Regatta Riverside Tower 1 [2007] QBCCMCmr 250 (30 April 2007)

Last Updated: 22 May 2007

REFERENCE: 0968-2006

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	31200
Name of Scheme:	Regatta Riverside Tower 1
Address of Scheme:	9 Sylvan Road TOOWONG QLD 4066

TAKE NOTICE that pursuant to an application made under the abovementioned Act by the body corporate for Regatta Riverside Tower 1 community titles scheme 31200

I hereby declare that By-Law 5.4 included in the community management statement for Regatta Riverside Tower 1 community titles scheme 31200 is invalid. I order that within one month of the date of this order, the body corporate for Regatta Riverside Tower 1 community titles scheme 31200 must lodge a request to record a new community management statement to remove By-Law 5.4.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0968-2006

"Regatta Riverside Tower 1" CTS 31200

Application
This application is by the body corporate seeking a declaratory order as to the validity of By-Law 5.4.

The community management statement (CMS) for the scheme includes By-Law 5.4 stating:

"Any person moving in or out of any apartment will pay to the Body Corporate:

(a) a fee set by the Body Corporate Committee from time to time to compensate for the use and maintenance of the Body Corporate lifts;
(b) a deposit, to be set by the Body Corporate Committee from time to time, to cover cleaning repair or rectification of any part of the Common property that may be required to be attended to as a result of such moving. In the event that no cleaning, repair or rectification is required, then the deposit will be refunded to the occupier."

Jurisdiction
"Regatta Riverside Tower 1" is a community titles scheme under the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Accommodation Module) Regulation 1997 (Accommodation Module).

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 claimed or anticipated contravention of the Act or the community management statement; or the exercise of rights or powers, or the performance of duties, under the Act or the community management statement^[1]. An order may require a person to act, or prohibit a person from acting, in a way stated in the order^[2]. An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate^[3].

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 and the committee. Submissions were received from the committee and a number of lot owners. The committee made a written reply to submissions under section 244 of the Act.

In its submissions, the committee stated that the application has been made to verify that the By-Law is valid.

The committee’s submissions about part (a) of the By-Law are to the effect that:

• It compensates the body corporate for damage to the lift/s when people move in and out of the building and is in essence a non-refundable amount.
• At its meeting dated 10 August 2006, the committee set the amount at $150.
• The reason for part (a) is the damage caused to the lifts by people moving in and out of the building. It is estimated that there is a ‘move-in’ and a ‘move-out’ every 3 weeks. Although protective covers are placed in a designated lift, some parts of the lift get damaged.
• People moving in and out cannot be supervised 100 per cent of the time and it is difficult to prove liability.

With respect to part (b) of the By-Law, the committee says that this part relates to collecting a deposit for any damage to the building when people move in or out of the building and is refundable if no damage occurs. It is submitted that at its meeting dated 10 August 2006, the committee set the amount at $100.

The committee also submit that the By-Law is not contrary to section 180(5) of the Act as it does not discriminate between owners and tenants as both are required to pay the amount/s set by the By-Law. It is also submitted that the By-Law is not contrary to section 180(6) of the Act as it stops the body corporate imposing fees or charges on owners or occupiers, and the body corporate is not "imposing a monetary liability on the owner or occupier of a lot simply because payers of the fee are not owners or occupiers at the time they are informed of the fee".

The submissions from owners who opposed the application stated various reasons including:

• Owners of lots may damage lifts and common property and they are not required to pay an additional fee.
• Body corporate fees are paid for the maintenance of the building.
• The By-Law discriminates between occupiers as it does not apply to occupiers who change furniture or have a spring clean.
• It imposes a liability on an occupier.

Determination
A body corporate is created when a community titles scheme is established under the Act^[4] and its functions and powers are prescribed by the Act^[5]. For example, section 94(1) provides that the body corporate must administer, manage and control the common property for the benefit of lot owners. Section 152 states the body corporate duties about common property and specifies that the body corporate must administer, manage and control the common property reasonably and for the benefit of lot owners. Section 152(1)(b) provides that the body corporate must "comply with the obligations with regard to common property and body corporate assets imposed under the regulation module applying to the scheme." Section 108 of the Accommodation Module states specific body corporate duties about common property, including that it maintain common property in good condition.

To meet its obligations with respect to common property, the body corporate must adopt budgets and fix contributions to be levied on the owner of each lot^[6]. Section 93(5) of the Accommodation Module provides that "The contributions levied on the owner of each lot (other than contributions payable for insurance and any other matter for which, under the Act or this regulation, the liability attaching to each lot is calculated other than on the basis of the lot’s contribution schedule lot entitlement) must be proportionate to the contribution schedule lot entitlement of the lot."

Despite a body corporate’s legislated general obligations with respect to common property, a lot owner may be responsible for maintenance of common property under, for example:

• Section 108(3) which provides that a lot owner is responsible for maintaining certain fixtures and fittings and utility infrastructure.
• Section 113 which provides that a lot owner is responsible to maintain authorised improvements made to common property by the lot owner, unless excused by the body corporate.
• Section 122 which provides that "An exclusive use by-law is taken, in the absence of other specific provision in the by-law for maintenance and operating costs, to make the owner of the lot to whom exclusive use or other rights are given responsible for the maintenance of and operating costs for the part of the common property to which the exclusive use by-law applies".

A body corporate may make by-laws which are stated in the community management statement for the scheme^[7] and have effect when the CMS is recorded^[8]. The CMS is binding on the body corporate, each member of the body corporate (lot owners) and on each person who is otherwise an occupier of a lot included in the scheme^[9]. Section 94 provides that a body corporate must enforce its by-laws and sections 182 to 188 provide detailed provisions dealing with by-law contraventions.

The Act contains a number of limitations about by-laws, including for example:

• Section 169 which provides that a by-law may only provide for matters such as the administration, management and control of common property; the regulation of, including conditions applying to, the use and enjoyment of lots included in the scheme and common property; and other matters the Act permits to be included in by-laws.
• Section 180(1) which provides that if a by-law is inconsistent with the Act, the by-law is invalid to the extent of the inconsistency.
• Section 180(6) which provides that "A by-law (other than an exclusive use by-law) must not impose a monetary liability on the owner or occupier of a lot included in a community titles scheme".

A body corporate’s power to make by-laws was considered in the judgement of Dowsett, J delivered on 7 March 1994 in Re:The Hastings (Group Title Plan No. 1154)(Unreported) No. 826 0f 1993, a Queensland Supreme Court case concerning the reasonableness and enforceability of by-laws, at page 7, where the Judge states –

The power to make by-laws must be construed in the context of the authorised functions of the body in question and the legislation conferring the power. It follows that such a power cannot be invoked to extend the powers or functions of the body or to contradict a provision of the Act in question, at least in the absence of express or necessarily implied authority to do so.

By-Law 5.4 relates only to a person moving in or out of a lot. Part (a) requires the person to pay a non-refundable fee (currently set at $150) to compensate the body corporate for the use of common property lifts. Part (b) requires the person to pay a refundable deposit (currently set at $100) to cover maintenance of common property to repair damage caused when the person is moving.

As stated above, a body corporate has extensive obligations about common property and in specific circumstances an owner can be responsible for the maintenance of common property. A body corporate’s power to levy each lot owner to make monetary contributions is in a proportion/s stated in either the Act or the Accommodation Module. The yearly contributions paid by lot owners are based on budgets with the administrative fund budget containing estimates to cover the body corporate’s cost of maintaining common property. It would be reasonable to expect that common property will require maintenance as a consequence of its reasonable use and enjoyment by persons such as owners and occupiers. In the instance where it can be demonstrated that common property has been damaged by a person, for example wilfully or in contravention of the Act, the body corporate has a right to take appropriate action. For example, section 281 of the Act provides for an order of an adjudicator to repair damage or to reimburse an amount paid for carrying out repairs where there has been damage to property because of a contravention of the Act or the CMS.

By-Law 5.4 relates to a particular group of persons who occupy or have occupied lots included in the scheme; requires these persons to pay monies to the body corporate whether or not they cause damage to common property; and the amount set by the body corporate is arbitrary and does not represent reimbursement for actual repairs to damaged property. The By-law requires the payment of a monetary amount which, in my view, constitutes a liability. "Liability" is defined in the New Shorter Oxford English Dictionary, Thumb Index Edition to mean "The condition of being liable or answerable by law or equity...The condition of being liable or subject to something...A thing for which a person is liable...A person who or thing which puts one at a disadvantage, a hindering responsibility, a handicap". As the By-Law can only bind a person mentioned in section 59 it applies to owners or occupiers.

In my view, not only does the body corporate not have a power under the Act to make a by-law containing the provisions stated in By-Law 5.4, but the terms of the By-Law are contrary to section 180(6). A by-law that is inconsistent with the Act is invalid to the extent of the inconsistency. For the above reasons, I conclude that By-Law 5.4 is invalid. I have made provision in the order for the body corporate to lodge a request to record a new CMS that excludes By-Law 5.4.

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^[1] Section 276(1), Act.
^[2] Section 276(2), Act.
^[3] Section 284(1), Act.
^[4] See sections 27 and 30, Act.
^[5] See sections 94 and 95, Act.
^[6] See sections 92 and 93, Accommodation Module.
^[7] Section 66, Act.
^[8] Section 179, Act.
^[9] Section 59(2), Act.