Figtree [2007] QBCCMCmr 167 (21 March 2007)

Last Updated: 2 April 2007

REFERENCE: 0830-2006

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	21687
Name of Scheme:	Figtree
Address of Scheme:	QUEENSLAND

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

Ms Ellen Poynton, the Owner(s) of lot 8

I hereby order that the application for an order: "That the resolution (of the committee) to replace Mrs Poynton’s fence with a Colorbond fence be declared invalid as it was not a special resolution of all residents and the new fence constitutes an ‘improvement’ which requires a special resolution. That the fence between Lot 8 (no 32/26 Elliott Street) and Figtree East be left as it is", is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0830-2006

"Figtree" CTS 21687

Application

The applicant, Ellen Poynton, the owner of Lot 8 (the applicant) has sought the following interim order of an adjudicator:

"That all work on replacement and improvement of fence between Lot 8 (32/26 Elliott Street) and Figtree East Lot 1 be ordered to be stopped".

In addition, the applicant has sought the following final orders:

"That the resolution (of the committee) to replace Mrs Poynton’s fence with a Colorbond fence be declared invalid as it was not a special resolution of all residents and the new fence constitutes an ‘improvement’ which requires a special resolution.

That the fence between Lot 8 (no 32/26 Elliott Street) and Figtree East be left as it is."

The Scheme

Figtree CTS 21687 is a 24 lot scheme registered under the Body Corporate and Community Management Act 1997 and is operating under the Body Corporate and Community Management (Standard Module) Regulation 1997. Typically, this module is intended for residential arrangements. Figtree is registered under a Group Titles Plan of Subdivision, now known as a Standard Format Plan.

Jurisdiction

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 quote the application grounds as follows:

The issue has arisen out of a series of decisions that began in 2004. (A copy of the minutes of the Committee Meeting of 23 July 2004) shows that the Committee started to look into the fencing issue in July 2004. By October 2004 the committee had decided that some sections (note they don’t refer to the entire fence) that "some sections" of the boundary fence with Fig tree East needed to be replaced.

The fence between Figtree East and Mrs. Poynton’ s property at Lot 8 which is No 32/26 Elliot Street was replaced five years ago in 2001 as it was at that time in disrepair. The BC Committee kindly replaced it with very good quality wood. The fence remains in excellent repair. See Foto 1. and Foto 2.

It was a strange decision to replace parts only of a rustic wooden ranch style fence with a colorbond steel fence. This seems to be a decision that is either irrational or a calculated plan to do away with the rustic ranch style fence without saying so and without putting it to the owners. Who came up with the colorbond idea is not articulated but seem at odds with the "some sections" concept. This is the start of an irrational and unsupported sinister change to the concept and style of the Figtree/Figtree East complex.

In January 2005 the Committee without notice of the "improvement" and required Special Resolution vote --with notice to all owners - decided to replace ALL the rustic wooden boundary fences with steel colorbond. This included fencing the areas that allowed access between Figtree and Figtree East. On the (attached) map the area between lot 8 and lot 9 was an open walkway between the two complexes that are designed as a whole and had open walkways between them done in the rustic ranch style low wooden fences. There was no boundary fence between lots 8 and 9 on the Figtree plan - that is the common area met up with and continued into a common area in Figtree East.

At no time did the Committee ever pass a motion to fence off the common area access to Figtree East and construct a 2 metre high fence there. This stretch of fence can only be described as an atrocious "improvement". Had ALL the residents had a vote on the matter it would never have been allowed.

At the general meeting of 26 June 2006 the meeting voted to postpone the fencing construction to 2007. This has not occurred.

It is the contention of Mrs. Poynton that the Committee has breached its own resolution is pushing the colorbond fence through in 2006.

I was informed by the information officers of the BCCM that a new fence of an extension of an old fence or a raising of the height of a fence is an issue of "improvement" and that on issues of improvement the entire BC, that is all the owners, would have a Special Resolution vote and that if there was not a 2/3 majority for the "improvement" or a 25% "No" vote against the "improvement" it could not proceed. Mrs. Poynton took this to mean that an "improvement" required a Special Resolution vote of the entire owner collective of the BC, not just a committee vote.

The objection is on the basis that there was no such "Special Resolution" vote of owners to

1) increase the height of the fence from 1.4 metres to 1.9 metres. (photos 3 and 4 and 5
show.the much higher fence) which constitutes an "improvement" requiring a Special Resolution.

2) that the issue of changing from wood fences to colorbond steel was a significant aesthetic issue that required a Special Resolution, and must be seen as an "improvement"

3) that the fence was being put in to close the open space (shown on the map) between Figtree and Figtree East that allowed the walkway that existed between Lot 8 and Lot 9 in Figtree to continue through to Figtree east. This was clearly a new fence hence an "improvement" requiring a Special Resolution.

4) That the BC Committee intended to extend the fence in front of the existing fence at the front of the complex (shown on the map and a photo) another unwanted and unapproved "improvement" requiring a Special Resolution.

Hence the outcome sought is to void the decision o the Committee to replace the existing rustic wooden fences with the Colorbond fence as an invalid decision, as it was not a whole complex owners Special Resolution. Indeed the closure of the walkway through to Figtree East between Lots 8 and 9 and the extension in front of the complex were never even notified to the owners as "improvements".

Furthermore Mrs. Poynton’ s fence, having only been constructed 5 years prior was not in need of replacement at all and it is, in particular, an abuse of process by the Committee and Management to force this upon her..

You requested in your letter of 6 November 2006, proof that the Committee of the BC consented to the 1.9 metre colorbond steel fence being constructed between Mrs. Poynton’s property and the Figtree East.

I herewith supply a true copy of the letter faxed to me and sent to Mrs. Poynton 11 October. 2006 by Strata-Jem for the Committee. This states the Committee’s decision, apparently the Committee delegated (quite improperly) the decision on fence height to Figtree East.

The above and photographs supplies the background and the proof of the "improvement" issue which yet requires a Special Resolution.

Interim Order

On 18 December 2006, I made the following interim order:

I hereby order that, pending a final determination, the body corporate for Figtree must not demolish the existing fence between Lot 8 Figtree and Lot 1 Figtree East or proceed with construction of a new fence.

Submissions

The body corporate manager and committee chose to rely on the submissions made in relation to the interim order on this application. A summary of their submission follows.

On 11 August 2006, the body corporate for the scheme next door served notice on the applicant’s body corporate stating that the boundary fence required replacement. On 20 August 2006, the applicant’s body corporate agreed to meet half the cost of the replacement fence. This amounted to $1,495.00 to cover approximately 22 meters between the lots in question and a further 45 meters of fence.

They advise that neither of the relevant bodies corporate thought the fence required a special resolution as the old fence was dilapidated in parts and the cost did not exceed the relevant limit for committee spending (which in this case is $3,000 for the applicant’s scheme).

They advise that on 20 September 2006, work on the 45 meter span of fence was completed. They state that on 21 September 2006, the applicant phoned them asking for work to cease, which they did. On 22 September 2006 the applicant wrote to request attendance at the upcoming committee meeting on 25 September 2006 and asked that the fence height be reduced from the 1.8 meters being constructed to 1.4 meters.

The body corporate manager advises that this letter was tabled to the committee meeting and it was explained to the applicant that the other body corporate actually initiated the request and therefore the height of the fence needed to be agreed between the 2 schemes. The committee therefore resolved to write to the next door scheme on behalf of the applicant.

They state that on 29 September the applicant gave verbal approval for the fence line to be cleared, no matter what the final height of the fence might be. They state that on 1 October 2006 they received a letter from the applicant’s son, a barrister, advising he would be acting for her.

They advise that the body corporate next door held a committee meeting on 11 October 2006 but resolved to continue replacing the remaining section of fence at 1.8 meters. This was advised to the applicant on the same day. They received advice of the application to this office on 17 October 2006.

They clarify that the decision made in January 2005 by the committee to replace the fencing was at all times subject to approval from the next door body corporate. As approval was not obtained at that time, the work was put on hold.

They advise that at the annual general meeting of 23 May 2005, it was resolved to replace the timber fences with metal fences, as funds permitted. While it was described as requiring an ordinary motion, it was carried 8 to 1.

They advise that at the annual general meeting held in June 2006, it was resolved to defer replacement of the fence until the 2007 financial year.

The committee submits that it made its decision to replace the remaining portion of fence (between the applicant and the scheme next door) at the height of 1.8 meters for the sake of uniformity for both schemes. They advise that, in time, the committee would like to replace all the fences around the scheme to conform with the work taken to date.

They also attach an email sent by the applicant’s son which includes a statement that "My mother advises she will offer no complaints about the 1.4. metre fence".

One other submission was received, through a solicitor. They simply state that this office has no jurisdiction as the matter falls within the Dividing Fences Act 1953.

Response to Submissions

The applicant attaches minutes to demonstrate that the committee has previously known of the need to seek a special resolution:

• where a garden bed on common property had been removed without authorisation and was to be replaced with a smaller garden bed by a lot owner;
• because a copy of committee meeting minutes shows the committee noted there was 25% opposition to painting garage doors or the building.

On this interpretation, the applicant therefore alleges that the committee has selectively applied its understanding of the requirements for improvements to common property and not sought a special resolution on this occasion.

The applicant also provides uniform objection statements, from what appears to be 7 other owners (only the street address is given rather than the lot number and some signatures cannot be deciphered). However, the point of this is that these objections combined with that of the applicant amount to a 33% dissenting vote, which is sufficient to defeat a special resolution if all parties attend to vote. The adjudicator notes that adjudicators are very wary of submissions presented on the basis of petitions, where we frequently find that a number of parties signing petitions felt obliged to appease the needs of the party requesting their signature.

The applicant again states that the change in the fence required a special resolution.


Legislation

Body Corporate and Community Management Act 1997

94 Body corporate’s general functions

(1) The body corporate for a community titles scheme must--

(a) administer the common property and body corporate assets for the benefit of the owners of the lots included in the scheme; and

(b) enforce the community management statement (including any by-laws for the scheme); and

(c) carry out the other functions given to the body corporate under this Act and the community management statement.

(2) The body corporate must act reasonably in anything it does under subsection (1).

106 Counting of votes for special resolution

(1) This section applies if a motion is to be decided by special resolution at a general meeting of the body corporate for a community titles scheme.

(2) One vote only may be exercised for each lot included in the scheme, whether personally, by proxy or in writing.

(3) The motion is passed by special resolution only if--

(a) for a meeting notice of which is given--

(i) before the commencement of subparagraph (ii)--the votes counted for the motion are more than the votes counted against the motion; or
(ii) after the commencement of this subparagraph--at least two-thirds of the votes cast are in favour of the motion; and

(b) the number of votes counted against the motion are not more than 25% of the number of lots included in the scheme; and

(c) the total of the contribution schedule lot entitlements for the lots for which votes are counted against the motion is not more than 25% of the total of the contribution schedule lot entitlements for all lots included in the scheme.

Schedule 6 Improvement includes-

(a)	the erection of a building; and
(b)	a structural change; and
(c)	a non-structural change, including for example, the installation of air conditioning.

At this point, the Act also makes reference to the Acts Interpretation Act 1954, which defines "change" in section 36:

Change includes change by addition, exception, omission or substitution.

Standard Module

26 Restricted issues for committee--Act, s 100

(1) A decision is a decision on a restricted issue for the committee if it is a decision--

(a) fixing or changing a contribution to be levied by the body corporate; or

(b) to change rights, privileges or obligations of the owners of lots included in the scheme.......

103 Spending by committee

(1) The committee may only carry out a proposal involving spending above the relevant limit for committee spending for the scheme if--

(a) the spending is specifically authorised by ordinary resolution of the body corporate; or

(b) the owners of all lots included in the scheme have given written consent; or

(c) an adjudicator is satisfied that the spending is required to meet an emergency and authorises it under an order made under the dispute resolution provisions; or

(d) the spending is necessary to comply with--

(i) a statutory order or notice given to the body corporate; or
(ii) the order of an adjudicator; or
(iii) the judgment or order of a court.

(2) For this section, if a series of proposals forms a single project, the cost of carrying out any 1 of the proposals is taken to be more than the relevant limit for committee spending if the cost of the project, as a whole, is more than the relevant limit.

(3) Section 104 applies to the proposal in addition to this section if--

(a) subsection (1)(a) or (b) applies in relation to the proposal; and

(b) the proposal involves spending above the relevant limit for major spending; and

(c) the proposal does not involve spending mentioned in subsection (1)(c) or (d).

109 Duties of body corporate about common property--Act, s 152

(1) The body corporate must maintain common property in good condition, including, to the extent that common property is structural in nature, in a structurally sound condition.

(2) To the extent that lots included in the scheme are created under a building format plan of subdivision, the body corporate must--

(a) maintain in good condition--

(i) railings, parapets and balustrades on (whether precisely, or for all practical purposes) the
boundary of a lot and common property; and
(ii) doors, windows and associated fittings situated in a boundary wall separating a lot from common property; and
(iii) roofing membranes that are not common property but that provide protection for lots or common property; and

(b) maintain the following elements of scheme land that are not common property in a structurally sound condition--

(i) foundation structures;
(ii) roofing structures providing protection;
(iii) essential supporting framework, including load-bearing walls.

(3) Despite anything in subsections (1) and (2)--

(a) the body corporate is not responsible for maintaining fixtures or fittings installed by the occupier of a lot if they were installed for the occupier’s own benefit; and

(b) the owner of the lot is responsible for maintaining utility infrastructure, including utility infrastructure situated on common property, in good order and condition, to the extent that the utility infrastructure--

(i) relates only to supplying utility services to a particular lot; and
(ii) is 1 of the following types--

• hot-water systems
• washing machines
• clothes dryers
• another device providing a utility service to a lot; and

Examples for subsection (3)(b)--
1 An airconditioning plant is installed on the common property, but relates only to supplying utility services to a particular lot. The owner of the lot would be responsible for maintaining the airconditioning equipment.
2 A hot-water system is installed on the common property, but supplies water only to a particular lot. The owner of the lot would be responsible for maintaining the hot-water system and the associated pipes and wiring.

(c) the owner of the lot is responsible for maintaining the tray of a shower that services the lot, whether or not the tray forms part of the lot.

(4) To avoid doubt, it is declared that, despite an obligation the body corporate may have under subsection (2) to maintain a part of a lot in good condition or in a structurally sound condition, the body corporate may recover the prescribed costs, as a debt, from a person (whether or not the owner of the lot) whose actions cause or contribute to damage or deterioration of the part of the lot.

(5) In this section--

prescribed costs means the proportion of the reasonable cost to the body corporate of carrying out the maintenance that can, in the body corporate’s reasonable opinion, be fairly attributed to the person’s actions.

113 Improvements to common property by body corporate

(1) The body corporate may make improvements to the common property if--

(a) the cost of the improvements, or, if the improvements together with associated improvements form a single project for improvement of the common property, the cost of the entire project, is not more than an amount (the improvements limit) worked out by multiplying the number of lots included in the scheme by $300; or

(b) the improvements are authorised by special resolution; or

(c) an adjudicator, under an order made under the dispute resolution provisions, decides the improvements are reasonably necessary for the health, safety or security of persons who use the common property and authorises the improvements.

(2) For subsection (1)(a), if a series of associated improvements forms a single project, the cost of any 1 of the improvements is taken to be more than the improvements limit if the cost of the project, as a whole, is more than the improvements limit.

114 Improvements to common property by lot owner

(1)	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.

(2)	The improvement must be authorised by special resolution of the body corporate unless--

(a)	the improvement is a minor improvement; and

(b)	the improvement does not detract from the appearance of any lot included in, or common property for, the scheme; and

(c)	the body corporate is satisfied that use and enjoyment of the authorised improvement is not likely to promote a breach of the owner’s duties as an occupier.

(3)	An authorisation may be given under this section on conditions the body corporate considers appropriate.

(4)	The owner of a lot who is given an authority under this section--

(a)	must comply with conditions of the authority; and

(b)	must maintain the improvement made under the authority in good condition, unless excused by the body corporate.

119 Supply of services by body corporate--Act, s 158

(1) The body corporate may supply, or engage another person to supply, utility services and other services for the benefit of owners and occupiers of lots, if the services consist of 1 or more of the following--

(a) maintenance services, which may include cleaning, repairing, painting, pest prevention or extermination or mowing;

(b) communication services, which may include the installation and supply of telephone, intercom, computer data or television;

(c)	domestic services, which may include electricity, gas, water, garbage removal, airconditioning or heating.

Example--

The body corporate might engage a corporation to supply PABX services for the benefit of the owners and occupiers of lots.

(2) The body corporate may, by agreement with a person for whom services are supplied, charge for the services (including for the installation of, and the maintenance and other operating costs associated with, utility infrastructure for the services), but only to the extent necessary for reimbursing the body corporate for supplying the services.

(3) In acting under subsections (1) and (2), the body corporate must, to the greatest practicable extent, ensure the total cost to the body corporate (other than body corporate administrative
costs) for supplying a service, including the cost of a commercial service, and the cost of purchasing, operating, maintaining and replacing any equipment, is recovered from
the users of the service.

Schedule relevant limit for committee spending, for a community titles scheme,

means an amount worked out by multiplying the number of lots included in the scheme by $125.

Determination

The applicant cannot bring an action against the next door body corporate under the Body Corporate and Community Management Act 1997 for an adjudication of whether or not the body corporate for the scheme next door followed correct procedures.

One submission suggests that this office has no jurisdiction over matters governed by the Dividing Fences Act 1953. That is quite correct. However, this application focuses on the processes adopted by the body corporate in making a decision. Therefore at first instance I have jurisdiction to consider whether the procedures adopted in reaching that decision were appropriate. That the decision is about a fence is not pivotal to the procedures to be adopted. However, if there was a dispute between the two bodies corporate involved in relation to the fence, I would not have jurisdiction.

The applicant’s core argument is that a special resolution was required as the new fence constitutes an improvement and therefore required a special resolution.

I agree that the change in the fence from a 1.4 metre wooden fence to a 1.8 meter Colorbond fence goes beyond maintenance and constitutes an improvement. In this case, I regard the new materials and height as amounting to a substitution in terms of the Acts Interpretation Act 1954.

The applicant maintains that at all times the body corporate knew that a special resolution was required and refers to two examples of knowledge. The first example relates to the issue of the unauthorised removal of a garden bed by an owner and the reinstatement of a smaller garden. The replacement garden was to be at the expense of the relevant owner.

I find this argument less than compelling for two reasons. Firstly, this matter relates to reinstatement after damage, rather than proposing an improvement by the body corporate. Secondly the replacement garden, which the applicant suggests is an improvement, might at most be identified as an improvement to the common property by a lot owner. The applicable section of the Standard Module is Section 114 and requires a special resolution in certain circumstances. In this matter, it is possible that the smaller garden was identified as "detracting" from the appearance of the scheme and so the body corporate decided it was prudent to present the motion as requiring a special resolution.

The second example put forward by the applicant is a committee note stating that a survey has determined that 25% of owners do not support the painting of the complex. Having regard to section 109 of the Standard Module, it is clear that where a community title scheme is created by way of a standard format plan (formerly known as a group title plan), maintenance of lot buildings, including painting, is the responsibility of the relevant owners while the body corporate is responsible for the common property areas. However Section 119 makes provision for the body corporate to coordinate bulk supply of a service to take advantage of economies of scale.
The identification of a figure of 25% within the minute may simply be a report of the number of owners who are unlikely to take up such an opportunity.

I am therefore unable to infer knowledge on the committee’s part, of any requirement for a special resolution for the change in the fence.

Section 113 of the Standard Module addresses the body corporate’s responsibility in relation to improvements to common property. This section provides for 3 circumstances where the body corporate may make improvements. In lay terms this means that the fence could be upgraded if:

• the project envisaged at that time costs less than $7,200; or
• if the project envisaged costs more than $7,200, by special resolution, or
• if an adjudicator ordered it.

It is therefore appropriate to examine the method of authorisation available to the body corporate to authorise this particular improvement.

In this matter, the project envisaged is costed at less than $7,200. Throughout the various submissions various costs to the applicant’s body corporate have been identified. These have ranged from half of $3,830 in January 2005, to $1,495 in August 2006, back up to $2,280 by September 2006. Therefore a special resolution was not required.

The committee may carry out spending within the "relevant limit" (see Section 103 of the Standard Module and the Schedule). The relevant spending limit for the committee is $125 per lot, or $3,000 in total. Therefore, based on all 3 costing scenarios the committee was authorised to commit the body corporate to the substitute fence. The applicant has not provided any evidence that the cost is anticipated to be above the amount of $3,000.

The applicant has included protest in her grounds relating to the change in materials, the change in height and also the closure of access to the next door scheme. However the orders sought are restricted only the boundary of the applicant’s lot.

I anticipate the applicant could also be trying to argue that the change in character of the fence could be a "change rights, privileges or obligations of the owners of lots included in the scheme......." and therefore a restricted issue for the committee. However, I disagree with the applicant’s assertion that the conversion to a Colorbond fence has never been put to a general meeting. While not posed as a general resolution at the annual general meeting of 23 May 2005, in effect, 89% of those in attendance resolved by special resolution to convert from a timber fence to a metal fence. The dissenting vote amounted to only 4.2% of the lots in the scheme and at most 5.9% of the contribution lot entitlements in the scheme.

The issue of height was not been explicitly addressed by the body corporate in general meeting. However, when the body corporate passed its resolution on 23 May 2005 it issued a mandate to its elected committee to carry that resolution to effect. That the resolution proposed at the annual general meeting by the owner of Unit 33 was not specific as to height is not the "fault" of the committee. In passing the resolution as they did, the body corporate has given the committee responsibility for considering such details. Had the change in the fence amounted to the doubling of a 1 metre fence to a 2 meter fence, I would have been concerned that the committee may not have acted reasonably in terms of Section 94 of the Act.

The relatively minor increase in height here and the lack of submissions received on invitation lead me to consider that the committee has acted reasonably in accordance with the mandate given to it on 23 May 2005.

For these reasons I will dismiss the application.