Jadran Court [2006] QBCCMCmr 301 (14 June 2006)

Last Updated: 19 December 2006

REFERENCE: 0757-2005

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	13870
Name of Scheme:	Jadran Court
Address of Scheme:	54 Frank Street LABRADOR QLD 4215

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

J Stonham, the Owner of lot 2

I hereby order that where proposed committee spending is not more than the "relevant limit for committee spending" (i.e. $125 x the number of lots), a motion regarding the proposed spending should be considered by the committee and a resolution of the committee authorising the proposed work, and the proposed expenditure is to be properly recorded in the minutes. I further order that members of the body corporate committee are to comply with section 34 of the Body Corporate and Community Management (Standard Module) Regulation which provides that a committee member is to disclose to a meeting of the committee any conflict of interest on a particular issue to be considered by the committee, and is not to vote on any such issue. I hereby order that any future spending by the body corporate committee above the "relevant limit for committee spending" should be approved in accordance with section 103 of the Body Corporate and Community Management (Standard Module) Regulation and where proposed spending is more than the "relevant limit for major spending" (i.e. $250 x number of lots in the scheme), at least two quotations are to be obtained. I further order that having regard to section 123 of the Body Corporate and Community Management (Standard Module) Regulation, the maintenance and replacement of the fence separating the lot 2 exclusive use area from other common property, is the responsibility of the owner of lot 2. I further order that the body corporate is deemed to have approved the necessary applications to the GCCC to allow existing structures located on the lot 2 exclusive use area (including the enclosed garage, pool shed and carport) to be approved by the GCCC. I further order that the owners of lot 1 are permitted to continue their letting and motel business subject to compliance with the scheme by–laws. I further order that the storage shed located on common property by the owners of lot 1 is to be removed within 3 months of the date of this order unless approved by a special resolution of an extraordinary general meeting.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0757-2005

"Jadran Court" CTS 13870

THE SCHEME

Jadran Court, Community Titles Scheme 13870, is a subdivision of 11 lots recorded under a building format plan of subdivision (formerly a building format plan) and is regulated by the Standard Regulation Module.

APPLICATION

The applicant, Mr Joe Stonham has sought the following order of an adjudicator under the Body Corporate and Community Management Act 1997 (the Act) seeking the following outcomes:

1. An Interim Order is sought to entitle Unit 2’s owner to the full rights of an owner at the next AGM as he has been made persona non gratia at consecutive AGM’s over a rejected account, which is subject to and explained in the following outcome being sought.

2. To expand on Order 500-2003 to direct that the Committee is responsible for the original pool shed and boundary fences including the fence between the EUA (exclusive use area) and the non EUA grounds. The committee had demolished part of the defining fence which was a wall to the pool shed while it has replaced all boundary fences except those enclosing unit 2.

3. That the body corporate records be audited because the chairman and his wife have been the biggest expenses over consecutive accounting periods and have refused to explain their personal income from the body corporate or to identify the body corporate monies paid to their family and friends and to appropriate unauthorised expenses assigned to unit 2 for the period that the pool was illegally occupied.

4. To overturn body corporate motions denying unit 2 approval make necessary submissions to the GCCC to ensure existing structures comply with GCCC requirements and to have unit 1 owners liable for similar responsibilities for noncomplying details of their holdings within the laundry and what is used as the unit 1 garage, but shown as motel car parking on GCCC plans and to demolish the noncomplying carport erected on common grounds in front of the building and used as a motel car cover and other abuses of common property.

5. That the logistics, laundry, cleaning and administrative and staff activities for the Holiday flats at 56 Frank St. be banned from the grounds of Jadran Court and that the current office be relocated from adjacent to and constantly inpinging on unit 2’s exclusive use area, as it’s traffic is a safety problem and the constant office activities impinge unreasonably on unit 2’s quiet enjoyment of the premises by denying reasonable peace, comfort and privacy.

BACKGROUND

Jadran Court, Community Titles Scheme 13870, consists of 11 lots and is regulated by the Standard Regulation Module. The complex also includes 5 motel units one of which is now the motel office.

It would appear that the original developer of the complex, Mr. Versic, resided in lot 2 from where he conducted a letting business for the other 10 units and 5 motel rooms. Lot 2 is the only lot which is entitled to an exclusive use area which is approximately one quarter of the total site area of 2,398 squares. In the mid to late 1970’s, a brick B-B-Q, besser brick wall and swimming pool were built on the exclusive use area. The applicant has provided a copy of an application form dated 28 April 1977 in which Mr. Versic, sought permission to build a swimming pool on land owned by him and described as Lot 1 on RP 135509.
It is also evident that Mr. Versic applied to the GCCC to have a number of ground floor parking spaces converted to motel units. There is also evidence of a subsequent application seeking approval for construction of an additional 2 bedroom unit at 54 Frank Street.

At an unknown time, a small shed was erected on the Western side of the lot 2 building and another small shed was erected on the Southern side of the lot 2 building. It would appear that both sheds were constructed within the EUA. In 2001 a three space carport was erected and used as a parking area, wholly within the lot 2 Exclusive Use Area (EUA). Although this building was approved by the GCCC on 16 August 2001, the then owner of lot 2 incorrectly advised the GCCC that he owned the subject land, when in fact his interest was an entitlement to exclusive use of the land.

A Mr Coleman was the subsequent owner of lot 2 as well as lot 1 which incorporated the motel premises. In June 2002 Mr. Coleman sold lot 2 to the applicant. In September 2002, Mr. Coleman sold lot 1 and the motel business to Mr & Mrs Humphrey. Adjacent holiday flats at 56 Frank St., also owned by Mr. Coleman, are leased to the Humphreys who let these flats with the motel units as part of the one business. The land on which the holiday flats are built includes a pool which is made available to the Humphreys’ guests.

From September 2002, Mr & Mrs Humphrey were the Chairman, Secretary and Treasurer of the body corporate committee and around this time the office was moved from the front of the complex to a unit at the rear.

Following disputes regarding the status of the lot 2 common property area, it was determined in a previous adjudication by this Office (500-2003) that lot 2 is entitled to exclusive use of the relevant area in accordance with a by-law created pursuant to a unanimous resolution dated 14 May 1974.

However, it is claimed that during 2003 Mr Humphrey closed the pool in the lot 2 exclusive use area without the consent of the owner of lot 2. Mr Humphrey also mowed the grass, engaged pool specialists to restore the pool water to acceptable standards and made an area of approximately 10 metres by 15 metres available to all guests as well as the EUA pool.

The applicant claims that there is limited evidence that Mr Humphrey’s actions have been authorised and efforts to obtain minutes were resisted. It is claimed that on 14 March 2005 Archers Body Corporate forwarded a purported set of minutes of the AGM held on 6 November 2004. The applicant states that the "minutes" are unsigned and are false and misleading.

The issues raised by the applicant can be summarised as follows:

• The Chairman of the body corporate, Mr Humphrey, commandeered the swimming pool located on unit 2’s exclusive use area and made it available to all residents;
• The Chairman of the body corporate has charged unit 2 for personal unsolicited labour and commercial expenditure on the pool and exclusive use area;
• The body corporate has refused unit 2 vehicles access to the EUA including the carport;
• body corporate costs have increased dramatically in recent years;
• The Chairman of the body corporate has demolished structures within the EUA including the boundary fence;
• The body corporate refused a request for approval to permit unit 2 to meet GCCC requirements to undertake rectification in regard to unit 2, and structures in the unit 2 EUA including the pool shed and carport.

The applicant also requests that the body corporate records should be audited because the current Chairman has incurred unusually large expenses and refused to provide details as to how his family has benefited financially. Questions have also been raised regarding various charges to the body corporate. As mentioned in my interim order Unit 2 has been charged $821.10 for the Chairman’s labour, pool contractors and lawn mowing. In addition, an invoice for a new pool pump was also forwarded to unit 2 seeking $461.50. Additional charges relating to a claim for unpaid fees, court costs and administrative costs, have been added and even though a cheque for $3,673.50 (the exact value of the unit 2 entitlement levy) was paid by the applicant, the amount of the cheque was not applied toward body corporate levies. As a result, the owners of unit 2 are prevented from voting and speaking at meetings.

SUBMISSIONS

Three submissions were received from other lot owners, summarised as follows:

• the carport referred to in the application was not approved by the body corporate and such approval is a perquisite to obtaining approval from the GCCC;
• the front motel unit previously used by Mr Coleman as an office for a period of some 20 years, was originally approved as residential accommodation;
• pool maintenance was undertaken to ensure compliance with GCCC requirements regarding safety and hygiene when the applicant was overseas and uncontactable (although this is disputed by the applicant);
• Mr Stoneham was refused the right to address the AGM of the Body Corporate as he owes a debt to the Body Corporate;
• The EUA surrounding the pool had been left in a derelict condition involving an old fibro fence, long grass, an old car and rubbish. This is disputed by the applicant who submits that the fence, shed and carport were all structurally sound, the carport was recently approved by the GCCC and the car was not abandoned.

A very lengthy submission was received from Mr & Mrs Humphrey in which they submitted:

• In 2003 the applicant indicated that he wished to place 2 demountable buildings on the EUA which led the body corporate to inspect the area and realise that there were numerous non-complying structures in the area;
• The developer did not own the EUA (this may be a misinterpretation of the titles office records);
• The "3 bay" carport should not have been built without body corporate approval;
• The "shed at the back of unit 2 was not approved by the body corporate or the GCCC;
• Unit 2 is "illegal";
• Mr & Mrs Humphrey nominated as chairman and secretary of the body corporate;
• They are entitled to access the front door of the kitchen, office and laundry;
• As at November 2003, they were not aware that the pool was located on the EUA and were awaiting the results of a departmental adjudication on this matter;
• They arranged for mowing of grass in the EUA and for the pool to be closed owing to health and safety concerns and possible liability of the body corporate for any accidents or diseases;
• The applicant was refused speaking/ voting rights owing to unpaid body corporate accounts and "speaking out of line";
• Archers Body Corporate Management were responsible for sending out minutes for the meeting held on 4 September 2004 and all other unit owners received signed minutes for that meeting;
• An audit had been ordered at the 21/1/05 meeting & they were not aware that the applicant requested an audit at the AGM or on the agenda for the meeting;
• Detailed accounts for their body corporate work have been prepared and disclosed;
• Accounts for work performed are presented to the body corporate manager and the body corporate manager has provided reimbursement ;
• Agenda items submitted by the applicant were received after the closing date;
• Maintenance was required in order to reduce the risk of injury to persons entering the exclusive use area for which the body corporate could be liable;
• The owner of unit 2 has not been banned from meetings but was "unfinancial" and therefore could not vote;
• The fence referred to by the applicant was infested with white ants and therefore required demolition;
• The majority of owners are entitled to refuse to retrospectively grant permission for unapproved structures on the EUA;
• the grass in the EUA is often not mowed for 8 weeks at a time and an old Volvo motor vehicle standing on blocks is danger to children who play in the area;
• The cupboard containing the hot water system was treated for termites and is structurally sound;
• The occupants and owners of lots in the complex are concerned about the effect of the run down EUA on the value of their lots.
• The pool pump is now a body corporate asset as the applicant refused to pay for replacement of the pump.

In response, the applicant made the following submissions:

• The pool was commandeered in October 2003 and opened to the public in November 2003. Mr Humphrey undertook unsolicited work on and around the pool which was charged to unit 2;
• A notice was issued by the GCCC regarding the pool in March 2004 and any work required to ensure compliance with the notice was undertaken by the applicant. The applicant states that he was in the country and in the presence of Mr Humphrey on the day that he arranged for the pool specialists to attend to the pool;
• The fence demolished by Mr Humphrey was effectively a freestanding 6mm thick corrugated fibro fence which had no decay. It is also claimed that the steel fence attached to two steel posts was in sound condition. White ant treatment was not undertaken until July 2004;
• A wall of the applicant’s shed was unnecessarily demolished;
• The applicant disputes that the EUA is "run down" as the grass is not left uncut for more than eight weeks and since September 2004 the volvo vehicle has had all wheels attached;
• Work resulting in "self payment" (to body corporate committee members) of approximately $3,000 per reporting period is not recorded in any minutes;
• In addition there are payments for "sweeping" and "secretarial duties" amounting to approximately $2,800 for which there are no work specifications;
• The current condition of the pool shed is not relevant to whether the building was approved;

•	The pool shed should be allowed to stand as it has satisfied GCCC structural inspection;

• motel and holiday letting business is conducted from the motel unit adjoining lot 2 which is the only ground floor unit ;

•	Mr & Mrs Humphrey continue to conduct the body corporate for their own benefit;

• Mr & Mrs Humphrey recently constructed a 3.3 M x 3.3 M shed outside the Southern wall and window.
• The applicant seeks the following order:
That all structures placed on common ground within the viewing area of the ground floor window of Unit 2 be removed: such items to include but not limited to the outdoor sink, home made sink frame, hose fittings, garbage bins, brooms & mops, ash trays, plastic containers, the shed and its contents: with the private shed to be totally removed from all common ground and return and replacement of the corrugated fibro and steel sheets as previously stored within the unit 2 EUA.

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

As the parties are no doubt aware, this scheme is unusual in a number of respects such as the inclusion of numerous motel units within one lot and inclusion of a large exclusive use in another lot. The applicant states that he purchased lot 2 on the basis that he was acquiring a backyard area which is permanently allocated for the exclusive use of lot 2. Further, many of the actions complained about, such as construction of unapproved structures, have occurred over a period of several years and it is evident that successive owners and body corporate committees have adopted a casual attitude toward compliance with body corporate legislation over the last 30 years.

In this order I will seek to deal with the following matters:

1. The liability of lot owners, particularly the owner of lot 2 for work undertaken by committee members;
2. accountability/ audit requirements;

3. Responsibility for maintenance/ repair/ replacement of the pool shed and boundary fences including the fence between the EUA and the non EUA area;

4. body corporate motions denying unit 2 approval to make necessary submissions to the GCCC to ensure existing structures comply with GCCC requirements;
5. Structures on lot 1 for which, it is alleged, body corporate approval has not been obtained;
6. conduct of a letting business for the Holiday flats at 56 Frank St;
7. Structures placed on common property including the storage shed.

Work undertaken by Committee Members

The Applicant alleges that the Chairman of the body corporate, Mr Humphrey, commandeered the swimming pool located on unit 2’s exclusive use area (EUA) and charged unit 2 for personal "unsolicited" labour and expenditure on the pool and surrounding exclusive use area. In particular the applicant states that Mr Humphrey demolished the boundary fence and arranged for mowing of grass in the EUA and arranged for pool treatment without consulting him.

In response Mr Humphrey submitted that:

• The fence referred to by the applicant was infested with white ants and therefore required demolition;
• the grass in the EUA was often not mowed for 8 weeks at a time and an old Volvo motor vehicle standing on blocks was danger to children who play in the area;
• the pool had to be treated owing to health and safety concerns and to ensure compliance with a notice issued by the Gold Coast City Council (GCCC) to Jadran Court;
• the applicant was overseas and/ or uncontactable at that time so the Chairman arranged for mowing of grass in the EUA and for work to be done on the pool;
• as at November 2003, they were not aware that the pool was located on the EUA and were awaiting the results of a departmental adjudication on this matter.

The applicant has since advised that Mr Humphrey failed to consult with him before undertaking the work and that the fence demolished by Mr Humphrey was effectively a freestanding 6mm thick corrugated fibro fence which had no decay. It is also claimed that the steel fence attached to two steel posts was in sound condition and white ant treatment was not undertaken until July 2004.

At this point in time it is extremely difficult, if not impossible, to make a finding as to whether or not the fence required demolition. From photographic evidence provided to me it is evident that the fence was primarily constructed from a fibro product often referred to as "super 6" fibro. In some places the fence was "freestanding" while in other places the fence was attached to untreated timber and also formed the wall of a shed located in the EUA. I think it is fair to say that the remaining fence surrounding the EUA is showing signs of deterioration. Some fence panels have been replaced with used garage doors while other fence panels are starting to lean.

Having regard to all the material provided by both parties, I believe it is probable that the owner of lot 2 failed to adequately maintain the EUA, fence and swimming pool, and therefore the body corporate was entitled to undertake remedial work.

Accountability

For future reference of the parties, I would point out that it is not appropriate for the body corporate chairman to unilaterally undertake such work and expect payment. Where proposed spending is not more than the "relevant limit for committee spending" (i.e. $125 x the number of lots), the appropriate course of action would be to firstly consult with the lot owner, and if necessary, submit a motion regarding work required on the EUA for consideration by the committee and have the decision properly minuted. A resolution of the committee should specify the proposed work and authorise the proposed expenditure.

I would also point out that section 34 of the Standard Module provides as follows:

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.

Where proposed spending exceeds the "relevant limit for committee spending" (i.e. $125 x the number of lots), the body corporate must comply with section 103 of the Standard Regulation Module which provides as follows:

103 Spending by committee
(1) The committee may only carry out a proposal involving spending above the relevant limit for committee spending (i.e. $125 x number of lots in the scheme) for the scheme if--
(a) the spending is specifically authorised by ordinary resolution of the body corporate; or
(b) the owners of all lots included in the scheme have given written consent; or
(c) an adjudicator is satisfied that the spending is required to meet an emergency and authorises it under an order made under the dispute resolution provisions; or
(d) the spending is necessary to comply with--
(i) a statutory order or notice given to the body corporate; or
(ii) the order of an adjudicator; or
(iii) the judgment or order of a court.
(2) For this section, if a series of proposals forms a single project, the cost of carrying out any 1 of the proposals is taken to be more than the relevant limit for committee spending if the cost of the project, as a whole, is more than the relevant limit.
(3) Section 104 applies to the proposal in addition to this section if--
(a) subsection (1)(a) or (b) applies in relation to the proposal; and
(b) the proposal involves spending above the relevant limit for major spending; and
(c) the proposal does not involve spending mentioned in subsection (1)(c) or (d).

Further, where the cost of proposed work amounts to "major spending" (i.e. $250 x number of lots in the scheme,) section 104 provides:

104 Quotes for major spending
(1) This section applies if--
(a) a motion to be moved at a general meeting of the body corporate proposes the carrying out of work or the acquisition of personal property or services, including the engagement of a body corporate manager or service contractor, but not including the engagement of a service contractor who also is, or is to be, a letting agent; and
(b) the cost of carrying the proposal into effect is more than the relevant limit for major spending for the scheme (i.e. $250 x number of lots in the scheme).
(2) The lot owners must be given copies of at least 2 quotations for carrying out the work or supplying the personal property or services.
(3) If the motion is proposed by the committee, the committee must obtain the quotations.
(4) If the motion is not proposed by the committee, the person proposing the motion must obtain the quotations and give them to the secretary.

Audit

I believe it was resolved at the 2005 AGM that the accounts be audited.

Under section 106 of the Standard Module a body corporate must have its statement of accounts for each financial year audited by an auditor unless the body corporate resolves by special resolution not to have the statement audited.

It should also be noted that under section 106 of the Act, a motion is passed by special resolution only if--
1. at least two-thirds of the votes cast are in favour of the motion; and

2. the number of votes counted against the motion are not more than 25% of the number of lots included in the scheme; and

3. the total of the contribution schedule lot entitlements for the lots for which votes are counted against the motion is not more than 25% of the total of the contribution schedule lot entitlements for all lots included in the scheme.

Replacement of Exclusive Use Area Fence

The applicant advises that the body corporate has replaced all boundary fences except those enclosing unit 2 and seeks an order that the committee is responsible for the original pool shed and boundary fences including the fence between the EUA and the non EUA grounds.

As stated above, it is difficult to determine in hindsight whether the fence was in fact so dilapidated that it required demolition. If it was the case that the body corporate committee removed the fence for purely aesthetic reasons, I would be inclined to the view that the body corporate committee should replace the fence. On the other hand the chairman argues that the subject fence required demolition and, as mentioned above, I note from photographs that the remaining fence surrounding the EUA is showing serious signs of deterioration.

Having regard to the earlier adjudicator’s determination and the by-laws for the scheme, there is no doubt that lot 2 is entitled to exclusive use of the subject area. However, the by-law which grants the exclusive use to the respondent is silent on the question of responsibility for maintenance. In this situation the provisions of section 123 of the standard module are relevant to determine responsibility for maintenance of the exclusive use area, and any improvements included therein. Section 123 provides -

123 Conditions and obligations under exclusive use by-law

(1) If the owner of a lot included in the scheme to whom rights are in the first instance given under an exclusive use by-law agrees in writing, the by-law may impose conditions (which may include conditions requiring the owner to make a payment or periodic payments to the scheme’s body
corporate or the owners of lots included in the scheme, or both).
(2) An exclusive use by-law is taken, in the absence of other specific provision in the by-law for maintenance and operating costs, to make the owner of the lot to whom exclusive use or other rights are given responsible for the maintenance of and operating costs for the part of the common property to which the exclusive use by-law applies.

The provisions of this section are relevant to the circumstances of this application. The owner of lot 2 is responsible for the maintenance and operating costs of the exclusive use area and all improvements in the exclusive use area, for example, the costs of maintaining the pool and fences which divide the EUA from other common property. The fence separating the EUA from other common property benefits unit 2 only, and having regard to section 123 above, is the responsibility of the applicant.

Structures on Exclusive Use Area

The applicant seeks a final order that the body corporate approve the necessary applications to the GCCC to ensure existing structures including the enclosed unit 2 garage, pool shed and carport are approved by the GCCC.

In 2001 a three space carport was erected and used as a parking area, wholly within the lot 2 Exclusive Use Area (EUA) . Although this building was approved by the GCCC on 16 August 2001, the then owner of lot 2 incorrectly advised the GCCC that he owned the subject land when his interest was in fact an entitlement to exclusive use of the land. I also note that the original owner of lot 2 submitted plans with the GCCC "to obtain preliminary approval of an additional unit at 54 Frank Street Labrador". The applicant believes that no body corporate was constituted at the time and in any event, the developer would have been the owner of all lots in the scheme at that time.

While these structures may have been built without the permission of the body corporate, the question arises whether the body corporate is entitled to require their removal several years after construction. Under section 94 of the Act, 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 under section 276. Having regard to the circumstances of this case it could be considered unreasonable and inequitable for the body corporate to require removal of the additional unit accommodation, which I believe was built in the former garage of unit 2, and the 3 bay carport. In particular, there are questions of equity that arise in this dispute including the principle of acquiescence. In the context of a community title scheme, the principle of acquiescence may operate to deny the body corporate the right to object to something that has in fact been in place for a number of years, giving rise to an inference of assent. I believe it is arguable that it would be unreasonable to now require removal of the structures referred to above.

However, this would not absolve the owner of the improvements from compliance with relevant building regulations. 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.

I believe that the additional unit accommodation and the 3 bay carport may be structurally sound and capable of GCCC approval, subject to any remedial action required in order to make the structures compliant with relevant building regulations .

From a perusal of photographs it would seem obvious to me that the shed at the back of unit 2A has also been standing for many years. While my initial observation is that the structure is rather crude, it is for the local authority or a suitably qualified certifier to determine whether it complies with building regulations.

Similarly, I believe that the carport used by unit 1, and cupboards built under the stairwell could be capable of GCCC approval subject to any remedial action required in order to make the structures compliant with relevant building regulations .
Conduct of a letting business for the Holiday flats

As I have outlined above, and in my interim order, 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 under section 276. I am not aware of any by-law which prohibits the conduct of a letting business in the scheme and in any event, it could be considered unreasonable and inequitable to require the Humphreys to move their operations elsewhere after carrying on their business from the same premises for a number of years.

This of course would not exempt the owners of lot 1 from complying with scheme by–laws regarding:

•	Noise & nuisance;
•	Vehicles;
•	obstruction of common property; and
•	behaviour of invitees.

Storage Shed on Common Property

Finally, the applicant seeks an order that the private storage shed be removed from the common property.

I have been provided with a photograph of the 3.3M x 3.3M colourbond steel storage shed located on common property at the rear of the "office-kitchen-laundry" area and outside the ground floor window of Unit 2.

Approval for the shed was purportedly recorded by way of a flying committee minute dated 12 December. The minute states that 2 committee members voted in favour of the motion and one committee member voted against the motion.

In my view the placement of the storage shed on common property for the benefit of the owners of lot 1 & 5 involves at least an improvement to common property which requires, inter alia, authorisation by a special resolution of the body corporate pursuant to section 114 of the Standard Module Regulation which provides as follows:

Improvements to Common Property by lot owner

(1) The body corporate may, if asked by the owner of a lot, authorise the owner to make an improvement to the common property for the benefit of the owner’s lot.
(2) The improvement must be authorised by special resolution of the body corporate unless--

(a) the improvement is a minor improvement (i.e valued at $250 or less); and

(b) the improvement does not detract from the appearance of any lot included in, or common property for, the scheme; and

(c) the body corporate is satisfied that use and enjoyment of the authorised improvement is not likely to promote a breach of the owner’s duties as an occupier.

(3) An authorisation may be given under this section on conditions the body corporate considers appropriate.
(4) The owner of a lot who is given an authority under this section--

(a) must comply with conditions of the authority; and

(b) must maintain the improvement made under the authority in good condition, unless excused by the body corporate.

FINAL ORDERS

Having regard to my comments above, I propose to make the following orders:

Accountability

Where proposed committee spending is not more than the "relevant limit for committee spending" (i.e. $125 x the number of lots), a motion regarding the proposed committee spending should be considered by the committee. A resolution of the committee authorising the proposed work and the proposed expenditure is to be properly recorded in the minutes.

Members of the committee are to comply with section 34 of the Standard Module which provides that a committee member is to disclose any conflict of interest on a particular issue to be considered by the committee, and is not to vote on any such issue.

Any future spending by the body corporate above the "relevant limit for committee spending" (i.e. $125 x the number of lots) should be approved by an ordinary resolution in accordance with section 103 of the Standard Module. Where proposed spending exceeds "the relevant limit for major spending for the scheme" (i.e. $250 x number of lots in the scheme), at least two quotations are to be obtained.

Replacement of exclusive Use Area Fence

The fence separating the EUA from other common property benefits unit 2 only, and having regard to section 123 above, is the responsibility of the applicant.

Structures on exclusive Use Area

The body corporate is deemed to have approved the necessary applications to the GCCC to ensure existing structures including the enclosed unit 2 garage, pool shed and carport are approved by the GCCC.

Conduct of a letting business

The owners of lot 1 are permitted to continue their letting and motel business subject to compliance with the scheme by–laws.

Storage Shed on Common Property

The storage shed located on common property by the owners of lot 1 is to be removed within 3 months of the date of this order unless approved by a special resolution of an extraordinary general meeting