Bacardie Court [2005] QBCCMCmr 564 (13 October 2005)

Last Updated: 19 July 2006

REFERENCE: 0411-2005

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	12942
Name of Scheme:	Bacardie Court
Address of Scheme:	21 Station Road INDOOROOPILLY QLD 4068

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Marinoc Pty Ltd, the owner of Lot 2

I hereby order that the application for an order by Marinoc Pty Ltd, the owner of Lot 2 seeking an outcome that the community management statement for Bacardie Court community titles scheme 12942 be replaced by a new community management statement which includes a previous By-Law allocating part of common property for the exclusive use of Lot 2, is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0411-2005

"Bacardie Court" CTS 12942

APPLICATION

This application is by Marinoc Pty Ltd, the owner of Lot 2 (applicant) against the body corporate (respondent). The applicant is seeking an outcome that the new community management statement for the scheme be rescinded and the previous statement be reinstated.

JURISDICTION

"Bacardie Court" Community Titles Scheme 12942 is a 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

The applicant’s main submissions were to the effect that:

• Lot 2 was purchased in November 1999 and the solicitor for the purchaser found the change in by-laws resolved in the Minutes of the Extraordinary General Meeting dated 22 July 1997 (1997 EGM). The solicitor did not bring this information to the applicant’s attention.
• The Queensland Resource Registry has subsequently rejected lodgements by the body corporate to record the by-law.
• Attempts have been made to rescind the motion passed at the EGM.

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 and the committee. A submission was received from two lot owners.

The owner of Lot 3’s main submissions were to the effect that:

• Numerous unsuccessful attempts have been made since the 1997 EGM to register the new CMS, including through the engagement of law firms.
• The body corporate engaged King & Company in 2004 to advise the body corporate and ultimately to have the new CMS registered.
• At the time of the applicant’s purchase of Lot 2, the exclusive use area was no longer accessible from the Lot as the entrance had been blocked.
• The applicant did not approach the body corporate until 2001 regarding overturning the exclusive use allocation.

The owner of Lot 1’s main submissions were to the effect that:

• When Lot 1 was purchased in 1997, it was agreed with the then owner of Lots 1 and 2 to seek a change in the exclusive use allocation to Lots 1 and 2 and when the body corporate approved the reallocation, a bricklayer completed the wall between the Lots.
• In 2002, the body corporate approved major structural changes to lot 1 including the floor space of the storeroom.

DETERMINATION

The submissions from the applicant and the owners of Lots 1 and 3 provide a detailed background to this matter. Given the general acceptance of the facts, I do not intend to restate them in detail. However, in summary it can be stated that:

• The plan of subdivision (BUP 2186) was registered on 10 August 1976. Level A of the Plan shows an area of common property between parts of Lot 1 and 2.
• On 2 July 1986, the Registrar of Titles recorded 36 By-laws on the Plan, including By-Laws 30 to 33 relating to allocations of exclusive use. By-Law 30 allocated an equal part of the common property between Lots 1 and 2 to each of these Lots.
• The body corporate, at the 1997 EGM resolved to repeal By-Law 30 and replace it with By-Law 38, the effect of which was to grant exclusive use of common property storage spaces to each lot in the scheme, excluding Lot 2. The Motion also provided that the owner of lot 2 "divests himself absolutely of the benefit of the exclusive use.....of the storage space No 2.....in favour of the proprietor of Lot 1".
• On 11 August 1997, the body corporate lodged a notification of change of by-laws with the Registrar (Dealing number 702148216). This lodgement was rejected by the Registrar on 25 September 1997 as a new community management statement (CMS) was required.
• In November 1999, the applicant purchased Lot 2.
• On 15 July 2000, a standard CMS was recorded for the scheme by the Registrar in accordance with section 339 (previously section 285) of the Act.
• On 24 October 2003, the body corporate lodged a new CMS with the Registrar (Dealing number 707119327). This lodgement was rejected by the Registrar on 19 April 2004.
• On 30 May 2005, the body corporate lodged a new CMS with the Registrar. The new CMS was recorded on 7 June 2005. The new CMS includes Schedule C By-Laws, including By-Law 30 relating to an allocation of common property for exclusive use for the purposes of storage space.

The body corporate, by resolution without dissent, at the 1997 EGM resolved to make the new exclusive use by-law. The EGM was held 9 days after the commencement of the Body Corporate and Community Management Act 1997. Despite the commencement of the Act, the body corporate lodged a change of by-laws under the previously applicable legislation, namely the Building Units and Group Titles Act 1980 (BUGTA). The notification to change the by-law was made within a month of the body corporate decision in compliance with section 30(7E) of the BUGTA. However, the lodgement was rejected on the basis that the Registrar required the lodgement of a new CMS under the Act rather than a change of by-laws under the BUGTA. The body corporate did not lodge a new document until 2003, and did not have a new CMS recorded until June 2005. An extensive period time lapsed between the lodgements of documents, and between the 1997 EGM and the recording of the new CMS in 2005. The Act provides a legislative time limit for lodging a new CMS of within 3 months of the endorsement of the consent^[1] prior to 4 March 2003, and after this date, within 3 months after the consent of the new statement^[2].

Sandra Dangerfield, the owner of Lot 3 since November 1996 submitted that a number of law firms were engaged over this period of time to record the new By-Law, but none of the firms completed the task. Ms Dangerfield provided copies of correspondence dated from 1998 to 2003 demonstrating that the body corporate was aware of the need to record the new by-law and that unsuccessful attempts were made to cause the necessary documentation to be prepared and lodged with the Registrar. Given the timing of the 1997 EGM, there is reason to excuse the body corporate initially seeking to register the new By-Law in accordance with the then recently replaced applicable legislation. In making this statement, I note that the document was executed by the then body corporate manager which indicates that the body corporate was relying on the services of a professional person in formalising the decision. Given the submission from the owner of Lot 3, it is apparent that the body corporate has continually sought to enlist qualified persons to record the By-Law. It is evident that the recent decision to engage King & Company provided the body corporate with the advice and the assistance to cause a new CMS to be recorded.

The owner of Lot 1 submitted that the new By-Law was made based on an arrangement made with the then owner of Lots 1 and 2. She submitted that the use was made of the common property based on the resolution at the 1997 EGM, and that work was carried out on or about this part of the common property. It is apparent that the owner of Lot 1 has had uninterrupted use of the exclusive use area since this time. The owner has submitted that further work was carried out to the area in 2002. Despite this, the owner did not have a right to exclusive use of the subject area until the new CMS was recorded by the Registrar^[3].

Despite the fact that the applicant has owned Lot 2 since 1999, he has not demonstrated that he believed he had a right of exclusive use over a part of common property between Lots 1 and 2, or that he has repeatedly sought to claim this right, or that the effect of the new By-Law is unreasonable. Rather, in my view, it is apparent from his conduct that the applicant did not believe that, as the owner of Lot 2, he had a right to exclusive use of a part of common property between Lots 1 and 2. While he claims that his solicitor did not bring information about the 1997 EGM to his attention, the previous By-law 30 was held by the Registrar at the time of his purchase and could have been obtained. In addition, it would seem that a right of exclusive use was not considered during the purchase of Lot 2. I am not satisfied that the applicant ever expected to have a right to use this part of the common property, and in my view, he has only sought to claim a right when he subsequently discovered or was informed about the issues relating to the recording of the new By-Law.

In my view, the action taken by the body corporate since 1997 and the actual use of the area of the common property which is the subject of the previous By-Law 30 and the new By-Law 30 since 1997 is significant to the outcome of the dispute. The owner of Lot 1 has had the use of this area since 1997 and I do not consider that the delay in having a new CMS recorded should disadvantage the owner of Lot 1. In addition, I am not satisfied that the owner of Lot 2 can reasonably presume a right to exclusive use of the area. In my opinion, these factors outweigh the technical application of the Act. In the circumstances, I do not consider that it would be just and equitable for an order to be made relying on the legislative time limit or on the requirement that a by-law does not effect until a new CMS is recorded when the conduct of the parties and the unambiguous terms of the resolution at the 1997 EGM clearly indicate the right of Lot 1 to exclusive use of part of the common property between Lots 1 and 2.

For these reasons, I have dismissed the application.

^[1] Previous section 56, Act.
^[2] Section 65, Act.
^[3] Section 59(1), Act.