Belhaven [2006] QBCCMCmr 65 (14 February 2006)

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Westgem Pty Ltd, the owner of Lot 1

I hereby order that within one month of the date of this order:

1. Westgem Pty Ltd, the owner of Lot 1 must pay to the body corporate for Belhaven community titles scheme 7950 the amount of $320.00 representing the cost of the installation of a security door at the entry to Lot 1 paid for from an account kept in the name of the body corporate.
2. Janice Waddell, the owner of Lot 2 must pay to the body corporate for Belhaven community titles scheme 7950 the amount of $320.00 representing an amount withdrawn by her without body corporate authorisation from an account kept in the name of the body corporate.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0714-2005

"Belhaven" CTS 7950

APPLICATION

This application is by Westgem Pty Ltd, the owner of Lot 1 (applicant) against Janice Waddell, the owner of Lot 2 (respondent). The applicant is seeking the following outcomes:

JURISDICTION

"Belhaven" Community Titles Scheme 7950 is a scheme under the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module).

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:

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)).

SUBMISSIONS

In accordance with the Act, submissions were called and a copy of the application was provided to the respondent. A submission was received from the respondent. The applicant made a written reply to submissions under section 244 of the Act.

DETERMINATION

"Belhaven" was established by the registration of Building Units Plan 7295 on 21 April 1986. With the commencement of the Act on 13 July 1997, a building units plan is now classified as a building format plan of subdivision under the Land Title Act 1994. A building format plan defines land using the structural elements of a building, including, for example, floors, walls and ceilings^[1]. Section 49C of the Land Titles Act 1994 provides that except to the extent permitted under directions of the registrar about the required format for a building format plan of subdivision, the boundary of a lot created under the plan, and separated from another lot or common property by a floor, wall or ceiling, must be located at the centre of the floor, wall or ceiling.

The body corporate’s general functions include administering common property and body corporate assets for the benefit of lot owners, enforcing the community management statement, and carrying out other functions given to the body corporate under the Act or the community management statement^[2]. The body corporate must act reasonably in anything it does under section 94(1)^[3]. The body corporate has all the powers necessary for carrying out its functions^[4]. The body corporate must administer, manage and control the common property reasonably and for the benefit of lot owners^[5]. Section 109(1) of the Standard Module provides that the body corporate must maintain common property in good condition. Section 109(2)(a)(ii) provides that the body corporate must maintain in good condition, doors situated in a boundary wall separating a lot from common property. Section 113 of the Standard Module makes provision for a body corporate making improvements to common property. Section 114 of the Standard Module specifies the conditions by which an owner may make improvements to common property and states that 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".

There is a security door at the entrance to each lot in the scheme. The applicant has recently installed a new security door at a cost to the body corporate of $320.00. The applicant claims that the respondent agreed to the installation of this security door. Subsequent to the installation of the door, the respondent withdrew $340.00 ($320.00 for security door and $20.00 for an overdraft fee).

Given the provisions of the Land Title Act 1994, the security door at the entrance to each lot is located on or adjacent to common property. As each door is located in a boundary wall separating the lot from common property, the body corporate has a maintenance obligation pursuant to section 109(2)(a)(ii) of the Standard Module. While this responsibility generally relates to the front door to a lot, it may include a security door where for example it is evident that the door was also installed at the time of construction of the building. In my view, this would be the installation of a security door at this time would be the only circumstance to bind the body corporate. A security door provides a benefit to an individual lot owner and other owners do not benefit from the existence of this type of door at the entrance to a particular lot in a scheme. That is, the installation of a security door is not for the general benefit of lot owners in keeping with a body corporate’s role. Consequently, unless it is indisputably evident from the circumstances that the security doors were installed at a time to obligate the body corporate, I consider that the lot owners are individually responsible for the maintenance (including the replacement) of the doors.

In my view, the time of the original installation of each security door is not clear from the material provided by the parties. The applicant submits the door is a body corporate responsibility as it is understood that the door was original given its style and condition. The applicant also submits that the body corporate is responsible as uniformity of doors enhances the appearance of the units. I do not consider that these factors indicate any body corporate obligation. The respondent has not provided any material regarding this issue. In my view, it is significant that the security doors were previously dissimilar given the applicant’s submission that the new door to Lot 1 was purchased on the basis that it matches the door at the entry to Lot 2 which is a modern style and in good condition. It would appear that the previous security doors were not similar in style or condition, implying that the doors were of differing ages and more importantly, were installed at different times. In addition, no material has been provided to evidence the previous installation of the doors was at the cost of the body corporate. Given these factors, I conclude that it is reasonable to expect that the doors were previously installed by the lot owners at a time after the scheme was established.

While section 114 of the Standard Module makes provision for a lot owner making an improvement to common property, By-Law 5 of the scheme By-Laws relates specifically to security devices and states, quote:

5 Damage to common property

(1) A proprietor or occupier of a lot shall not mark, paint, drive nails or screws or the like into, or otherwise damage or deface, any structure that forms part of the common property except with the consent in writing of the body corporate, but this by-law does not prevent a proprietor or person authorised by the proprietor from installing--

(a) any locking or other safety device for protection of his or her lot against intruders; or

(b) any screen or other device to prevent entry of animals or insects upon his or her lot.

(2) Provided that the locking or other safety device or, as the case may be, screen or other device is constructed in a competent manner, is maintained in a state of good and serviceable repair by the proprietor and does not detract from the amenity of the building.

In my view, the applicant and the respondent could install a security door on common property provided each person complied with By-Law 5. However, the maintenance and replacement of each door is at the cost of each lot owner individually and not the body corporate. Therefore, I have ordered that the applicant reimburse the body corporate for the cost of the installation of a new security door at the entrance to Lot 1. I have also ordered that the respondent reimburse the body corporate for the amount withdrawn from a body corporate account for a security door without body corporate authorisation. The respondent also withdrew $20.00 from the body corporate account for an overdraft fee. The reasoning for the withdrawal of this fee has not been explained and in my view further investigation is not necessary in the resolution of this dispute. While I have not made an order with respect to this amount, I would suggest that the parties discuss this payment and the amount should be paid to the body corporate by the respondent if she cannot indisputably show that the amount was paid as it represented a valid body corporate expense.

Both lot owners must recognise that the body corporate exists primarily for the management of common property. The lot owners, as the sole members of the body corporate, are responsible for the administration of the affairs of the body corporate. No one lot owner has, without the specific and proper authorisation of the body corporate, the authority to use or commit body corporate funds. The legislation has been established to ensure that processes are followed for a body corporate to decide to expend funds, including the convening and holding of a general meeting or a committee meeting. The keeping of accurate minutes of such meetings ensures that decisions are verifiable and eliminates disputes where one party considers an agreement was made between the owners. The financial management of the body corporate is a matter to be considered and determined by the body corporate. However, the body corporate must keep both an administrative fund and a sinking fund. The body corporate is not required to keep separate accounts for each fund and the monies for each fund are capable of being kept in ane account. In this instance, the body corporate would need to ensure that proper accounting is made of the monies paid into and from the account. With respect to the matter of both owners being authorised to sign on the body corporate account jointly, this is to be determined at a properly convened body corporate meeting.

Number of Scheme:	7950
Name of Scheme:	Belhaven
Address of Scheme:	8 Lavarack Cresent BUDERIM QLD 4556

(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.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Belhaven [2006] QBCCMCmr 65 (14 February 2006)