Bayview Mansions [2005] QBCCMCmr 53 (1 February 2005)

Last Updated: 5 July 2005

REFERENCE: 0718-2004

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	9302
Name of Scheme:	Bayview Mansions
Address of Scheme:	26 Rees Road CLAYFIELD QLD 4011

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

William Perrins, the owner of lot 17

I hereby order that the application by William David Perrins, the owner of lot 17, for orders, quote – 1. That the EGM called for 30 November 2004 be not held; and 2. That the Body Corporate implement resolution 17 passed at the AGM on 16 August 2004 without delay, is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0718-2004

"Bayview Mansions" CTS 9302

The applicant, William David Perrins, the owner of lot 17, has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) quote –

That the EGM called for 30 November 2004 be not held.

Also that the Body Corporate implement resolution 17 passed at the AGM on 16 August 2004 without delay. That the resolution is as follows:

That the seven (7) Cuban Royal Palms on the northern side of the building between the swimming pool and the main building be completely removed as soon as possible.

The applicant also sought an interim order that the EGM called for 30 November 2004 be not held. On 24 November 2004, the requested interim order was dismissed.

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)).

The scheme is a subdivision of 24 lots recorded under a building unit plan (now a building format plan) of subdivision. The regulation module applying to the scheme is the Standard Module.

In the interim order, I relevantly concluded:

At this time, I am considering only the terms of the interim order as sought. The interim order requested seeks that an EGM scheduled for 30 November 2004 (the EGM) not be held. One of the motions proposed to be considered (proposed motion 2) at the EGM is that –

That the decision under Motion 17 at the AGM 16 August 2004, be rescinded.

Clearly, the applicant is seeking to prevent the EGM proceeding, and in particular, to prevent the body corporate from considering proposed motion 2.

At the outset, I must indicate that it is within the contemplation of the legislation that a body corporate may wish to either amend or revoke a motion previously carried. Section 58 provides as follows –

58 Amendment or revocation of resolutions passed at general meeting
(1) This section applies if a resolution of 1 of the following types is required to decide a matter--
(a) a resolution without dissent;
(b) a special resolution;
(c) a majority resolution;
(d) an ordinary resolution.
(2) Once it has been passed, the resolution may be amended or revoked only by a resolution of the same type.

The applicant alleges that "the notice of meeting is defective, incorrect and misleading as it states that the three motions have been proposed by the committee. The applicant as a member of the committee is aware that no such motions have been proposed by the committee. The reference to the date of the AGM in motion 1 is also incorrect".

The applicant further states that "no new information has been brought to light which was not available at the time of the AGM on 16 August 2004".

The applicant’s remaining grounds in my view do not relate to the interim order, but rather the final order as sought.

In respect of the interim order, this office sought a submission from the committee only. A submission has been provided by the Secretary stating that –

We respectfully point out that the committee ... is not competent to may any submission of the matters raised.

However, the secretary does go on to state –

By error, the external manager ... sent notice to all owners advising that an extraordinary meeting of owners to deliberate on certain motions proposed by "THE COMMITTEE" dated 5^th November would be held on November 30^th. ...

The manager has been instructed by a congregation of owners to call for the Extraordinary Meeting which had been requested by fourteen owners, the signature of six of whom were signed and witnessed in the letter to the manager.

A correcting notice was sent to all owners on the 16^th November by the Manager – see attached copy.

(The applicant) did not advise the Commissioner of the change of the name of the mover of the proposed motions. ...

On 11 November 2004, the body corporate manager wrote to all owners stating –

I wish to advise that motions 2 and 3 proposed for the forthcoming EGM were not proposed by the committee, but were proposed by owners of Units 1,2,3,5,8 and 19.

I apologise for the misunderstanding and have enclosed an amended "Voting Paper".

That amended voting paper shows motions 2 and 3 as being proposed by the relevant owners and not the committee.

Given the date of the letter (11 November) and the date of receipt of the application here (12 November), I am not prepared to make any adverse finding in respect of the applicant alleged failure to bring the amendment of the voting paper to my attention.

Section 61 provides that an extraordinary general meeting (a "requested extraordinary general meeting") of the body corporate must be called if a notice asking for an extraordinary general meeting to consider and decide motions proposed in the notice is signed by or for the owners of at least 25% of all the lots included in the scheme. I am satisfied there was sufficient authority to call the EGM based on the requisition of the motion by 6 owners.

I return to the applicant’s grounds for invalidation of the EGM. I consider that the applicant’s contention has lost much of its potency given the body corporate manager’s letter of 11 November 2004 and the amended voting paper. I consider that it would now be clear to owners that the motions were proposed by individual owners and not the committee. More generally, I am satisfied that the body corporate has taken reasonable steps to clarify what was a clear error in meeting documentation. I am not concerned with the incorrect date in motion 1 – this is minor and of no consequence. ...

It is clear in my view that the applicant is seeking to close down or prevent discussion on resolution 17 carried at the AGM. However, it is clear that a body corporate has power to and might in fact review earlier determinations it has made. Given this, than an order which seeks to prevent this occurring is in my view contrary to the spirit and intention of the legislation. Resolution 17 should stand or fail on its merits, not on some technical argument preventing its re-consideration by the body corporate in general meeting.

In the circumstances, I am not prepared to order as sought in the interim order application. I consider that the meeting has been properly requisitioned, subject to any contrary information being provided on this, and that the major concern raised by the applicant has been satisfactorily addressed. I consider the meeting should proceed on this basis. I will consider the terms of the final order in due course.

Following the making of the interim order, the EGM the subject of this application was held. The minutes record that the motion to rescind the decision under Motion 17 of the AGM of 16 August 2004 was carried by the narrowest of margins: 12 in favour of rescinding the motion and 11 against with 1 abstention. The body corporate then resolved a further motion that appropriate measures be taken by the body corporate committee to control any risks associated with falling fronds.

I make the observation that all owners in the scheme participated in the vote in respect of the motions, including the owner who chose to abstain. This indicates to me the clear level of owner interest / participation in respect of this issue.

The final order sought by the applicant is that the EGM called for 30 November 2004 be not held. Given the determination made in the interim order, this order is now impossible. What might now be ordered however is that for some reason, the resolutions carried by the body coprorate at the EGM on 30 November 2004 are invalid and of no effect. This would have the practical effect of reviving the earlier resolution to remove the palms.

In respect of the aspects considered in the interim order, I do not propose to revisit my earlier findings. I consider those finding to be valid and believe that the EGM should have proceeded. In this regard I re-affirm the ability of a body corporate to amend or revoke a motion previously carried. This ability is explicit in subsection 58(2) which states

(2) Once it has been passed, the resolution may be amended or revoked only by a resolution of the same type.

In the interim order, I considered and dismissed the applicant’s first ground for invalidating the meeting. In his grounds, the applicant provided 3 additional grounds, which I now intend to consider.

The first is that "no new information has been brought to light which was not available at the time of the AGM on 16 August 2004". Whilst this has in a sense been disputed, the point is of no significance in any event. It is not a requirement for a body corporate in revisiting a previous determination that there be "new information" concerning the motion. The simple fact of the matter is that a body corporate may amend or revoke an earlier resolution.

The second additional ground is that "the offending palms continue to constitute a nuisance and annoyance to the applicant and others occupying his unit and should be removed as soon as possible as resolved". This statement is at the very essence of the complaint. On the basis of the information before me, I do not accept that the application is about the alleged danger of falling fronds, or potential structural damage to the foundations. These aspects are red herrings in my view. The applicants concern is to have the palms removed so that views he formerly enjoyed are again available. Obviously there are other owners in the scheme who are sympathetic to this desire on the part of the applicant.

However what the applicant fails to establish in my view is some legal right or basis to have is view reinstated. He states that the "offending palms continue to constitute a nuisance and annoyance to the applicant". The concept of nuisance is dealt with in section 167 of the Act, quote –

167 Nuisances
The occupier of a lot included in a community titles scheme must not use, or permit the use of, the lot or the common property in a way that--
(a) causes a nuisance or hazard; or
(b) interferes unreasonably with the use or enjoyment of another lot included in the scheme; or
(c) interferes unreasonably with the use or enjoyment of the common property by a person who is lawfully on the common property.

Clearly, the provisions of this section have no application here.

Sections 94 and 152 of the Act further provide -

94 Body corporate’s general functions
(1) The body corporate for a community titles scheme must--
(a) administer the common property and body corporate assets for the benefit of the owners of the lots included in the scheme; and
(b) enforce the community management statement (including any by-laws for the scheme); and
(c) carry out the other functions given to the body corporate under this Act and the community management statement.
(2) The body corporate must act reasonably in anything it does under subsection (1).

152 Body corporate’s duties about common property etc.
(1) The body corporate for a community titles scheme must--
(a) administer, manage and control the common property and body corporate assets reasonably and for the benefit of lot owners; and ...

More generally, and whilst the applicant has not referred to these sections, or sought to raised an argument that the body corporate has not acted "reasonably" in its administration, management and control of the common property, the potential for such an argument exists.

I quote from a recent determination by another adjudicator (No. 267 of 2004) to explain the context of an argument on the basis of the above sections:

Turning to the issue in dispute, I have dismissed the application for the following reasons.

Putting aside for the moment that the work must be ratified in general meeting, the question of the removal of trees or other landscaping that provides a particular benefit to one or more owners is one of striking a balance between the competing interests of owners. I can best describe this by quoting from a previous order, Order 808-2003 –

"Section 35 of the Act provides that owners have a general proprietary right over the common property as tenants in common, however sections 94 and 152 impose on the body corporate the duty to administer, manage and control the common property and its assets, but must do so reasonably and for the benefit of lot owners. While the principle "for the benefit of lot owners" has a general application, when the body corporate is considering a maintenance action that impinges adversely on a particular owner or group of owners then the principle must be carefully considered as to its application. The term does not require that body corporate actions must benefit all owners, nor does it mean that the course of action benefiting the majority of owners must necessarily be followed. Further, it may require the body corporate to take a course of action that is for the benefit of the minority of owners, even a single owner, where the balance of the benefit of the majority is outweighed by the disadvantage to the minority.

This principle was set out in my Order 325-95 of 6 March 1996, being made as Referee under the Building Units and Group Titles Act 1980 ("the BUGT Act"). Although the legislation is different, the relevant provisions are either identical or similar as will be seen in the BUGT Act references below. While the application concerned the removal of a tree outside the applicant’s lot, it applies equally to situations where an owner has a "singular interest" in a particular part of the common property because of its location, such as in this instance where the relevant portion of retaining wall lies directly adjacent to the applicant’s rear courtyard and is virtually of no interest to other owners as to its composition or appearance as it cannot be seen by them.

"Section 27(3) of the (BUGT) Act requires that the body corporate "shall do all things reasonably necessary for...the control, management and administration of the common property". Section 37(1)(a) then provides that it must carry out this duty "for the benefit of the proprietors". A part of that duty under section 37 includes the establishment and maintenance of suitable lawns and gardens.

The general duty to act "for the benefit of the proprietors" does not mean that all actions of the body corporate will be for the benefit of all proprietors; there are times when actions for the benefit of the majority will have to be followed even though it will mean an inconvenience or even a disadvantage to other proprietors.

However, there are other situations where the duty protects a minority. For example, 99 out of 100 proprietors may wish to construct a barbecue setting on the common property to be located under the window of the remaining proprietor. Even though a great majority of proprietors are in favour of the action, the detriment to be suffered by the affected proprietor (noise, smoke and smells) offends against his right to the use and enjoyment of his lot which other occupiers cannot impinge upon by using the common property in a manner which interferes unreasonably with that right in contravention of section 51 of the Act.

Each matter needs to be looked at individually in regard to its own circumstances and the most equitable action taken in the interests of proprietors.

In relating this duty to the affect on proprietors of trees on the common property, my opinion is as follows. If a tree provides a singular benefit (eg shade, privacy) to a proprietor and neither its existence nor removal affects others, then the body corporate should largely follow the wishes of that proprietor in retaining it; or if it causes a singular nuisance then remove it."

In relating that principle to the present situation at "Currumbin Views" there are a number of things to consider. The relevant area was an unkempt area – the applicant may regard it as a haven for flora and fauna but most people would regard it as requiring some clearing and pruning to give it a better appearance and reduce its attraction for vermin (eg cockroaches and rats). Another major consideration is that no owner has a right to a view. There is no such right at common law and there is nothing in the body corporate’s by-laws to alter that position. Accordingly, the owners in the southern block (Lots 32 to 41) have no right to have trees pruned in order that they obtain an ocean view. Similarly, owners have no right not to be overseen and there is nothing in the by-laws to alter this, though the owners in the applicant’s block (Lots 28 to 31) have apparently always had the advantage of the trees providing privacy for them. ...

Such an approach is by its very nature subjective. It seeks to have the view or position of a minority prevail over that of the majority on the basis that the decision taken by the body corporate so impacts on the rights or interests of the minority that the decision cannot be considered a reasonable one and made for the benefit of lot owners. In applying the above considerations, whilst the applicant is alleging a nuisance from the existence of the palm trees on the common property, I conclude that their existence or threatened removal cannot be said to not affect other owners. Clearly several owners have a considerable interest in preserving the palm trees on the common property. Given the circumstances of the application, with such a close vote, and with the wishes of all owners being reflected in the vote, I am not prepared to consider an argument on this basis. I conclude this is a situation where the wishes of the majority must be respected and should prevail. Conversely the interest of the minority here is not so singular and without consequence to the majority that it should be allowed to prevail over the majority view. Moreover, the alleged nuisance to the applicant is the loss of his view but as the Adjudicator correctly points out –

Another major consideration is that no owner has a right to a view. There is no such right at common law and there is nothing in the body corporate’s by-laws to alter that position.

However, all parties should be aware that this determination not to interfere with the determination of the majority on this issue is the proverbial double edged sword. Clearly, this body corporate is on a knife edge regarding this issue. It is easy to contemplate a future circumstance (eg. the sale of one lot) where the majority might diametrically change to a majority in favour of removal of the palms. There is nothing to prevent a motion seeking removal of the palms being put up repeatedly. Consequently, I suggest to all owners that they consider their position in this light. As an adjudicator, given my determination in this application and the reasons for it, I would certainly not be receptive to a future application seeking an order to overturn a majority determination to remove the palms, unless such application was based on a sound technical basis (ie. some fraud or illegality in the meeting / voting procedure associated with the resolution in question). That is, I would not be receptive to an argument to retain the palms based on sections 94 and 152 of the Act in the event a valid resolution to remove them. I conclude that an application on this basis could not succeed given my findings here.

Given this consideration, perhaps there is some room for compromise between the two positions. The thought that occurs to me is that perhaps certain of the palms could be removed whilst others left in situ. I suggest that the possible benefits of such a compromise, on the basis that it is a final resolution of the issue and cannot be revisited, might be apparent to all, and do not require my enunciation.

Finally, for the sake of completeness, I will address the final ground raised by the applicant; namely "no good reason exists for the resolution to be not implemented". I conclude that the "good reason" which now exists is that there is a valid resolution overturning or revoking the previous resolution to remove the palms.

In the circumstances, this application is dismissed.