Villa Del Mare [2007] QBCCMCmr 472 (7 August 2007)

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Roger and Kay Broady, the owner of Lot 2 and Allan and Debra Billington, the owner of Lot 3

I hereby order that the application for an order by Roger and Kay Broady, the owner of Lot 2 and Allan and Debra Billington, the owner of Lot 3 against the body corporate for Villa Del Mare community titles scheme 16072 seeking an outcome that Motion 4 at the Extraordinary General Meeting dated 8 March 2007 be declared as not passed, is dismissed.

I further order that the resolution made on Motion 4 at the Extraordinary General Meeting dated 8 March 2007 is void.

I further order that within six weeks of the date of this order, the body corporate must call and hold a general meeting to consider a motion to authorise the erection of the shade sail on common property adjacent to the northern boundary of Lot 4. The body corporate must give at least seven days written notice of the meeting to each lot owner. The authorisation must be in accordance with section 114 of the Body Corporate and Community Management (Standard Module) Regulation 1997. The agenda for the meeting may include any other motion properly submitted.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0281-2007

"Villa Del Mare" CTS 16072

Application
This application is by Roger and Kay Broady, the owner of Lot 2 and Allan and Debra Billington, the owner of Lot 3 (applicants) against the body corporate seeking an outcome that Motion 4 at the Extraordinary General Meeting dated 8 March 2007 (EGM) be declared as not passed. Motion 4 sought An explanation of the need for the sails to be erected on common property over the car space adjoining unit 4 garage. The minuted note to the Motion states Lyn said body corporate approval for a covering over the car space had been given at a previous meeting to give shade to a car parked there. A vote was taken on whether the motion previously passed should stand resulting in a tied vote. Yvonne called for a poll to be conducted as she had no objections to the sail. The motion was carried as a result of the poll.

Jurisdiction
"Villa Del Mare" is a community titles scheme under the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module).

An adjudicator may make an order that is just and equitable in the circumstances 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 (section 276(1), Act). An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 276(2), Act). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (section 284(1), Act).

Procedural matters
On 16 May 2007, a copy of the application was provided to the body corporate secretary for distribution to the owner of each lot (excluding the applicants) and the committee, with an invitation to respond to the matters raised in the application. Submissions were made by Lyn Fuller, the co-owner of Lot 4 and the body corporate secretary.

A dispute resolution recommendation has been made under section 248 of the Act referring the dispute to departmental adjudication.

The applicants indicated that they wished to respond to any submissions. The applicants did not receive notice of Ms Fuller’s submissions. In accordance with the investigative powers of an adjudicator stated in section 271 of the Act, I gave the applicants the opportunity to respond to these submissions. The applicants replied to the submissions on 26 July 2007.

Submissions
The applicants submit that the shade sail was erected on common property next to Lot 4 by the owner of the Lot on 3 February 2007. They state that Lots 1 and 4 voted for Motion 4 at the EGM and Lots 2 and 3 voted against the Motion. The applicants say that the owner of Lot 4 claims to have permission for the sail from 9 years ago and the vote on Motion 4 was whether the previous permission should stand. The applicants consider that the sail is unsightly and spoils the view of the complex from the entrance. The applicants provided a sketch showing that the sail is on a part of common property adjacent to the northern boundary of Lot 4.

Lyn Fuller submitted a copy of minutes of a meeting dated 28 September 1999 attended by Cliff and Audrey Reid, Joan Craft and Lyn Fuller stating (in part) It was approved by all present to erect a carport or cover for unit 4 for outside carport.

In their reply to submissions, the applicants state that they have never sighted this paper and that it was not produced at the EGM.

Further Information
In accordance with my powers under section 271 of the Act, I requested information from the owner Lot 4 about the shade sail. This information was provided verbally by Mr Fuller to a member of the Commissioner’s office on 23 July 2007. In response to the questions asked, Mr Fuller stated the sail was erected on or about 7 February 2007 at the cost of the owner of Lot 4 and that it was erected on the part of common property indicated in the sketch provided by the applicants.

Determination
The shade sail
Building Units Plan 104270 (now a building format plan) shows the scheme land, the common property and the four lots within two buildings. The boundaries of the lots are determined by reference to the relevant survey plan, and the Land Title Act 1994 (LTA). A building format plan "defines land using the structural elements of a building, including, for example, floors, walls and ceilings" (section 48C(1), LTA) and the boundary of a lot separated from another lot or common property by a floor, wall or ceiling, must be located at the centre of the floor, wall or ceiling (section 49C(4), LTA).

The position of the sail is not disputed. As indicated by the applicants the sail has been erected over land outside and adjacent to the northern boundary of Lot 4. The sail has been attached to the common property external wall of the building containing Lots 3 and 4 and to common property land.

Section 35 of the Act provides that owners own the common property as tenants in common. This gives each owner a general proprietary right to use the common property. However, sections 94 and 152 of the Act provide that it is the body corporate which administers, manages and controls the common property, and an owner’s right to do something on common property may be subject to the legislation and/or a scheme by-law.

In this case, the sail has been erected on common property by the owner of Lot 4 and not the body corporate. It would seem that the owner and/or visitors of the owner use the common property covered by the sail to park a vehicle. In my view, the sail is an improvement to common property for the benefit of Lot 4. Section 114 of the Standard Module states:

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

(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.

(b) must maintain the improvement made under the authority in good condition, unless excused by the body corporate.
I do not consider that the improvement is a minor improvement (an improvement with an installed value of $250 or less; Dictionary Standard Module). Therefore, the body corporate could only authorise the erection of the sail by special resolution in general meeting.

Body corporate authorisation
The owner of Lot 4 has relied on a decision made in September 1999 as authorisation. The minutes provided indicate that the persons present unanimously supported the erection of a carport or cover for unit 4 for outside carport. While the decision does not stipulate who would erect the carport or cover, given that the carport or cover was for unit 4, it could be argued that the work would be done by the owner. If this work was to be done on common property, the legislated authorisation by special resolution applied in 1999. It could be implied from the minuted decision that this authorisation was in fact given. If this was the case, the body corporate could amend or revoke the resolution, but only by a resolution of the same type (section 58, Standard Module). The decision made on the disputed Motion 4 was on whether a previous vote should stand, and in the absence of information to the contrary, it would seem that the 1999 decision is the previous vote mentioned. Therefore, it could be argued that a special resolution was necessary to revoke the previous resolution and given the counting of vote requirements for a special resolution stated in section 106 of the Act, the Motion to revoke the earlier resolution would have been lost.

The minuted September 1999 decision refers simply to a carport or cover ... for outside carport. The minutes do not specify the actual improvement to be made and do not specifically identify the area where the improvement is to be made. This ambiguity may have not been an issue if the owner of Lot 4 carried out work in reliance on the decision soon after the meeting. For instance, the persons present at the meeting may have had in mind what work was to be done and where. The mention of an outside carport may also be to the part of common property now covered by the sail and may have been in reliance of the terms of By-Law 13. However, the owner of Lot 4 waited over seven years before implementing this decision and in this time the ownership of the lots included in the scheme substantially changed. In my view, there are now too many doubts caused by the passage of time before the owner acted. Further, the general terms of the minuted 1999 decision do not now assist the owner.

The owner of Lot 4 has now made an improvement which seems to alienate part of common property for the owner’s personal enjoyment and for the benefit of the owner’s Lot without giving the other owners an opportunity to consider the proposed work. This is a significant matter given the legislated ownership of common property and the possible personal benefits to be derived by the owner of Lot 4 from the use and enjoyment of a part of common property to the exclusion of other owners. It could now be validly argued that the 1999 decision is nothing more than a general indication of the opinion of owners at that time and was subject to a specific proposal being presented to the body corporate for approval. There is sufficient vagueness with respect to the 1999 decision to question whether in fact it represented a resolution under section 114 of the Standard Module.

On balance, I do not consider there was any basis for the body corporate, in considering Motion 4, to have to amend or revoke the 1999 decision by special resolution.

Motion 4
The minutes with respect to the resolution made on this Motion are also vague. As with the earlier 1999 decision, the minuted words are ambiguous and do not achieve any outcome other than seeking an explanation from an unknown person or persons, and then taking a vote about an unknown decision at an unknown previous meeting. It would seem that the Motion required an ordinary resolution (see sections 108 to 110, Act). The basis of this requirement is uncertain (as stated above, a special resolution would be necessary to authorise the erection of the shade sail or to amend or revoke an earlier authorising resolution).

I accept that the body corporate is being self-managed; that all owners were represented at the EGM; that it is likely the owner of Lot 4 was the unnamed person; and that it is likely that the previous meeting was that mentioned as being held in 1999. However, while the applicants and other owners may be aware of the outcome to be achieved by the resolution on the Motion, this is not evident from the minutes of the EGM. The legislation contains detailed procedures about the convening and holding of general meetings. Many of these provisions are designed to protect the body corporate members and any person seeking to rely on a resolution to do something. Despite these regulations, it may be just and equitable to overlook some non-compliance in circumstances where it is apparent that the non-compliance was insubstantial and did not significantly impact on the ability of members to participate in the decision making process or on the management and administration of the body corporate.

However, I do not consider the resolution on Motion 4 represents any reconsideration of the 1999 decision. Nor do I consider that the resolution can be relied on as body corporate authorisation under section 114 of the Standard Module (if it was, a special resolution would not have been passed). In my view, the resolution on the Motion does not serve any purpose. For these reasons, I have dismissed the outcome sought.

However, the Motion cannot remain as a body corporate resolution to be relied on at some future time. Therefore, I have made an ancillary order that the resolution on Motion 4 is void.

Consequential order
It is apparent from the grounds for the outcome sought that the applicants would prefer to have the shade sail removed by the owner of Lot 4. However, an order of this nature cannot be made for this dispute as the applicants have sought an outcome against the body corporate, not a particular owner. When investigating an application, an adjudicator must observe natural justice (section 269(2)(a), Act). Fairness would not be exercised if an order was made against a person without that person being made aware of the specific claim being made against him or her and having the opportunity to respond to that claim.

Despite this, it is evident that the owner of Lot 4 has made an improvement to common property and that this improvement has not been properly authorised by the body corporate. For the reason that this matter requires proper body corporate consideration, I consider it appropriate that a consequential order be made requiring the body corporate to now convene and hold a general meeting for the purpose of giving consideration to authorising the erection of the shade sail on common property in accordance with section 114 of the Standard Module. It would seem that Lot 4 may potentially change ownership. Given the significance of this issue and the fact that there are only four lots included in the scheme, I have made provision in the order to reduce the time for giving notice of the meeting to lot owners to at least 7 days (section 43 of the Standard Module requires at least 21 days notice). I have also made provision for the agenda of the meeting including any other motion properly submitted. I acknowledge that a motion proposing to authorise the improvement will not be passed if the applicants maintain their opposition. This possible outcome should not prevent the body corporate from properly considering the matter. It may be that the owners reach some agreement internally. Importantly, I do not consider it appropriate to determine whether or not the shade sail should remain in this application given the outcome sought by the applicants and the named respondent.

As stated above, section 106 of the Act specifies the counting of votes for a special resolution. Section 106(3)(a)(ii), (b) and (c) provides:

(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.

If the motion is passed by special resolution, this will represent the authorisation of the body corporate for the improvement. If the motion is not passed, the improvement will not have the body corporate’s authorisation. It will be dependent on what subsequently transpires as to whether any further proceedings are necessary. For example, the owner of Lot 4 may make an application under the dispute resolution provisions of the Act if for instance, the owner feels (and provides supporting grounds) that the objections are unreasonable. Alternatively if warranted, a person may make an application against the owner of Lot 4 seeking an outcome that the improvement be removed from the common property.

Number of Scheme:	16072
Name of Scheme:	Villa Del Mare
Address of Scheme:	6 Clifton Street LABRADOR QLD 4215

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Villa Del Mare [2007] QBCCMCmr 472 (7 August 2007)