Glostermin [2004] QBCCMCmr 89 (13 February 2004)

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Roger Hess, the co-owner of lot 27

I hereby order that the committee’s purported approval of the garage cupboards constructed in the exclusive use car park spaces of lots 18 and 25 is invalid and of no effect.

I further order that the body corporate secretary shall list two motions to be determined by special resolution on the agenda of the next general meeting, the first seeking approval for the garage cupboards constructed in the exclusive use car park space of lot 18, and the second seeking approval for the garage cupboards constructed in the exclusive use car park space of lot 25.

I further order that, for the purposes of explanatory material accompanying the general meeting voting paper under section 42C of the Body Corporate and Community Management (Standard Module) Regulation 1997, the owners of lots 18 and 25 shall be considered the "submitter" of the motion regarding their respective cupboard and so shall be entitled to submit an explanatory note pursuant to that section regarding the motion that effects their respective cupboard, providing that it is given to the secretary by the closing date for the submission of motions for the meeting.

I further order that a copy of this order and the accompanying reasons shall be included with the agenda papers for the next general meeting.

I further order that this order is self-executing in accordance with the decision of owners on the motion, in that if the motion fails to pass, the owners of lot 18 and 25 must immediately remove their respective garage cupboards at their own expense.

I further order that until the above motion is determined at the next general meeting, the two garage cupboards shall be permitted to remain.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0389-2003

"Glostermin" CTS 6049

APPLICATION

This application was made by Roger Hess, co-owner of lot 27 (applicant) on 12 June 2003 under the Body Corporate and Community Management Act 1997 (Act). The applicant sought orders against the Body Corporate for Glostermin (respondent) in the following terms:

Glostermin community titles scheme (Glostermin) consists of 27 lots and common property. The community management statement for Glostermin indicates that the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module) applies to the scheme.

PROCEDURAL MATTERS

Under section 243 of the Act, a copy of the application was provided to the respondent body corporate and to all owners, with an invitation to the committee and all owners to respond to the matters raised in the application. Written submissions were made by or on behalf of the owners of 15 lots and the committee. The applicant inspected the submissions received and made a written reply (see sections 246 and 244 of the Act respectively).

The applicant and body corporate treasurer have sought the invalidation of the committee submission on the basis that two committee members were not a party to the submission. Similarly, the applicant disputes the submission made on behalf of the owner of lot 3 on the basis that it was signed by the owner’s proxy. I am not willing to ignore these submissions in this circumstance, but I will be mindful of these issues in assessing the probative weight of the information contained in the submissions, including that the purported committee submission does not represent the views of the entire committee. I note that the Commissioner’s Office advised that a dissenting committee submission would be permitted in the circumstances, and I am aware that the affected committee members have both made a submission on this matter.

A dispute resolution recommendation was made referring the dispute to departmental adjudication.

JURISDICTION

This is a matter which falls within the dispute resolution provisions of the legislation (see sections 227, 228, 276 and Schedule 5 of the Act).

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:

(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)).

MATTERS IN DISPUTE

The application relates to the purported body corporate committee approval for construction of storage cupboards in the exclusive use car park areas of lot 18 and 25. The facts of the dispute, as outlined in the application, submissions, and reply to submissions, can be summarised as follows.

At the annual general meeting (AGM) of 9 September 2002 there was apparently debate regarding the construction of storage cupboards in garage spaces. The applicant indicates that the minuted outcome was a resolution that the committee investigate a standard for cupboards.

At some point in the month after the AGM, the owner of lot 25 (Mr W Tatchell) constructed storage cupboards in his garage. The applicant wrote to the body corporate secretary on 15 October 2002 expressing concern that this had occurred.

The committee meeting minutes of 21 October 2002 record that an application was received from the owners of lot 18 (the Kings) for the construction of cupboards, with an apology that the construction had already occurred. The committee apparently deferred approval until it could inspect the cupboards. The minutes of the 30 October 2002 committee meeting indicated the view that the lot 18 cupboards were constructed with weatherproof materials by a registered builder and painted in fire retardant coatings. The unit 25 cupboards were described as constructed of termite proof timber materials that were not completely exposed to the weather, fitted in with the exterior of the area and of good appearance. The suggestion was that any future approvals for cupboards should comply with the design and specification of these cupboards. After some dissent, it was resolved that a construction specification would be obtained and then a motion for the approval of cupboards based on this specification would be drafted to guide owners and the committee.

Following the resignation of committee members at a meeting on 19 March 2003, a committee meeting was held on 5 May 2003 to appoint new members. At the next meeting of 15 May 2003 the owner of lot 25 was appointed chairman and the following three resolutions were passed:

The minutes record that Mr Tatchell did not enter into discussion or vote on the motion relating to his unit. Similarly, Ms L King (a co-owner of lot 18) had left the meeting at the time these resolutions were discussed and voted on. Two committee members apparently voted against the motions because they felt that they should be considered by a general meeting.

The primary basis for the applicant’s objections appears to be that there was no approval prior to construction. The applicant asserted that the cupboards have timber in direct contact with the ground and are structurally attached to the carport timber. For this reason the applicant asserts that the cupboards and carport structure are now at risk of termite infestation. The applicant also asserted that, by undertaking the work immediately after the discussion at the AGM, Mr Tatchell was blatantly disregarding the body corporate.

I have considered the material provided in the submissions and do not propose to outline the issues raised in detail. Some parties making submissions agree that proper approval was required. Some of those parties agree with the need for storage although there are some objections to the actual cupboards. Other submissions disagree with the application primarily on the basis that storage cupboards are required.

I note that a related application 0218-2003 was lodged in this by a co-owner of lot 18 seeking approval for the installation of car park cupboards. The applicant in the current dispute, and many other owners, made submissions in respect of that application. However that earlier application was withdrawn after submissions were sought, because the new body corporate committee approved the cupboards.

DETERMINATION

In considering the legislative requirements relating to the declaratory order sought, I have had regard to the provisions of the Standard Module as in force at the time that the events in question occurred. I note that Body Corporate and Community Management Legislation Amendment Regulation (No. 1) 2003 SL No. 26, which had affect from 1 December 2003, has amended many of the provisions of the Standard Module, and I have highlighted any relevant changes.

General approval for improvements

By-law 47 in the community management statement for Glosterim states that:

If there were no other relevant by-laws or legislative provisions, under this by-law an improvement such as the cupboard constructed in the car parks of lots 18 and 25 could be constructed if there was written approval given by the committee acting on behalf of the body corporate (noting that a notice of opposition to the committee’s approval could be made under section 37 of the Standard Module if owners disagree with the committee’s decision). However, because the car parks are exclusive use areas, different requirements arise.

Approval of improvements in exclusive use areas

Section 170 of the Act provides that an exclusive use by-law attaches to a lot and gives the occupier of the lot exclusive rights and enjoyment, or other special rights to a part of the common property identified in the by-law. By law 63 provides for the exclusive use areas of Glostermin common property, including provision for lots 18 and 25 to have exclusive use of designated car park areas. This by-law establishes no particular rights or obligations on either the owner or body corporate, other than that the owner has the responsibility for keeping the area clean and tidy and in compliance with the by-laws of the local and other authorities.

Section 173(c) of the Act provides that the regulation module applying to the scheme may make provision about authorisation given under an exclusive use by-law for the making of improvements. In turn, section 124 of the Standard Module provided, at the relevant time, as follows:

(1) An exclusive use by-law may authorise the lot owner who has the benefit of the by-law to make stated improvements to the part of the common property to which the by-law applies.

(2) Without limiting subsection (1), improvements stated in the by-law may include the installation of fixtures on the common property and the making of changes to the common property.

(3) If the exclusive use by-law does not authorise the lot owner to make an improvement, the lot owner may make the improvement only if the body corporate authorises it to be made.

(4) However, if the value of the improvement mentioned in subsection (3) is more than $200, the making of the improvement must be authorised by a special resolution of the body corporate.

(It is noted that, as of 1 December 2003, the improvement value has increased to $250.)

By-law 63 does not authorise the owners of lots 18 and 25 to make stated improvement to their exclusive use areas. Accordingly, any improvements to these areas must be authorised by the body corporate. Moreover, if the value of the improvement is more than $200 (at the relevant time), the body corporate approval must be by special resolution. The parties in this dispute did not indicate the value of the cupboards. I have sought clarification of this issue from the owners of lots 18 and 25, and have been advised that the garage cupboard for lot 18 cost $900 and for lot 25 cost $1,200. (I note that this information, provided for the owners of these lots by the contractor, also indicates that both cupboards were constructed in "early 2003" although this conflicts with the information provided by all other parties as to when construction occurred.)

In terms of the requirement for higher value improvements to be authorised by a special resolution at a general meeting, I refer to section 106 of the Act which determines the requirements for a special resolution:

(1) This section applies if a motion is to be decided by special resolution at a general meeting of the body corporate for a community titles scheme.

(2) One vote only may be exercised for each lot included in the scheme, whether personally, by proxy or in writing.

(b) the number of votes counted against the motion are not more than 25% of the number of lots included in the scheme; and

(c) the total of the contribution schedule lot entitlements for the lots for which votes are counted against the motion is not more than 25% of the total of the contribution schedule lot entitlements for all lots included in the scheme.

Other issues

There are references in the application and submissions to some other issues in dispute. These include a disputed balcony wall apparently constructed by lot 18, the validity of Ms L King’s appointment as acting secretary, and potential conflict of interest by committee members. These issues are either not directly related to the orders sought by the applicant, or I otherwise consider that they are not issues that I need to determine to resolve this dispute. Accordingly, I have not discussed these matters further. In the event that any member of the body corporate has a dispute regarding these or other issues, and is unable to resolve the dispute with the other affected parties, they may consider lodging a dispute resolution application in this Office. To the extent that any such application sought to overturn a decision at a committee or general meeting, the application should have regard to the time limits on applications outlined in section 242 of the Act.

Conclusion

This dispute is not about whether it is appropriate or not to install enclosed cupboards in the exclusive use garage area, or the quality or appearance of the cupboards installed. Rather, it relates to whether the legislative processes required for their approval have been followed. Clearly the improvements in this case were of a value greater than the limit in section 124 of the Standard Module, and so a special resolution of a general meeting is required to approve the installation of the cupboards. It is obvious that these approval processes have not been complied with. Moreover, it has been a substantial, rather that a minor or technical, non-compliance.

In the circumstances, I consider that the most appropriate course of action is to require this issue to be considered at a general meeting. All owners eligible to vote will then have the opportunity to consider motions for approval for the two garage cupboards in accordance with section 124. My order is self-executing, meaning that if the motions are not passed by special resolution, the owners of lots 18 and 25 must remove the cupboards, but if the motions pass then the cupboards can stay.

For the purposes of explanatory material accompanying the voting paper under section 42C of the Standard Module, I have made an order deeming the owners of lot 18 and 25 to be the ‘submitter’ referred to under section 42C. This will enable the two owners to lodge an explanatory note about the motion that refers to their cupboard, providing them with an opportunity to explain the reasons why they consider approval should be granted. Such explanatory notes should be given to the secretary by the close of time for submitting motions on the general meeting agenda.

I have made an order permitting the cupboards to remain in situ until such time as the motion is considered at the next general meeting. I have not ordered that an extraordinary general meeting be called specifically to consider this motion because I am mindful of the expense that this would incur for owners. However, if the applicant or other owners would like this matter pursued before the next scheduled general meeting, they may pursue the processes outlined in section 61 of the Standard Module for a requested extraordinary general meeting.

Consideration of the motions that I have ordered is not subject to the body corporate developing or considering guidelines or specifications for appropriate storage cupboards in the garage (which the committee resolved to do in May 2003), and listing of the motions cannot be deferred until this occurs. However, it may well be desirable for the committee to pursue such specifications prior to the next general meeting, if this has not already occurred.

Number of Scheme:	6049
Name of Scheme:	Glostermin
Address of Scheme:	17 Whyenbah Street, HAMILTON QLD 4007

	"That the Glostermin Body Corporate Committee provide guidelines and specifications for any owner wishing to provide for a storage cupboard within the parking space allocated for the use by that Unit on their Body Corporate Common Property for Exclusive Use." (5 for, 1 against)
	"That Body Corporate Committee approval, under By-Laws sect. 47, be granted to Unit 18 owners for a storage cupboard on their Body Corporate Common Property for Exclusive Use" (4 for, 2 against)
	"That Body Corporate Committee approval, under By-Laws sect. 47, be granted to Unit 25 owners for a storage cupboard on their Body Corporate Common Property for Exclusive Use" (3 for, 2 against)

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Glostermin [2004] QBCCMCmr 89 (13 February 2004)