Aarons [2005] QBCCMCmr 674 (1 December 2005)

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

I hereby order that the application for the following orders:

1. That the body corporate cause to be reallocated any exclusive use areas which are not in compliance with the CMS.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0518-2005

"Aarons" CTS 11476

ORDER SOUGHT

The owner of lots 4, 5, 6, 7, 8, 10, 11, 14, 15, 16, 17, 20, 21, 22, 25, 26, 27, 28, 32, 33, 34, 36, 37, 38, 41 and 42, seeks the following orders:

1. That the body corporate cause to be reallocated any exclusive use areas which are not in compliance with the CMS.

2. That the body corporate or its nominated representative, in complying with Order 1, be entitled to enter, after 7 days of forwarding this order to all lot owners, onto exclusive use areas and if necessary remove any and all debris, rubbish and other items from these particular areas including the removing of fencing and boarding which close off certain areas.

SCHEME DETAILS

Aarons CTS 11476 is registered on a building unit plan of subdivision (now described as a building format plan). It comprises 44 lots, and is regulated by the Body Corporate and Community Management (Accommodation Module) Regulation 1997.

BACKGROUND

The applicant, Lee Parker Pty. Ltd. ACN 101506870, owns 26 of the 44 lots in the scheme. The most recent Community Management Statement for the scheme, registered with the Department of Natural Resources on 31 May 2000, provides for the allocation of exclusive use areas to each of the lots as parking spaces.

The applicant has set out in the following table format the problems associated with the way various exclusive use areas are used:

Lot No./ Area	Problem
36	Lot 36 has been allocated 2 car parking spaces but has re-allocated one of these spaces to lot 5.
35	Lot 35 has been allocated 2 car parking spaces but has re-allocated one of these spaces to lot 2
1, 2 & 33	The car parking spaces allocated to these lots are used by the resident caretaker and letting agent for storage purposes. It is claimed that the area is being use to store rubbish which is a fire and vermin hazard.
39	It is claimed that a pile of bricks is stacked in the far left hand corner of the car space
15	The car parking spaces allocated to lot 15 is used by the resident caretaker and letting agent for storage purposes and cannot be used by the owner of lot 15.
Common property to right of lot 15 car park space	It is claimed that although this area is common property, it has been caged off and is used by the resident caretaker and letting agent for storage purposes
11, 12 & 24.	It is claimed that although the area between these car spaces is common property, it has been caged off and is used by the resident caretaker and letting agent for storage purposes. It is considered that use for storage purposes is unauthorised is hazardous and unapproved.

It is claimed that the reallocation of the car parking spaces is in breach of the CMS and the car parking spaces should be allocated to their "rightful owners".

It is further claimed that closing off areas for storage purposes constitutes a vermin and fire hazard.

SUBMISSIONS

The application was circulated to all owners and in response, five submissions were received.

A submission on behalf of the body corporate supported the applicant, who, as noted above, owns the majority of lots in the scheme.

The owners of lot 1, the resident caretakers and letting agents, advised:

The owner for the time being of each lot in the Scheme shall be entitled to exclusive use for himself and his licensees of the car space or spaces as identified for each lot in Schedule E and on Plan A hereto, PROVIDED THAT in respect of those car spaces allocated pursuant to this by-law , the Committee is hereby authorised to vary the allocations so made and to transpose car spaces from one lot to another at any time and from time to time on the written request of the owners of the lots involved.

Three other submissions from lot owners supported the submission by the resident caretaker/ letting agent and point out that there are sufficient car parking spaces available as many guests, particularly overseas visitors, do not have cars. It is further submitted that the areas are used for storage and are neither a fire or vermin risk.

Perhaps most importantly however, the owners of lot 43 submit it is inappropriate to proceed directly to lodgement of a dispute resolution application with the Office of the Commissioner when the proper course of action would be for the applicant to firstly approach the body corporate committee to issue a contravention notice.

JURISDICTION

The application evidences a dispute in a community titles scheme within the meaning of section 227 of the Act).

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

(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

Sections 182, 183 and 184 of the Act (when read together) provide that contravention notices must be issued before any formal enforcement action is taken in respect of alleged by-law contraventions.

As the administrative arm of the body corporate, the body corporate committee is usually responsible for ensuring all owners and occupiers comply with the by-laws, although owners can also commence enforcement action which commences with the issue of mandatory notices except in very limited circumstances. The types of contravention notices include a Continuing contravention notice and a Future contravention notice. Where a lot owner is continuing to breach exclusive use by-laws, and accumulating rubbish in breach of by-laws, the body corporate would be entitled to issue a continuing contravention notice to the owner allegedly contravening a by-law. It is only after the owner fails to comply with a contravention notice that the committee, or the body corporate in a general meeting, can decide to commence enforcement proceedings in the Commissioner’s Office or in the Magistrates Court.

In response to a request by this office to provide evidence of a dispute, the applicant’s solicitor forwarded a copy of a Notice of Default issued to the Caretaker/ Letting Agent, alleging non-compliance with the provisions of the Caretaking Agreement. However, I have not been provided with any evidence that that a contravention notice has been issued.

In this instance I am of the view that the applicant should have taken the preliminary step of requesting the body corporate to issue a contravention notice to the person allegedly contravening the by laws by way of the applicable "approved form" (Form BCCM 1). Where the body corporate does not, within 14 days after receiving the request, advise the complainant that the contravention notice has been issued, the complainant may commence enforcement action in this Office.

While there are certain situations in which a lot owner may lodge an application without giving a preliminary notice, these circumstances are limited to "special circumstances " set out in Section 186 of the Act i.e. contraventions which:

Subsection 184(2) provides as follows:
(2) The body corporate may make an application under chapter 6 for resolution of the dispute only if the body corporate has given the owner or occupier a contravention notice for the contravention the subject of the dispute.

It would appear to me that the applicant has failed to comply with the preliminary procedure set out in section 184 and in view of the clear and unambiguous language of subsection 184(2), the application must be dismissed.

GENERAL OBSERVATIONS

I would like to take this opportunity to make some observations which may be of assistance to the parties.

Car Parking Spaces

It would appear that the current CMS, including the exclusive use by-laws, fails to reflect certain informal arrangements existing within this scheme including:

• one of two car parking spaces allocated to lot 36 is used by lot 5,
• one of two car parking spaces allocated to lot 35 is used by lot 2

Under section 171 of the Act, two or more lot owners may swap their exclusive use areas under a re-allocation agreement. Obviously this would require the consent of both parties and lodgement of a new CMS recording the amended exclusive use by-law.

A lot owner is also at liberty to allow another lot owner to use their exclusive use area.
For example, the owner of lot 35 can allow the owner of lot 2 to use an exclusive use area allocated to lot 35. To give permanency to such an arrangement it would be necessary to amend the exclusive use by-laws and register a new CMS.

However, I am of the view that a bona fide purchaser is entitled to rely on the version of the CMS registered under the Land Title Act. Therefore a re-allocation of exclusive areas which has not been recorded in a new CMS, would not be binding upon a subsequent bona fide purchaser.
For example, lots15, 33 and 36 are owned by the applicant and accordingly, in my view, the applicant is entitled to the exclusive use of areas allocated to lots 15,33 & 36 by the exclusive use by-laws.

Enclosure of Car Parking Spaces and Storage Areas on Common Property

The applicant submits that no proper authorisation has been obtained from the body corporate or from the Gold Coast City Council regarding the enclosure of parking spaces with fibre cement sheeting.

While it would appear that these walls have been constructed in contravention of the scheme by-laws, the question arises whether the body corporate is entitled to require the respondent to remove the walls more than twenty years after construction. The body corporate is required to act reasonably in carrying out its functions and an adjudicator is required to make an order that is just and equitable to resolve a dispute (Act 94, 276). Having regard to the circumstances of this case it could be considered unreasonable and inequitable for the body corporate to require removal of walls enclosing parking spaces allocated to lots 1 and 2. There are questions of equity that arise in this dispute including the principle of acquiescence. The principle of acquiescence operates to deny a person the right to later object to something that has in fact been in place for some time without any action or complaint having been taken, giving rise to an inference of assent. It is arguable that it would be unreasonable to now require removal of the walls enclosing the parking spaces for lot 1 & 2 .

Similar issues arise in relation to the common property areas adjacent to the car space for lot 15 and the space between car spaces 11, 12 & 24 . On the evidence submitted, it would appear that these areas have always been used by the resident caretaker/ letting agent as storage areas. Again it could be considered unreasonable to deny them the use of this area after some 25 years of acquiescence.

Of course, by-laws regarding storage of hazardous materials and disposal of refuse/ garbage would continue to apply.

Finally, I would point out that I have no jurisdiction to consider Local Authority issues. Should the Gold Coast City Council subsequently require modifications or removal of these structures, then it would not be unreasonable at that time for the body corporate to require the respondent to undertake modifications or removal as necessary.

Number of Scheme:	11476
Name of Scheme:	Aarons
Address of Scheme:	3355 Gold Coast Highway SURFERS PARADISE QLD 4217

•	It is submitted that use of the lot 1 & lot 2 car parks to store materials for the purposes of carrying out their caretaking duties complies with the above by-law. The owners of the lots have permitted the caretaker/ letting agent to utilise these areas for storage purposes effectively making the caretaker a licensee of the proprietor
•	Car spaces allocated to lots 2 and 33 and the common area to the right of the car space for lot 15 were enclosed in 1980 by the developer and used for storage of furniture for unsold units. The space between car spaces 11, 12 & 24 is primarily used as a games area but part of the area has always been used by the resident caretaker/ letting agent for storage purposes.
•	The developer granted exclusive use of these areas to the then caretakers, and the areas have been used by successive caretakers ever since. Therefore the current caretakers/ letting agents are entitled to exclusive use of these areas.
•	The by-laws allow for alteration of exclusive use areas by the body corporate or by lot owners and it would not be appropriate to "revert to allocations that effectively have never been put in place".
•	It is denied that the areas constitute a fire and vermin hazard as fire safety and pest control professionals have certified that the complex complies with all relevant legislation.
•	The second car space allocated to lot 36 is being used by lot 33 (not lot 5);
•	The lot 1 car space is being used by the caretakers/ letting agents who are entitled to use this area for any purpose they wish as long as such use is consistent with the scheme by-laws;
•	The lot 39 car space is not used by the caretakers/ letting agents. The materials were left in this space by contractors engaged by the body corporate and it is believed that these materials have been abandoned.;
•	It is submitted that the lot 15 exclusive use area is currently used by the owner of lot 15;
•	The space between car spaces 11, 12 & 24 is primarily used as a games area which is available to all occupants of the building. A small part of this area is used as a linen storage area by the resident caretaker/ letting agent .

•	The car parking spaces allocated to lots 1, 2 & 33 are used by the resident caretaker and letting agent for storage purposes.
•	Common property to the right of the lot 15 car park space and adjacent to lots 11, 12 & 24 has been caged off and is used by the resident caretaker/ letting agent for storage purposes.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Aarons [2005] QBCCMCmr 674 (1 December 2005)