Reeflections Clifton Beach [2005] QBCCMCmr 370 (8 July 2005)

Last Updated: 19 July 2006

REFERENCE: 0283-2005

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	31385
Name of Scheme:	Reeflections Clifton Beach
Address of Scheme:	QUEENSLAND

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

The Body Corporate of reeflections Clifton Beach.

I hereby order that the application for an order that the owners of Lot 1 are not to allow any building work to take place until such time as the relevant plans are approved by the body corporate, is dismissed pursuant to section 270(1)(b) of the Body Corporate and Community Management Act 1997 on the grounds that that this is an appropriate case for determination by a court of competent jurisdiction.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0283-2005

"Reeflections Clifton Beach" CTS 31385

The scheme

"Reeflections Clifton Beach" is a subdivision of 8 lots on a Standard format plan. The Regulation Module applying to the scheme is the Standard Module.

The owners of lot 1 (the respondents) intend to build a house and have engaged an architect to prepare plans for this purpose. The proposed building has been the subject of on-going negotiations between the respondents, the developer and the body corporate during 2003 and 2004 due to allegations that the proposed building does not comply with the Building and
Development Covenants.

Application

By application received by this Office on 20 April 2005, the applicant body corporate sought the following interim order of an adjudicator:

To prevent any building taking place on Lot 1 until such time as the plans are approved by the body corporate.

This application was submitted for adjudication with this office as is alleged that the proposed structure would not comply with the special conditions of the sale contract, development covenants and site plan which places strict controls on the dimensions of buildings for the purposes of maximising water views of all lots. It is therefore claimed that construction of the proposed building would involve a breach of clause 12 of the Community Management Statement dated 26 May 2003 which relevantly provides as follows:

12.1 The Body Corporate will approve from time to time Building and Development Covenants setting out the requirements for building on lots.

12.2 The Building and Development Covenants may only be altered by resolution without dissent or by an order of the Commissioner.

12.3 An owner may not carry out any building work on a lot except in accordance with the Building and Development Covenants.


On 28 April 2005 I made an Interim Order that pending final determination of this application, the owners of Lot 1 are not to allow any building work to take place on Lot 1 until such time as the relevant plans are approved by the body corporate.

I also made the following observations:

this is an interim order which is temporary in nature until a final order is made or the application is withdrawn. I consider that an effective resolution of this application requires further investigation, particularly by requesting further written submissions before the matter is finally determined. At this point in time I have been provided with only a bare outline of the body corporate’s concerns and how these have been addressed by the respondents.

Subsequently, all owners of lots in the scheme were invited to make submissions prior to final determination of the application.






Background

The respondents entered into a contract to purchase lot 1 on 1 August 2003, attached to which were special conditions including special condition 2.2.1 which reads:

The Seller and Buyer agree and acknowledge that the buyer, when preparing proposed building plans for a dwelling on a Buyer’s lot, that the buyer will observe the allowable height and footprint are designs as set out in the attached site plan by Tony Driscoll, Designer.

Also of relevance is clause 12 of the Community Management Statement dated 26 May 2003 which provides as follows:

12.1 The Body Corporate will approve from time to time Building and Development Covenants setting out the requirements for building on lots.

12.2 The Building and Development Covenants may only be altered by resolution without dissent or by an order of the Commissioner.

12.3 An owner may not carry out any building work on a lot except in accordance with the Building and Development Covenants.

The Building and Development Covenants are quite lengthy and include the following clauses:

1.1 Written approval must be obtained by the buyer/ owner from the body corporate prior to commencing any building works. The body corporate will from time to time determine approval process guidelines, in order to consider and process such approval(s) as soon as reasonably practicable and in any event within 28 days of such written request....

1.4 The buyer must not submit any plans of building works to the Cairns City Council or other relevant authority for approval before obtaining the seller’s/ body corporate approval. ....

1.6 The seller/ body corporate must not act unreasonably or capriciously in refusing any application or imposing conditions. The refusal of any application or imposition of conditions will be deemed to be not unreasonable or capricious if Mr Tony Driscoll, designer, licensed designer, certifies that he does not approve the plans, or undesirable because they may effect the appearance, health or amenity of the neighbourhood....

The respondents have made a detailed submission and requested that this matter be dealt with by way of specialist adjudication in view of the complex and technical nature of the issues, the fact that a site visit is likely to be necessary and the high value of both the land and the proposed building involved. In this regard I note that the consideration paid for lot 1 was $700,000 and from a perusal of material on file, the cost of constructing the house is likely to be several hundred thousand dollars.

The submissions of the respondents include the following:

• that no site plan was attached to the contract or special conditions and that the site plan was only provided after they had executed the contract;
• the plans comply with all reasonable requirements necessary to ensure that the dwelling house blends in with development of the scheme land;
• there is no untoward blockage of any other owner’s esplanade views. It is further submitted that their pre-settlement search of body corporate records did not reveal the existence of building and development covenants or the site plan;
• By letter dated 22 June 2004 they were advised that their first set of plans were rejected by the body corporate and a letter from Mr Driscoll to Mr. Margach dated 28 July 2004;
• The owner of lot 2 has made representations (presumably to the body corporate) that they wish to have more of a sea view despite the respondent’s contention that the plans comply with the height and footprint area referred to in special condition 2.2.1;
• Although Mr Driscoll’s letter states that lot 2 must have access to ocean views, there is no such reference in the special conditions and by-laws;
• In August 2004, the plans submitted by the respondents were discussed with the body corporate which raised a number of issues concerning extensions to the upper living areas and the nature of the fencing. It was claimed that these parts of the proposed building work did not comply with the building covenants and "footprint".
• Following further discussions, amended plans were submitted in late 2004 but were also rejected by the body corporate.
• On 4 April the respondent’s Solicitor advised the Body Corporate that amended plans were delivered to it on 20 December and as nothing further was heard from the Body Corporate, the respondent would proceed to seek Cairns City Council approval of the plans and commence construction in accordance with clause 1.1 of the Building and Development Covenants ( above).
• as the plans were submitted for approval on 20 December 2004, but not considered and processed by within 28 days as required by clause 1.1 of the Building and Development Covenants, the respondents are entitled to proceed to obtain the approval of the Cairns City Council.
• on 22 December 2004, an email message was received from Body Corporate Services advising that the decision maker was away until 20 January 2005. This is confirmed by a copy of the email communication provided by the applicant in which Mr Price stated "My client has complied with every request. I think the only way for us to proceed is to go to the Commissioner".

Further submissions were also received from owners of lots 4, 8 and 5 including the Chairman, Secretary and Treasurer of the body corporate, each of whom expressed similar concerns including:

• that the owners of lot 1 were fully aware of the Building and Development Covenants;
• the building footprints contained in the covenants are designed to ensure that all eight lots in the estate have ocean views as well as limiting inappropriate or over development;
• building the house on lot 1 in accordance with the submitted plans would inhibit the views of other lots, thus devaluing those properties; and
• allowing lot 1 to build outside the footprints opens the way for the owners of the remaining vacant lots to contravene the covenants and further impact on properties in the estate.

Jurisdiction

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)).

Determination

In my interim order, I noted that on the face of the application and annexed material it was at least arguable that the owners of Lot 1 have not acted in compliance with clause 12(3) of the Community Management Statement dated 26 May 2003 which provides "An owner may not carry out any building work on a lot except in accordance with the Building and Development Covenants".

On the other hand I acknowledged the respondents’ submissions including the following:

• that no site plan was attached to the contract or special conditions at the date of execution;
• that the plans comply with all reasonable requirements necessary to ensure that the dwelling house blends in with development of the scheme land; and
• that the plans were submitted for approval on 20 December 2004, but not considered and processed by within 28 days as required by clause 1.1 of the Building and Development Covenants.

The object of the dispute resolution provisions contained in the Act is to ensure that disputes are resolved in an informal and cost efficient manner. The process of departmental adjudication involves an examination of material submitted in writing, and although I have a limited power to conduct investigations and interview parties (section 271 of the Act), there is no provision under the Act for an adjudicator to conduct a hearing or to take evidence on oath. In considering the material before me I have concluded that the evidence could only satisfactorily be tested if the parties and their witnesses were able to be examined and cross examined.

I have therefore reluctantly concluded that having regard to the complexity of the issues involved, the need for evidence to be tested, and the limited rights of appeal from a decision of an adjudicator, the matter is one which should be determined in a court or tribunal of competent jurisdiction (section 270(1)( b) of the Act) and I have dismissed the application accordingly.