Valley Views (No. 1) [2004] QBCCMCmr 292 (7 June 2004)

Last Updated: 30 September 2005

REFERENCE: 0470-2003

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	18901
Name of Scheme:	Valley Views
Address of Scheme:	Trezise Road PORT DOUGLAS QLD 4871

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Christopher Young, the owner of Lot 14

I order that – 1. The body corporate must within six (6) months of the date of this order undertake all works necessary for the formation, reinstatement and/or repair of a road on common property as defined on Group Title Plan 70462 ("the scheme road"), to provide direct access from the scheme road to every lot which abuts the common property and is not accessed from Trezise Road, namely lots 12, 13, 14, 9, 15, 5 and 6 ("the affected lots"), the scope of such works to include: a. forming and/or realigning the scheme road on the common property so that it does not encroach on any lot, and b. forming and/or making good the scheme road to a safe trafficable all weather condition of a standard appropriate to the area and the level of usage and acceptable to Council or the appropriate authority; c. any associated works, for example drainage and culvert works; d. obtaining all necessary permits, authorities or approvals for the works. 2. For the purposes of complying with the preceding order, the body corporate must call for and consider a quote (or two quotes if the cost of the works is to exceed the maximum spending limit for the body corporate) for the entire scope of works required to give effect to the order. I further order that: 3. Craig Armstrong of The Community Managers is appointed Administrator to call, hold and chair a general meeting ("the meeting") of the body corporate for Valley Views (No.1) CTS 18901 within three (3) months of the date of this order for the purpose of – a. the consideration of motions included on the agenda of the meeting, which may include motions relating to the authorisation of the works for the formation, reinstatement or repair of the scheme road referred to in orders 1 and 2; and b. the election of committee members. 4. The Administrator shall hold the appointment for the period beginning from the date of this order until the close of the meeting ordered. 5. The body corporate must pay the sum of Three Hundred dollars ($300) to the Administrator as remuneration, except for such other financial arrangement as may be agreed between the Administrator and the body corporate. I further order that 6. Within seven (7) days of the date of this order the Administrator must give a copy of this order to each owner. I further order that 7. For the purpose of calling, holding and chairing the meeting, the Administrator shall have all the powers of the chairperson, secretary and treasurer of the body corporate, and of the committee, with the exception of the following powers – a. to further delegate any of those powers to another person; or b. to incur any expenditure apart from that necessary for the calling and holding of the meeting. 8. The nomination and election procedures for the election of committee members shall be in the same manner as provided for in sections 14 and 15 of the Body Corporate and Community Management (Standard Module) Regulation 1997 ("the Standard Module"). 9. The Administrator must give at least two (2) weeks written notice to owners inviting them to submit motions for inclusion on the agenda of the meeting. 10. The Administrator must not give the notice of meeting to owners earlier than four (4) weeks from the date of this order. 11. The meeting shall be otherwise called and held as an annual general meeting in accordance with the Act, particularly sections 42 and 45 of the Standard Module, and all other provisions relating to an annual general meeting under Part 4 of the Standard Module. I further order that. 12. For the purposes of determining future financial years of the body corporate, the end of the month preceding the month in which the above ordered meeting is held shall be deemed to be the end of the financial year. I declare that: 13. The body corporate’s responsibility pursuant to the Act and Standard Module for maintaining the common property includes the maintenance of the scheme road on the common property.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0470-2003

"Valley Views" CTS 18901

APPLICATION AND SUBMISSIONS

1. The applicant seeks the following orders and rulings, set out in his original application, and augmented by his reply:

(a) That "Valley Views" Body Corporate elect an independent Body Corporate Manager;
(b) That a functioning body corporate be formed;
(c) That the body corporate establish an Administrative Fund;
(d) That the body corporate establishes a Sinking Fund;
(e) That the body corporate calls for two quotes to repair and reinstate the road on common area as defined in the Group Title Plan;
(f) That the most favourable of the 2 quotes be accepted and the body corporate authorise the works to be carried out to repair and reinstate the road
(g) That the works be carried out as expeditiously as possible to permit all Lot owners to have access to their parcel of land;
(h) A ruling on the standard of road on the common property required to avoid a public liability problem;
(i) A declaration about how the roads are to be maintained in future by the body corporate;
(j) A declaration about the respective liability of lot owners for payment of the quoted work.

2. Submissions were called and received from Mr and Mrs Stacker, Mr Phillips, Messrs Colin and Jeffrey Heidke, Mr Martin, and Mr and Mrs Baker.

3. On 20 February 2004, I conducted a teleconference with Mr Young and Mr Martin. At that time, they indicated that the issues could be resolved between the parties without further intervention of the Commissioner’s Office. However, the parties subsequently advised that adjudication was required.

4. On 24 May 2004 I therefore conducted a further teleconference attended by Mr Young, Messrs Jeffrey and Colin Heidke, Mr Baker, and Mr Stacker. Other owners were not available. At that teleconference, the issue of appointment of an administrator to arrange and conduct a general meeting of the body corporate, and respective rights and obligations of the body corporate were again canvassed. It was agreed Mr Young would obtain Mr Armstrong’s written consent and a quote for undertaking the appointment to the conclusion of the meeting. Mr Armstrong’s consent was received on 31 May 2003.

JURISDICTION

5. Section 276(1) of the Act provides that an adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the context of a community titles scheme, about-

(a) a claimed or anticipated contravention of the Act or the community management statement; or

(b) the exercise of rights or powers, or the performance of duties, under the Act or the community management statement; or

(c) a claimed or anticipated contractual matter about-

(i) the engagement of a person as a body corporate manager or service contractor for a community titles scheme; or

(ii) the authorisation of a person as a letting agent for a community titles scheme.

6. 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)).

FACTS

7. The Valley Views Community Titles Scheme comprises ten lots. The Body Corporate and Community Management (Standard Module) Regulation 1997 ("the Standard Module") applies to the scheme.

8. The lots are semi-rural, having been excised from a cane farm. The arrangements for management of the scheme have to date been almost non-existent. No regular body corporate meetings have taken place, no committee formed, no financial funds established, no levies have been raised. None of the obligations under the Act in this respect have been complied with.

9. The plan of subdivision depicts the lots being accessed by a road on common property ("the scheme road"). The common property on which the scheme road is supposed to be situated roughly bisects the subdivision in an arc between two points of access from a public road on the eastern boundary of the subdivision, Trezise Road. The common property transverses at least two seasonal creeks.

10. Because of the terrain, cost, and a wish to minimise public traffic through the scheme, the scheme road has only been formed over the Northern and Southern sections of the common property, separated by a section of natural bush and creek ("the reserve") preventing access through the whole circuit of common property.

11. Sections of the scheme road were originally graded, it appears by the owners of lots rather than the original developer. However the road was not maintained on common property, and has become overgrown and unpassable. Lot owners have habitually detoured on to private property to access their lots, and "alternate" routes became established over some years.

12. The applicant, Mr Young, owns Lot 14 and seeks to reinstate the access to his property through common property. In addition, Lot 7 was sold, and the new owners indicated that access through that lot would no longer be permitted. This will particularly affect access to Lots 15 and 14.

13. The applicant contends that the body corporate is responsible for providing or re-instating the access on the scheme road to an appropriate standard, and thereafter maintaining it. The remaining lot owners contend, in summary, that Mr Young should bear the cost of doing so, as the practice in the past has been that each lot owner undertook any maintenance or repair to the common property required for their lot at their own expense, and the reinstatement of access to Lot 14, which is at the rear of the subdivision, would be for the sole benefit of Mr Young.

14. At the May teleconference, the issue of lot entitlements was discussed, with the view of a number of the owners being that, in addition to the issue of usage, levying pro-rata contributions would be unfair, given the diversity in lot entitlements in this particular scheme. The issue of cost is accentuated because no administration or sinking funds have ever been established, so there is no provision even for maintenance, let alone major works.

FINDINGS

15. The orders sought by the applicant fall into two broad categories:

a.	the proper functioning of the body corporate in accordance with the Act; and

b.	access to the lots, particularly responsibility for the provision, reinstatement or maintenance of the scheme road on common property.

A. Functioning Body Corporate

16. The Standard Module provides-

S100 of the Act provides that:-
The body corporate must establish and keep an administrative fund and a sinking fund.
The body corporate must ay into its administrative fund any amount received by the body corporate that is not required under subsection (3) to be paid into its sinking fund.

The body corporate must pay into its sinking fund –

(a) the amount raised by way of contribution to cover anticipated spending of a capital or non-recurrent nature (including the periodic renewal or replacement of major items of a capital nature and other spending that should be reasonably met from capital); and
(b) amounts received under policies of insurance for destruction of items of a major capital nature; and
(c) interest from investment of the sinking fund.

17. The Body Corporate for Valley Views has not held properly convened annual general meetings, nor had a duly elected functioning committee, nor established statutory funds, nor undertaken the administrative actions required by the Act or the superseded legislation, virtually since the establishment of the scheme in 1979.

18. The failure to comply with the Act is longstanding. Knowledge and understanding of the Act amongst the lot owners appears limited, as does the overall willingness to comply with its provisions, rather than operate on an ad hoc basis. I am of the view that current communications and relations within the scheme preclude efficiency in initially dealing with body corporate matters.

19. In the circumstances, I find that the body corporate is incapable of effectively rectifying its non-compliance with the Act without assistance. It is therefore appropriate to appoint an administrator to call and hold a general meeting to formally deal with the outstanding measures required for compliance with the legislation and any motions properly submitted for consideration.

20. That meeting will also provide an opportunity for the body corporate to itself determine issues raised by lot owners, such as common property maintenance (discussed below), the ongoing engagement of a body corporate manager, reimbursement of outlays by lot owners for improvements or maintenance of common property, and any other general business properly proposed by motion.

21. To facilitate the body corporate operating effectively in the future, and to enable it to prepare its budget for a full year, I have made an order deeming the financial year for the body corporate to be calculated with reference to the date of the meeting.

B. Access to the Lots

22. It is outside the parameters of this decision to advise how a road ought to be constructed to avoid a public liability problem. That is a technical and legal matter to be taken up with Council, engineers, those engaged to build the road, and any other appropriate advisers or authorities to ensure all required standards are met. I will not address this issue further.

23. The applicant submits, in support of his contention in relation to responsibility for the road, that upon establishment of the scheme, council approval was granted on the basis of an interim application which stated that "access to the Lots is to be gained from the Common Area and not from the adjoining road frontage."

24. Permit 94, 2 November 1977, provided that the subdivision was allowed subject to the conditions contained in the permit, namely:-

Common Land

a.	The boundary of proposed Lot 1 be extended to abut onto the proposed common area access read, or alternatively, such common area be extended to abut onto the boundary of the said proposed Lot 1.

Access Road

b.	Access from Trezise Road to the subject land is to be restricted to two points to adjoin the common area access acceptable to the Shire Engineer and is to include pipe culverts at such points where the said access roads cross the table drain of Trezise Road.

25. The plan of subdivision subsequently lodged with council reflected those conditions and was approved in 1979.

26. This tends to suggest that that the road was formed to some degree as part of the original subdivision. However, formation of the road to an acceptable standard appears to have been undertaken largely by some of the original owners, particularly Mr Martin and Mr Jeffrey Heidke.

27. Mr Martin, owner of Lot 15, submitted a "mud map" of the access, stating that:

"... the road in this dispute was and still is the headland around the sugar cane field on the Group Title Plan Map Lot 7. This was owned by the original owner from whom we bought the properties and subdivided into the group title lots. He accepted the use of the cane headland as our means of access and both he and the Douglas Shire Council accepted our usage and maintenance of the access are required. It was in the cane farmer’s interest as we kept the accessing good usable condition thru (sic) the years and thru the ‘wet season’ at our cost."

28. It appears that while the road was originally formed mainly on common property, in some instances there was a deviation. For example, Mr Martin asserts:

"..., the common land adjoining Lot 6 & 5 is a nature reserve, that a short section of the access road to Lot 15 deviates around a huge tree and natural mound and uses the cane headland, with the permission of the cane farmer to access Lot 15. The distance is less than 50 metres. Lot 5 uses the common area in the park/nature reserve... Lot 9 can and does access at the entry from the Trezise Rd. on the common land. Access to the rear of Lot 9 is the same as Lot 14 as they adjoin at the end of this road...This short bit of road is partly on common land, having moved sideways onto cane headland thru continuous maintenance of the sloping land."

29. Mr Jeffrey Heidke also provided a map where respective points to which he referred in his submissions were marked. He explained:

"70% of the common access was formed by myself owner of Lot 9 and Garry Martin owner of Lot 15. I built access form Point A to E and Garry Martin built access from point E to F, point F to G was never formed because it is a creek."

30. From the maps and explanations, it appears that a road, of some description, had at some time been formed on the majority of the common area designated for access except for a short section which is a creek and reserve. In summary, the current access for those lots not accessed directly from Trezise Road appears to be:

a.	Lots 12 and 13 are accessed via the Northern section of the scheme road. Lot 9 abuts this section but is accessed through lots 12 and 13 via an "internal easement agreement". Lot 14 is accessed partly through this section of scheme road and partly by a detour through Lot 7;

b.

Lots 5 and 6 are accessed via the Southern section of the scheme road. Lot 15 is accessed partly through this section of scheme road, and partly through a detour through Lot 7, as the terrain on the reserve precludes the Southern section from being extended to allow direct access from the common property to Lot 15.

31. Mr J Heidke and Mr Martin both contend that the common area was never meant to be accessed "all round ", as the topography precluded this from being achieved economically, would detract from the bush environment, and would invite unauthorised users and sightseeing traffic through the private road.

32. Legally the common property is owned by the owners of the lots as tenants in common in the shares proportionate to their lot entitlements. However, generally the body corporate has the ability to deal with the common property on behalf of the owners of the lots, subject to authorisation in general meeting pursuant to the Act or regulation module. The body corporate is liable to maintain the common property, not individual lot owners, regardless of usage.

33. Access to all lots must be provided for via the scheme road, unless access is provided and authorised directly from Trezise Road. In this way, all users are covered by the body corporate insurance, and existing or future lot owners are not at peril of being denied access to their lots as a result of changed ownership or usage of private property over which they have habitually traversed. The value of lots in the scheme is dependent upon there being guaranteed, safe access for all lot owners.

34. In those areas where the scheme road was formed, but fell into disuse or disrepair, or its formation is necessary for safe access to any lot without encroaching on another lot, the body corporate must obtain any necessary permits and undertake any necessary works, including any associated drainage works, to provide direct access from the scheme road to every lot which abuts the common property and is not accessed from Trezise Road, namely lots 12, 13, 14, 9, 15, 5 and 6.

35. The scope of those works must include realigning the scheme road on the common property so that it does not encroach on any lot, and forming or repairing the scheme road to a safe trafficable all weather condition of a standard appropriate to the area and the level of usage and acceptable to Council or the appropriate authority.

36. The body corporate is responsible for the ongoing maintenance of the common property, including the scheme road.

37. This effectively means, on the evidence available to me, that the owner of Lot 15 will no longer be able to access his lot via the Southern section of the scheme road, as that requires travelling over private property (Lot 7). It is apparently not feasible to extend the Southern section of scheme road on common property to his boundary because of creek and reserve. Unless the existing Southern section of scheme road can in fact be extended on common property, access to Lot 15 via the Northern section of the road (past Lot 14) must be made good.

38. A written quote should be obtained covering the entire scope of works required for compliance with the orders, that is, for the formation, reinstatement and/or maintenance of those parts of the scheme road required to access all lots abutting the common property, at both Northern and Southern points of entry from Trezise Rd. If the cost of the whole of the works is to exceed the maximum spending limit of $250 per lot entitlement, namely $10,500, a further quote must also be obtained, and submitted to the general meeting to select a suitable tenderer.

39. Any lot owner is at liberty to submit additional or alternative quotes (in the form of motions) to that meeting for consideration.

40. Quotes for the ongoing maintenance should also be obtained, to be allowed for in the relevant budget put to the meeting, and factored in to the calculation of levies.

41. The body corporate is required to fund the works from contributions levied as required by the Act, that is, pro-rata on the basis of respective lot entitlements, not usage.

42. Some lot owners have expressed the view that the significant disparity in lot entitlements results in "unfairness" in contributing on a pro rata basis. The benefits and disadvantages of a disparity in entitlements, and any options available in relation to this issue, are matters about which they should take independent legal advice.

43. In the reserve area of the common property where the road was never formed, and its formation is not necessary to provide direct access from common property to any lot in accordance with this decision, I find that the creation of a road would constitute an improvement to the common property. On the available evidence, the creation of a road on these sections of the common property would not be an improvement reasonably necessary for health, safety, or security, and I do not intend to order that it be undertaken.

44. If, apart from allowing the necessary access, a lot owner requires creation of road on the reserve area of the common property, it is appropriate that a motion be put to the body corporate. The legislation is directed to self-determination of such issues, and the body corporate must be given an opportunity to properly consider the matter in general meeting.