Heussler Gardens [2006] QBCCMCmr 70 (16 February 2006)

Last Updated: 19 December 2006

REFERENCE: 0794-2005

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	17032
Name of Scheme:	Heussler Gardens
Address of Scheme:	67 Heussler Terrace MILTON QLD 4064

TAKE NOTICE that pursuant to an application made under the abovementioned Act by John Auer, a co-owner of Lot 8

I hereby order that Motion 2 resolved as carried at the Extraordinary General Meeting dated 21 October 2005 is void.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0794-2005

"Heussler Gardens" CTS 17032

APPLICATION

This application is by John Auer, a co-owner of Lot 8 (applicant) against the body corporate (respondent) seeking an outcome to void Motion 2 of the Extraordinary General Meeting dated 21 October 2005 (EGM).

JURISDICTION

"Heussler Gardens" Community Titles Scheme 17032 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:

(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)).

INTERIM ORDER

The applicant had also sought an interim order that the resolution on Motion 2 at the EGM not be implemented until a final order is made.

On 17 November 2005, I made the following interim order, quote:

I hereby order that pending a final determination of this application, the Body Corporate for Heussler Gardens Community Titles Scheme 17032 (including through its Committee) shall not proceed with, implement or otherwise act upon the resolution made on Motion 2 at the Extraordinary General Meeting held on 21 October 2005.

This interim order has effect until 12 months have elapsed from the date of this order, a further interim or final order for the application is issued, or until the application is withdrawn, rejected or otherwise ended (whichever is the earlier).

SUBMISSIONS

In accordance with the Act, submissions were called and a copy of the application was provided to the body corporate manager for distribution to the owner of each lot (excluding the applicant) and the committee. A submission was received from the committee.

DETERMINATION

The applicant claims that:

• Motion 2 at the EGM does not disclose all the proposed work, including the improvements to some exclusive use areas. The quote accepted by the body corporate includes excavation work to some car spaces which will improve the space, and this cost of this work should be met by the benefiting lot owner.
• The common property driveway does require maintenance; however the car spaces do not need resurfacing.
• The maintenance of the exclusive use car spaces should be at the expense of the lot owners who have the benefit of exclusive use.

Submissions on behalf of the body corporate committee can be summarised as:

• While the car spaces are allocated as exclusive use, occupiers use the spaces "in a friendly and cooperative manner".
• The car spaces require maintenance as some damage has occurred, and having the driveway and car spaces resurfaced at the same time will "maintain an aesthetically pleasing exterior".
• Car spaces are proposed to be excavated to level the spaces and to provide sufficient head clearance. The current height of the spaces does not comply with the Building Code of Australia, and the body corporate is concerned about the possibility of litigation.

The Statement of Reasons for Decision for the interim order stated, quote:

The Minutes of the EGM indicate that Motion 2 was a motion with alternatives and that the body corporate resolved, by 8 votes to nil to accept the quotation from Ash Industries to resurface the car park and driveway and for the cost of the work to be paid from the sinking fund.

The plan of subdivision (BUP 102640) was registered on 7 June 1995 by the Registrar of Titles, Department of Natural Resources and Mines. Subsequent to the registration of the plan, the body corporate approved and registered three changes of by-laws in September and December 1995. The changes of by-laws related to allocating parts of the common property as exclusive use to lots included in the scheme. The registered by-laws:

1. Allocated a part of common property for the exclusive use of the owner or occupier of Lots 1 and 2, and 4 to 9.
2. Include conditions that the owner of the Lot with the exclusive use entitlement "shall not litter...create a nuisance or obstruction and shall be responsible at his/her expense for the performance of the duties of the body corporate under section 37(1)(c)(i) in respect of such part of the common property to which this By-Law applies".

At the time of the registration of the By-Laws, the Building Units and Group Titles Act 1980 (BUGTA) applied to the body corporate. Section 37(1)(c) of BUGTA states, quote:

37 Duties and powers of body corporate regarding property etc.

(1) A body corporate shall--

(c) subject to section 37A, properly maintain and keep in a state of good and serviceable repair (including, where reasonably necessary, renew or replace the whole or part thereof)--

(i) the common property

At the time of the making of the exclusive use By-Laws, the body corporate could impose conditions of this nature^[1]. With the commencement of the Act in 1997, these By-Laws continue to be included as By-Laws for the scheme^[2]. Section 123 of the Standard Module makes provision for the imposition of conditions in an exclusive use by-law. It is a function of the body corporate to enforce any by-laws for the scheme^[3]. While the body corporate has submitted that the exclusive use areas are informally shared between occupiers, the By-Laws apply and must be enforced.

While the body corporate has provided documentation that clearly indicates that it has disclosed to lot owners the proposal to resurface the common property, and has examined the issue carefully, the applicant has, even though he may have not participated in the decision making process, raised the question of the responsibility for the maintenance of the exclusive use areas, and this is a point requiring further consideration given the conditions imposed by the body corporate when the relevant By-Laws were made. Also requiring further consideration are factors such as the need to maintain the exclusive use areas, the reasonableness of maintaining both the driveway and the car spaces at the same time and the body corporate’s responsibility to carry out the approved excavation work given the conditions imposed in the By-Laws. I also note that 2 of the 10 lots in the scheme do not have the benefit of exclusive use of an identified part of the common property.

The determination of the responsibility for the maintenance of the common property, including the common property exclusive use areas is fundamental to the resolution of this dispute.

The body corporate is responsible under section 109(1) of the Standard Module to maintain the common property in good condition, including to the extent that common property is structural in nature, in a structurally sound condition. Consequently, the body corporate has an obligation to maintain those parts of the common property driveway which are not the subject of an exclusive use by-law.

By-Laws 12 to 19 of the scheme By-Laws allocates parts of the common property for the exclusive use of the owners of Lots 1, 2, and 4 to 9. Exclusive use by-laws of this nature can only be rescinded with the written consent of the benefiting owner and by resolution without dissent in general meeting^[4]. Therefore, the right of exclusive use can effectively mean that the subject area is largely an extension of the owner’s lot. The responsibility for the maintenance of the area reflects this position. Section 123(2) of the Standard Module provides that unless excused under the relevant by-law, the benefiting lot owner is taken to be responsible for the maintenance and operating costs for the part of the common property to which the exclusive use applies. As stated above, each By-Law includes the condition that the owner of the Lot with the exclusive use entitlement "shall be responsible at his/her expense for the performance of the duties of the body corporate under section 37(1)(c)(i) in respect of such part of the common property to which this By-Law applies". Given this condition, I consider that it is reasonable for the benefiting lot owners to assume a broad responsibility for the maintenance of the exclusive use area in return for their right to exclusively use part of the common property which is owned by all the lot owners^[5]. If it were otherwise then the other lot owners (including the owners of Lots 3 and 10 who do not similarly enjoy such a benefit) in the scheme would contribute to the maintenance of a part of common property that had no benefit for them.

While I understand that in this case, the lot owners and occupiers informally share the allocated areas, the fact remains that the By-Laws must be enforced. Therefore, I conclude that, given the terms of the By-Laws, the body corporate is not responsible for the maintenance of the parts of the common property allocated for the exclusive use of lot owners as proposed in Motion 2.
Consequently, the body corporate does not have the power to make a decision to resurface parts of the common property which have been allocated by By-Laws 12 to 19 within the terms specified in Motion 2 at the EGM. For this reason, I have ordered that the Motion is void.

It is apparent that the parts of the driveway not allocated as exclusive use require maintenance. The body corporate will need to obtain a quotation or quotations for this work and depending on the cost, present a proper motion or motions to owners. The owners who have the exclusive use benefit under By-Laws 12 to 19 will be responsible for the maintenance of their respective exclusive use areas. If the body corporate proposes to maintain the driveway, lot owners who have an obligation pursuant to exclusive use by-laws may choose to have their areas similarly maintained and may reach agreement with the body corporate under section 119 of the Standard Module. It should also be noted that the body corporate may carry out work required of a lot owner and recover the reasonable cost of the work from the owner as a debt pursuant to section 121 of the Standard Module. The committee has also raised the issue of the head clearance of some of the car spaces. Given the finding that the respective lot owners have individual responsibility for the maintenance of their respective exclusive use areas and have assumed that responsibility of the body corporate, I do not consider that the body corporate would necessarily be responsible for the maintenance of some exclusive use car spaces for this reason.

Given the informal nature of the use of the exclusive areas, the relevant lot owners and the body corporate may consider amending or rescinding the By-Laws. While this is a matter for the parties, it must be recognised that while the By-Laws remain in force, every effort must be made to comply with the By-Laws and lot owners must recognise their rights and obligations with respect to common property. Given the functions of the body corporate under section 94(1)(b) of the Act, the body corporate has the power to enforce the By-Laws under sections 182 to 188 of the Act. It may also be necessary to properly identify the lot which has the use of each car space to ensure that only the person with the right makes use of the space.

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^[1] Section 30, BUGTA.
^[2] Section 339(5), Act.
^[3] Section 94, Act.
^[4] Section 171(2)(b), Act.
^[5] Section 35(1), Act.