No 1 Glen Kyle [2004] QBCCMCmr 497 (21 October 2004)

Last Updated: 30 September 2005

REFERENCE: 0209-2004

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	29539
Name of Scheme:	No 1 Glen Kyle
Address of Scheme:	1 - 3 Glen Dyle Drive MAROOCHYDORE QLD 4558

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Nedmere Pty Ltd, the owner of lot 1

I hereby order that the annexation by the owner of lot 2, John Stephen Browne and Leanne Ellen Browne (as trustee) of common property being the northeastern wall of the building facing Wises Road (the relevant wall) for signage purposes associated with the owner’s business conducted from lot 2, was not authorized, and is not reasonable. I further order that the owners for the time being of both lots are entitled to equal, or approximately equal signage rights or space on the relevant wall. I further order that the owners should, at the next general meeting of the body corporate, determine all practical issues associated with the sharing of signage space on the relevant wall, and thereafter incorporate such agreement in an exclusive use by-law, which shall be resolved, and thereafter submitted for recording as part of the community management statement for the scheme. I further order that if the owners are unable to agree on all practical issues to be determined, or fail to resolve to record an exclusive use by-law as required by the terms of this order, then either owner is at liberty to make a further application to this office for the determination of these aspects.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0209-2004

"No 1 Glen Kyle" CTS 29539

The applicant, Nedmere Pty Ltd, the owner of lot 1, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) quote –

A decision to be made to share signage space as shown on proposed community plan "C".

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.

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)).

The scheme is a subdivision of 2 lots registered under a building format plan of subdivision. The regulatory module applying to the scheme is the standard module.

The parties are in dispute regarding signage rights for a large external wall of the building facing Wises Road. The exterior surface of the wall is common property. Nedmere originally owned both lots, but sold lot 2 to John Stephen Browne and Leanne Ellen Browne (as trustee) (Browne). Soon after Browne sought and received "verbal approval" for new signage. Browne subsequently erected signage on the building, and Nedmere alleges that the signage was beyond the intended approval given. Nedmere alleges that –

Verbal agreement given by Nedmere for replacement of Taubmans’s sign to ICS.
Sign that replaced original sign now takes up the whole wall ... .

Browne is vague in their submission as to the terms of the verbal approval given. They state –

As a result of received verbal approval in the body corporate meeting 5^th November 2001, I organised for new signage on our building ... . The signage proposal had been discussed at the body corporate meeting 05/11/2001.

Browne does not attach the minutes referred to and I can only conclude that those minutes contain nothing specific to support its position. A "Doc 2" is attached by Browne. There is nothing in that document which supports Browne position.

The difficulty in determining this dispute is the almost complete absence of written information evidencing the intention or state of mind of the parties. On this basis, both parties have provided to me in their material statements of what they believed, intended or understood to be the case, or the basis on which they acted. Both parties have been remiss in recording their position, and this is in large part the cause of their current dispute.

I conclude that much of the material relied on by Browne (including the basis on which it allegedly acted) cannot be relied on. I do not believe for the most part that the submissions of Browne are credible. The onus is on Browne to show that it received body corporate approval for the signage, and in particular, the extent of the signage on the large wall in dispute. Whilst it is clear that there was "verbal approval" for signage, this is about the extent of it.

I do not accept Browne’s contentions that the "key reason" for the purchase of the lot was the exposure on the wall for signage, nor that it paid an increased price to achieve the "advertising exposure". For a start, most purchasers pay more than their first offered price for purchase of a property. There is nothing to support a conclusion that the increase in price was related to the specific possibility of advertising exclusively on the wall in question. However, even more obvious to me is that if Browne’s contentions are to be believed, why did it not seek to ensure specific signage rights via the contract of purchase. If, as alleged, this was the compelling reason for purchase, why then would any purchaser leave such an important consideration to chance or later agreement with the body corporate. Browne had a perfect opportunity to ensure the signage rights in question. Nedmere, at the time of contracting with Browne, was the owner of both lots and as such constituted the body corporate. As such it was open to Nedmere, as the body corporate, to grant the signage rights in question. Browne failed to raise the signage rights at all. I simply do not accept that signage rights were within the contemplation of Browne in the initial stages, or more relevantly, where the "key reason" for purchase.

In its submission, Browne subsequently states –

In all our negotiations, I believed that I would be able to have exclusive signage use of the eastern wall. ... In accepting this corner signage leasing arrangement being the only mention of assigned signage rights in the contract, I therefore assumed that there were no other signage restraints associated with our "purchase contract" ... .

In all the circumstances, there is no reasonable basis for the stated beliefs and assumptions of Browne. When an issue is not discussed whatsoever, what basis can there be for beliefs and assumptions which Browne states it had or made. Browne’s statements lack credibility.

It is my conclusion that when Browne sought verbal approval for the signage, it was a reasonable assumption on the part of Nedmere that the signage, in particular that on the wall in question, would be similar in size to the existing signage of the previous tenant, Taubman’s. It would have been unreasonable for Nedmere to refuse signage rights, with Taubman’s now gone. The worst that can be said of the conduct of Nedmere in relation to this matter is that it failed to seek clarification of the proposed signage. However, I do consider that there was an onus on Browne to be specific with its intended signage. I conclude that Browne has exceeded the terms of the approval given, and did this knowingly, seeking to obtain the advantage in question.

The area in question is common property. The rights sought by the parties in respect of the common property are in this instance, signage rights. Such rights are "special rights about common property" and as such, in order to be valid and enforceable, should be the subject of an exclusive use by-law (see section 170 of the Act). This will require that an exclusive use by-law be carried by the body corporate in general meeting, and both owners will need to vote in favour of the motion for it to be carried. I am not prepared to order that an exclusive use by-law be recorded for several reasons.

Firstly, I consider that the parties, with the benefit of the terms of this order, must now determine how signage space on the wall in question will be shared / allocated. For example, will the signage for each party be vertical or horizontal. If vertical, who will have the left or right side. If horizontal, who will have the top half. These are practical considerations which I consider the parties should determine, and which should not be imposed. However, the parties should be aware that if they cannot agree on these matters, I would be prepared to make further or other orders determining these and any other issues the parties might raise, except that I will not re-visit the issues determined here.

Secondly, and relevantly, Nedmere does state that –

As Nedmere Pty Ltd or the tenant, CUB, do not require any advertising space at this time, it has not been requested that Mr Browne remove his sign, but that, if and when signage is required that agreement has been properly documented.

I suggest that this does not prevent the parties determining the matters referred to above, and recording a by-law for the equal, or approximately equal allocation of common property for signage, but then providing in such by-law a proviso that until such time as Nedmere or the owner of lot 1 for the time being gives written notice that it, or its then tenant, requires to exercise its signage rights under the by-law, that Browne, or the owner of lot 2 for the time being, or its then tenant might continue its then existing signage. This written notice should allow reasonable time for Browne, or the owner of lot 2 for the time being, or its then tenant, to arrange to adjust its signage to accord with its allocation under the relevant by-law. I suggest that three (3) months would be a reasonable period of notice to allow for the signage to be adjusted.

For the avoidance of doubt, when I say "the equal, or approximately equal allocation of common property for signage" I intend the equality specifically in respect of the wall in dispute, and not equal in terms of all signage on the building.