Avalon Parkside [2007] QBCCMCmr 19 (15 January 2007)

Last Updated: 9 February 2007

REFERENCE: 0356-2006

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	30987
Name of Scheme:	Avalon Parkside
Address of Scheme:	449-451 Gregory Terrace FORTITUDE VALLEY QLD 4006

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Raymond Newman, the previous owner of Lot 14

I hereby order that the application for an order by Raymond Newman, the previous owner of Lot 14 against the body corporate seeking an outcome that the community management statement for the scheme be replaced as soon as possible to replace By-Law 17 as decided at the Annual General Meeting dated 22 March 2005 and that an administrator be appointed to ensure there are no other outstanding important matters, is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0356-2006

"Avalon Parkside" CTS 30987

APPLICATION

"Avalon Parkside" Community Titles Scheme 30987 is a scheme under the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Accommodation Module) Regulation 1997 (Accommodation Module).

Raymond Newman (the applicant) is seeking an outcome that the community management statement (CMS) for the scheme be replaced as soon as possible to replace By-Law 17 as decided at the Annual General Meeting dated 22 March 2005 (AGM) and that an administrator be appointed to ensure there are no other outstanding important matters.

SUBMISSIONS

In accordance with the Act, submissions were called and a copy of the application was provided to the body corporate secretary for distribution to the owner of each lot (excluding the applicant) and the committee. A submission was received from the committee and a lot owner. The applicant made a written reply to submissions under section 244 of the Act.

FURTHER INFORMATION

In accordance with an adjudicator’s investigative powers stated in section 271 of the Act, on 7 December 2006 I requested the body corporate manager provide a copy of the notice and minutes of the AGM. This information was provided by the manager on 19 and 21 December 2006. The manager also informed a member of the Commissioner’s office that the applicant had sold Lot 14.

DETERMINATION

An adjudicator may make an order that is just and equitable in the circumstances to resolve a dispute about a claimed or anticipated contravention of the Act; or the exercise of rights or powers, or the performance of duties, under the Act (section 276(1), Act). Section 227 of the Act makes provision for the meaning of dispute, which includes a dispute between the owner of a lot and the body corporate. The owner of a lot is defined to mean "a person who is, or is entitled to be, the registered owner of the lot" (Schedule 6, Dictionary, Act). The Schedule 2 Dictionary of the Land Title Act 1994 defines registered owner of a lot as "the person recorded in the freehold land register as the person entitled to the fee simple interest in the lot".

When the application was lodged the applicant was entitled to make an application under section 227 and was a party to a dispute in respect of which an adjudicator could make an order. A search of the Queensland Land Registry indicates that documents to transfer ownership in Lot 14 were lodged on 2 January 2007 and that on 11 January 2007, Sharon Gourley was registered as the owner of Lot 14. Given the sale of this Lot, Mr Newman is no longer a person mentioned in section 227. Consequently, a dispute no longer exists limiting my power to make an order.

The applicant has sought an outcome that the body corporate implement a resolution made on Motion 8 at the AGM to replace By-Law 17. This By-Law relates generally to the enclosure of balconies and terraces and to the installation of certain structures or devices on balconies and terraces. The applicant’s grounds on which the outcome is sought variously are that the body corporate has not had an amended CMS registered in accordance with section 65 of the Act and that he enclosed a balcony on the Lot in reliance on the new By-Law.

Given that an amendment to a by-law does not come into force until the CMS containing the by-law is recorded by the registrar of titles (section 179, Act), the grounds relating to relying on the body corporate resolution are not a basis for determining the application in the terms being sought. In any event, the enclosure of the balcony on Lot 14 has been determined by an adjudicator in Application 0441-2005 precluding further consideration of this matter. Given the terms of the By-Law amendments contained in the resolution, I do not consider that the applicant has a significant or continuing interest in the relief sought in this application now that he is no longer the owner of Lot 14. Consequently, the application is dismissed.

However, I do not agree that the application is frivolous, vexatious, misconceived or without substance. The application was made more than one year after the AGM and there is no claim that the resolution is void or incapable of implementation. Rather the body corporate argues that the resolution did not authorise it to record a new CMS and that the application is premature as the body corporate has not considered a motion to consent to the recording of a new CMS. In my view, it would be reasonable to expect that the body corporate had considered such a motion by the time the application was made. The body corporate has not provided any reason for not considering such a motion. If the body corporate did not intend to implement the resolution, it should have given consideration to amending or revoking the resolution (section 56, Accommodation Module). Consequently, a lot owner is entitled to make a dispute resolution application.

The body corporate does submit that the resolution on Motion 8 purports to amend the existing CMS in contravention of section 54(1) of the Act. However, the motion was not ruled out of order by the person chairing the AGM (section 45, Accommodation Module), or as mentioned above the resolution itself has not been challenged. Section 54(1) of the Act provides that an existing CMS cannot be amended, but a new CMS may be recorded by the registrar of titles in place of the existing CMS. Section 54(2) states that the new CMS may be recorded only if the body corporate consents under section 62 to the recording of the new CMS and endorses its consent to the new statement. Section 62 provides for the form of body corporate consent to the recording of a new CMS with subsection (2)(a) providing that the consent may be by special resolution if the difference between the existing CMS and the new statement is limited to a difference in the by-laws (other than a difference in exclusive use by-laws). It is evident that the body corporate passed a special resolution (even though ordinary resolution is referred to in the voting paper) on Motion 8 to amend By-Law 17.

The body corporate also refers to the statement made by Adjudicator Hanly in the decision made on Application 0441-2005 that "It appears from the material before me that the body corporate has not considered a motion by which it could consent to the recording of a new community management statement. The change to by-law 17 has therefore not taken effect". In the written reply to submissions, the applicant says that the Adjudicator’s statement was based on an incorrect copy of the minutes of the 2005 AGM which indicated that Motion 8 required an ordinary resolution. I have read the material on Application 0441-2005 which includes a request for information by the Adjudicator from Deb Aston of Strata Solutions as to whether the new CMS had not been lodged because the motion only required an ordinary resolution. There is no indication on the application that Ms Aston responded to this specific request. The application did include a copy of a page from minutes of the AGM supplied by the applicant with a submission indicating that Motion 8 was resolved by ordinary resolution. This type of resolution is also stated in the voting paper for the AGM mentioned above. It could be that the incorrect reference to ordinary resolution may have been reason for the Adjudicator’s statement.

In my view, given the information provided to lot owners in the notice of the AGM and the requirements of the Act, there is reason to suggest that the resolution was in effect consent to a new CMS to incorporate the difference in the By-Law. However, I have not made a finding about this issue given that the applicant is no longer the owner of Lot 14 and also given that it would seem that unexplained possible amendments were made to Motion 8 at the AGM. Despite this decision the body corporate should deal with the resolution passed on Motion 8 at the AGM.