Lake View Park [2004] QBCCMCmr 451 (22 September 2004)

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

I hereby order that, if the respondents cause or allow any representations likely to give an impression that they are appointed as letting agents for Lake View Park or conduct letting from Lake View Park (excluding advertising or distribution of brochures made before this order is given to the respondents and not reasonably able to be recalled by the respondents) then the respondents (and any related entities, as defined in by-law 17A of the scheme) must not provide any of the following services in respect of Lake View Park units pending a final resolution of this dispute:

1. Meeting prospective tenants on scheme land;
2. Exchanging keys on scheme land;
3. Taking any bookings on scheme land, including by telephone;
4. Agreeing any letting terms of scheme land, including by telephone;
5. Collecting any rents or bonds on scheme land; or
6. Providing any cleaning or similar services for tenants on scheme land.

This is an interim order and will remain in effect for a period of not longer than twelve months. It is the responsibility of the applicants to apply to extend this order if no final determination has been made within that period. This order will automatically lapse upon a final order being made or this application being withdrawn.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0454-2004

"Lake View Park" CTS 20751

Lake View Park Community Titles Scheme (Lake View Park) is a 39 lot scheme under the Body Corporate and Community Management Act (Act) and the Act’s Standard Module Regulation (Standard Module).

This is an application for an interim orders. It arises out of an application by the body corporate (applicant) seeking an order to require Ian and Jillian McColl, the owners of lot 26 (respondents) to cease acting or holding themselves out as letting agent for the scheme. Further, the application seeks to require the respondents to remove certain items and lighting from their lot that the body corporate considers to be associated with the respondents acting as letting agents. The body corporate also seeks to require the respondents to cease any advertising indicating that they are acting as letting agents.

The body corporate is seeking an interim order to require the respondents to cease acting or holding themselves out to be a letting agent for the scheme and cease using their lot for the business of a real estate agent pending a final determination of the dispute.

The respondents were the letting agents for Lake View Park from 1994 until 2001. While their appointment as letting agents lapsed in 2001 they continue to reside at the scheme. The respondents currently operate a real estate business in nearby Bundaberg.

The body corporate alleges that the respondents have continued to act as letting agents for the scheme notwithstanding that their letting agency agreement has lapsed and the body corporate has appointed another letting agent. However, the respondents say that some individual owners have requested that they continue to act as their agent and claim that they are entitled to continue to do this as part of their real estate agency business.

On 15 November 2002, the body corporate registered by-law 17A in order to stop any occupiers providing letting services from within scheme land. The relevant part of this by-law is:

"Letting Agent’s Services" is defined to mean "the services provided or agreed to be provided by the Letting Agent under the appointment by the Body Corporate including any agreement in writing between the Letting Agent and the Body Corporate".

This agreement provides that "The Letting Agent must provide a letting agency service and ancillary services commonly rendered in connection with a first class residential/holiday apartment development from the Property at all hours reasonably required to the Owners. Without limitation, that service will include the following services:

The respondents unsuccessfully brought an application before this office seeking to invalidate this by-law, and subsequently unsuccessfully brought appeals before the District Court and the Court of Appeal.

In this present application the body corporate is seeking to enforce this by-law against the respondents. The respondents admit that they are letting units in the scheme. However, they say that they are not contravening the by-law and have the same entitlement to let units as any other real estate agent.

An interim order will not be granted unless is it necessary due to the nature or urgency of the circumstances to which the application relates (Act, 279). Further, any orders granted must be just and equitable in the circumstances (Act, 276).

The body corporate is seeking orders of an injunctive nature designed to prevent the respondents carrying out certain activities alleged to contravene the by-laws pending a final determination of whether the body corporate is entitled to permanent relief. For it to be just and equitable to grant interim relief at this stage, before full and final consideration of all the issues raised, I would need to be satisfied that the application raises a serious question to be determined. I would also need to be satisfied that the balance of convenience between the parties justifies the grant of injunctive relief. That is, I would need to balance the inconvenience to the body corporate of refusing any interim relief against the inconvenience to the respondents if interim relief is granted.

There are a number of matters in dispute. Firstly, the body corporate is concerned that the appearance of the respondent’s lot continues to give people the impression that it contains a letting agent’s office. The body corporate therefore seeks to require the respondents to remove a number of items from their lot. Secondly, the body corporate seeks to immediately stop the respondents from operating the business of a letting agent from scheme land. Thirdly, the body corporate seeks to stop the respondents from engaging in advertising or making representations that indicate they are a letting agent for Lake View Park.

The body corporate has alleged that posters, lighting, a sign, an external telephone, an external "key box", and a bell all give the appearance that the respondents are acting as letting agents in contravention of the by-laws. The respondents dispute these matters saying that certain of these items have been removed and others have a legitimate domestic use.

On balance, I am satisfied that there is a serious question to be determined regarding these matters. In particular, one of the respondents said that tenants are aware of the respondents’ location and may occasionally use the external telephone to contact them. Further, even though tenants are instructed to leave the key locked in the unit when they depart there will be occasions when they will leave the key in the "security letter box".

The respondents claim that they operate a real estate business in Bundaberg and any disputed activities on scheme land are incidental to this business and not in contravention of the by-law. For example, the respondents say that bookings are made on the telephone number for their business which may be diverted to their residence. They submit that they should not be prevented from taking telephone bookings at home simply because their private residence happens to be within the scheme. Further, the respondents say that, as real estate agents, they accompany prospective tenants to the scheme to show them the units. Therefore, they argue that it is not contravening the by-laws for them to meet prospective tenants at the unit to be let, or direct them to attend the respondent’s unit before being taken to the unit that is to be let.

When making a final determination, I will be required to interpret the by-laws of the scheme and determine if any acts of the respondents contravene the by-laws. On a strict literal interpretation it may be contrary to the by-laws for the respondents to take any bookings for scheme units on their home telephone or show prospective tenants scheme units, even where the prospective tenants have made the booking through Ian McColl Real Estate in Bundaberg.

However, if some ambiguity is shown then a purposive interpretation could result in the by-law being read down to only prohibit the performance of services that are associated with, or have the characteristics of, an onsite letting arrangement. If that interpretation is followed then it would not appear contrary to the by-laws for the respondents to take bookings or show units in their capacity as real estate agents based in Bundaberg, even if they did this on scheme land. Instead, the respondents would only be restricted from taking bookings or showing units on scheme land if prospective clients were given the impression that they were not booking through Ian McColl Real Estate, Bundaberg but were booking through an onsite agent or through "Lakeview Park Holiday Townhouses", being a letting agent for the scheme.

The by-laws specifically prohibit the erection of signage within scheme land without body corporate permission. However, the body corporate also complains of advertising and representations by the respondents that give the impression that the respondents are a letting agent appointed for the scheme.

It is not apparent that general advertising including advertisements in local newspapers, delivery of brochures to the local information centre, and accommodation listings in magazines would contravene the terms of the by-law unless it could be shown that these matters were arranged from scheme land or otherwise connected with scheme land.

However, advertising by the respondents may be relevant in another way. On a strict literal interpretation of the by-laws, the respondents are entitled to advertise letting of scheme units outside the scheme but not do anything within scheme land that could comprise letting agent services. This would appear to prohibit the respondents taking telephone bookings on scheme land or showing scheme units to prospective tenants. However, on a more purposive interpretation, the respondents would be entitled to take bookings and show units to prospective tenants provided that they are acting only as an external real estate agent and not as a letting agent appointed specifically for the scheme. If this interpretation was followed then it necessary to consider whether the services provided by the respondents have the character of services typically provided by a letting agent or services typically provided by an external real estate agent. Advertisements and representations made by the respondents would be very relevant in determining the target market and the character of the services provided by the respondents.

The body corporate has established that there is a serious question to be determined. However, to gain an interim order the body corporate will also need to establish that the balance of convenience favours relief being granted prior to a final determination.

A body corporate is required to enforce the by-laws for the scheme (Act, 94). On its face, the body corporate has provided evidence indicating that the respondents have been contravening the by-laws. However, submissions will be sought from all owners before a final determination is made. It will also be necessary to consider the respondents’ argument that they are merely acting as external real estate agents and it is possible that a final determination will allow the respondents to let units in the scheme as external real estate agents.

There is strong evidence that the respondents are giving the impression that they are letting agents for Lake View Park and it is therefore arguable that, even with an interpretation of the by-laws that would allow the respondents to act as external real estate agents, the body corporate would still be entitled to injunctive relief preventing the respondents from continuing to act in their current manner.

However, the respondents have given some indications that they are willing to make changes to how they conduct their business in order to avoid contravening the by-laws. It could therefore be inequitable to place the respondents under an absolute prohibition against providing any services related to letting units in Lake View Park if it is possible that a final determination could allow the respondents to act as external real estate agents provided they change their business practices sufficiently that they could not be seen to be acting as letting agents appointed by the body corporate.

Having said this, the evidence suggests that the respondents would have to change their business practices significantly for their services to cease having the character of services of a letting agent appointed specifically for the scheme. There are a number of ways in which the respondents give the impression that they are letting agents for the scheme rather than simply external real estate agents letting some lots within the scheme. Firstly, the advertising in RACQ magazines and similar magazines uses the scheme name and is specific to that scheme rather than a generalist advertisement of an external real estate agent acting for more than one client. The brochures distributed by the respondents are also specific to the scheme and give the impression the respondents are acting as onsite letting agents. Secondly, there is evidence that the respondents tell potential tenants that they live on the scheme and allow tenants or potential tenants to attend their onsite residence. Thirdly, the respondents provide some cleaning services themselves as is more typical of an onsite letting agent rather than engaging another business to provide cleaning services as is more typical of an external real estate agency.

In conclusion, the body corporate has shown a real prospect that it can obtain final orders to either absolutely prohibit the respondents from using scheme land in any way for the letting of units or, alternatively, to restrict any use of scheme land by the respondents to letting services that have the character of services provided by an external real estate agent rather than a letting agent appointed for the scheme. I am satisfied that the balance of convenience favours granting the body corporate some relief to prevent further contraventions of its by-laws. However, to avoid the respondents having to suffer unnecessary financial loss, I will provide an interim order directed at allowing the respondents to only use scheme land as external real estate agents rather than entirely prohibiting the respondents from using scheme land for letting units. For as long as this interim order is in effect, it will be for the respondents to ensure that they do not make any representations likely to lead to the impression that they are letting agents appointed by the body corporate so that they avoid the services they provide from scheme land taking on the character of services provided by a letting agent appointed by the body corporate.

Regarding the changes to the appearance of the respondents’ lot, the balance of convenience appears to favour allowing the respondents lot to remain in its present state pending any final orders requiring changes. In any event, if the respondents are seeking to avoid any letting services provided by them taking on the appearance of services provided by a letting agent appointed for the scheme then they should avoid having tenants or prospective tenants coming to their unit, or even being aware that they live onsite.

For these reasons, I make the interim order above.

The respondents have an arguable position that the by-laws allow them to continue to act as external real estate agents. This interim order therefore gives the respondents the opportunity to take advantage of the interpretation of the by-laws that is more favourable to their position. Provided that the respondents do not give the impression they are letting agents for the scheme then this interim order does not prevent them advertising units in the local press or on the internet under the name of Ian McColl Real Estate, answering telephone calls to Ian McColl Real Estate that have been diverted to their home, showing tenants units, or engaging cleaners at the end of a tenancy in the same manner that an external real estate agent would act.

However, the respondents should ensure that they do not give the impression they are letting agents rather than external real estate agents. For example, advertising under the name "Lakeview Park Holiday Townhouses" rather than "Ian McColl Real Estate" on the internet or in accommodation magazines will give that impression. Also, if people are aware that the respondents reside on the scheme then this is likely to give the impression of onsite letting services. If the respondents wish to act only as external real estate agents then they will need to cease any such representations. This includes removing any internet listings under the name
"Lakeview Park Holiday Townhouses" and ensuring no further advertisements under that name are printed in accommodation magazines. The respondents should also ensure no future tenants are told that they reside onsite and it would be prudent to tell tenants already aware of their presence not to attend their onsite premises.

The respondents should be aware that if the body corporate obtains evidence of, for example, persons attending the respondents’ onsite premises for letting purposes or the respondents leaving accommodation listings under the scheme name rather than the real estate agency name, then the body corporate may have grounds to seek a penalty of up to $30,000 against the respondent in respect of any letting services provided by the respondents on scheme land (Act, 288).

Number of Scheme:	20751
Name of Scheme:	Lake View Park
Address of Scheme:	Lake View Park Waimarie Street KELLYS BEACH BARGARA QLD 4670

•	The respondents were appointed as letting agents for Lake View Park on 20 April 1994 and their appointment expired on 26 August 2001;
•	The current letting agents, Gregory and Janice Cumerford, were appointed on 17 September 2001 for a period of five years; and
•	The respondents are continuing to act as on-site letting agents, firstly, by placing advertisements in newspapers and magazines, secondly, by taking bookings from scheme land and, thirdly, by using their lot as an office with an installed "key box", external telephone, additional lighting, and brochure display.

•	They no longer display any posters or brochures in a way that is viewable from within or near their lot;
•	They have removed the door signage next to the external telephone;
•	The external telephone acts as an intercom and is typical of modern day communications in private houses;
•	There is no "key box" but rather a security letter box. It may have been used in the past as a key box but the respondents will instruct any tenants who let through Ian McColl Real Estate Pty Ltd not to use this in future;
•	The lighting complained of is security lighting and the signage complained of has been removed;
•	The brass bell complained of is not used by people attending the premises but is for display purposes only;
•	The phone number concerned is a business number for Ian McColl Real Estate. While this number was previously attached to their private unit the respondents are taking steps to ensure that their private unlisted number is used for personal purposes and the business number is only used for business purposes;
•	The business name "Lakeview Park Holiday Townhouses" is a business name that has been used by the respondent’s company for a long period of time. It is quite appropriate that this company continues to use this business name; and
•	None of the respondents operate, engage in, or otherwise practise the business of a letting agent or hold themselves out to be a letting agent from their lot or any other location within the scheme land. The respondents have endeavoured to ensure that not only do they not carry on business from their lot but that they do not give the impression to others that they do so, or that they are the letting agent for the scheme.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Lake View Park [2004] QBCCMCmr 451 (22 September 2004)