Qven Technology Centre [2004] QBCCMCmr 64 (2 February 2004)

Last Updated: 30 September 2005

REFERENCE: 0816-2003

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	29109
Name of Scheme:	Qven Technology Centre
Address of Scheme:	9 Technology Drive ARUNDEL QLD 4214

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Leonard James MIERS, as a co-owner of Lot 4,

I hereby order that Ross McLeod of Airlift Hovercraft and occupier of Lot 1, must immediately deliver to a member of the body corporate committee (Leonard Miers, David Alexander or Janice McCarthy) a copy of the relevant electrician’s certificate attesting that the installation of power to the demountable building, the hot water system in the ancillary room to the lot building, and any other area in respect to the habitation of both areas, are in accordance with Australian Standards, failing which he must immediately disconnect the power to those areas. I further order that within two (2) weeks of the date of this order the same Ross McLeod must remove and keep removed from the common property the demountable building caused to be placed by him near the rear, western boundary of the lot building he occupies, and must restore the common property to its previous condition.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0816-2003

"Qven Technology Centre" CTS 29109

The applicant, Len Miers of Lot 3, has sought the following orders of an adjudicator under the Body Corporate and Community Management Act 1997 ("the Act") -

That the occupier/lessee of Factory No.2, Lot 1 Airlift Hovercraft, L Ross McLeod –

1.	Immediately vacate the demountable type building placed on Body Corporate Common Property, and the entrance door be padlocked with the key being placed in the Body Corporate custody.

2.	That within 48 hours the building be dismantled and removed and the land be restored to its previous condition and any damage to the boundary fence be made good, immediately by the offending party.

3.	That the factory unit cease to be used as living quarters in particular with regard to two male children who have been regularly noted residing overnight therein through leaving for school (am) and returning to the factory (pm).

The Body Corporate is unsure as to whether this application should also include the owner of the lot who in terms of the by-laws and the Gold Coast City Council regulations is also in default. That being the case, the owner is Ausbrook Holdings Mr Stephen Uther, 1/9 Technology Drive, Arundel Qld 4214.

The applicant has also sought an interim order in the same terms as the final order sought above. Although not the applicant in the matter, the committee in its submission to the application dated 7 January 2004 suggests that orders 1 and 2 above should be the subject of the interim order to lessen "immediate risks". As the applicant is a co-signatory to this committee submission and is also the chairperson, this choice as interim order would also appear to be his. However, as it would have has no material impact on my decision I do not intend to regard it as a formal amendment of the application and for reasons that will be apparent I will issue only one order to this dispute.


JURISDICTION:
This is a dispute between an owner (the applicant Miers) and a tenant (L Ross McLeod trading as Airlift Hovercraft ABN 26 322 100 832, tenant occupier of "Unit 2", being part of Lot 1 owned by Ausbrook Holdings Pty Ltd A.C.N.103 229 830), concerning the placement of a demountable building on the common property and use of the factory building comprising "Unit 2" as a habitable dwelling.

The first matter is one falling within the disputes resolution provisions of the legislation (see sections 227(1)(a), 228(1)(a) and 276 of the Act).

In regard to the second matter, the use of the factory building as a habitable dwelling is in itself not within the jurisdiction of an adjudicator under the Act to determine, but is a matter for the Gold Coast City Council to pursue under its regulations. However, as there is an allegation that uncertified and/or unqualified electrical connections have been made to the "lean-to" (hereafter "ancillary room") attachment to the rear of the factory building, and this may prove a fire risk to the building which is insured by the body corporate and may affect that cover, then I shall assume jurisdiction on this point.
While section 279(1) of the Act provides that an adjudicator may make an interim order if satisfied on reasonable grounds that an interim order is warranted because of the nature or urgency of the circumstances, there is nothing in the legislation to prevent an adjudicator, in appropriate circumstances, from making a final determination of the dispute by proceeding directly to a final order.

I consider this course is appropriate in this instance because: the facts of the matter are relatively simple and clear; the relevant parties (see later under heading "Application and Submissions" following) have been provided with a copy of the application and given the opportunity to speak to the disputed matter; sufficient information is available to determine the matter; and, in particular, a prompt resolution of the dispute is in the interests of all parties.

Accordingly, this order will be the only order made in respect of the application. The parties, of course, retain their appeal rights against the order made, and my having dispensed with the making of an interim order does not diminish those rights.

General powers of an Adjudicator in making an order:
Section 276(1) 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 this 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) of the Act). An adjudicator’s order may contain ancillary or consequential provisions the adjudicator considers necessary or appropriate (section 284(1) of the Act).


APPLICATION AND SUBMISSIONS:
Under section 243 of the Act, a copy of the application was provided to the following parties: the respondent McLeod of Airlift Hovercraft; Ausbrook Holdings Pty Ltd (Stephen Uther) as the owner of the respondent’s lot, Lot 1; the committee; and all other lot owners, with an invitation to each to respond to the matter of dispute raised in the application.

Neither the respondent McLeod nor the owner Ausbrook Holdings Pty Ltd (hereafter "Ausbrook") made a submission in response to the application. However, submissions were received from the committee, comprising owners Miers and David Alexander of Lot 5, and others.

The applicant Miers seeks a prompt determination of this matter seemingly for two reasons: firstly, because McLeod has rejected the committee’s direction to remove the demountable building, provide a electrician’s certificate for the electrical work done to the ancillary room and the demountable relocatable, and cease using the building (including the ancillary room) and demountable home to house his family which includes two children; and secondly, because the body corporate damage insurance cover may be effected by any uncertified electrical work which is the cause of any fire, and also the body corporate liability insurance cover is voidable if local government regulations are not being complied with in the scheme.
In the circumstances, I considered that it was in the best interests of the parties and owners generally that the matter be resolved on a final rather than an interim basis.

Despite the failure of McLeod to respond, and in his best interests, I arranged for a teleconference between the applicant Miers, McLeod and I so that I could obtain directly the full facts of the disputed matters and the views of the parties on those facts. McLeod refused to participate in a teleconference, as did Uthers of Ausbrook when asked in his stead.

By failing to make a written submission or participating in a teleconference, the respondent loses the opportunity to rebut the allegations and facts as put by the applicant. In this case, however, there is sufficient photographic evidence and corroborative evidence of others to establish facts upon which a decision can be made.

From the application and submissions, the broad facts of the matter are as follows.

The respondent McLeod leases that part of Lot 1, namely the western end of the lot building referred to as "Unit 2". The lot building defines the boundaries of the lot including, for example, the ancillary room outline.

The demountable building has been positioned on that part of the common property that lies between the western boundary of Lot 1/Unit 2 and the western scheme boundary, just north of the ancillary room. From my viewing of the registered plan for the scheme, it is also positioned over a storm water and sewerage easement though this has no relevance to the dispute as the demountable can be easily removed.

The applicant states that McLeod is only leasing the building for a short period while his factory is being built elsewhere and due to be completed in March 2004. The lease is for commercial and accommodation purposes and both the ancillary room and the demountable are being used for living purposes with a hot water system installed in the ancillary room. Power is connected to the demountable accommodation. A washing machine, beds and other living facilities allow the family to live on site. A caravan previously parked within the building has been removed.

The committee members have requested both McLeod and Ausbrook that placement of the demountable on common property, the provision of electrical power to both the demountable and the ancillary power are believed to be in breach of electrical standards, and living on-site is contrary to the Gold Coast City Council’s town planning regulations. The committee (Miers and Alexander) and the Body Corporate Manager by letter dated 10 November 2003, have requested the demountable be removed, the electrical certification be produced for sighting and the McLeods not continue to live on site, however McLeod by letter dated 22 December 2003 has refused all of these requests. In that letter, McLeod states that his lease in his business and of no interest to the body corporate committee and body corporate issues should be taken up with the owner Ausbrook. He requires the committee not to concern itself with his living, insurance, business arrangements as he regarded this as harassment and will seek a court order against them..

The applicant states that McLeod said that his family would be remaining as they were and that the City Council process to have them removed will not have effect by the time his other factory is ready when they will be moving. The applicants also states that McLeod claims his lease with Ausbrook allows him to live on site though when asked would not produce the lease; Ausbrook denies giving permission for this.




DETERMINATION:
"Qven Technology Centre" was registered as a building format plan on 5 March 2001 and comprises five lots. It is regulated by the Body Corporate and Community Management (Commercial Module) Regulation 1997 ("the Commercial Module").

I have already said that the issue of the McLeods living on site is a matter for the Gold Coast City Council to consider under its regulations which restrict habitable buildings. The installation of electrical wiring to a hot water system in the ancillary room and to the demountable, is part of that habitation of these areas and also a local government concern. However, I have accepted jurisdiction on this issue the ground that both matters may affect the insurances of the body corporate. This possibility is set out in a letter to Miers dated 5 December 2003 from the body corporate’s insurance broker, Body Corporate Brokers A.C.N.002 809 298, which states –

"Please be advised that in accordance with the policy terms and conditions, the Body Corporate must ensure that at all times they comply with all Gold Coast City Council Building Regulations.

Failure to comply with all Gold Coast City Council Regulations relative to electrical wiring and habitation may void protection under their Building and Public Liability insurance policy."

The consequences for the body corporate damage policy which insures all lot buildings within the scheme, and for its public liability policy which provides protection for all owners against claims for personal injury on common property, are quite serious. The correspondence between the parties, and certainly this order, are evidence that the consequences are known to both McLeod and Ausbrook. If a claim arises and is refused by the insurer for the above reason, then both parties may well find they are either separately liable or jointly liable with the body corporate. Both McLeod and Ausbrook should promptly seek their own legal advice on this issue if they propose to allow the present situation to continue.I shall return to this aspect after considering the larger question of whether the respondent Mcleod, as an occupier of a lot in the scheme, has a right to place a demountable on the common property. My decision on this larger question will dictate my decision on the electrical wiring and habitation matters.The law on the question of whether an owner, or an occupier, may use part of the common property for habitation purposes is quite clear. I shall quote an extract from my most recent order (pages 2 and 3 of Order 225-2003 of 18 November 2003) on the matter which explains the law generally, and then relate it to the situation of the demountable -

In brief, the law concerning an owner’s use of common property is as follows. Section 35 of the Act provides that owners own the common property as tenants in common which gives each owner a general proprietary right to use the common property. Sections 94 and 152 of the Act then provide that it is the body corporate which administers, manages and controls the common property, though it must do so reasonably and for the benefit of owners. Each owner’s right to use the common property is regulated by the legislation (the Act and the relevant regulations) through the body corporate. The basic rule governing an owner’s use of common property is contained in section 167 which prohibits an owner from using, or permitting another from using, their lot or the common property in such a way that, amongst other things, interferes unreasonably with another’s use or enjoyment of their lot or the common property.

Whereas on the authority of a special resolution under section 114 of the Standard Module* an owner can effect an improvement on common property for the benefit of the owner’s lot, this only applies where the use is incidental as for example in the case of an air-conditioner positioned in a window where it overhangs common property.Where the owner wishes to use part of the common property as if it were their own lot, for example by extending their lot to include a carport, a room or a deck, then this is beyond a mere improvement and is an alienation of the relevant area of common property. In the matter of Platt v Ciriello (1997) QCA 33 (14 March 1997), the Court of Appeal found that the primary test for determining an owner’s use of common property is that of "unreasonable interference" (see earlier reference to section 167 of the Act). That is, an owner may exercise his general proprietary right to use common property so long as it does not interfere unreasonably with another’s use of their lot or the common property. This interference may not just be physical, it may, for example, include a consideration of the effect the use has on the appearance and aesthetics of the scheme generally. Also, even where the use may not be causing an unreasonable interference, the "exclusive use" test may apply in the circumstances to require the owner to only hold that use under an exclusive use by-law. That use was characterised by Ambrose J as being "the sort of exclusive use which a proprietor makes of his lot".(* equivalent of section 94 Commercial Module)

While the location of the demountable may be such that it does not interfere with other occupier’s use of the common property, that is not the test under Platt v. Ciriello that applies here. The appropriate test is the "exclusive use test" as McLeod’s use of that part of common property the demountable sits on is clearly "the sort of exclusive use which a proprietor makes of his lot". Whether the demountable is used for sleeping, living or merely the storage of private or business furniture or goods, all are uses within the character of the use of a lot.Accordingly, the only circumstances under which the demountable may remain is where there is a by-law giving the owner of the lot the right to exclusive use of that area of common property; the by-law, comprised within a new community management statement recorded by the Registrar of Titles, can only be authorised by a resolution without dissent of the body corporate of owners. There would be no reason why owners would wish to grant over such an alienation of the common property, and from the application and submissions of owners it would not occur anyway.Therefore, the demountable is unlawfully occupying part of the common property and my order can only be that it be removed. To allow the occupier time to remove his goods and make other arrangements, I have allowed a period of two weeks for the order to take effect.Returning to the matter of the breaches of the City Council regulations, namely the electrical connections for habitation purposes, the order to remove the demountable does not immediately resolve the electrical installation dispute for either the demountable or the ancillary room (hot water system). Accordingly I have made a separate order requiring McLeod to produce to the committee a copy of the electrician’s certification for the wiring and installation in respect of both the demountable and the ancillary room, and any other point relating to his residence (eg power point for washing machine), failing which the supply must be immediately disconnected.
The applicant states that McLeod has said that he would remain in and use the demountable and ancillary room for living because the Council will be too slow to act before he has his new factory completed. I would point out that it is an offence under section 288 of the Act to contravene an adjudicator’s order with the offender open to a fine up to 400 penalty units (near $30,000) and costs. The applicant has only sought an order against the tenant, however Ausbrook as the owner should seriously consider its position as to any unauthorised electrical installation to its lot building, and the presence of the connected demountable, in regard to the effect on insurances for its lot and other lots.