Elkedra [2005] QBCCMCmr 262 (18 May 2005)

Last Updated: 5 July 2005

REFERENCE: 0112-2005

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	14133
Name of Scheme:	Elkedra
Address of Scheme:	267 Gympie Terrace, NOOSAVILLE QLD 4566

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

Mr Graeme & Diana Neilson, the Owner(s) of lot 4

I hereby declare that resolution 7 at the annual general meeting of 22 January 2005 was at all times void. This is because the resolution did not address issues of alteration of lot boundaries or the grant of exclusive use in purporting to authorise the owner of lot 3 to extend the balcony of that lot.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0112-2005

"Elkedra" CTS 14133

Application

Elkedra Community Titles Scheme (Elkedra) is an 8 lot scheme under the Body Corporate and Community Management Act 1997 (Act) and the Act’s Standard Module Regulation (Standard Module). The scheme is designed for residential purposes. Lot boundaries are designated under a building units plan (now known as a building format plan).

This application is by Graeme and Diana Neilson, owners of lot 4 (applicants) seeking orders against the body corporate for Elkedra (respondent). The applicants are seeking to invalidate resolution 7 passed at the annual general meeting on 22 January 2005. This resolution authorised the owner of lot three to extend the balcony of her unit to the west. This balcony extension was proposed as being the same width as the existing balcony but curtailed at the north-west corner so that the extension would not protrude any further west than the western alignment of the building as a whole.

Submissions

The applicants’ main submissions were to the effect that:

• An extension to the deck would result in a loss of privacy to lot 4;
• The resolution did not adequately particularise the proposed works;
• The resolution did not address the inconsistency that will arise between the boundaries of lot 3 on the plan and the actual boundaries of lot 3 if the extension was undertaken;
• The vote on the resolution was 5 votes for, 2 votes against and 1 abstaining. This did not amount to two thirds of the votes cast being in favour of the motion so the motion should not have been declared passed.

An owner of lot 3, Beryl Gillespie, has provided a submission in response to the application. This submission is to the effect that:

• In putting forward the proposal to extend the balcony she carefully considered the issue of privacy of both her neighbour and herself. She does not consider the extension of her balcony to the west will compromise the privacy of her neighbours or herself;
• At the time of the meeting she was seeking approval in principal to the proposal and drawings had not been finalised. It was explained at the meeting that this would be forthcoming and that council approval would be sought and tabled at a future meeting;
• The proposed extension was accurately described in the letter from the engineers which stated "The extension would be the same width as the existing balcony. However, the extension’s north-west corner would be curtailed so the balcony would not protrude any further west than the western alignment of the building as a whole"; and
• She was not aware of any additional technical requirements requiring an amendment to the community titles scheme.

Decision

Applicable law

The legislation includes provisions to the effect that:

• Improvements to the common property for the benefit of an owner’s lot must ordinarily be authorised by special resolution (Standard Module, 114);
• An exclusive use by-law gives the occupier of a lot for the time being exclusive use to the rights and enjoyment of, or other special rights about, common property or a body corporate asset (Act, 170). An exclusive use by-law may only attach to a lot if the owner agrees in writing before the passing of a resolution without dissent consenting to the by-law and may stop applying only with the written consent of the lot owner and a further resolution without dissent (Act, 171); and
• The body corporate may lease or licence common property for more than three years, or sell or otherwise dispose of common property, by resolution without dissent (Standard Module, 111).

Extension of balcony

The respondent proposes to extend her balcony to the west. The scheme is established under a building units plan and a review of the plan indicates that any extension of the respondent’s balcony would involve the respondent making use of common property of the scheme.

The additional common property that would be utilised by the respondent is presumably mostly airspace as the plan indicates that the respondent’s lot is on level "B" of the building. There are no arguments that the extended balcony or any supports for the balcony would interfere with any of the other occupiers except to the extent that one owner claims a possible reduction in privacy.

However, technically speaking, the proposed extension will require a resolution without dissent rather than a special resolution. This means that a single owner could vote to stop the resolution being passed. A resolution without dissent is required because the proposed extension appears to be of a permanent nature rather than an improvement that can be removed if the body corporate subsequently decides to alter or revoke any approval to make the improvement (Standard Module, 58). It is, for example, possible for the body corporate to pass a special resolution that approves a lease of an area of common property for two years and the erection of a shed on that area provided the shed is removed and the common property restored to its original state upon expiry of the lease. However, for an owner to make improvements to common property of a permanent nature it would be necessary for the owner to seek alteration of the lot boundaries or at least obtain a right of exclusive use over the additional area that the owner is proposing to use (Act, 170).

A grant of exclusive use requires written consent of the owner of the lot and also requires a resolution without dissent rather than a special resolution (Act, 171). The power to grant exclusive use is subject to any general requirements including that the body corporate act reasonably in carrying out its functions and in administering the common property for the benefit of owners (Act 94, 152). For example, an adjudicator can make an order giving effect to a motion requiring a resolution without dissent if satisfied that the motion was not passed because of opposition that, in the circumstances, was unreasonable (Act – Schedule 5, Item 10). However, normally, a single negative vote is enough to prevent a proposal requiring a resolution without dissent from proceeding.

As an aside, I note that the owner of lot 3 did have sufficient support for the proposal to pass the motion by special resolution as the number of votes cast in favour was 5 and only 2 votes were cast against the motion (Act, 106). In this respect, any abstentions are not counted as a vote cast. However, it appears any future proposal will need to be passed by resolution without dissent. I note also that the absence of any drawings with the original proposal makes it difficult to assess the privacy concerns raised and issues of what exact areas of the common property would be used in terms of any support structure for the extended deck.

Order

For these reasons, I will declare the resolution void.

If the owner of lot 3 wishes to pursue permission of the body corporate to extend the deck then it may be beneficial for owners to have some informal discussions to determine if agreement in principle can be reached. The owner of lot 3 can then seek formal approval by way of placing the appropriate resolution before the body corporate.