Palmhurst [2007] QBCCMCmr 511 (20 August 2007)

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Samara Ernst, the owner of Lot 4

I hereby order that the application for an order by Samara Ernst, the owner of Lot 4 seeking an outcome that the body corporate for Palmhurst community titles scheme 414 approves the installation of an air-conditioner in the second bedroom of the Lot, is dismissed.

I further order that Samara Ernst may, within two months of the date of this order, give to the body corporate a written motion requesting body corporate authorisation to install air-conditioning infrastructure on common property for the benefit of Lot 4.

I further order that provided Samara Ernst submits a motion in accordance with this order, the body corporate must, within two months of being given the motion, call and hold a general meeting in accordance with the Body Corporate and Community Management Act 1997 and the Body Corporate and Community Management (Standard Module) Regulation 1997 to consider the motion.

I further order that the agenda for the general meeting called and held in accordance with the terms of this order may include any other motion properly submitted.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0442-2007

"Palmhurst" CTS 414

Application
This application is by Samara Ernst, the owner of Lot 4 (applicant) against the body corporate seeking an outcome that the body corporate approve the installation of an air-conditioner in the second bedroom of the Lot.

Jurisdiction
"Palmhurst" 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 (s276(1), Act). An order may require a person to act, or prohibit a person from acting, in a way stated in the order (s276(2), Act). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (s284(1), Act).

Procedural matters
On 15 June 2007, a copy of the application was provided to The Community Managers (the body corporate manager) for distribution to the owner of each lot (excluding the applicant) and the committee, with an invitation to respond to the matters raised in the application (s243, Act). By email dated 12 July 2007, Kylie Bean of The Community Managers informed the Commissioner that the submission documentation was distributed to owners on 20 June 2007.

No submissions were made from the committee or lot owners.

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

In accordance with my investigative powers stated in section 271 of the Act, on 9 August 2007 I requested that the body corporate manager be contacted to determine if the committee had or wanted to make submissions about the application. Kylie Bean informed a member of the Commissioner’s office that she had spoken to the body corporate secretary and was informed that the committee did not intend to make any submissions.

Submissions
The applicant has provided:

Further information
In accordance with the investigative powers of an adjudicator stated in section 271 of the Act, on 16 August 2007, I requested a member of the Commissioner’s office telephone Kylie Bean for information about whether the body corporate proposed to hold a general meeting in the near future. Ms Bean has provided information to the effect that the next annual general meeting will not be held until after the end of February 2008 and that an extraordinary general meeting has not been proposed or requested.

Determination
Position the air-conditioner proposed to be placed
It is apparent that the applicant proposes to install air-conditioning infrastructure outside the building containing Lot 4 and on an external wall of the building.

The boundaries of the lots included in the scheme are determined by reference to the relevant survey plan (BUP 71222) and to the Land Title Act 1994. This Act states that the plan defines land using the structural elements of a building, including, for example, floors, walls and ceilings (s48C(1), Land Title Act 1994) and the boundary of a lot is the centre of a floor, wall or ceiling of the lot separating the lot from another lot or common property (s49C, Land Title Act 1994).

Relevantly, the centre of the wall of the building mentioned by the applicant constitutes a boundary between Lot 4 and common property. The parts of scheme land on which the applicant proposes to place a component of the air-conditioning infrastructure and to affix piping is common property.

Body corporate authorisation
The installation of this infrastructure is an improvement^[1] to common property providing a benefit only to Lot 4.

Section 114 of the Standard Module provides:

(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.
As the improvement is not a minor improvement^[2], the authorisation can only be made by special resolution in general meeting of the body corporate.

It is noted that By-Law 12 of the scheme by-laws allocates part of common property adjacent to Lot 4 for the exclusive use of the owner or occupier of the Lot. It is not clear from the material presented whether the applicant proposes to install the infrastructure on land subject to the By-Law. However, this is not an issue here given the By-Law does not authorise a person such as the applicant to make this type of improvement to the exclusive use common property. If the improvement was proposed to be made on the exclusive use area, section 123(4) of the Standard Module would apply to requiring body corporate authorisation by special resolution.

It is evident that the applicant has not sought body corporate authorisation in general meeting. Rather, the applicant approached the committee. It would seem that the committee opposed the request by voting dated 18 April 2007. The copy of the minute provided refers to section 101A of the Act. At the time the decision was made, the Act did not contain a section 101A^[3]. However, it would seem that the decision was made outside a committee meeting as allowed under section 35 of the Standard Module. This decision may have been made on the basis of By-Law 15 which deals with the installation of air-conditioners. This By-Law seems to relate to the installation of an air-conditioner on a lot, although it does make reference to common property.

In the circumstance where the applicant proposes to install infrastructure on common property, the requirements of either section 114 or 123 prevail over By-Law 15. Consequently, the applicant should have sought body corporate authorisation in general meeting before making this application.

Existence of a dispute
Section 227(1) of the Act prescribes the meaning of ‘dispute’ as being between particular parties such as the owner of a lot and the body corporate. A ‘dispute’ cannot exist between a lot owner and the committee. While this particular dispute may relate to a committee decision, a decision of the committee is a decision of the body corporate (s100(1), Act) and an owner can make an application against the body corporate.

The applicant has named the committee as a party to the dispute given its refusal to authorise her request to install the air-conditioning infrastructure. As I mentioned above, this authorisation may only be given in general meeting by special resolution. The committee’s power to make body corporate decisions is limited by section 100(2) of the Act which provides that section 100(1) does not apply to a decision that is on a restricted issue. A restricted issue includes an issue requiring a special resolution (s26(1)(d), Standard Module). Consequently, the committee could not give this authorisation.

The absence of proper consideration of the applicant’s request brings into question the existence of a dispute. Section 276(1) of the BCCM Act provides that an adjudicator may make an order to resolve a dispute. The issue of the existence of a ‘dispute’ under the BCCM Act has been considered by the District Court (the then appellant jurisdiction against an order made by a department adjudicator under the BCCM Act). In K.G. Tully & Anor. v The Proprietors The Nelson Body Corporate [2000] QDC 031, Judge Robin QC held that There must be "dispute" before an adjudicator has jurisdiction. The application identified the committee of the body corporate as the other party to the dispute. The respondent's case is that the nature of the permission sought by the appellants was such that the body corporate itself must give permission or authority; it never having been asked by the appellants to do so there can be no dispute involving it as a party, and therefore no right in the applicants to apply to the adjudicator on the basis that they are parties to "a dispute" for purposes of s.192(1)(a) (renumbered as section 238). The objection to the application is sound in principle, in my opinion. The existence of a relevant "dispute" is fundamental to an adjudicator having jurisdiction.

These comments are relevant to this matter. There is no ‘dispute’ where there has not been consideration by the body corporate as specified by the legislation. Given that the body corporate has not voted on the applicant’s request in general meeting, I cannot make an order in the terms being sought.

Order
For these reasons, I have dismissed the outcome sought by the applicant.

However, I am of the view that it is just and equitable to compel the body corporate to give proper consideration to this issue (should the applicant indicate an intention to proceed with her request) given that:

The compulsion to hold a general meeting is linked to the applicant indicating an intention to progress this matter. If the applicant does not give the motion within the time stated in the order, she can submit a motion at a later time. In this circumstance, the motion would be included on the agenda of the next general meeting in a way stated in section 41 of the Standard Module.

If she intends submitting a motion, the applicant should note that she may also give an explanatory note to the secretary about the motion, provided it is no longer than 300 words. This note may include information such as a description as to where the infrastructure is proposed to be placed, the type of air-conditioning system and the expected noise to be produced.

For the information of the parties, votes are counted on a motion requiring a special resolution in the manner prescribed in section 106 of the Act:

(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.

(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.

The committee’s primary reason for opposing the applicant’s request would seem to relate to the issue of appearance. What constitutes good appearance is to a large extent subjective. It could be validly argued that uniformity is preferable. Similarly, an opinion that owners should be able to make improvements to common property of the nature being sought and that the appearance is not detrimentally affected by the improvement is equally valid. Improvements which have already been allowed by the body corporate can be significant when the issue of appearance is considered. For example, it cannot be reasonably claimed that absolute uniformity is preferred or that the appearance of the building will be detrimentally affected when the body corporate has allowed other owners to make improvements of a similar nature to common property. It is relevant that the owner of Lot 7 above Lot 4 has been allowed to have an air-conditioner affixed to the common property wall adjacent to Lot 7 and the applicant is proposing to do similar (and possibly less visually invasive) work; and that other owners have also possibly been permitted to install air-conditioning infrastructure on common property. These events raise the issue of discrimination. It should be noted that a body corporate may be seen as acting in a discriminatory manner if it refuses (without good reason) a request to install an air-conditioner when it allows another similar installation. If the body corporate is concerned about appearance, it may as a condition to authorising an air-conditioning improvement for example, require the associated pipes to be of a colour which does not stand out against the colour of the external wall of the building.

If the applicant’s request is considered and rejected in general meeting, the applicant will be able to make another application if she considers for example, that the opposition to her request was unreasonable.

^[1] "Improvement" defined, Schedule 6 Dictionary, Act to include "a non-structural change, including, for example, the installation of air conditioning".
^[2] An improvement with an installed value of $250 or less; Dictionary Standard Module.
^[3] The Act did contain a section 101A prior to the amendments commencing March 2003 which related to voting other than at a general meeting. This section is currently numbered 111. It should be noted that this section does not apply to a scheme subject to the Standard Module.

Number of Scheme:	414
Name of Scheme:	Palmhurst
Address of Scheme:	2 - 4 Springfield Crescent MANOORA CAIRNS QLD 4870

•	A letter she addressed to the committee dated 5 April 2007 seeking approval for three different alterations, one of which related to the installation of a 7000btu Fujitzu inverter split system air-conditioner to the external wall of the second bedroom. In the letter, the applicant stated that "the box that will be situated on the outside of the wall will be hidden behind the garden – which will not damage the garden and will also not affect the aesthetics of the apartment block. I have noticed almost every other unit in the complex have air conditioners installed, and the electrician has told me the one I am seeking will be installed in almost the same fashion as the air conditioner in the unit directly above my own (the bedrooms are on top of one another)".
•	An email she received from Kylie Bean dated 18 April 2007 advising the committee "may consider approval of a/c installation in 2^nd bedroom however suggested a ‘dual pump’ be linked to other air-con and a hole can go into the cornice in bedroom corner, in wardrobe preferably, linking them both. Their main concern is the visibility of the unit on the exterior of the building, creating an eyesore". Attached to the email was a copy of a resolution passed by written vote under section 101A of the Act on 18 April 2007 where 3 no votes were recorded against permitting the applicant "to install a small air-conditioner in the second bedroom in the same fashion as the air-conditioner in the unit directly above".
•	An email of the same date she sent to Kylie Bean questioning the above decision when everyone else has air conditioners and when there are 2 air conditioners poking out of the wall directly above where she wants to install an air-conditioner and that her air-conditioner would be less visible as it would be hidden behind bushes.
•	A letter she wrote to the committee on 19 April 2007 stating that the air-conditioner will be hidden behind a garden, that only small piping will be seen, that her proposal is less invasive than other air-conditioners, and that a ‘dual pump’ linked to the split system in the first unit bedroom would be highly impractical.
•	A letter from Winfield’s Electrical stating that the Fujitsu 7000btu inverter has a sound pressure level of 48db, the box a/c is 58db and inside the unit is 46db.
•	Photographs indicating the place where it is proposed to place the air-conditioner, the external wall where the associated piping is proposed to be placed, and an air-conditioning unit and piping affixed to the external wall for Lot 7 above Lot 4.

•	The committee should have either decided to refer the applicant’s initial request (made in April 2007) to a general meeting or informed the applicant that her request could only be decided at a general meeting. Given that the next annual general meeting was not due to be held for approximately a year after the initial request was made, if the committee did not decide to hold an extraordinary general meeting, the applicant could have sought support from other owners to requisition an extraordinary general meeting for the purpose of determining her request (s61, Standard Module).
•	The committee did not properly apply the legislation in denying the applicant’s request.
•	The committee did not, it would seem, respond to the applicant’s concerns in her letter dated 19 April 2007about their response to her initial request.
•	As it now stands, the applicant will more than likely have to wait until possibly May 2008 before getting an answer to her request. In my view, this delay is unacceptable.
•	There have not been any submissions made by owners opposing the application.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Palmhurst [2007] QBCCMCmr 511 (20 August 2007)