Calypso Plaza Cairns Commercial [2005] QBCCMCmr 116 (2 March 2005)

Last Updated: 5 July 2005

REFERENCE: 0148-2004

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	27323
Name of Scheme:	Calypso Plaza Cairns Commercial
Address of Scheme:	53 - 57 The Esplanade CAIRNS QLD 4151

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

A & K Ankars Pty Ltd, the owner of lot 120

I hereby order that the application for an order that the minutes of the annual general meeting for Calypso Plaza Cairns Commercial held on 5 December 2003 be amended to accurately reflect the approval by the body corporate for all current signage for lot 120, and not limited to the "hanging sign" as stated in the minutes, is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0148-2004

"Calypso Plaza Cairns Commercial" CTS 27323

ORDER SOUGHT

The applicant has sought an order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) as follows:

For item 14 of the minutes of the annual general meeting for Calypso Plaza Cairns Commercial held on 5 December 2003 to be amended to accurately reflect the approval by the body corporate for all current signage for lot 120, and not limited to the "hanging sign" as stated in the minutes.

JURISDICTION

The applicant has named the body corporate for Calypso Plaza Cairns Commercial, which is a subsidiary scheme as the respondent to the dispute. Originally, it named Calypso Plaza Cairns Site, which is the principal body corporate. The applicant has standing in relation to the subsidiary scheme (section 227(1)(b) of the Act). It does not have standing in relation to the principal scheme’s body corporate for the reasons which follow.

Under section 18 of the Act a "layered arrangement of community titles schemes" is defined as meaning:

(1) A layered arrangement of community titles schemes is a

grouping of community titles schemes--

(a) in which there is 1 community titles scheme (the

principal scheme)4 that--

(i) is not a lot included in another community titles

scheme; and

(ii) is made up of--

(A) the scheme land for all other community

titles schemes in the grouping; and

(B) its own common property; and

(C) each lot (if any) that is not a community

titles scheme, but that is included in the

scheme; and

(b) in which there is at least 1 basic scheme; and

(c) in which there may or may not be 1 or more community

titles schemes located between the principal scheme and

each basic scheme.

4 See schedule 1, parts 2 and 3 for examples of layered arrangements of community

titles schemes.

(2) Each community titles scheme, other than the principal

scheme, in a layered arrangement of community titles

schemes--

(a) is a subsidiary scheme for the principal scheme; and

(b) unless it is a lot included in the principal scheme--may

also be a subsidiary scheme for another community

titles scheme forming part of the layered arrangement.

(3) A subsidiary scheme, for a community titles scheme

(scheme A), is a community titles scheme the scheme land for

which forms part of the scheme land for scheme A.

(4) In this Act, the expression included in, if used in the context

of the inclusion of a lot in a community titles scheme,

establishes the relationship the lot has to the scheme and, in

general terms, is used to establish that the lot is directly a part

of the scheme, rather than only indirectly a part of the scheme.

(5) The diagram and notes in schedule 1, part 35 illustrate more

comprehensively how the expression ‘included in’ is used.

Section 19 provides:

19 Provisions about lots that are community titles schemes

If a community titles scheme (scheme A) includes a lot that is

another community titles scheme (scheme B)--

(a) a reference in this Act to the owner of the lot is a

reference to the body corporate for scheme B; but

(b) a reference in this Act to a lot included in scheme A does

not include a reference to scheme B if the provision is

about--

(i) the subdivision of a lot; or

(ii) the indefeasible title for a lot; or

(iii) a lease or mortgage of a lot; or

(iv) the occupier or registered proprietor of a lot.

Under section 19(a) the body corporate for Calypso Plaza Cairns Commercial would therefore be regarded as the owner of a lot in the principal scheme and could lodge a dispute application against the body corporate for Calypso Plaza Cairns Site under section 227(1)(b), but the applicant would not be similarly regarded, and would therefore be confined to an application against the body corporate for its own scheme (or another owner or occupier in that scheme if that were relevant).

My view is further reinforced by the definition of "owner" in the Schedule 6 Dictionary of the Act:

owner, of a lot (other than a lot that is a community titles

scheme) included in a community titles scheme, means--

(a) the person who is, or is entitled to be, the registered

owner of the lot, and includes--

(i) a mortgagee in possession of the lot; and

(ii) if, under the Land Title Act, 2 or more persons are

the registered owners, or are entitled to be the

registered owners, of the lot--each of the persons;

and

(b) for chapter 6, see section 226.

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)).


SCHEME DETAILS

Calypso Plaza Cairns Commercial (the subsidiary scheme) registered as a building format plan in a layered scheme arrangement on 24 September 1999. It comprises 21 lots and common property. The majority of the lots are used for commercial and retail purposes. The scheme is regulated by the Body Corporate and Community Management (Accommodation Module) Regulation 1997 (Accommodation Module).

BACKGROUND

The applicant contended that the body corporate approved all of its signage at the annual general meeting held on 5 December 2003, not just the "hanging sign", as was specified in the minutes of the meeting. The body corporate for the subsidiary scheme denied this assertion.

All owners and the body corporate committee of the subsidiary scheme were invited to respond to the application. Two owners lodged submissions in which they both argued that the applicant’s signs should be approved by the body corporate.

The solicitors for the subsidiary scheme’s committee also lodged a submission in which it was argued that only the applicant’s "hanging sign" had been approved by the body corporate. The solicitors stated that a special resolution was passed in relation to signage (including the applicant’s "hanging sign") by both the principal scheme’s body corporate (28 November 2003) and the subsidiary scheme’s body corporate (5 December 2003). The solicitors further stated that to the knowledge of the subsidiary scheme’s body corporate, all of the applicant’s signs are on the common property of the principal scheme.

DETERMINATION

In January 2001, when the MPS Group wrote to the body corporate manager in relation to the applicant’s signs, by-law 48.1 of both the principal scheme and the subsidiary scheme provided:

"Subject to these by-laws, no sign or notice shall be placed on the common property without the written consent of the committee provided that the committee shall not unreasonably withhold its consent to the placement of the sign or notice which is consistent with the overall appearance of the building as a first class residential resort which incorporates commercial businesses."

Section 113(1) of the Accommodation Module provides that the body corporate may, if asked by the owner of a lot, authorize an owner to make an improvement to the common property for the benefit of the owner’s lot. Section 113(2) provides that the improvement must be authorized by special resolution of the body corporate unless, amongst other things, the improvement is a minor improvement (defined as being an improvement with an installed value of $250.00 or less). The applicant stated in the supporting grounds to the application that it had "incurred several thousand dollars in costs to have the sign constructed and put into place".

Section 180(1) of the Act provides that if a by-law is inconsistent with the Act (including a regulation module applying to the scheme) the by-law is invalid to the extent of the inconsistency.

The applicant’s signs clearly required authorization by special resolution. As the signs are on the common property of the principal scheme, the body corporate for the subsidiary scheme could not have authorized them in any event. I have not been requested to make an order in relation to the validity of motion 14 resolved by special resolution at the annual general meeting of the subsidiary scheme’s body corporate on 5 December 2003. The applicant simply sought to have the minutes amended to reflect the true outcome of the resolution (that is, authorizing all of its signs). I do not accept the applicant’s arguments in that regard. The motion is quite specific in its reference to the "hanging sign" and there is no evidence that the motion was amended. However to the extent that motion 14 purported to approve signage which was on the common property of the principal scheme, the motion would be invalid. If the principal scheme’s body corporate passed a similar motion then perhaps the applicant’s "hanging sign" has been authorized by it. However, I am unable to consider the question of that authorization because of my finding that the applicant does not have standing in relation to the body corporate for the principal scheme.

I am aware that this result places the applicant and the bodies corporate for both schemes in a difficult position. However, in my view the legislation as presently drafted allows for no other outcome. This is a significant deficiency, and one which should be remedied at the earliest opportunity