Tuncunba Gardens [2005] QBCCMCmr 719 (20 December 2005)

Last Updated: 16 January 2006

REFERENCE: 0635-2005

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	32688
Name of Scheme:	Tuncunba Gardens
Address of Scheme:	23 Gympie Road TIN CAN BAY QLD 4580

TAKE NOTICE that pursuant to an application made under the abovementioned Act by the body corporate for Turcunba Gardens

I hereby order that the application by the body corporate for Tuncunba Gardens to have the owners of lot 43 Alexandra Connolly and Michael Kirk-Smith remove the signs erected in their lot, and which has not been approved by the Body Corporate, is dismissed. I further order that the owners of lot 43 Alexandra Connolly and Michael Kirk-Smith are hereby authorised to continue to place the signs upon their lot and or common property for such period as they require provided however, the signage is not to be enhanced or added to in any way.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0635-2005

"Tuncunba Gardens" CTS 32688

The applicant, the body corporate for Tuncunba Gardens has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) quote:

To have the owner of lot 43 remove the signs erected in their lot, which has not been approved by the Body Corporate.

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 43 lots recorded under a standard format plan of subdivision. The regulation module applying to the scheme is the standard module.

This dispute concerns the placement by Alexandra Connolly and Michael Kirk-Smith, the owners of lot 43 (the respondents) of two for sale signs on their lot without the permission of the body corporate. The application seeks the removal of the signs.

The applicant body corporate states that the erection of the signs is contrary to by-law 8 which requires body corporate approval before displaying a sign. The applicant concludes:

The body corporate requires that the Commissioner to enforce by-law 8 and have the owner of lot 43 remove the signs as body corporate approval has not been given for the owner to erect the signs.

A copy of the relevant by-law is provides. Headed Appearance of lot the by-law states in part that an occupier must not, without the body corporate’s written approval, display a sign, advertisement, placard, banner or pamphlet or similar article if the article is visible from another lot or the common property, or from outside the scheme land.

This office sought submissions from all owners in the scheme and the respondents. Only the respondents elected to make a submission.

The respondents have submitted that the "developers of Tuncunba Gardens" have omitted a provision from the standard by-laws allowing real estate advertising signs for sale or letting if of a reasonable size, from the by-laws. I acknowledge that this provision does appear in the standard by-laws. The standard by-laws in the Act are the default by-laws. Those by-laws apply to a scheme when specific by-laws are not adopted by the body corporate.

I conclude that this argument by the respondents must fail. The by-laws applying for the scheme are those recorded for the scheme in the community management statement, and not the standard by-laws. If specific by-laws are recorded for the scheme, then they can contain whatever provisions the body corporate in general meeting determines. The by-laws need not reflect or be consistent with the standard by-laws.

The respondents further allege that "the developers are effectively the body corporate as chairperson, secretary and treasurer and sole members". The respondents further allege that the developers, as committee, have "allowed themselves to put up their own For Sale signs to sell their own properties".

The respondents are essentially alleging a number of matters, including:

• A potential conflict of interest by committee members;
• That the committee are not acting reasonably.

The applicant body corporate did not accept the invitation to obtain a copy of the respondent’s submission, and to reply to that submission. Whilst this is not obligatory, I consider that if allegations are made in submissions which are not refuted, then it is open for an adjudicator to consider and rely on such allegations.

As to the allegation of the committee members having a conflict of interest, section 34 of the standard module provides:

34 Conflict of interest
(1) A member of the committee must disclose to a meeting of the committee the member’s direct or indirect interest in an issue being considered, or about to be considered, by the committee if the interest could conflict with the appropriate performance of the member’s duties about the consideration of the issue.
(2) If a member required under subsection (1) to disclose an issue is a voting member, the member is not entitled to vote on the issue.
(3) A person who holds the proxy of a member of the committee must disclose to a meeting of the committee the proxy holder’s direct or indirect interest in an issue being considered, or about to be considered, by the committee if the interest could conflict with the appropriate performance of
the proxy holder’s duties about the consideration of the issue.
(4) A proxy holder required under subsection (3) to disclose an issue must not vote as the proxy on the issue.
(5) A person who holds the proxy of a member of the committee must disclose to a meeting of the committee the member’s direct or indirect interest in an issue being considered, or about to be considered, by the committee if the proxy holder is aware that the member, if present, would
be required under subsection (2) not to vote on the issue.
(6) A proxy holder required under subsection (5) to disclose an issue must not vote as the proxy on the issue.

Effectively, what this means is that members of the committee who have a conflict of interest in a matter under consideration by the committee should not vote on the matter in question. If, as alleged, committee members are in fact associated with the developer, then I could see how a conflict of interest might exist. If such conflict of interest did in fact exist, then the decision of the committee to serve the contravention notice, and to make application to this office would be invalid and of no effect.

Secondly, there is an obligation for a body corporate (which includes the committee) to act reasonably in enforcing the by-laws. Section 94 of the Act provides:

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). (my highlighting)

The question then arises: has the body corporate acted reasonably in this matter?

The grounds relied on by the body corporate do not disclose any basis for the order it is seeking except perhaps that there be compliance with the by-laws. No nuisance is alleged to arise from the placement of the signs. There is no allegation that the signs are unsightly, or in other ways detrimentally or negatively affect the common property or users thereof. As noted previously, no owner has made a submission alleging any detriment.

I have considered photos of the two signs in question. They are simply standard signs used by real estate agents for the advertising of a property for sale. The respondents allege that they sought permission for the signs in writing from the body corporate, but that there has been no response to that letter. Rather the body corporate have commenced the current action against the respondents.

In the circumstances, I conclude that the body corporate is not acting reasonably. I conclude that there no detriment evidenced from the placement of the signs. They are a standard method of advertising a property for sale. I suggest that no person could reasonably be offended by such signage. In the circumstances, I intend to dismiss the application. As well, I intend to specifically authorise the respondents to continue to place the signs upon their lot and or common property for such period as they require. However, the signage is not to be enhanced or added to in any way. It is the existing or very similar signage which is authorised to remain.