The French Quarter [2004] QBCCMCmr 80 (11 February 2004)

Last Updated: 30 September 2005

PJ HANLYREFERENCE: 0394-2002F

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	16734
Name of Scheme:	The French Quarter
Address of Scheme:	1 Halse Lane Hastings Street NOOSA HEADS

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Tangos Investments Pty Ltd, the owner of Lot 7,

CG YOUNGI hereby order that By-law 32 was properly recorded as a by-law of the body corporate by the Registrar of Titles and took effect from 6 October 1995, and that allocations of exclusive use of various parts of the common property to specified lot owners (being the same as those later identified in Schedule E of the new community management statement recorded on 20 January 1998) were made on 6 October 1995 in accordance with the terms of By-law 32, but those allocations only took lawful effect from 13 July 1997.

I further order that –

(a) the grant of exclusive use under By-law 32 to the owner of Lot 8 of that area of common property lying between the northern scheme boundary adjacent to Hastings Street and the northern boundaries of commercial Lots 1, 2, 3, 4, 5, 6 and 7 and including the entry area lying between the eastern boundary of Lot 4 and the western boundary of Lot 5, as identified by hatching and titled "8" and "Patrons Use" on the sketch plan in Schedule E of the new community management statement (a copy of which is attached to this order), is, having regard to the interests of all owners and occupiers of lots in the scheme in general and the interests of those commercial lot owners in particular, unreasonable; and in consequence

(b) the body corporate must within four (4) months of the date of this order lodge with the Registrar of Titles a new community management statement showing the exclusive use area referred to in (a) above, removed from both the Schedule E narrative titled "Allocation of Exclusive Use Areas" and the accompanying sketch plan for Level A.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0394-2002

"The French Quarter" CTS 16734

The applicant, Tangos Investment Pty Ltd of Lot 7, has sought the following orders of an adjudicator under the Body Corporate and Community Management Act 1997 ("the Act") -

1. "That By-law 32 be declared invalid.

2. That the Request to Record CMS 16734 registered on 20 January 1998 and CMS 16734 be declared invalid and of no force and effect.

3. In the alternative, if By-law 32 is valid, that Motions 20 and 21 referred to in the voting paper for and considered at the annual general meeting held 22 November 1997 be given effect on the grounds that opposition in the circumstances was unreasonable.

4. That the Body Corporate lodge in the Department of Natural Resources and Mines a request to record a new Community Management Statement in such form as the Commissioner shall deem fit but which shall contain the following by-laws –

(a) That By-law 32 be declared invalid.

(b) That the occupier for the time being of Lot 7 be entitled to the exclusive use to the rights and enjoyment of the area identified by cross hatching on the plan annexed hereto marked "AA" shall be entitled to use such area for the purpose of conducting the business carried on in Lot 7 from time to time including the business of a restaurant, coffee shop or café and shall keep such area clean and not litter the same as to create a nuisance. The owner of such lot shall not be responsible otherwise for the maintenance of and operating costs of the said area.

(c) That the occupier for the time being of Lot 8 be entitled to the exclusive to the rights and enjoyment of the area identified by hatching on the plan annexed hereto marked "BB" and shall use such area for the purpose noted on such areas on the plan and shall keep such area clean and not litter the same as to create a nuisance. The owner of such lot shall not be responsible otherwise for the maintenance of and operating costs for the said area.

(d) That the occupiers for the time being of Lots 18-21, 50-59 and 98-107 inclusive be entitled to the exclusive use of the rights and enjoyment of the respective areas identified by hatching on the plan annexed hereto marked "CC" and bearing the same number as the lot to which the exclusive use attached and shall use such area for residential purposes and shall keep such area clean and not litter the same as to create a nuisance. The owner of such lot shall not be responsible otherwise for the maintenance of and operating costs for the said area.

5. Such further and other order as to the Commissioner may seem just.

6. Costs.

JURISDICTION:
This is a dispute between an owner (the applicant owner of Lot 7) and the body corporate (the respondent) concerning: the validity of a by-law and a community management statement ("CMS"); giving effect to two motions (which in effect transfers rights of exclusive use over an area of common property from another owner (Lot 8) to the applicant) that allegedly failed to pass because of unreasonable opposition; and the body corporate be required to lodge a CMS with a replacement by-law which defines exclusive use areas for a number of owners, including the "transfer" area for the applicant. These are matters that come with the dispute resolution provisions of the legislation (see sections 227(1)(b), 228(1)(a) and (b), and 276 of the Act).

However, while there is a general jurisdiction to deal with the matters in dispute, there are two questions concerning jurisdiction that I need to address at the outset.

Order 6 seeks costs in circumstances where an adjudicator has no power under the legislation to award costs. The legislation provides for an adjudicator to make a costs order in only one circumstance (other than the costs of adjudication by a specialist adjudicator – see section 280 of the Act) and that is against an applicant where the application appears to the adjudicator to be frivolous, vexatious, misconceived or without substance (see section 270(3) of the Act). That is not the case here.

Order 3 seeks to have the adjudicator review two motions both of which were tabled at a meeting held on 22 November 1997, with a view that an order be issued to give effect to both motions on the ground that the votes cast opposing the motions were unreasonable. Section 10 of Schedule 5 (which schedule sets out various examples of the exercise of an adjudicator’s power to resolve disputes) specifically provides that an adjudicator may make such order, including to give effect to motions requiring a resolution without dissent such as the two subject motions.

Section 242 of the Act sets a time limit of 3 months for applications to be brought for declaring void a resolution of the body corporate (which can be waived by an adjudicator for good reason). Here the application is not to void a motion purported to have been passed, but for an adjudicator to give effect to a failed motion where the application is lodged some 5 years after the relevant meeting. While the legislation does not set a similar time limit for making such orders, such a lengthy delay would constitute a formidable obstacle to the matter being favourably considered.

However, the need to review the two motions does not arise for reasons that will become apparent in my determination of the application under the heading "Determination".

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:
In accordance with section 243 of the Act, a copy of the application was provided to the respondent body corporate (committee) and to affected parties, being the owner of Lot 8, the owners of Lots 1 to 6 (commercial lots affected by the existing exclusive use benefiting Lot 8), and Lots 18 to 21, 47, 50 to 59, 74, 83, 98 to 107, and 125 (residential lots with exclusive use rights over adjacent parts (courtyards) of the common property), with an invitation to each to respond to the matter of dispute raised in the application.

Submissions were lodged by the following: John Mainwaring of JMA Architects (Qld) Pty Ltd owner of Lot 1; Thomas Offermann of Distal Pty Ltd owner of Lot 6; and Hickey Lawyers for Break Free Resorts Pty Ltd owner of Lot 8 and on-site manager under a caretaking and letting agreement with the body corporate. The respondent body corporate (committee) did not lodge a submission (though three committee members and the Body Corporate Manager, Larry Richards of Richards Body Corporate Management ("RBCM"), attended a conference of the parties – see later). The solicitor for the applicant, Virgil Power, inspected the submissions and made a written reply to them (see sections 244 and 246 of the Act).

The facts of the matter reach back some 6 years and are fairly complex.

1995:
The scheme was registered on 8 September 1995 under the legislation which then regulated community title schemes, namely the Building Units and Group Titles Act 1980 ("the BUGT Act"). The statutory First Annual General Meeting was held within time on 26 September 1995 and was attended by Graham Cooper as the nominee for the original proprietor Hastings Street Pty Ltd (the sole owner of all scheme lots) with RBCM also present. The minutes of that meeting include the following resolution –

"By-laws:
Resolved by resolution without dissent, that the Third Schedule by-laws to the Act are hereby amended, added to and repealed in the following manner;-

By deleting the By-laws No’s 1 to 11 inclusive and by adding By-laws numbering 1 to 43 inclusive as set out in the attached schedule.

The secretary was authorised to lodge notification in Form 17 under the Act with the Department of Freehold Land Titles."

The applicant states that the records do not include any such "attached schedule". However, on 27 September 1995 a Notification of Change of By-Laws (Form 17) was lodged with the Registrar of Titles ("the Registrar"). It was subsequently requisitioned by the Registrar.

On 2 October 1995 an extraordinary general meeting was held (again with Cooper as the nominee and sole voter) and the minutes show that in order to meet the requisition, the resolution of 26 September 1995 was repealed and the following resolution passed –

"Resolved resolution without dissent that the Third Schedule By-laws to the Act are hereby amended added to and repealed in the following manner:-

By deleting the By-Laws No’s. 1-11 inclusive and by adding By-laws No’s. 1-34 inclusive as set out in the attached schedule".

Hastings Street Pty Ltd, as the owner of the lots benefiting from exclusive use By-law 32 contained in the schedule, gave written notice on 6 October 1995 to the body corporate that it consented to the by-law granting exclusive use rights attaching to those lots.

On 6 October 1995 a Form 17 was recorded by the Registrar pursuant to section 30 of BUGT Act and, in the words of the body corporate on the document, "by special resolution duly passed on the 26^th September 1995". The by-laws previously requisitioned by the Registrar were re-numbered in accordance with the resolution of 2 October. By-law 32 reads as follows –

"The proprietors of Lots 8, 18, 19, 20, 21, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 98, 99, 100, 101, 102, 103, 104, 105, 106, and 107 shall be entitled to the exclusive use and enjoyment for himself/herself and each of their invitees of those parts of the common property notified in writing by the Original Proprietor to the Body Corporate within one month of the date of registration of the Building Units Plan. When notifying the areas of exclusive use and enjoyment the Original Proprietor shall identify by plan the areas and shall have endorsed on the plan the use to which the proprietor of the respective lots may put the area of exclusive use. The proprietor shall only make use of the area for the purposes noted on the Plan so lodged. The proprietor with the benefit of an area of exclusive use and enjoyment by virtue of this by-law shall at all times and at his/her own cost keep and maintain the area in a neat, tidy and clean condition but otherwise the Body Corporate shall continue to be responsible to carry out its duties pursuant to Section 30(1)(b) and (c) at its own expense.

On 9 October 1995 an extraordinary general meeting was held with Robert Lehn, solicitor, as nominee for Hastings Street Pty Ltd (still described as the original and sole proprietor of all the lots) and the minutes include under the heading "By-laws" the following –

"Mr Lehn informed the meeting that the amended By-laws which had been added pursuant to resolution without dissent at an extraordinary meeting on the 5^th day of October last had been registered in the Department of Freehold Land Titles at Brisbane by registration of notification Form 17 under the Building Units and Group Titles Act."

This should have referred to the meeting of 2 October. The applicant states that Lehn also stated –

Hastings Street Pty Ltd had delivered in accordance with the by-laws a Notice of Exclusive Use attaching to the lots, referred to in By-law 32 and the use to which such areas could be put."

By letter dated 4 December 1995, Robert Lehn forwarded the sketch plans for Levels A, B, C and D
showing hatched the respective exclusive areas of common property allocated for the benefit of those lots mentioned in By-law 32 and identified by the number "8" (relating to Lot 8) or by being adjacent to the benefiting lot (being the courtyard areas for the remainder of the lots mentioned in By-law 32). The applicant says there is no evidence that the allocations were notified to the Registrar and they were not shown as being recorded on the plan.

1997:
An extraordinary general meeting was held on 22 November 1997. A request to record a new community management statement ("CMS") was lodged with the Registrar on 6 January and recorded on 20 January 1998. The CMS refers to a special resolution being passed at the meeting to add a new By-law 35. This by-law reads –

By-law 35
The owners from time to time of Lots 19-127 inclusive shall bear equally the cost of upgrading the antenna distribution system and future monthly payments to the service provider and maintenance of the system.

While the applicant states that there was no such resolution passed at the meeting, my review of the minutes show such a motion was indeed passed, with the same wording as the above by-law. Having passed this motion, it was necessary for the body corporate to submit a new CMS to incorporate this additional by-law. A resolution was also passed at the meeting allowing the owner of Lot 7 (the restaurant) to place chairs, tables, umbrellas and braziers on common property adjacent to the restaurant. There were also two other motions of interest put to this meeting (both mentioned in the orders sought in this application), both failing as resolutions without dissent on the dissenting vote of two owners (Lots 30 and 93) for Motion 20, and three owners (Lots 4, 30 and 93) for Motion 21. The motions are -

Motion 20. Amend By-law:
That, by resolution without dissent, By-law 32 be amended by deleting from the plan referred to therein the area identified by cross hatching on the plan annexed hereto marked "A". Was considered and declared lost.

Motion 21. Exclusive use restaurant area:
That, by resolution without dissent, the owner of Lot 7 shall be entitled to the exclusive use and enjoyment of the area identified by cross hatching on the plan annexed hereto marked "A" and shall use such area for the purpose of conducting a restaurant, coffee shop or café and shall not litter the same as to create a nuisance and shall be responsible for the maintenance of and operating costs for the said area. Was considered and declared lost.

Motion 20 sought to remove from Lot 8’s exclusive use area lying between the northern front of the scheme buildings (comprising commercial Lots 1 to 7) and the northern scheme boundary (near Hastings Street), an area north and north east of Lot 7 as shown on attachment "A", and Motion 21 sought to then give the benefit of the exclusive use of that same area to Lot 7 restaurant.

Until 2 July 2001 there was a commonality of interest between Lot 8 (management) and Lot 7 (restaurant) such that the restaurant’s use of the common property adjacent to Hastings Street, though part of Lot 8’s exclusive use, was not an issue. On that date the owner of Lot 8 ceased to be the lessee of Lot 7 and subsequently demanded rent for the restaurant’s use of this part of its exclusive use area.

The applicant submits that By-law 32 is invalid for a number of reasons which I have addressed under the heading "Determination"; most reasons relate to the errors in procedure set out above as submitted by the applicant, and that the exclusive use allocation to Lot 8 includes all of the common property lying between the northern scheme boundary and the northern boundaries of the commercial lots, requiring customers to walk over the exclusive use area to access these businesses.

I shall address the information supplied in the submissions, particularly the submission by Break Free Resorts Pty Ltd as the owner of Lot 8 and on-site caretaker and manager, which has exclusive use of the area which is the subject of this application.


DETERMINATION:
"The French Quarter" was registered as a building units plan (now termed a building format plan) on 8 September 1995 and comprises 127 lots. Of these lots, Lots 1 to 8 are commercial lots and the rest are residential; Lot 7 is operated by the applicant owner as a restaurant while Lot 8 comprises the office and reception area for the on-site manager. The scheme is regulated by the Body Corporate and Community Management (Standard Module) Regulation 1997 ("the Standard Module").

On 23 May 2003 I convened a conference at the scheme with the following interested parties present, to better understand the facts of the matter and the positions of the parties:

• Representing the applicant – Virgil Power, Solicitor, and Dennis Len, Property Agent.
• Representing the respondent body corporate – Graham Colley as treasurer, Peter McDonald as ordinary committee member, Tom Offerman as ordinary committee member, and Larry Richards of RBCM.
• Representing an affected party:

o Break Free Resorts Pty Ltd, On-site Manager and owner of Lot 8 – Grant Bachelor, (Solicitors Hickey Lawyers unable to attend).the applicant:
o Owners of Commercial lots - Tom Offerman of Lot 6, John Mainwaring of Lot 1 and original scheme building Architect.

Following the conference, the parties were to attempt a negotiation of the issues raised in the application. On 24 November 2003, the solicitor for the applicant submitted a document seeking a certain order be made. As none of the matters have been considered by the body corporate in general meeting, I shall not be giving any regard to this submission and shall proceed on the basis of the original application.

The applicant has raised a number of reasons why it considers By-law 32 should be declared invalid. I shall deal with these points initially – most concern procedural issues that relate to the events set out under "Application and Submissions".

The applicant states that the minutes for the first annual general meeting held on 26 September 1995 do not include the document comprising the replacement by-laws numbered 1 to 43 referred to in the relevant motion. That may be so, however as the document was lodged with the Registrar at 12:45 pm the next day (see dealing 700878613), there is no reason to doubt that it existed at the time of the meeting as stated. Following the general meeting of 2 October 1995 which rectified the errors queried by the Registrar, including the renumbering of the by-laws from 43 to 34 (evident in viewing the changes to the by-law document), the rectified document was lodged with and recorded by the Registrar on 6 October 1995.

The applicant states that the owners benefiting from the exclusive by-law did not give consent at the time of the passing of the resolution on 2 October, but by a later notice dated 6 October 1995, being given by Hastings Street Pty Ltd as the original proprietor and owner of the relevant lots (in fact, all lots). Section 30(7) of the BUGT Act required, "With the written consent of the proprietor or proprietors of the lot or lots concerned, a body corporate may, pursuant to a resolution without dissent make a by-law conferring on the proprietor of a lot specified in the by-law ...the exclusive use and enjoyment of...any part of the common property" (my underlining). While the provision must be read such that the written consent should be given at the time of the passing of the relevant resolution, in circumstances where the benefiting owner votes in favour of the by-law motion, particularly when that implied consent is confirmed in writing four days later as in this instance, then it is my view that the by-law should stand as validly consented to.

The applicant also refers to the wording of the Form 17 notification as being lodged in consequence of a "special resolution" of 26 September, however this appears to me to be no more than a slip error as the minutes of that meeting clearly show the by-law motion was properly passed as a resolution without dissent in accordance with the requirements of section 30(7) of the BUGT Act (see above).

Accordingly, I do not consider any of the issues raised by the applicant are fatal to the validity of the by-law, and in my view the by-laws comprising that notification document, including By-law 32, were properly passed by the body corporate and took effect upon being recorded on 6 October 1995 (see section 30(3) of the BUGT Act).

However, the validity of the allocations of exclusive use made under the terms of By-law 32 is a separate matter.

The by-law specifies that allocations must be made in the following manner –

"The proprietors of Lots 8, 18, 19, 20, 21, 50, 51, 52, 53, 54, 55, 56, 57, 58, 59, 98, 99, 100, 101, 102, 103, 104, 105, 106, and 107 shall be entitled to the exclusive use and enjoyment for himself/herself and each of their invitees of those parts of the common property notified in writing by the Original Proprietor to the Body Corporate within one month of the date of registration of the Building Units Plan. When notifying the areas of exclusive use and enjoyment the Original Proprietor shall identify by plan the areas and shall have endorsed on the plan the use to which the proprietor of the respective lots may put the area of exclusive use.

That is, within a month of registration of the plan on 8 September 1995 the original proprietor (Hastings Street Pty Ltd) had to give written notice of the grants to the respective owners of lots specified in the by-law, and a plan identifying the granted areas and showing how the respective areas may be used.

The minutes for the meeting of 9 October 1995 (see applicant’s grounds paragraph 15) include a statement by Lehn’s (solicitor and nominee for the original proprietor) that a Notice of Exclusive Use had been "delivered in accordance with the by-laws", signifying that the notification of allocations of exclusive areas (addressed to The Proprietors and dated 6 October 1995) was done within the month time limit imposed by the by-law. I accept that the terms of the by-law were met based on the date of the notification and the minute by Lehn; also, as the original proprietor was still the sole owner of all the lots and in effect constituted the body corporate, the practical effect of the notification of 6 October was that the body corporate received it at the same instant. The fact that the Body Corporate Manager was not advised by Lehn until 4 December is of no consequence.

Section 30(7E) of the BUGT Act required that the allocations had to be notified to the Registrar within 3 months for recording on the registered plan. There is no evidence that the allocations (in narrative and sketch plan form) were notified to the Registrar within three months of 6 October 1995, nor are they shown as being recorded on the plan during the remaining time the scheme was regulated by the BUGT ACT, namely when the current Act commenced on 13 July 1997. During this time then, By-law 32 was a valid by-law and the allocations under the by-law had been made, but the allocations were not lodged or recorded to give them legal force and effect in accordance with section 30(7D) of BUGT Act). It appears that the relevant owners were unaware of this failure by the body corporate to secure their exclusive use allocation, and treated their respective areas as if they had been lawfully granted.

Had the new Act not come into existence, or had certain transitional provisions in the new Act not been included, then the relevant owners would have no lawful right to the exclusive use over the areas allocated to them by the notification of 6 October 1995.

Under then section 283(4)(b) (now section 337(4)(b)) of the transitional provisions of the new Act, in recognition of many similar failings by bodies corporate to properly secure exclusive use allocations for owners, parliament gave a grace period of 18 months for bodies corporate to notify the Registrar of unrecorded allocations. If accepted, they would be taken to be part of the interim statement forming the scheme’s initial CMS under the Act, and thereby have force and effect.

What happened next in "The French Quarter" was that an extraordinary general meeting was held on 22 November 1997 arising out of which a new CMS was lodged with and recorded by the Registrar on 20 January 1998.

The new CMS was lodged in respect of a motion passed at the meeting for an additional by-law (By-law 35 concerning antenna distribution) not relevant to this dispute, though what is relevant is that both the narrative (Schedule E) and sketch plans for the allocations under By-law 32 were included in the CMS (though not based on any resolution of the meeting). The sketch plans with the allocations identified that form Schedule E, are those referred to at the meeting of 9 October and subsequently forwarded by Lehn to RBCM on 4 December 1995. This is the first occasion that the allocations were notified to the Registrar (recall they should have been lodged within 3 months of allocation under the BUGT Act).

The question arises whether the inclusion of the allocations in this CMS can be regarded as a notification under the section 283(4)(b) transitional provision, it being within the 18 month grace period. The relevant provisions at the time stated (the scheme is an existing 1980 Act plan under then section 276 (now section 330)) –

Community Management Statement
283 (3) The interim statement is the community management statement for the new scheme until--

(a) under provisions of this Act for the recording of a new community management statement, a new community management statement is recorded for the scheme; or
(b) if a new community management statement is not recorded--the end of 3 years after the commencement.

(4) Despite subsection (3)--

(a) an amendment of, addition to or repeal of by-laws in force for an existing 1980 Act plan agreed to by special resolution under the 1980 Act on or after 13 April 1997 but before the commencement may, if deposited for recording within 18 months after the commencement, be recorded under the 1980 Act, and the interim statement is taken to be amended to reflect the amendment, addition or repeal; and
(b) a notification of an allocation, including a variation or transposition, of identified common property happening before the commencement under a by-law for an existing 1980 Act plan may, if deposited for recording within 18 months after the commencement, be recorded under the 1980 Act, and the interim statement is taken to be amended to reflect the allocation, variation or transposition.

The request by the body corporate at Item 6 on the Request to Record New Community Management Statement Form 14 only refers to an additional by- law (By-law 35). However, regardless that the request did not specify the inclusion of the allocations (Schedule E narrative and sketch plans) or that the request was stated to be in respect to section 283(4)(b), I consider the inclusion of the hitherto omitted allocations was sufficient in being a notification of an allocation within the meaning of the section for the allocations to be part of the interim statement, and under then sections 283(3(b), 48 and 50(1) as the new CMS for the scheme. The effect of the allocations being deemed to be part of the interim statement is that the allocations had force and effect from the date the interim statement came into being, namely the commencement of the Act on 13 July 1997.
Summarising my findings to this point: By-law 32 was a valid by-law and effective from 6 October 1995; the allocations were properly made in accordance with the terms of the by-law on 6 October 1995, and those allocations were made effective by the CMS recorded on 20 January 1998 and the transitional provisions as if they were in force at the commencement of the Act.

I have therefore included an order declaring By-law 32 to be valid and effective from 6 October 1995, and the allocations made under the authority of By-law 32, as set out in Schedule E of the CMS recorded on 20 January 1998, are deemed to be effective from 13 July 1997.

However, having found the by-law and the allocations to have been properly recorded and effective, I will now consider the submission of the applicant, as mentioned previously, that customers wishing to access the commercial lot businesses facing Hastings Street could be prevented from doing so by the owner of Lot 8 which has the benefit of exclusive use over the area lying between these lots and the northern, Hastings Street scheme boundary ("the Hastings Street area"). This Hastings Street area of exclusive use includes the whole of the common property access area right to the front doors of the businesses comprising Lots 1 to 7.

The grant of exclusive use over this area is absurd and not in the interests of either the commercial lot owners by allowing access to their businesses to be prevented, or other owners and visitors wishing to use the entry situated between Lots 4 and 5 which is also part of the granted area. The words "Patron Use" inscribed on this area on the allocation sketch plan may have been an attempt to condition the grant to allow access to business patrons, but the wording of the by-law itself does not contain any such condition to the grant. In any case, the words "Patron Use" would still exclude owners and visitors accessing the businesses and the northern entry to the scheme.

An adjudicator is given wide powers under section 276 of the Dispute Resolution provisions of the Act, in being able to 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. Subsection (3) allows an adjudicator, without limiting the general empowering sections, to make an order mentioned in Schedule 5. Section 20 of that schedule provides as follows –

20. If satisfied a by-law is, having regard to the interests of all owners and occupiers of lots included in the scheme, oppressive or unreasonable--an order requiring the body corporate to lodge a request to record a new community management statement--

(a) to remove the by-law; and
(b) if it is appropriate to restore an earlier by-law, to restore the earlier by-law.

While this example of the exercise of an adjudicator’s power refers to the removal of a body corporate’s by-law for unreasonableness, it is indicative of the power of an adjudicator to resolve disputes which could also be exercised in a similar manner to remove an allocation of exclusive use where the allocation is unreasonable. It would be absurd if an adjudicator had power to revoke an unreasonable exclusive use by-law but did not have power to revoke an allocation made under a by-law.

In my view, for the reasons already mentioned, the allocation to Lot 8 of exclusive use of the Hastings Street Area was, and still is, unreasonable. That such a grant could ever have been made would be inexplicable if it were not for the recollection of John Mainwaring of JMA Architects Qld Pty Ltd, owner of Lot 1, who was the designer responsible for the concept of the "French Quarter" environment. In his submission Mainwaring says "As far as the zone outside the shops is concerned, it was always intended that the manager control this area so it was kept free of unwanted advertising, sandwich boards, and various commercial "debris" that shop tenants may place there.
Obviously it was not the intention for the manager to have control over who goes in and out of shops. At the conference of 23 May 2003, he confirmed that the intention was only to allow the manager (Lot 8) to keep the Hastings Street Area clear and not to have exclusive rights over the area so as to exclude customers or to be of commercial value to that owner such as leasing part of the area to a business lot owner.

Accordingly, I have made an order that removes from the owner of Lot 8 the exclusive use of the Hastings Street Area in its entirety.

In the orders sought and in Motion 20 rejected at the meeting of 22 November 1997 (see previous), the applicant seeks not only the removal of the Hastings Street Area from Lot 8, but also the allocation of that area depicted on the sketch plan for Level B and inscribed with the words "Car Parking". This area comprises quite a large building used for car parking by Lot 8. My order does not include the removal of this allocation from Lot 8 as, firstly, the obvious unreasonableness of the Hastings Street Area does not extend to this area, and secondly I have no argument before me as to why its allocation is unreasonable. It may be a useful area for the body corporate, by way of parking for visiting tradespersons, professionals and ordinary visitors; however that is not sufficient, in my view, in establishing unreasonableness.

The practical result of my orders are that the other grants of exclusive use to the owner of Lot 8 (car parking area, storerooms, pool equipment room and staff amenities room), and to the owners of the other lots in respect to their attached courtyard areas (ie for Lots 18 to 21, 50 to 59,... etc, as per Schedules E and sketch plans), as recorded in the CMS, are held to be valid. The removal of the Hastings Street Area from Lot 8 will not affect the operations of the manager in either caretaking the scheme or the letting of scheme lots.

In regard to Order 4(b) sought by the applicant, namely for the owner of Lot 7 (restaurant) to have exclusive use of an area of common property adjacent to the northern boundary and the north eastern area of the lot, has been dismissed. I understand that this area has been used as part of the restaurant from the outset of the scheme, however the right to exclusive use of part of the common property by Lot 7, whether by lease, licence, or under an exclusive use by-law, is a matter that should properly be placed before the body corporate in general meeting for owners to decide. Similarly, if the manager wishes to use some part of the common property then it could seek an occupation authority under section 91 of the Standard Module.

I have allowed a period of four months for the body corporate committee (see section 62(4)(b) of the Act) to lodge the necessary CMS excluding the Hasting Street area, so that if the owner of Lot 7 is successful in securing an area of exclusive use adjacent to the lot, then the authorising by-law can also be included with the new CMS ordered. Indeed, the body corporate may take the opportunity to pass and include any other by-law change.