Aarons [2006] QBCCMCmr 661 (15 December 2006)

Last Updated: 27 March 2007

REFERENCE: 0346-2006

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	11476
Name of Scheme:	Aarons
Address of Scheme:	3355 Gold Coast Highway SURFERS PARADISE QLD 4217

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Lee Parker Pty Ltd, the Owner(s) of lots 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 13, 14, 15, 16, 17, 18, 20, 21, 22, 24, 25, 26, 27, 28, 30, 31, 32, 33, 34, 36, 37, 38, 41, 42 and 43.

I hereby order that: 1. Kathryn Margaret and Robert Charles James (the respondents) are to vacate the exclusive use car space areas 2 and 33 and, at their own cost, remove all cladding surrounding these areas within 3 months of the date of this order; and 2. The respondent may retain the cladding around exclusive use car space 1 and enclose any surface that is exposed due to compliance with the above order; and 3. Within 3 months the respondent is to remove its items from the caged area near car space 15, subject to: a. successfully formalising an authority with the Body Corporate for occupation of the sauna area by the respondent as resident manager; and b. dismantling of the cage around the area in question, at the expense of the Body Corporate, with dismantling not to occur before 3 months has elapsed from the date of this order. 4. The cage around the area near car space 15 must not be dismantled unless the respondent successfully negotiates occupation of the sauna area with the Body Corporate. I further order that the application is otherwise dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0346-2006

"Aarons" CTS 11476

Application

Lee Parker Pty Ltd, the Owner(s) of lots 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 14, 15, 16, 17, 18, 20, 21, 22, 25, 26, 27, 28, 30, 32, 33, 34, 36, 37, 38, 41, 42 and 43 (the applicant) seeks the following orders against:

1.	A declaratory order that each lot owner in the scheme is entitled to the exclusive use of the exclusive use area (or areas) allocated to them in Schedule E of the CMS.
2.	That Kathryn Margaret and Robert Charles James (the respondents), within seven days from the date of this order, remove all boarding, rubbish and other materials for which it is responsible from the arrears allocated as car spaces to lots 1, 2 and 33.
3.	That the respondent, within seven days from the date of this order, remove all boarding, rubbish and other materials being stored by it from the area allocated as a car space to lot 15.
4.	That the car space, renumbered by the respondent as belonging to lot 2, be immediately renumbered to reflect its allocation to the owner of lot 33.
5.	That the car space, renumbered by the respondent as belonging to lot 5, be immediately renumbered to reflect its allocation to the owner of lot 36.
6.	That any materials or items being stored on the common property by the respondent without appropriate authority from the body corporate be removed within seven days of the date of this order.

Jurisdiction

Aarons CTS 1176 is a 44 lot building units plan registered under the Body Corporate and Community Management Act 1997 and is operating under the Body Corporate and Community Management (Accommodation 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

(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)).

Grounds

I have taken the liberty of taking background material on this matter from the previous file 0518-2005, which dealt with the same matters. That application failed on the basis that a continuing contravention notice had not been issued by the Body Corporate.

The applicant, Lee Parker Pty. Ltd. ACN 101506870, owns 35 of the 44 lots in the scheme and I believe exercises some control over a further 4 lots^[1]. The most recent Community Management Statement for the scheme, registered with the Department of Natural Resources on 31 May 2000, provides for the allocation of exclusive use areas to each of the lots as parking spaces.

By law 32 states that:

The owner for the time being of each lot in the Scheme shall be entitled to the exclusive use for himself and his licensees of the car space or spaces as identified for each lot in Schedule E and on Plan A thereto, PROVIDED THAT in respect of those car spaces allocated pursuant to this by-law, the Committee is hereby authorised to vary the allocations so made and to transpose car spaces from one lot to another lot at any time and from time to time on the written request of the owners of the lots involved.

The applicant has set out in the following table format the problems associated with the way various exclusive use areas are used:

Area	Description	Problem
B	36	Lot 36 has been allocated 2 car parking spaces but someone has re-allocated one of these spaces to lot 5.
C	35	Lot 35 has been allocated 2 car parking spaces but someone has re-allocated one of these spaces to lot 2.
D	1, 2 & 33	The car parking spaces allocated to these lots are boarded up and used by the resident caretaker and letting agent or as directed by them for storage purposes. It is claimed that the area is being use to store rubbish which is a fire and vermin hazard.
E	39	Photos show that a pile of bricks is stacked in the far left hand corner of the car space.
F	15	The car parking spaces allocated to lot 15 is used by the resident caretaker and letting agent for storage purposes and cannot be used by the owner of lot 15.
G	Common property to right of lot 15 car park space	It is claimed that although this area is common property, it has been caged off and is used by the resident caretaker and letting agent for storage purposes.
H	11, 12 & 24.	It is claimed that although the area between these car spaces is common property, it has been caged off and is used by the resident caretaker and letting agent or as directed by them for storage purposes. It is considered that use for storage purposes is unauthorised is hazardous and unapproved.

Supporting photographs are supplied.

They say the relocation of car spaces is in breach of the CMS as the owners who were allocated these exclusive use areas should have clear access. Further, the storage of building debris and other rubbish means owners cannot use or give use of the areas.

There is also concern that the enclosing of common areas and storage of items such as milk crates and other matter are a vermin and fire hazard.

A continuing contravention notice was issued on 15 December 2005, pursuant to a resolution of the committee. At that meeting, the committee was composed of Mark Howard, the managing director of Lee Parker Pty Ltd, Shane Corbel, Ron Merrick (with a proxy from Casuarina Lifestyles Pty Ltd’s nominee), Rachael Sparks and Bettina Salarda.

Submissions

Two submissions were received. One was from the owners of lot 29 who say that since they bought their unit 18 years ago areas B, C, D, F and G have been rooms for use by the owners and the 5 different resident managers that have moved through the complex in that time. They state that these areas have been of tremendous importance in storing and keeping safe personal belongings while owners are not in residence. These storage areas are also said to house a store of old whitegoods which are used for spare parts and other furniture items. They state many owners have stored chattels in these areas at time of renovation and the like.

They say it would be very unreasonable if the current managers were deprived of the linen/cleaners room housed area G, when previous managers have all had access.

The resident managers have engaged Macrossans Lawyers to make their submissions. In a decision dated 20 January 2006^[2], Adjudicator Meek ordered that:

Margaret Howard, Ron Merrick, Rachael Sparks and Bettina Salarda are hereby declared not to be members of the committee of Aarons Body Corporate and shall take no further involvement whatsoever in the affairs of the committee.

The adjudicator then ordered that certain owners, including Mr Howard the owner of Lee Parker Pty Ltd and the owner of Casuarina Lifestyle Pty Ltd, be members of the committee.

The respondent’s solicitor gives a brief outline of the dysfunctional nature of the committee and of the history of disputes of the scheme. They allege that there has been a history of poor management of the scheme before the arrival of the respondent and suggest that the 25 year old reallocations of the exclusive use areas is due to prior management.

The respondent acknowledges that the intention of the applicant must be to redevelop the property. They say this intention is why the allocation of the areas cannot be negotiated without contention. They say there are sufficient parking spaces available to meet the needs of guests and residents and as a non-resident owner, the applicant does not suffer any hardship. They suggest it would be just and equitable for the adjudicator to make an order to conclude any ongoing disagreement.

They also point out, that as a purchaser since this application was first attempted under file 0518-2005, the applicant was on notice that the allocations were not currently functioning in accordance with the CMS.

In relation to the notice of continuing contravention they state:

•	Area F is not used by the respondents for storage purposes "all in all" and there is no contravention of by-law 32 by the respondent;
•	The allegation that part of area C has been allocated to lot 2 is between the owner of lot 35 and lot 2 (the applicant) and there is no contravention of by-law 32 by the respondent;
•	The allegation that part of area B has been allocated to lot 5 is between the owner of lot 36 (the applicant) and lot 5 (the applicant) and there is no contravention of by-law 32 by the respondent;
•	No inappropriate or hazardous materials are stored in the areas specified in the notice of continuing contravention;
•	Area D is used by the respondents consistent with their role as resident managers. They state that there is no breach of by-law 32 in respect to lots which they own. They say its location is appropriate for the resident managers and that it has been sued this way for 25 years.
•	They argue that as the applicant had the aim of acquiring the site for redevelopment, the registered exclusive use areas did not go to the essence of his reasons for buying lots 2 and 33;
•	They state that the applicant has not made out any hardship suffered as a result of the use of lots 2 and 33;
•	They say the allocation of other exclusive use areas would address the problem and attach an alternate plan of exclusive use allocation;
•	They say if the applicant is successful, alternate arrangements for the resident managers will need to be made, and this is far more complicated.

In summary they suggest:

(a)	That by-laws relating to exclusive use areas be amended to:

(i)	Reflect the existing use of car parks and common property by the respondents (plan attached) and particulars of which are as follows:

(1) Caged area – 3^rd bay south of allocated space for lot 15 (G);
(2) Linen room – currently unallocated common property (H);
(3) Store room allocated car spaces for lots 1, 2 and 33 (D);
(4) Reception annex.

(ii)	Allocated the owners of Lots 35 and 36 two unallocated spaces between car space allocated for Lot 15 and the caged area.

(b)	That within three months the committee of the Body Corporate register a new community management statement reflecting the amended by-law.

While no reference is made in the submission, a letter to the applicants is also attached dated 5 October 2005. It suggests that the original developer has in effect reallocated these exclusive use areas in accordance with by-law 32 and that this took place around 25 years ago.

They say that the premises are regularly inspected by professional fire safety and pest control authorities who have certified that the complex complies with all relevant regulations. I note that in the applicants old file, they have provided the opinion of a private certifier that disputes this (dated 21 November 2005).

While they have not addressed this issue in the current application, in the previous submissions, the respondents state they have nothing to do with the materials in area 39, which was left by contractors engaged and paid by the Body Corporate.

Determination

Area B

I agree with the respondents’ submission that the use of the owner of lot 5 of part of the exclusive use area of lot 36, is between the owners of those 2 lots. In this case, both owners are the applicant. If the applicant wishes to have the lots renumbered, they should formally make this request to the Body Corporate.

Area C

The respondents seek to raise the same argument in relation to the allocation of Part of Lot 35’s exclusive use area to lot 2. While I agree that the owner of Lot 2 has jurisdiction to dispute the use of his allocated lot by another, I do not agree that there is a dispute here unless the owner of Lot 35 has a complaint in relation to the owner of Lot 2 using a portion of his allocation.

As the applicant in this matter is not the owner of lot 35, I will not make any orders in relation to this area.

If the applicant wishes to have the lot renumbered, they should formally make this request to the Body Corporate.

Area E

The applicant is not the owner of Lot 39 and therefore it has not been demonstrated to me that the owner of Lot 39 has an objection to the materials deposited in the area. Further, the applicant has not in my mind demonstrated their basis for placing the blame for the materials abandoned on Lot 39 to the respondents.

As the applicant in this matter is not the owner of lot 39, I will not make any orders in relation to this area.

Area F

The applicant is the owner of this area. The respondent states that Area F is not used by the respondents for storage purposes "all in all". While I accept that it is likely that milk crates in the photos taken in January 2005 and a wheelbarrow in the photo taken in March 2003 may have been the responsibility of the respondents, the applicants have not demonstrated to me that:

•	the respondent currently uses the area to store milk crates, a wheelbarrow or other items; or
•	that the respondent is responsible for other items in the area such as the sun beds, push bike or table in the photo of March 2005.

In the absence of any proof that the applicants continue to be responsible for materials left in the area, I will not make orders in relation to the area. However, it is clear that the respondent should not be storing items in this area.

Area D

The applicant owns 2 of the lots that are occupied by the respondents and it appears, the lots are inaccessible to the applicant.

I note that the applicant became the registered owner of lot 2 on 3 August 2006 and the registered owner of lot 33 on 15 September 2003. While the respondent has been in occupation of these areas for a substantial period of time, the allocation of these areas to the applicant is recorded on the community management statement. The respondent has not in my mind provided compelling argument as to why their preference to occupy this area given the nature of a large number of the items stored in the areas. In these circumstances it is inappropriate for an adjudicator to reallocate exclusive use areas from one lot to another and also inappropriate given the application of Section 89 of the Body Corporate and Community Management (Accommodation Module) Regulation 1997 which is discussed below.

I will order that the respondent vacate exclusive use areas 2 and 33 and dismantle the cladding surrounding the areas. I will order that the respondent may continue to enclose Lot 1, based on the acquiescence of the Body Corporate over at least 17 years. However, I will allow a just and equitable period of time to enable the respondent to make alternate arrangements through other processes e.g. appropriateness of providing owners with a storage facility, collection of items by relevant owners, negotiation of an alternate authorised area from the Body Corporate or, if necessary, dispute resolution.

Areas G and H

While the respondents allege that these areas have been used for storage purposes for the last 25 years, at least 17 years of this type of usage has been corroborated by the owners of Lot 29.

These areas warrant different considerations to the exclusive use areas, as they relate to non-exclusive use areas of the common property.

The respondents’ solicitor has furnished a statement saying that area H is currently used as a linen room. Photos of area G reveal items that appear to include cupboards, a ladder, and perhaps some garden implements and stage bins.

In the 1997 Body Corporate and Community Management legislation, specific provisions were incorporated to regulate the operation of letting and service contract agreements. Manager/caretaker agreements are invariably "service contract" agreements and therefore subject to regulation. One such regulation precludes letting agents and service contractors from occupying common property for the purposes of performing obligations under their agreement, except under a prescribed "occupation authority".

Section 89 of the Body Corporate and Community Management (Accommodation Module) Regulation 1997, which is the regulation module adopted by "Aarons", provides at subsection (1) –

ú
Occupation of common property by service contractor or letting agent [SM, s 91]

89.(1) The body corporate may, by ordinary resolution, give a person (a "property occupier" ) who is a service contractor or letting agent an authority (an "occupation authority") to occupy a particular part of the common property for particular purposes necessary to enable--

(a) if the property occupier is a service contractor--the property occupier to perform obligations under the property occupier’s engagement as a service contractor; or

(b)	if the property occupier is a letting agent--the property occupier to operate as a letting agent.

Example--

The body corporate might authorise a letting agent to occupy a particular part of the common property as a reception area, or a caretaker to occupy a shed on the common property for storage of tools and garden implements.

Sub-section (7) then states that an "occupation authority" under this section is the only way in which a letting agent or service contractor may occupy common property –

(7) A service contractor or letting agent may acquire rights to occupy part of the common property for the purpose of the service contractor’s engagement or letting agent’s authorisation, only under this section.

That is, neither can occupy common property under, for example, a lease, an exclusive-use by-law or a licence. The purpose of the provision is to avoid the unsatisfactory situation of a letting agent or contractor continuing to have rights over part of the common property even though their agreement may have expired or been terminated.

I note that I interpret this provision as in no way jeopardising the exclusive use allocation of the car park attaching to the manager’s lot.

However, I regard this provision of the Act as excluding an adjudicator from making the exclusive use allocations suggested by the respondents.

The use of part of the common property by the resident manager for storage purposes seems a sensible and necessary proposal, providing the position and area is reasonable for the purpose, and it can be simply achieved by the body corporate granting an "occupation authority" by ordinary resolution of the body corporate in general meeting (see section 89(1) above).

In the subsequent submissions, the applicant has indicated they have no objections to the respondent continuing to occupy area H, therefore I will dismiss the application in relation to that area and suggest to the respondent’s that they make application to the Body Corporate to formalise the arrangement.

In relation to area G, the respondents again refer to the storage of owner and other items and also the protection of utility boards within the cage. The applicant argues that it is not necessary to enclose an entire lot for the purpose of protecting utility boards and that much of the equipment stored in the area is unwarranted. I note that the protection of utility boards is for the benefit of the Body Corporate as a whole.

I observe that the applicant has expressed in principle support for the respondent to occupy the disused sauna area.

In this regard, if will order the respondent to remove its items from the area, subject to the following:

•	successfully formalising an authority with the Body Corporate for occupation of the sauna area; and
•	dismantling of the cage around the area in question, at the expense of the Body Corporate (given the presence of the utility boards), with dismantling not to occur before 3 months has elapsed from the date of this order.

Parties should note that both events must occur in order for the respondent to be required to vacate the area (subject of course to new developments or convincing evidence that the items stored pose an unacceptable fire hazard).

I will further order that the cage must not be dismantled unless the respondent successfully negotiates for occupation of the sauna area with the Body Corporate.2n

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^[1] Refer decision 0430-2006
^[2] 0679-2005