Glades Easthill North [2006] QBCCMCmr 551 (30 October 2006)

Last Updated: 19 December 2006

REFERENCE: 0678-2006

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	32506
Name of Scheme:	Glades Easthill North
Address of Scheme:	Easthill Drive ROBINA QLD 4226

TAKE NOTICE that pursuant to an application made under the abovementioned Act by David Huddy, a co-owner of lot 28, and Andrew Albert Crawford Butlin, a co-owner of lot 48,

I hereby order that resolution 17, purportedly passed by special resolution of the body corporate at the annual general meeting held on 13 July 2006, which purported to authorise a change to by-law 41.7 and consent to the recording of a new community management statement reflecting that change, was at all times void. I further order that the body corporate is to, within one month of the date of this order, lodge a request to record a new community management statement (replacing community management statement dealing number 709930742) that records by-law 41.7 as it was recorded in the community management statement prior to the existing one. I further order that this application is otherwise dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0678-2006

"Glades Easthill North" CTS 32506

Scheme

"Glades Easthill North" was registered as a building format plan of subdivision in 2004. It now comprises 80 lots and common property. It is regulated by the Body Corporate and Community Management (Accommodation Module) Regulation 1997 (the Accommodation Module).

Application

This application is brought by a co-owner of lot 28, David Huddy and a co-owner of lot 48, Andrew Albert Crawford Butlin (the applicants) against the body corporate, seeking the following orders:

That the resolutions at the Body Corporate Annual General Meeting of 13 July 2006 to make amendments to Exclusive use by-laws 41.4 and 41.7 of the scheme be set aside.

Also, that any attempt to register a new Community Management Statement (CMS) that embodies the above amendments be rejected or cancelled.

The applicants’ grounds were to the following effect:

• At the AGM on 13 July 2006, the agenda and voting paper included two motions (16 and 17) that sought amendments to Exclusive Use by-laws of the scheme and also sought consent for the necessary steps to register a new CMS incorporating these Exclusive Use by-law wording changes.

• The motions were put to the meeting as special resolutions. Motion 16, after minor amendment from the floor, was recorded as resolved by 23 votes in favour to 10 against, with no abstentions. Motion 17 was recorded as resolved by 25 votes in favour to 6 against, with 2 abstentions.

• The effect of the motions is to transfer decision making power on certain matters from the body corporate in general meeting to the committee.

• It is anticipated that the committee will attempt to use the by-law changes to give retrospective approval to an illegal structure the subject of dispute resolution application 0312-2006. (This application has since been determined.)

• Section 62(2) of the Act requires that consent to recording a new CMS must be in the form of a resolution without dissent.

• Since motions 16 and 17 received a number of dissenting votes, it is submitted that those motions in fact failed and any attempt to register a new CMS that incorporates those amendments is without the necessary legal authority, in that it directly contravenes section 62 of the Act.

Submissions

Submissions in response to the application were sought from all owners (excluding the applicants) and the committee. Four submissions were received – three from owners and one from the committee. One owner supported the applicants. Two owners and the committee opposed the making of the orders sought. The two owners made submissions to the following effect:

• The amendments are aimed at allowing permission for some alterations, improvements and additions to exclusive use common property to be approved at committee level, rather than awaiting approval by the body corporate in general meeting.
• These changes will make for smoother running of business for the committee, enabling them to give speedier approvals to matters requiring their consideration. This may mean giving more power to the committee, but they have been elected to do this job, so we should let them got on with it.

The committee submitted as follows:

• In the case of by-law 41.4 (Motion 16) the body corporate committee wished to make it clear in the by-laws that reference to the "body corporate" is (as per the wording of the Act) reference to the body corporate committee, not a general meeting of the body corporate.
• In the case of by-law 41.7 the body corporate committee were of the opinion that as various approvals had been made in the past for the construction of pergolas and the like in courtyards it was no longer necessary to continually refer to a general meeting on each occasion that an owner wished to make such an improvement.

The committee noted that the CMS embodying the changes to the by-laws approved at the AGM was lodged for registration on 28 August 2006, prior to their receipt of the dispute resolution application and was registered on 12 September 2006.

The applicants exercised their right to inspect the submissions made and submitted a reply.

Jurisdiction

This is a dispute which falls within the dispute resolution provisions of the Act.^[1]

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)).

Decision

The applicants base their arguments on section 62(2) of the Act, which requires the consent to the recording of a new CMS to be in the form of a resolution without dissent, where changes to exclusive-use by-laws are concerned. They further state that although subsequent paragraphs list some exceptions to this requirement, changes to exclusive-use by-laws are explicitly excluded from these exceptions in section 62(3)(a). Moreover, it cannot be substantiated that these attempted exclusive-use by-law changes are of no substance under section 62(4)(i) given that a quite minor wording change produces a very significant change in the rights of lot owners such that it deprives owners of the right to have a say on matters of importance.

The committee responded by stating that while motions 16 and 17 did vary by-laws relating to exclusive-use areas, they did not change the allocation of exclusive-use in any way and did not change owners rights in regard to the use of exclusive use areas. In the case of motion 16, it did not even amend the meaning of the by-law.

Via motion 16, the body corporate sought to amend by-law 41.4 to the following (by inserting words in bold):

14.4 Subject to by-law 41.6 the rear courtyard exclusive use areas granted under this by-law are to be used by the occupiers of each lot as garden and courtyard area only and provisions of by-law 5 shall be observed by each occupier. Each occupier has the permission of the Body Corporate to make an improvement to the exclusive use rear courtyard area to install:

•	An air-conditioner unit and attachments and/or
•	A hot water system and/or
•	A satellite dish

To the occupier’s lot, provided the consent of the Body Corporate is first obtained at a meeting of the committee. In granting its consent, the Body Corporate may impose conditions on the style, size, and colour of the proposed additions permitted under this by-law. Any satellite dish must be appropriately screened to ensure there is no adverse impact on the visual amenity of the lot or the scheme land.

Motion 16 was deemed passed by special resolution on the basis of 23 votes for and 10 against.

I agree with the submission of the committee that the effect of motion 16 was not of any substance and therefore the exception to the requirement for a resolution without dissent in section 62(4)(i) of the Act applied. Section 100 of the Act details the power of a committee to act for the body corporate. Section 101(1) specifically states that a decision of the committee is a decision of the body corporate. Therefore, even without the amendment to by-law 14.4 by inserting the words "at a committee meeting", the consent of the committee would have been sufficient. Not even a special resolution was required. In fact, the committee could have consented to this change themselves without going to a general meeting on the issue.^[2]

Via motion 17, the body corporate sought to amend by-law 14.7 to the following (see words in bold):

14.7 Owners of lots which have an exclusive use yard area are authorised to make an improvement to that exclusive use area to install a pergola over the exclusive use area. The style, design and colour of the pergola shall be consistent with the lot to which the exclusive use area attaches, shall not detract from the amenity of the scheme and be according to plans approved by the Body Corporate at a committee meeting (instead of "by ordinary resolution in general meeting"). The owner of such lot shall also have the special right to affix the pergola where reasonable to the common property on the outside of the lot. The owner of the lot shall ensure that the pergola matches the colour and style of the dwelling and be of a high quality of design and workmanship. The occupier shall repair and maintain the pergola so that any part of the pergola visible from outside the lot is kept in an attractive state. An occupier shall not, except with the consent in writing of the Body Corporate, change the size, type or colour of pergola once constructed.

Motion 17 was deemed passed by special resolution on the basis of 25 votes for, 6 against and 2 abstentions.

I agree with the applicants in the case of motion 17, that a change of some substance resulted. The approval of the relevant plans is expressly removed from the body corporate in general meeting (by passing an ordinary resolution) and placed in the hands of the committee. This is a substantial change in the approval process for pergola plans and alters owners’ rights. I agree with the applicants that motion 17 should have been passed by a resolution without dissent in order to have been successful. The voting results show that a resolution without dissent would not have passed. I have therefore ordered that resolution 17 of the AGM held on 13 July 2006 is void and of no effect. Accordingly, the body corporate must lodge a new community management statement removing by-law 14.7 in its current form and including by-law 14.7 as it was recorded in the previous version of the CMS.

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^[1] See ss.226, 227 & 228.
^[2] See section 62(7) Act