years) have been denied since the 1998 resolution.

The two owners’ submissions indicate opposition to air conditioner primarily on the basis of noise, and suggest that the air conditioner on the roof does not raise the same concern. They indicate that the prohibition on air conditioners was a factor in their choice of unit. The respondent notes that the AGM discussion expressed concern with setting a precedent, external appearance, noise, and that the location and orientation of the building do not necessitate air conditioning.
After I had commenced determination of the dispute, the applicant submitted further information relating to an earlier request to install an air conditioning unit. The applicant wrote to the body corporate manager on 2 February 2001 providing details, plans and drawings of his proposal. On 19 February 2001 the body corporate manager advised the applicant that the request had been passed to the committee for consideration and said "I have now been advised that a number of years ago it was determined by owners throughout the building that there would be no consent granted for external air conditioners as this would be detrimental to the external appearance of the building. Accordingly, I advise that consent will not be granted in this instance for installation of any air-conditioning unit that will be visible from any other lot within the scheme or outside the building." The letter suggested that an internal unit be considered. The committee meeting of 22 March 2001 noted the applicant’s letter and resolved to ratify the letter sent denying consent.

The application indicates that at the June 2003 meeting, Mr Max Klingner the applicant’s power of attorney, and apparently the unit occupier, indicated that he had a medical condition that made him intolerant to the heat. Following the teleconference, the applicant supplied a letter from Mr Max Klingner’s doctor confirming this and recommending the consideration of air conditioning during the hotter weather. In its reply to this further information, the respondent notes that this medical advice does not suggest that air conditioning is a necessity, and the uncertainty over this issue would make it difficult decline further requests for air conditioning. The applicant appears to refute this and suggests that further medical advice detailing Mr Klingner’s condition and treatment is available, but has not been supplied.

Finally, the applicant has indicated that, if necessary, he would be willing to limit usage of his air conditioner to between 7am and 10pm if noise levels were excessive.

DETERMINATION

Two issues arise in this dispute. Firstly, were the decisions regarding the air conditioning motions at the 2003 AGM valid? Secondly, has the body corporate acted reasonably in refusing the installation of air conditioners (see section 94(2) of the Act)?

In considering the legislative requirements relating to this dispute, I have had regard to the provisions of the Standard Module as in force at the time that the events in question occurred. However, I note that under the Body Corporate and Community Management Legislation Amendment Regulation (No. 1) 2003 SL No. 26, amendments have been made to many of the provisions of the Standard Module with effect from 1 December 2003.

Explanatory notes

Section 45(4) of the Standard Module provided, at the relevant time, that "If the lot owner seeking the inclusion of a motion under subsection (2)(a)(iii) supplies an explanatory note about the motion, and the note is not longer than 100 words, the note must accompany the agenda." (I note that this provision has been substantially altered by the amendments to the Standard Module, and I would draw the parties’ attention to the new section 42C in particular.) The applicant’s letter did not specify that it provided an explanatory note for inclusion in the agenda. If the letter can be seen as providing the text of an explanatory note, the issue arises whether it was submitted in time.

The applicant validly submitted the relevant motions by the 28 February 2003 end of the financial year (as per section 41(2) of the Standard Module, but from 1 December 2003 see section 41(3)). On the face of the document, and in the absence of any explanation of the discrepancy in the dates, I am satisfied that the applicant’s letter was sent on 26 May 2003. As such it was sent out after the original notice of meeting and amended voting papers were issued.
Even if the letter was sent on 26 March 2003, this was outside the time in which motions could be accepted. While section 45(4) does not require explanatory notes to be submitted at the same time as the motion, it is arguable that a practical reading of the relevant sections suggests that explanatory notes should be submitted by the closing date for the submission of motions (in this case, prior to the end of the financial year immediately proceeding an annual general meeting). In any event, the explanatory note must be in the hands of the secretary before the agenda is prepared, so that it can, as required, "accompany" the agenda and I am not satisfied that this occurred here.

Notice of meeting

Section 43 of the Standard Module (which has not been altered by the recent amendments) requires a general meeting to be held at least 21 days after the notice of meeting is given to owners. In calculating the 21 day period, section 38(1) of the Acts Interpretation Act 1954 indicates that the day of sending the notice and the day of the AGM are not to be taken into account – that is, there should be 21 clear days between the giving of the notice and the meeting. Therefore, the notice of the AGM should have been given on or before 13 May 2003. (I refer to the Adjudicators’ reasons in order 0196-2000 which provides a detailed analysis on the issue of calculating the notice period.)

There is no date on the original notice of meeting, and the applicant variously describes having received this notice on 15 and 20 May 2003. On request, the respondent has advised that the notice was sent on 9 May 2003 and in the absence of any clear information to the contrary, I am inclined to accept this. Accordingly, I consider that the original notice of meeting was validly made.

The additional voting paper with the motions in question, however, is dated 23 May 2003. This voting paper, which must form part of the notice of meeting, was not issued within 21 days of the meeting. In fact, it fell well short of the required notice period. Furthermore, it is not apparent that the agenda was ever revised to include the two disputed motions. While less significant procedural errors or omissions can be disregarded if no owner is disadvantaged, proper notice, including the proper period of notice, is generally a matter of fundamental importance to a valid meeting.

Section 52(5) of the Standard Module provides that "A general meeting may pass a resolution on a motion only if the motion is (a) included as an item of business on the general meeting’s agenda; and (b) stated in the voting papers accompanying the notice of the meeting." (This section has been altered by the recent amendments but not in a manner that would impact on this type of situation.) It is evident that the disputed motions were not included on the agenda, and were not on voting papers that were included in a notice of meeting that was given within the required notice period.

Casting votes in writing

In regard to the applicant’s concern about voting papers submitted after the scheduled start of the meeting, section 51(2) of the Standard Module provides that "A written vote is cast by completing the voting papers as required by the accompanying instructions and giving them to the secretary (personally, by post or by facsimile) before the start of the meeting." I consider this refers to the time at which the meeting actually commenced, rather than the scheduled starting time. Accordingly, on the basis of the information provided by the respondent, I am satisfied that the written votes were validly made.

I also refer the applicant to section 51(3) which provides that a written vote may be withdrawn at any time before the result of the motion is declared (except that a proxy cannot withdraw a written vote.) This has the effect that any owner present at the meeting could have withdrawn their written vote during and voted in person in respect of the motion. (Again, while section 51 has been amended as of 1 December 2003, these amendments would not affect this situation.)
Body corporate decisions on air conditioners generally

This means that an external air conditioning unit may not be installed in a lot without written approval of the body corporate committee. The committee is entitled to approve or refuse a request for an air conditioner, provided that it acts reasonably in doing so. If an owner considers the committee has acted unreasonably, they can lodge a notice of opposition (section 37 of the Standard Module), or submit a motion to a general meeting, or, if unable to otherwise resolve the matter, lodge a dispute resolution application (noting the time limits in section 242 of the Act).

The body corporate committee refused approval for several air conditioners, apparently on the basis of the resolution in 1998. However, I am of the view that the 1998 resolution did not in itself resolve to refuse air conditioners – it merely maintained the status quo in that the motion to permit air conditioners failed to pass. The status quo is by-law 9. Even if a resolution had been passed specifically agreeing that air-conditioners are not permitted, this would not override by-law 9. In the absence of a decision by the body corporate to introduce a by-law that prohibits air conditioners entirely, I consider that the committee must consider requests for air conditioners under by-law 9.

This does not mean that air conditioners must necessarily be permitted. Rather, for each application received, the committee should consider the individual merits rather than applying a blanket rule (whether set by itself or a general meeting). In doing so the committee should have regard to the views of all owners (for example, as expressed in 1998), along with any special circumstances particular to the application that would make it unreasonable to refuse. The committee should also consider general changes in circumstances, such as any change in owner opinion and changes in technology (for example, which may mean that external air conditioners are smaller and quieter).

I am mindful that, notwithstanding the invalidity of the resolutions at the AGM of June 2003, a clear majority of owners appear to have demonstrated a similar view on air conditioners in both 1998 and 2003. In June owners considered noise, visual amenity, and that the aspect of the building does not warrant air conditioning. External appearance was apparently the prime reason for the 1998 vote, and the refusal of the applicant’s 2001 request. I have considered these issues in turn.

The fact that the building’s aspect catches the ocean breeze is not in itself, in my opinion, sufficient reason to refuse an air conditioner. If one owner prefers to be cooled by an air conditioner, they should not be prevented simply because others prefer an open window. The applicant also suggests that some units are sited such that they do not benefit from the breeze, and some are north-facing which leaves them exposed to hot northerly winds.

Given the photographs provided by the applicant and the range of other items apparently kept by lot owners on various balconies, I am not convinced that the siting of an air conditioner of the dimensions and location described by the applicant would have a significant negative impact on the external appearance of the units. The respondent has restated its view that this is an issue, but have not explained how or why this is a problem, except perhaps that an air conditioning unit may be more visible in some other units. Air conditioners are a common sight on Queensland buildings. Even if units of the same dimension were located in similar positions in each lot, I am not satisfied on the material provided that there would be a substantial visual impact. Moreover, the committee is able to limit approval to air conditioning units in unobtrusive locations or that are screened.

Noise, to my mind, is a potentially more significant issue. The applicant draws comparisons with washing machines, toilets, dryers and dishwashers being used in units. I do not consider that these are comparable, firstly because these are more likely to be used for a comparatively shorter period of time, and secondly because they are much less likely to be used at night. An air conditioner is likely to be left on for extended periods of time and potentially throughout the night. The fact that there are environmental protection regulations regarding the noise of air conditioners (outlined below) suggests that there is an acknowledged issue with air conditioning noise. I also agree that the air conditioner on the roof may have a different impact that those on balconies. Moreover, there may be a valid argument that any noise impacts from one air conditioning unit could be amplified if the approval of one unit led to the approval of one or more units in each lot.

On balance, I consider that the committee’s blanket prohibition on external air conditioners, based on the 1998 resolution, is unreasonable. In drawing this conclusion, for the reasons outlined below, I have had the benefit of similar reasoning outlined by the adjudicator in order 0622-2002:

The committee’s approach has been based on a desire not to set a precedent, and to treat all owners equally. This is understandable. However, by-law 9 contemplates the installation of air conditioning, subject to express approval. The committee is obliged to act reasonably in enforcing the by-laws. By enforcing a blanket prohibition, the committee have not exercised the discretion suggested by by-law 9 or considered the specific circumstances surrounding individual requests. I consider that by-law 9 requires the committee to assess each application on its merits. If the recording of a committee decision clearly demonstrates the reasons for the decision and any special considerations, other requests can be distinguished if the same considerations do not apply. It will then be enough to show that the decision has been made on the merits of the individual case.

Applicant’s request for an air conditioner

The applicant sought approval for an air conditioner in his lot from the committee in 2001 but presented no special circumstances as to why the air conditioner was required. The applicant did not seek to overturn that decision, and this application does not specifically seek to do that. Regarding this application, I have considered whether there are any particular factors warranting an exception to any general approach against air conditioners in the case of the applicant.

The applicant also says that he has been advised that internal air conditioning systems are not very efficient and that several units would be required to obtain the desired temperature, which he argues would be very expensive.
The application includes a Gold Coast City Council fact sheet on noise pollution. This fact sheet is based on the Environmental Protection Regulation 1998, and particularly section 6Z, which provides that it is an offence for the noise from an air conditioner (as measured from a complainant’s property) to exceed 50 decibels (dB(A)) between 7am and 10pm, and 40dB(A) or 5dB(A) above the background noise (which ever is higher) between 10pm and 7am. The product specifications provided by the applicant show that the proposed unit has a noise level of 50dB(A). Therefore, while the noise levels heard in adjacent units should not exceed 50dB(A) during the day time, it is less clear (without the benefit of expert advice) whether the night time limit could be exceeded by the proposed unit, particularly if adjacent units without air conditioning leave their windows open for cooling purposes. However, the applicant has indicated that he would limit operation of his air conditioner during these hours if necessary.

The applicant also refers to the installation of an air conditioner on the roof by the developer in 1996. However, I do not consider that this sets a precedent that means it would be unreasonable for the committee to refuse any other air conditioner. Firstly, this is on the roof and so potentially has different noise impacts than a balcony air conditioner. Secondly it was not a decision of the committee to allow this air conditioner, and even if it had been I consider that it is within the scope of the discretion in by-law 9 for the committee to change its approach to air conditioners over time, providing that the reason for its decision in each case is reasonable.

Finally, the application refers to a medical condition which makes the occupier uncomfortable in the heat. Medical advice recommends air conditioning for health reasons but on the face of the material provided I am not satisfied that this indicates that the medical practitioner considers air conditioning a necessity, rather than desirable. The applicant has been given the opportunity to provide me with more detailed information in this regard but has chosen not to, and so I have not requested the further details which it appears may exist.

Conclusion

I am satisfied that the purported resolution number 8 at the AGM of 3 June 2003 was not a valid resolution, because the applicant’s motions were not included on the agenda and was not validly included in the notice of meeting. I have considered whether I should require motions 8 and 9 to be considered properly at another general meeting. However, as these motions seek approval for air conditioners in the scheme generally, rather than specific approval of the applicant’s proposed air conditioner, I do not consider that this approach would resolve the orders sought by this application. Moreover, I hope that the orders that I have made will address the situation without the need to reconsider those motions. Accordingly I have not made an order of that nature. However, if the applicant wishes these motions to be considered at a future meeting, he should resubmit them and ensure that any explanatory material is provided within the appropriate time and in accordance with section 42C of the Standard Module. The secretary must of course ensure that any motions submitted to it are included on the agenda and voting paper within the required notice period.

The applicant has asked me to approve the installation of the air conditioner. However, while I acknowledge the applicant’s circumstances, I am not strongly persuaded as to the merits of his case. Moreover, I do not consider that it would be in the best interests of the scheme for me to impose a decision that should properly be made by the committee. Most importantly, I consider that there is potential to negotiate conditions on the granting of approval, to minimise any impact on other owners, and the details of any such conditions would be best considered by the committee. The committee has not formally considered the applicant’s current request, nor has it received a request that outlined why a general preference against air conditioners should be departed from in the applicant’s case. As such, I am of the view that the most appropriate course of action is that the issue be returned to the committee to properly exercise the discretion given to it under by-law 9.
Accordingly I have ordered that the applicant should make a formal written application to the committee for approval for its proposed external air conditioner. This application should include the location and specifications of the proposed air conditioner, details of the circumstances that warrant special consideration being given to the applicant, and details (if any) of conditions or restrictions on usage (such as limited usage at night) that the applicant would be willing to agree to in order to address the concerns of the body corporate members, particularly with regard to noise. In particular, if the applicant is seeking special consideration on the basis of medical circumstances, he should be aware that the committee can only assess that issue in light of the level of detail and substantiation provided by him in that regard. I acknowledge that this is a further step for the applicant but it will give him the opportunity, to make his case addressing the issues which, in light of my reasons, the committee will need to consider.

Within twenty-one (21) days of receipt of the applicant’s new request for an air conditioner, the committee shall advise the applicant in writing of its decision, including the reasons for its decision. In considering the application, the committee should have regard to its responsibility to decide the application on its merits and not in strict adherence with any policy against air conditioners. The committee must act reasonably in applying the by-laws, and in doing so should have regard to the matters outlined in this statement of reasons. The committee should also give regard to whether approval of the air conditioner would be reasonable if there were conditions placed on approval that may address the concerns felt by owners. In setting any standards relating to the approval for an air conditioner in one unit, the committee must be cognisant of potentially multiplying the impact if other meritorious applications for external air conditioners were received.

The committee’s decision will be recorded in the minutes of the meeting. If any owner considers that the decision is unreasonable, they can pursue the normal avenues to overturn the resolution. If approval is granted, the specification of such approval (the number, size, location, any special considerations, and any conditions placed on approval) will both provide guidance to other owners and set the limits on any precedent.

In the event that the owners wish to prohibit air conditioners from the scheme in all circumstances, they should give consideration to submitting a motion to include a by-law in the community management statement to this effect. This would ensure that all prospective owners are clearly aware of the issue before purchasing their units and enable the committee to administer the by-laws with certainty. However, the committee’s consideration of the applicant’s request as outlined above may not be delayed by the committee in light of any proposed motion to that effect.

Number of Scheme:	16288
Name of Scheme:	Grande Corniche
Address of Scheme:	127 Musgrave Street COOLANGATTA Q 4225

	Regardless of an individual’s reasons for living where they do, Queensland’s sub-tropical temperatures can be difficult to tolerate for extended periods in the height of summer. Certain persons (including young children, aged persons, and those suffering medical conditions) have a greater sensitivity to the heat, and their health might be adversely affected by such heat.
	Air conditioners have become an expected part of modern living for many people, particularly in this climate. They are no longer considered a luxury, but are becoming almost a necessity for some, in the same way as a dishwasher or microwave are necessities for others.
	It is open to the committee to place conditions on the approval of air conditioners (such as the number, location, size, type, hours of usage, power requirements, drainage requirements, and decibel level) to minimise any perceived adverse impact.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Grande Corniche [2004] QBCCMCmr 10 (8 January 2004)