Hevan [2007] QBCCMCmr 363 (14 June 2007)

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

I hereby order that neither the Body Corporate for Hevan, nor its Body Corporate Committee, nor its Architectural Review Committee, shall give consent to the construction of a building over the registered easement burdening Lot 4, until a final order is issued in respect of this dispute resolution application.

I further order that a copy of this interim order and statement of reasons for decision be provided by the Body Corporate to all owners within the scheme within seven days of the date of this order.

I further order that this interim order has effect for a period of four months from the date of this order.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0473-2007

"Hevan" CTS 32175

The Hevan community titles scheme (Hevan) consists of 11 lots and common property. The Community Management Statement (CMS) for Hevan indicates that the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module) applies to the scheme. Department of Natural Resources Mines and Water records show the scheme is registered as Survey Plan 152850.

INTERIM APPLICATION

This is an application for interim orders lodged by Barry and Robyn Casey, Owners of Lot 5 (applicants) on 29 May 2007 under the Body Corporate and Community Management Act 1997 (Act). The applicants sought interim orders against the Body Corporate for Hevan (respondent) in the following terms:

To restrain the Architectural and Landscape Committee from giving consideration to proposed plans for Lot 4 until they are re-submitted without the need to build over a registered easement.

The application also seeks the following final order:

To restrain the Architectural and Landscape Committee for the Hevan Estate Body Corporate from granting approval to Phillip Hulse (Lot 4) for attached house plans that propose constructing 3 stories over a registered easement (Qld Registry No 707453971) - refer copy attached.

PROCEDURAL MATTERS

In accordance with section 247 of the Act, the Commissioner for Body Corporate and Community Management has referred the application to me to decide whether the nature or urgency of the circumstances of the application warrant an interim order. The Commissioner has referred the application notwithstanding that affected persons have not been given notice of the application or afforded an opportunity to make submissions about the application (section 247(3)).

A copy of the application was provided to the Body Corporate Committee and the Owners of Lot 4 (Philip and Lisa Hulse) with a limited period to make a submission in respect of the interim order applications. Submissions were received from the Owners of Lots 3 and 4.

MATTERS IN DISPUTE

This dispute relates to an application by the Owners of Lot 4 for Body Corporate approval to construct a three story residence on their Lot, which has an easement. Although the application is disjointed and lacks detail, it seems that the circumstances of the dispute are as follows.

The Owners of Lot 4 have applied to the Body Corporate for building approval on two previous occasions. Although apparently a Committee member, the applicants have not provided the dates or details of these applications other than excerpts of a draft email response from the former Chairman dated 17 October 2006 and another excerpt from an undated but apparently final response. The applicants say both requests were rejected by the Architectural Review Committee^[1] (ARC), in part because they proposed to build over a registered easement.

The rejection emails indicate that the submitted plans were ‘deemed’ by the ARC to be in contradiction with the Architectural and Landscape Code (the Code) for the scheme, with specific reference to Clauses 2 and 3. The emails raise concerns that the plans show the building spanning a sewer line and that the proposed construction would increase the costs for the Body Corporate if repairs were required to the sewer line because of limiting access. In addition, the response says construction exceeding 8.5m above the natural ground level could not be endorsed.

The Owners of Lot 4 apparently resubmitted building plans for further consideration by email on 25 May 2007. Architectural drawings have been attached to the dispute resolution application but as these are dated 26 June 2006 it is unclear whether they are the plans currently proposed.

While the registered easement (No. 707453971) specifies that the easement is for the benefit of the Body Corporate, the applicants say only they are affected because only their Lot 5 is serviced by the sewer line contained in the easement. They object to the proposal because of the impact on them if the sewer is damaged during building or at a later date. They claim they are the only owners who are entitled to approve or disprove the request to build over the easement.

A CMS must state certain matters, including by-laws, and may include anything that the applicable regulation module says it may include.^[2] Section 6(b) of the Standard Module provides that a CMS may include "provisions adopting and regulating the operation of an architectural and landscape code, including the establishment and operation of an architectural review committee". Schedule D of the Hevan CMS outlines the Code. Clause 2 of the Code outlines the purpose of the Code and Clause 3 provides for building design.

Clause 1.1 of the Code defines the ARC as the Body Corporate members and/or other person/s (qualified architect/s) appointed to the ARC at each annual general meeting. If there is no such appointment the ARC is defined as the Body Corporate Committee. The applicants say the ARC is the Committee and so it can be assumed that no other appointment has been made. Clause 6 of the Code provides the process for the ARC to consider applications for construction on a lot. It includes that the ARC may not unreasonably withhold its consent but may give its consent unconditionally, subject to conditions, or subject to variations to comply with the Code. It indicates that the ARC’s decision is final and binding.

The applicants say the normal process of the ARC is for proposals to be sent to ARC members and, if there are no objections from any Committee member, a letter of approval is sent. They claim motions are passed by a 2/3rds majority. A meeting of the ARC and/or Body Corporate Committee has apparently been called for 29 June 2007, although the applicants do not state why or by whom. The applicants say the Body Corporate Manager will advise Committee members of the meeting and call for motions at least seven days prior to the meeting but it seems this has not yet occurred. The applicants claim there has been "considerable lobbying" of Committee members to approve the plans. It is for this reason that they seek the interim order.

The submission from the Owners of Lot 4 includes the following arguments:

A submission from the Owners of Lot 4 argues for the refusal of Lot 4’s proposal in its current form. They assert that the proposal contravenes Clauses 2 and 3 of the Code, particularly in that it does not address Clause 3(a)(iv), which requires that dwellings minimise overshadowing and overlooking adjoining dwellings, and Clause 3(a)(v)(E), which required building design to consider the privacy and view lines of neighbours and particularly the windows and verandas of existing homes. They say immovable structures should not be built over the easement so there is no long term damage to the sewer and to minimise the cost and disruption of any future maintenance.

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

(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)).

Section 279(1) of the Act allows an adjudicator to make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances of the application.

I acknowledge the concerns of the Owners of Lot 4 that the application is really about the easement on their land which is a question of title to land. Pursuant to section 285, of the Act I have no jurisdiction to determine a question of title to land. Moreover, to the extent that the dispute relies on a determination on the scope, application and rights granted under the registered easement itself, those issues may be beyond the coverage of section 276(1). In this regard I note that pursuant to section 270(1)(b) of the Act I am empowered to dismiss an application on the basis that it should be determined within a court or tribunal of competent jurisdiction.

At this stage, however, I am satisfied that this is a matter which falls within the legislative dispute resolution provisions and that there are issues which I have jurisdiction to determine.^[3] I propose to proceed to consider the interim order. In the event that the application progresses to a final order I will give further consideration to the scope of the orders sought and, as such, the parties are on notice that I may not have jurisdiction to decide on some aspects of the issues in dispute.

DETERMINATION

Urgent interim relief

At this time, I am concerned with the application for an interim order and the threshold issue of whether interim orders are warranted. An interim order will not be granted unless is it necessary due to the nature or urgency of the circumstances to which the application relates.^[4] Any order granted must be just and equitable in the circumstances.^[5] The examples in section 279 of the Act indicate the usual circumstances where an interim order might be made and are in the nature of injunctive relief. While it is not possible to define the range of matters that might be the subject of an interim order, an applicant needs to establish that the circumstances warrant an interim order. An interim order will not be made, or will be refused, if the only urgency relates to an applicant’s desire to resolve or expedite the matters in dispute, or where the nature of the circumstances are such that the matter is not capable of being dealt with in the context of an interim order.

It is not appropriate to consider the substantive issues in the application in detail at this time. But to determine whether it is just and equitable to grant interim relief, it can be relevant to briefly consider the issues raised in the application. As an interim order can be considered on an ex parte basis, an adjudicator must be satisfied that the application raises serious legal questions and that the balance of convenience between the parties justifies injunctive relief. That is, an adjudicator must balance the inconvenience of granting relief now if final orders are ultimately refused against the inconvenience of refusing relief now if final orders are ultimately granted. Of particular relevance is evidence that an interim order is necessary to prevent serious or irreparable harm.

Serious legal question

Notwithstanding that the information provided by the applicants lacks specific details, I am satisfied that there is a prima facie question arising in this dispute about the capacity of the ARC, Body Corporate Committee or the Body Corporate to consent to the proposed building plans and whether such consent would be reasonable in the circumstances. Moreover, I am satisfied that this amounts to a serious legal question to be determined.

I note the claims of Owners of Lot 4 that the easement is not currently used by the Body Corporate and that the existing sewer benefiting Lot 5 is not a use permitted under the easement. Without investigating the question in detail I have reservations with this argument. Under section 20 of the Act, it would seem that the sewer which is contained within the easement is utility infrastructure that is itself common property. As such the current use of the easement seems legitimate.

I also have some queries which may warrant further consideration about the process which the Body Corporate is currently employing to consider applications lodged in respect of the Code.

Inconvenience from an interim order

While it is not the role of this Office to interpret or apply building regulations I understand that section 65 of the Building Act 1975 provides that where there is a building development application for land that is subject to a registered easement, the application must not be approved without each registered holder of the easement consenting to the building work.

As the Body Corporate is the registered holder of this easement, it seems that the Body Corporate (rather than the ARC or the applicants) is the entity that may well be required to provide written consent to enable the Owners of Lot 4 to obtain relevant building approval.

There is, therefore, a valid concern that if the ARC, on behalf the Body Corporate, gave written consent to the construction of a building over the registered easement, the Owners of Lot 4 could legitimately use that consent to pursue a development application. If building approval was granted by a relevant authority on the basis of the alleged Body Corporate consent it may be that such approval could not be overturned even if I intimately ordered that the ARC’s approval was not valid or reasonable in the circumstances. Moreover, even if the building approval could be overturned, all parties concerned may incur costs and inconvenience in the process of applying for and overturning that approval.

Misconceived or without substance

The Owners of Lot 4 have alleged that the application is misconceived or without substance although they give no specific explanation of this claim. Section 270(1)(b) of the Act provides that an adjudicator may dismiss an application if it appears to the applicant that the application is frivolous, vexatious, misconceived or without substance. As indicated I am satisfied that there is a serious legal question to be determined in this dispute. Accordingly, I do not consider there is any reason to dismiss the application for being misconceived or without substance at this stage.

Conclusion

On the evidence before me I am satisfied that it is appropriate to grant an interim order to preserve the integrity of the final order application. While this may inconvenience the Owners of Lot 4, on balance I consider that this impact is outweighed by the effect on all parties if the ARC consented to the building plans and then building approval was granted before a final order was made.

The application relates to the issue of the easement, but it seems from the material provided that there may be a range of other reasons why the ARC may wish to refuse the request by the Owners of Lot 4 for approval of their building plans. For this reason my interim order will not prevent the ARC from considering the application. If the building plans are refused by the ARC, that decision will stand unless the Owners of Lot 4 take action to overturn the decision. However, I will order that the ARC will not be entitled to consent to the building plans until a final order is made or the dispute resolution application is otherwise resolved.

I have also ordered that a copy of the order and reasons be provided to all owners so they are fully aware of the circumstances.

Next steps

The matter will now be progressed in accordance with the usual processes undertaken by this Office. In the first instance I propose to refer the application to the conciliation service provided by the Commissioner. I would strongly encourage the applicants and the Owners of Lot 4 to participate cooperatively in conciliation with the Body Corporate. This may well provide the most time effective and constructive means for all parties to have their primary concerns met. Parties should also note that, where appropriate, conciliation can agree to a resolution on some issues and refer unresolved issues back for adjudication.

I encourage the parties to think broadly about the avenues that could be explored to reach a mutually acceptable solution to the issue. For example, is there scope for the easement to be moved? Or, if the Owners of Lot 4 believe the proposed construction will not affect access to the easement, is there scope to amend the terms of the easement so that Lot 4 takes responsibility for any additional costs (which would seem to currently be borne by the Body Corporate) involved in accessing the easement to install services or maintain or repair services contained in the easement.

While it is not strictly part of the application, the parties could also use this forum to air any other concerns that may exist regarding the building design. Addressing any related concerns may assist the parties in reaching agreement in relation to the easement issue.

If conciliation does not result in a resolution, or only a partial resolution, the application will be referred back for consideration of the final orders. At that stage I anticipate that some further information may be sought from parties. Then submissions in respect of the final order application would be invited from the Committee and all owners. The substantive investigation of the application would occur at that time and a final order to the application would be made in due course.

Effect of an Interim Order

All parties should note the provisions of section 279(2) of the Act, which provides that:

(b) may be extended, varied, renewed or cancelled by the adjudicator until a final order is made; and

(ii) the commissioner gives the person who made the application a written notice under section 241 rejecting the application; or

(iii) a final order is made by an adjudicator to whom the application is referred.

I have provided that this interim order has effect for a period of not longer than four months. This Office will not automatically renew an interim order and it is the responsibility of the applicants to apply to extend this order if no final determination has been made within that period. The interim order will automatically lapse upon a final order being made or this application being withdrawn.

^[1] Although the applicant has referred to the Architectural and Landscape Committee, I have used the name Architectural Review Committee as described in the Architectural and Landscape Code.
^[2] See section 66 of the Act and particularly subsection 2(b)
^[3] See sections 227, 228, 276 and Schedule 5 of the Act
^[4] Section 279 of the Act
^[5] Section 276 of the Act

Number of Scheme:	32175
Name of Scheme:	Hevan
Address of Scheme:	35 Tullyease Place, CHERMSIDE WEST QLD 4032

-	The ARC has an obligation to consider every application before it and a right to approve the plans as is, or with conditions, or subject to variation.
-	They applicants do not have an easement over their land. The easement benefits the Body Corporate and is for the use and enjoyment of the dominant tenement (the common property of the scheme) and not for any other purpose.
-	There are no services running through the easement area that service or benefit the Body Corporate and no plans for any such uses.
-	The sewer running from Lot 5 through Lot 4 is not a purpose covered by the easement.
-	For the applicants to legally use the easement area they would need to be the grantee of the easement which they are not, and Lot 5 would need to be the benefited land, which it is not.
-	They have offered the applicants an easement on reasonable terms but this was refused.
-	They dispute that it is not legal for a house to be built over the easement.
-	Their proposed plans do not include construction over the easement. Part of their house will be metres over the easement and so will allow easy access to underground services.
-	It is common for construction to be permitted over an easement where access is acceptable.
-	The fact that the Body Corporate does not use the easement and has no plans to do so must be taken into consideration when considering Clause 3(a) of the easement, which prevents the obstruction of the easement area.
-	Even if their building caused some obstruction to the easement area, which they dispute, the Body Corporate can still allow construction over the easement.
-	Any damage caused to any Body Corporate services during constriction would be the responsibility of the builder causing the damage and not the Body Corporate.
-	They have not lobbied Committee members and even if they had this would have been open and honest communication encouraged by the Act.
-	An adjudicator does not have jurisdiction to deal with the application because it amounts to a question of title to land.
-	Delayed construction will cause them financial loss. They believe the applicant is trying to cause delay to pressure them into constructing a building that is more acceptable to them.
-	The application should be dismissed as misconceived and without substance.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Hevan [2007] QBCCMCmr 363 (14 June 2007)