Walaringah [2006] QBCCMCmr 506 (9 October 2006)

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

I hereby order that:

• the respondent is to remove the fence erected on common property; and

• the respondent is to restore the common property garden, car spaces and lawn to their former condition; and

• the meter box servicing lot 2 may stay in its current position and the owner of lot 1 may not charge the owner of lot 2 rent for it being within the boundaries of lot 1; and

• a Body Corporate exists for community titles scheme 22912, located at 39 Binstead Drive, Southport; and

• The members of the Body Corporate for the community titles scheme 22912 "Walaringah" are the owners of both lots included in the scheme; and

• As members of the Body Corporate for Walaringah, the owners of both 1 and 2 are to comply with the requirements of the Act, including insurance and the raising of levies.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0903-2005

"Walaringah" CTS 22912

Application

Neville and Norma Dayes, the Owners lot 2 (the applicants) have sought the following orders:

Jurisdiction

Walaringah CTS 22912 is a 2 lot scheme registered under the Body Corporate and Community Management Act 1997 and is operating under the Body Corporate and Community Management (Standard Module) Regulation 1997. Typically, this module is intended for residential arrangements.

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)).

Grounds

The applicants advise that:

Submissions

Fence

The respondent disputes that the building of a fence was ever officially defeated in 2003, as she maintains all her husband ever asked about was why the fence was crooked. She says she first though about erecting a fence in June 2005. She says this is because there was some talk of buying the other lot for her daughter but for various reasons this did not eventuate.

However, in anticipation of the sale she started the fence for protection reasons. She says it protects the units from water damage during storms, reduces street noise and protects the units from termites prevalent in the area.

She says they had been erecting the fence for 3 months before the applicant said anything. She says she had provided letter boxes for both units at their own expense, to keep the contents dry.

Car Spaces

The respondent states that every suggestion she and her husband make is rejected by the applicants because the applicants haven’t done anything for the premises in 10 years.

Body Corporate

She does not want a Body Corporate and insurance because the real estate agent told her and her husband there wasn’t one. She has never been shown proof that a Body Corporate exists. She says she has never received the books of account of the Body Corporate, only hand written letters saying the insurance has been paid. She says she was never consulted about insurance and that the respondent’s name does not appear on any letters or receipts.

She says they only found out recently that the bank was charging account keeping fees of $360 a year. She says they attend to maintenance around the premises. She says if she has to take the fence down, she wants compensation for the maintenance that was done and refund of some payments.

Electricity Control Panel

She says that the electricity control panel is on her private property and should be moved.

Response to Submissions

The applicants have been drawn into addressing some of the issues raised in the respondent’s submissions. For the most part the information and evidence offered in response to the submission does not need to be considered, as there are no orders sought in relation to the matters the respondent is seeking to demonstrate to the adjudicator.

Fence

The applicants provide some explanations to the respondent in relation to some actions they have taken. They observe that had they known the respondent was going to erect a brick fence, they would have enquired about issues such as the finish, letter boxes and repairs to landscaping.

They say the minutes of the meeting of May 2003 were shown to the respondent’s husband and he didn’t say anything. They say they visited in November 2005 and were surprised to find a fence erected (they live off premises). They say the respondent had made specific enquiries about capturing some of the common property previously. They say that on the November visit, the applicants had in their possession all relevant documentation regarding the Body Corporate, if the respondent wished to see it.

They acknowledge that heavy rain does cause some water to accumulate and then drain away. They are not aware of any flooding of the units.

They note that when visiting a friend in the area they had noticed that the respondent was building a brick fence on her far side boundary. However, given the meeting of May 2003, it did not occur to them that she would build a similar fence on common property. They did note that the old picket fence had been removed however.

Car Spaces

They state the car parks are required to meet Gold Coast City Council requirements. They say the area was originally turfed with a garden grown along unit 1’s fence. They say that council requires a turning area of 6 metres, but the changes that have taken place have reduced this to 4.89 metres. They say they have consented (minuted) to allow the owner of lot 1 to plant other parts on the common property.

Body Corporate

The applicants state that when the respondent purchased her unit, they supplied the information in relation to searches conducted by the respondent’s solicitor. They state the sale contract was headed "For lots in a community titles scheme".

They state all bank account statements from the time the respondent purchased from when the respondent purchased to 21 November 2005 were sent to the respondent. They say the statement received 30 January 2006 was about to be posted when the applicant responded to submissions on 1 February 2006. Copies of invoices were provided.

They state that the applicant’s husband was shown the "results" of the Body Corporate financial year ended 30 June 2005 on 17 November 2005.

They state that the respondent has never previously raised any concern regarding the insurance and say that if she had a better deal, she should have let them know.

Electricity Control Panel

They say the meter box has been in the same position since the units were built in 1993. The respondent’s husband has said if they don’t move it, they will charge rent. The applicant suggests there is no reason why Energex should not be able to go to both meters in one box.

Determination

I note that in this matter a significant amount of material that goes beyond the orders sought has been brought into discussion. I will restrict my decision to the orders sought and the issues that are relevant to the orders sought.

I further note that I have no access to the confidential information relevant to the conciliation process that has taken place.

Body Corporate

I am aware that addressing the issues in this order is a departure from the previous heading’s order, however many of the issues that follow need to be understood in the context of this issue.

Duplexes, like any other community titles scheme, must comply with the provisions of the Act and the Standard Module. Often, the two lot owners in a duplex (or even a single owner of both the lots) do not realise that they are part of a body corporate in a community titles scheme. Disputes may arise when one owner seeks to have the other owner comply with legislation and the other owner denies the existence of the scheme, or their obligations as a member of the body corporate. Frequently, new owners may be told (incorrectly) "there is no body corporate".

Once registered as a community titles scheme, the owners of the lots are automatically members of the body corporate (s.31 Act). A lot owner cannot refuse to be a part of the body corporate and has certain obligations as a member of the body corporate.

What are the body corporate’s obligations?

The lot owners in a duplex are the body corporate. The body corporate makes decisions on matters with shared responsibility, such as:

Most issues, including those listed above, must be considered by the body corporate in a general meeting.

How are meetings conducted?

There are two kinds of meetings relevant to the business of running a body corporate: committee
meetings and general meetings.

The committee for the body corporate

The committee is tasked with the administrative and day to day requirements of the body corporate. The committee in larger schemes is elected at the Annual General Meeting (AGM). However, in a duplex where the two lots are in different ownership an election is not necessary. Instead, the committee consists of the two individuals who are the owners, or the nominees of the owners, and they must decide between themselves who is to hold the positions of chairperson, secretary and treasurer (the executive positions) (Standard Module s.11(1)). If they cannot agree, the positions of the executive members are jointly held by both of them (Standard Module s.11(4)).^[1]

General meetings

The body corporate must hold an AGM and must consider all motions included on the agenda of the AGM (Standard Module s. 45). However, if matters arise that can’t wait until the next AGM, the body corporate may hold an extraordinary general meeting to consider the issue. For more detailed information on the requirements for general meetings of a body corporate, refer to the BCCM fact sheet General Meetings.

How is the common property maintained?

The body corporate is obliged to:

For more detailed information on the obligation of a body corporate to maintain common property, refer to the BCCM fact sheet Maintenance Issues.

How does the body corporate manage finances?

At the AGM the body corporate must:

For more detailed information on the financial obligations of the body corporate, refer to the BCCM fact sheet Financial Management.

Who is responsible for insuring duplex buildings?

The body corporate is responsible for insuring the buildings of the duplex if there is a common wall between the two lots of the building. This means that both lots must be insured with the same insurance company on the one policy in the name of the body corporate, e.g. "Walaringah Community Title Scheme 22912". If the two individual lot owners manage to insure their lots with two different insurers, the policies of both of the lot owners may be invalid. The policy must be for full replacement value of the buildings, the common property and any body corporate assets. (Standard Module s.127 and s.129). Additionally, the body corporate must maintain public risk insurance. For more detailed information on the insurance obligations of a body corporate, refer to the BCCM fact sheet Insurance.

How are expenses calculated?

The CMS will include two lot entitlement schedules, the contribution schedule and the interest schedule. The contribution schedule is used to calculate how much a lot owner pays towards the maintenance of the scheme. The interest schedule is used to calculate the lot owner’s share of the insurance premium and also the total share in the land value of the community titles scheme. Both the contribution and interest schedule lot entitlements for each lot in the "Walaringah" community titles scheme are equal, so each owner contributes half of the total expenses of the body corporate.

For more detailed information on lot entitlements for a community titles scheme, refer to the BCCM
fact sheet Lot Entitlements.

What are by-laws?

By-laws are a set of rules for a community titles scheme that regulate various matters including the keeping of animals, noise and parking. The bylaws are shown on the CMS and are binding on all
occupiers, including owners and tenants. The by-laws must be enforced by the body corporate. Enforcement of the by-laws may include the issue of a contravention notice by the body corporate to an occupier (owner).

For more detailed information on by-laws including contravention and enforcement, refer to the BCCM fact sheet Body Corporate By-laws.

In summary then, I note the provisions of Sections 30 and 31 of the Act:

Fence

"Walingarah" was registered as a group titles plan (now termed a standard format plan) on 29 December 1995, and comprises 2 residential lots.

I will first set out the law concerning common property and its use by owners, and then determine the order sought by the applicant for the fence to be removed from common property.

Section 35 of the Act provides that owners own the common property as tenants in common, giving each owner has a general proprietary right to use the common property. Sections 94 and 152 of the Act then provide that it is the body corporate which administers, manages and controls the common property, but it must do so reasonably and for the benefit of owners. Each owner’s right to use the common property is regulated by the legislation (the Act and the Standard Module regulations) through the body corporate. The basic rule governing an owner’s use of common property is contained in section 167 which prohibits an owner from using, or permitting another from using, their lot or the common property in such a way that, amongst other things, interferes unreasonably with the use or enjoyment of another lot or the common property by another.

As the use of common property by owners is a difficult area of adjudication, I shall detail the relevant parts of the key legislative provisions -

35.(1) Common property for a community titles scheme is owned by the owners of the lots included in the scheme, as tenants in common, in shares proportionate to the interest schedule lot entitlements of their respective lots.

167. 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--

114.(1) The body corporate may, if asked by the owner of a lot, authorize 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--

(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 24 --

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

(Adjudicator’s Note: A "minor improvement" is defined as one valued at $200 or less and is not relevant here).

170.(1) An "exclusive use by-law", for a community titles scheme, is a by-law that attaches to a lot included in the scheme, and gives the occupier of the lot for the time being exclusive use to the rights and enjoyment of, or other special rights about--

(2) If an exclusive use by-law attaches to a lot that is another community titles scheme, the exclusive use or other rights are for the benefit of the other scheme.

171.(1) The common property or body corporate asset to which an exclusive use by-law for a community titles scheme applies must be--

(2) An exclusive use by-law that specifically identifies the common property or body corporate asset to which it applies, other than an exclusive use by-law contained in the first community management statement for the scheme--

(a) may attach to a lot only if the lot owner agrees in writing before the passing of the resolution without dissent consenting to the recording of the new community management statement to incorporate the exclusive use by-law, or the lot owner votes personally in the resolution; and

(b) may stop applying to the lot only if the lot owner agrees in writing before the passing of the resolution without dissent consenting to the recording of the new community management statement that does not incorporate the exclusive use by-law, or the lot owner votes personally in the resolution

In the matter of Platt v Ciriello (1997) QCA 33 (14 March 1997), the Court of Appeal had before it a dispute concerning various uses of common property by an owner, including the placement of café tables and chairs, display stands, advertising signs, and bins. The Court of Appeal found that the primary test for determining an owner’s use of common property is that of "unreasonable interference" (see section 167 of the Act). That is, an owner may exercise his general proprietary right to use common property so long as it does not interfere unreasonably with another’s use of their lot or the common property. This interference may not just be physical, it may, for example, include a consideration of the effect the use has on the appearance and aesthetics of the scheme generally. Also, even where the use may not be causing an unreasonable interference, the "exclusive use" test may apply in the circumstances to require the owner to only hold that use under an exclusive use by-law. That use was characterised by Ambrose J as being "the sort of exclusive use which a proprietor makes of his lot".

I have only given a brief overview of this case but it is sufficient for determining this matter.

My view is that the fence defines an area of common property for the purpose of it being used exclusively by the respondent as an extension of her lot. It can only remain, therefore, if the respondent, or more properly the owner of Lot 1, has the benefit of an exclusive use by-law over that immediate area of common property adjacent to the lot. Even beyond that, the fence itself would require a separate approval of the Body Corporate in terms of the nature of the fence to be built.

It would be a matter for the respondent to put a motion before a general meeting for such a by-law. The wording of the by-law and whether a survey of the proposed area is necessary or not (the discretion lies with the Registrar of Titles) are matters the respondent may need to seek assistance on. Such by-laws can be made conditional in regard to such matters as council approvals in relation to reduction in car spaces, a payment for the benefit (once only or annual fee), right exists for a limited period or whatever else the body corporate may require.

In a duplex, both owners would need to agree. Clearly, the applicant does not consent to the granting of an additional exclusive use area to the respondent. I accept the applicant’s statement that the initial stages of the fencing they saw, did not necessarily lead them to conclude that the respondent would continue the fences into the common property. I do not regard the applicant’s objection to the placement of the fence as unreasonable. The respondent has not offered me any material that persuades me that it is appropriate that the fences remain where they have been erected. I will order their removal from common property.

Car Spaces

This office has no jurisdiction in relation to the enforcement of council approval requirements.

However, in line with the issues considered under the heading "Fences" the respondent has not offered me any material that persuades me that is appropriate that they be permitted to encroach onto the common property, including the designated car parks.

I will order that the common property be reinstated to its former condition.

Electricity Control Panel

Schedule 6 of the Act provides that electricity supply is a utility service. Further, Schedule 6 says:

Therefore, the electricity meters are captured within the meaning of utility infrastructure.

Section 115O Land Title Act provides as follows:

115O Easements in favour of lots for utility services and utility infrastructure

(1) An easement exists in favour of a lot and against other lots and common property for supplying utility services to the lot and establishing and maintaining utility infrastructure reasonably necessary for supplying the utility services.

(2) However, the exercise of rights under the easement must not interfere unreasonably with the use or enjoyment of the lot or part of common property against which the easement lies.

The respondent has not demonstrated to me that the housing of Lots 2’s meter box within her lot is in any way interfering unreasonably with her use or enjoyment of her lot. Therefore in this case, there is a statutory easement in favour of the applicants for the meter and meter box to remain within the boundary of lot 1. The applicant has the benefit of a statutory easement in favour of lot 2 and against lot 1 and the common property, for that improvement which supplies utility services.

I will order that the meter box may stay in place, with no rent to be charged by the respondent.

^[1] For more detailed information on the role of the committee for a body corporate, and its functions, refer to the BCCM fact sheet The body corporate committee.

Number of Scheme:	22912
Name of Scheme:	Walaringah
Address of Scheme:	39 Binstead Drive SOUTHPORT QLD 4215

•	maintain common property in good condition, and to the extent that common property is structural in nature, in a structurally sound condition (Standard Module s.109);
•	administer the common property and body corporate assets, and enforce the by-laws for the scheme (s.94 Act); and
•	administer, manage and control the common property and body corporate assets (s.152 Act).

•	adopt an administrative fund budget and a sinking fund budget each financial year (Standard Module s.94);
•	fix contributions to be levied on the owner of each lot, based on such budgets, for the financial year (Standard Module s.95);
•	give each owner notice of the contributions due (Standard Module s.96); and
•	open an account with a financial institution in the name of the body corporate (s.151 Act) and keep there the "administrative fund" and the "sinking fund" (Standard Module s.100).

•	When a community titles scheme is established, a body corporate is created, and is the body corporate for the scheme; and
•	The members of the Body Corporate for a community titles scheme are the owners of all lots included in the scheme.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Walaringah [2006] QBCCMCmr 506 (9 October 2006)