Q1 [2007] QBCCMCmr 131 (8 March 2007)

Last Updated: 12 March 2007

REFERENCE: 0870-2006

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	34498
Name of Scheme:	Q1
Address of Scheme:	QUEENSLAND

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

Ken McCarthy, the Owner(s) of lot 1908

I hereby order that motion 2 of the extraordinary general meeting of 10 August 2006 (adjourned from 6 April 2006) is deemed to be passed and the body corporate is authorised to record a new community management statement to incorporate the changes proposed by that motion.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0870-2006

"Q1" CTS 34498

Application

Q1 Community Titles Scheme (Q1) is a 526 lot scheme under the Body Corporate and Community Management Act 1997 (Act) and the Act’s Accommodation Module Regulation (Accommodation Module).

This application is by Ken McCarthy, an owner of lot 1908 (applicant) seeking orders against the body corporate for Q1 (respondent). The applicant is seeking an order to give effect to a motion proposing to amend the exclusive use by-laws despite five owners voting against the amendment. The proposed amendment is to allow an owner or occupier to install a storage device within their allocated exclusive use car park. The storage device to be of a type, design and colour, as approved by the committee in writing prior it installation and subject to conditions set by the committee.

Submissions

The applicant’s main submissions were to the effect that:

• The proposed amendment to the by-law does not require each owner to install a storage device. It merely gives owners with exclusive use areas the ability to install storage devices subject to consent in writing from the committee;
• The dissenting voters are no prejudiced by the motion being carried and there is no valid reason for voting against the motion;
• The installation of storage devices is in the best interests of the body corporate as a whole and owners who do not want the devices do not need to install them; and
• Preference should be given to the wishes of the overwhelming majority where it does not dilute or detract from the rights of the dissenting voters.

The committee indicated it was in full support the proposed amendment to the exclusive use by-law to allow for the installation of storage devices. Other owners also made submissions in support of allowing the installation of storage devices.

Only the owners of one lot made a submission opposing the changes to the by-laws to allow for installation of storage devices. This submission was to the effect that they originally supported the change to the by-law but are now opposed because:

• The car parks would become unsightly;
• Extra obstacles will make it harder to keep the car parks clean;
• It will be more difficult to walk between the parking bays;
• A common use bicycle storage area would be better.

Decision

Overturning opposition to a motion

Order of an adjudicator

An adjudicator may make an order that is just and equitable in the circumstances to resolve a dispute (Act, 276). The present dispute has arisen because five votes were exercised against a proposed amendment to the by-laws in a situation where the proposed changes were to an exclusive use by-law and would have required a resolution without dissent. The applicant claims that this opposition to the wishes of the overwhelming majority is unreasonable and has sought an order on a just and equitable basis to overturn this opposition. A specific example of an order an adjudicator may make is an order giving effect to a motion requiring a resolution without dissent if the resolution without dissent was not passed because of opposition that in the circumstances is unreasonable (Act - Schedule 5, Item 10).

The appropriate test

The question for me to determine is whether the five votes that prevented the exclusive use amendment motion from passing constituted "opposition that in the circumstances is unreasonable".

The appropriate test is to determine whether it is just and equitable to override the opposition because the opposition was unreasonable when viewed objectively. I do not consider there is any particular formula or test for reasonableness and note that the High Court has supported a view that a paraphrase can place an unwarranted gloss on relatively plain words applying a test of reasonableness.^[1] The preferred approach is to determine objectively whether the votes against the proposed amendment of the exclusive use by-laws constitute opposition that in the circumstances is unreasonable.

In determining whether votes against a motion constitute opposition that in the circumstances is unreasonable it is necessary to consider all the material facts. What is material will vary from case to case but typically the requirement for an adjudicator to make a just and equitable decision involves some balancing of the interests of the majority and minority and raises questions of fairness.^[2] It is relevant to consider if any minority opposing the proposal will suffer any real prejudice if their objection is overruled.

Proposed new exclusive use by-law

Exclusive use amendment motion

The core of this dispute is motion 2 at the extraordinary general meeting of 10 August 2006, as adjourned from 6 April 2006, proposing to amend the exclusive use by-laws (exclusive use amendment motion).

The by-law gives relevant owners exclusive use of areas of the common property for the purpose of car parking. The proposed amendment provides that "An Owner or Occupier may install a storage device of a type, design and colour, approved by The Body Corporate Committee in writing prior to installation, which may be subject to conditions set by the Body Corporate Committee, within their allocated exclusive use carpark" and a provides for the relevant owner or occupier to carry out maintenance duties in regard to the storage device.

No reasons provided for votes against the amendment

All owners have been given an opportunity to make a submission in respect of this application. The body corporate manager confirmed on 8 December 2006 that copies of relevant material had been mailed to owners. I have no hesitation in overruling opposition on the basis it is unreasonable where no submission has been provided to justify the opposition.

Submission opposing the amendment

The owners of one lot have provided a submission opposing the application. It is not clear that these owners actually exercised a vote against the motion in which case it may be technically unnecessary to make any order overruling their opposition. However, in any event, I have concluded that the reasons they have provided for opposing the amendment are unreasonable in the circumstances.

These circumstances include the large degree of support for the proposal by other owners, the relevant owners already having exclusive use rights over the areas upon which they would be installing the storage containers, and the likely minimal impact on other owners by allowing storage containers on areas already for the exclusive use of the owner. In this respect, I note that the proposed amendment requires committee approval for storage boxes and allows the committee to set any relevant conditions. This would allow the committee to deal with any potential issues including impacts on cleanliness, storage of potentially dangerous materials, and potential positioning of storage boxes immediately against the edge of an exclusive use area where it may make it more difficult for adjacent occupiers to get in and out of their cars.

I do not find persuasive the objection that the car parks may become unsightly given the proposed amendment allows the committee to approve a particular design and given the absence of any evidence that the car park areas are of great aesthetic value. I also do not consider a preference for a common bicycle storage area to be sufficient to justify opposition to individual storage boxes and note that consideration of a common bicycle storage area can be considered in addition to the present proposal to allow individual storage boxes.

Order

In summary, I have considered the submissions in their entirety. The proposed change is relatively minor to allow for an additional use of existing exclusive use areas. Particularly relevant is the submission that preference should be given to the wishes of the overwhelming majority where it does not dilute or detract from the rights of the dissenting voters.

Having considered the submissions and circumstances in their entirety I have formed the view that, objectively speaking, the opposition to motion 2 was opposition that in the circumstances was unreasonable. I am therefore satisfied that it is just and equitable to make an order giving effect to the motion as proposed.

---

^[1] McKinnon v Treasury [2006] HCA 45 per Hayne J at paragraph 61. Waters v Public Transport Corporation [1991] HCA 49; (1991) 173 CLR 349.
^[2] Points North, Order 0261-2004, CJ Carrigan, 2 September 2004 at paragraph 44. Ocean Plaza Apartments, Order 0262-2004, CJ Carrigan, 23 September 2004 at paragraph 26.