Imperial Surf [2005] QBCCMCmr 333 (20 June 2005)

Last Updated: 2 August 2005

REFERENCE: 0184-2005

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	9742
Name of Scheme:	Imperial Surf
Address of Scheme:	72 - 80 Esplanade SURFERS PARADISE QLD 4217

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Craig Chapman, the Owner of Lot 1

I hereby order that the application for an order by Craig Chapman, the owner of Lot 1 seeking the following outcomes, quote: 1. A declaration that the Body Corporate Committee in restricting access of lot owners to Common Property is not administering, managing and controlling the Common Property reasonably and for the benefit of lot owners in accordance with section 152 of the Act. 2. A declaration that the Body Corporate acted unreasonably in restricting access to common areas, in that it held legal advice that it was not entitled to do so and acted against that legal advice in restricting access. 3. A declaration that the restriction of access to areas of Common Property is a restricted issue pursuant to Section 26(1)(b) of the Module. 4. A declaration that Motion 12 of the Committee meeting of 1 September 2004 be overturned on the basis that the Committee was not entitled to consider the Motion, the Motion being a restricted issue. 5. A declaration that the Motion (regarding restricting access) of the Committee meeting of 1 March 2005 be overturned on the basis that the Committee was not entitled to consider the Motion, the Motion being a restricted issue. is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0184-2005

"Imperial Surf" CTS 9742

APPLICATION

This application is by Craig Chapman of Lot 1 (applicant) against the body corporate (respondent) seeking the following outcomes, quote:

1.	A declaration that the Body Corporate Committee in restricting access of lot owners to Common Property is not administering, managing and controlling the Common Property reasonably and for the benefit of lot owners in accordance with section 152 of the Act.
2.	A declaration that the Body Corporate acted unreasonably in restricting access to common areas, in that it held legal advice that it was not entitled to do so and acted against that legal advice in restricting access.
3.	A declaration that the restriction of access to areas of Common Property is a restricted issue pursuant to Section 26(1)(b) of the Module.
4.	A declaration that Motion 12 of the Committee meeting of 1 September 2004 be overturned on the basis that the Committee was not entitled to consider the Motion, the Motion being a restricted issue.
5.	A declaration that the Motion (regarding restricting access) of the Committee meeting of 1 March 2005 be overturned on the basis that the Committee was not entitled to consider the Motion, the Motion being a restricted issue.

JURISDICTION

"Imperial Surf" Community Titles Scheme 9742 is a 165 lot scheme under the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module).

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)).

SUBMISSIONS

In accordance with the Act, submissions were called and a copy of the application was provided to the body corporate manager for distribution to the owner of each lot (excluding the applicant) and the committee. A submission was received from the committee and a number of lot owners. The applicants made a written reply to submissions under section 244 of the Act.

DETERMINATION

The applicant had also applied for interim orders to the effect that all lot owners be given the right to access all areas of the common property. By Interim Order dated 21 April 2005, I dismissed this application primarily for reason that at the time the application was made, the security system had been operational for since on or about 22 September 2004. I considered that it was significant that the body corporate had incurred an expense in implementing the system and given the period of operation it was likely that users were familiar with its operation. In addition, there was no evidence to suggest that owners generally opposed its implementation.

The applicant’s main submissions were to the effect:

• That at a meeting dated 1 September 2004, the committee resolved that the secretary advise lot owners that the new security access control will be operational on or about 22 September 2004 and that the keys can be obtained from the building manager.
• Prior to the introduction of this system, all owners had access to all areas of common property. The effect of the new system is that it only allows elevator access to the level of the owner’s unit.
• The system prevented the ambulance service attending a recent life threatening emergency until a committee member was located.
• The body corporate has failed to fulfil its duties about common property under section 152(1) of the Act.
• The committee decision to restrict access was contrary to section 26(1)(b) of the Standard Module.

The implication from the applicant’s submission is that the committee had, at the meeting dated 1 September 2004 resolved to implement a system which restricted an owner or occupier’s access to parts of the common property. However, the submissions from the body corporate and a number of lot owners clearly demonstrate that a security key system has in fact been operational within this scheme for approximately 20 years. The system allowed an occupier to access the building foyer, the level of the building the person’s unit was located on, the garage, and some other areas of scheme land. The new system provides the same security, but allows ‘swipe disc’ numbers to be recorded and cancelled, thereby improving the building security. It has been shown in the submissions that the committee decision related to upgrading the original security system, and that by making this decision, the committee was implementing a resolution of the body corporate at the Annual General Meeting dated 8 April 2003. The minutes of this meeting indicate that (at Motion 18) it was resolved to authorise the committee to upgrade the security system at a cost not exceeding $16 528.00 plus GST.

In the response to the submissions, the applicant did not provide any argument disputing that the committee decision was not connected to the resolution of the body corporate at the Annual General Meeting dated 8 April 2003. Although the applicant raised a new argument (regarding exclusive use to which I will refer later) with respect to this decision, Motion 18 has not been previously disputed and therefore is a lawful decision of the body corporate which the committee must put into effect (section 101(2), Act).

The applicant also relies on the limitations specified in section 100(2) of the Act and section 26 of the Standard Module. It is clear that the system has been operational for many years. Despite a number of the submissions to the contrary, the applicant is adamant that owners previously were not denied access to common property and that the committee resolution has restricted that right. The applicant has not provided any information or verification of substance to support this statement. In the circumstances, I do not accept the applicant’s statements in this regard.

Therefore, in my opinion, the committee, at the September 2004 meeting was merely complying with its legislative obligation to put into effect a decision of the body corporate. The committee resolution did not change the rights or privileges of lot owners, as in my view, the primary effect of the resolution was to upgrade the infrastructure associated with the use of the existing system. Based on the submissions in response to the application, I am satisfied that the changes did not further restrict an owner or occupier’s rights to use common property.

The applicant also substantially relies on section 35(1) and (3) of the Act, and argues a connection between ownership and use of common property. Section 35(1) of the Act provides that lot owners have a proprietary interest in the common property. The lot owners form the membership of the body corporate, and it is the body corporate’s function to administer the common property reasonably and for the benefit of the lot owners (section 94, Act). Section 95 of the Act provides the body corporate with the powers necessary to carry out its functions. Section 152 of the Act provides the duty that the body corporate must administer, manage and control the common property reasonably and for the benefit of lot owners. Section 169 of the Act provides a body corporate with the power to make by-laws providing for the administration, management and control of common property and to regulate the use and enjoyment of common property.

In my view, section 35(1) does not provide an unlimited individual right to a lot owner with respect to common property. A fundamental principle of the legislation is that the common property is managed by the body corporate and a lot owner as a member of the body corporate who has a proprietary interest in the common property has a right to participate in the management of the scheme, including common property. Clearly, this management responsibility includes having the power to make decisions in accordance with the legislation with respect to the use and enjoyment of common property. Consequently, it is the body corporate and not an individual lot owner that has legislative powers with respect to the administration, management and control of the common property. In my view, a body corporate’s function, power and duties should not be interfered with unless it can be demonstrated that the body corporate is acting unreasonably, not for the benefit of lot owners, or otherwise not in accordance with provisions of the legislation.

The circumstances in this dispute relate to a right of a lot owner or occupier to access specific areas of the common property for the scheme, primarily for security reasons. In my view, a decision of this nature is in accord with a body corporate’s management powers and responsibilities. A lot owner’s right to the use and enjoyment of the common property is subject to proper decisions of the body corporate. For example, the body corporate may make an exclusive use by-law under section 171 of the Act, or grant a lease under section 111 of the Standard Module, or authorise a use in accordance with a by-law. It is also reasonable that a body corporate may also make decisions about restricting access to parts of the common property. It is common for body corporate’s to restrict access to areas of common property for the benefit of owners where for example, the area may contain utility infrastructure servicing the scheme, hazardous or dangerous goods or materials, or other equipment or property. The body corporate must have the power to make such decisions to enable it to effectively manage the scheme. While it is acceptable for a body corporate to consider issues of the nature to which I have referred, the body corporate’s power should not be limited to such issues, and its management responsibilities include making decisions relating to the security of the scheme, and the security of the lots in the scheme. This power and responsibility should not be subject to an ownership claim by an owner citing section 35(1).

The body corporate has determined to restrict the access rights of lot owners for security reasons. The decision applies equally to all lot owners, and does not provide a benefit to a particular owner or group of lot owners. The restriction does not restrict access to common property facilities such as the swimming pool and barbecue. The decision relates to the general security of the scheme and lots in the scheme, minimises the possibility of a user of the common property unreasonably interfering with another person’s use of their lot, and may also limit the possibility of damage to common property. Despite the statements of the applicant, the security system has operated in the scheme for many years with the agreement of lot owners generally. This agreement is evident by the resolution at the Annual General Meeting dated 27 April 2005 to formalise the security system in a by-law. In my opinion, the operation of this system demonstrates that the body corporate is reasonably exercising its duties and functions for the benefit of lot owners. The body corporate has submitted that an owner can request access to common property. I consider this to be reasonable.

The applicant also raised concerns about dealing with emergency situations. While I initially commented on this in the Interim Order, I am satisfied with the relevant response from the body corporate and consider that the body corporate has, by employing a person who is always on duty and who has access to all areas of the building, properly and appropriately dealt with this matter.

Other than the claimed ownership rights by reference to section 35, the applicant has not presented any argument reasoning that this right prevails over the body corporate’s management responsibilities. The applicant also belatedly raised an argument with respect to exclusive use. The applicant should note that a response to submissions is limited to the issues raised by the submissions (section 244, Act). However, I have decided not to delay this matter any further as in my opinion, the effect of the security arrangements does not imply exclusive use.

I consider that the body corporate (including through its committee) has properly implemented a reasonable security arrangement for the benefit of lot owners in accordance with its legislative responsibilities. Therefore, I have ordered that the application is dismissed.

The body corporate has submitted that the application should be dismissed and that the applicant pays the costs of the body corporate to respond to this application which exceed $2000.00. I do not consider that such an order is warranted in the circumstances.