One Park Road [2007] QBCCMCmr 78 (14 February 2007)

Last Updated: 27 February 2007

REFERENCE: 1064-2006

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	2114
Name of Scheme:	One Park Road
Address of Scheme:	1 Park Road MILTON QLD 4064

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Kiara Holdings Pty Ltd, the owner of Lot 4

I hereby order that the resolution made on Motion 3 at the Extraordinary General Meeting of the body corporate for One Park Road held on 28 December 2006 (EGM) is void. I further order that the application by Kiara Holdings Pty Ltd, the owner of Lot 4 that an amended notice of the EGM be issued if Edith Dindas Pty Ltd chooses to press the issue clarifying for the benefit of the body corporate owners that proposed Motion 4 is to be described as requiring to be passed without dissent and that Motion 5 is to be expressed in such a way as to not be uncertain or misleading and deceptive, is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 1064-2006

"One Park Road" CTS 2114

APPLICATION

This application is by Kiara Holdings Pty Ltd, the owner of Lot 4 (applicant) against the body corporate. The final outcome sought is that an amended notice of the Extraordinary General Meeting called for 28 December 2006 (EGM) be issued if the requisitioner and proposer, Edith Dindas Pty Ltd chooses to press the issue clarifying for the benefit of the body corporate owners as follows that proposed motions 3 and 4 are to be described as motions requiring to be passed without dissent; and that proposed motion 5 is to be expressed in such a way as to not be uncertain or misleading and deceptive.

JURISDICTION

"One Park Road" Community Titles Scheme 2114 is a scheme under the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Commercial Module) Regulation 1997 (Commercial Module).

Section 276(1) of the Act provides that 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 exercise of rights or powers, or the performance of duties, under the 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).

In its submissions, the committee questions the existence of a dispute as Motions 3 to 5 were submitted by a lot owner, not the body corporate. In the reply to submissions, the applicant stated that there is a dispute as the body corporate (or the body corporate manager) refused to amend the agenda and voting paper for the EGM despite the applicant’s written request; and the body corporate’s obligation to include a motion on the agenda of a general meeting does not deprive the applicant from having the dispute heard. The legislation establishes the framework for convening and holding a general meeting (see sections 104 to 110, Act, section 27 to 49, Commercial Module). A basis for the outcome sought is that incorrect types of resolutions have been stated for Motions 3 and 4. Given that the EGM is a body corporate meeting, the types of resolutions required to pass the motions on the agenda are controlled by the body corporate, and the resolutions made are body corporate decisions, the applicant is entitled to make a dispute resolution application against the body corporate.

INTERIM ORDER

The applicant had sought an interim order that the EGM (or that part of it as concerns motions 3, 4 and 5) be adjourned pending compliance with the final outcomes. On 20 December 2006, I made an interim order that pending a further order of an adjudicator, the body corporate for One Park Road community titles scheme 2114 shall not proceed with, implement or otherwise act upon any resolution passed on Motions 3, 4 and 5 on the agenda of the Extraordinary General Meeting dated 28 December 2006.

The interim order was made without the body corporate or Edith Dindas Pty Ltd (the owner who submitted the Motions) being invited to make written submissions. In the statement of reasons for decision, I stated that the interim order prohibits "the body corporate from taking any further action pursuant to any resolutions passed on the disputed Motions pending a determination of the application for an interim order.
This determination will be made after the body corporate and Edith Dindas Pty Ltd has been given a reasonable opportunity to make submissions about the application. Submissions will now be sought regarding the interim order application".

Submissions have been sought from the parties to the application. Even though all lot owners have not been given an opportunity to make submissions on the application, I consider that a final determination can be made given that the terms of the outcomes sought are technical in nature and that I do not consider that the issues will be progressed any further should the determination be delayed to provide all owners with an opportunity to make submissions.

SUBMISSIONS

On 20 December 2006, the body corporate committee and Edith Dindas Pty Ltd were invited to make submissions on the interim order application by 4 January 2007. Submissions were made by Nicholsons Solicitors for the committee.

The applicant was invited to make submissions in reply to the committee’s submissions by 12 January 2007. The time for making submissions was extended to 25 January 2007 at the request of the applicant’s solicitor, Holding Redlich Lawyers. Holding Redlich made submissions on behalf of the applicant in response to the committee’s submissions.

On 29 January 2007, I invited the applicant, the committee and Edith Dindas Pty Ltd to make written submissions to me about whether Lot 30 was intended to be included in the amalgamation of lots proposed in Motion 3 on the agenda of the EGM. All parties made submissions.

DETERMINATION

Motion 3
Motion 3 on the agenda of the EGM concerned the amalgamation of lots. The voting paper for the EGM indicates that the Motion was proposed by Edith Dindas Pty Ltd and required an ordinary resolution. The Motion proposed "That lots 15, 17-26, 31, 33, 35, 36, 37 and 40 on BUP 13555 be amalgamated into Lot 42 on SP 197434 and that the new Lot 42 have a Contribution Schedule Lot Entitlement and Interest Schedule Lot entitlement equal to the aggregate of the entitlements of the amalgamated lots and that a new Community Management Statement reflecting the amalgamation be executed by the Body Corporate and lodged in the Department of Natural Resources to reflect the amalgamation". The proposed SP 197434 of Lot 42 included in the notice of the EGM cancels Lots 15, 17-26, 31, 33, 35, 36, 37 & 40 on BUP 13555.

The Minutes of the EGM indicate that the Motion was carried by ordinary resolution with 28 votes for the Motion; 6 against; and 1 abstention.

The applicant contends that the voting paper for the EGM is misleading as it wrongly describes the Motion as requiring an ordinary resolution when a resolution without dissent is necessary given that the Motion seeks a new community management statement (CMS) to reflect the amalgamation of lots (section 62, Act). The committee relies on section 62(4)(h) and (5) of the Act stating that an ordinary resolution is sufficient to resolve the Motion. In the reply to submissions, the applicant submits that section 62(4)(h) does not apply because section 62(5) applies as the amalgamation affects the allocation of car parks on common property. The applicant states that By-Law 21 and the rights it gives will be affected if the lots are amalgamated. The applicant submits that even if section 62(4)(h) applies, the basic requirement of subsection (4) would not be satisfied as the new CMS would not be different from the existing CMS only in the matters set out in the subsection because of the amendment to By-Law 21.

Section 62 of the Act provides for the form of body corporate consent to the recording of a new CMS for the scheme in place of an existing CMS. The consent must be in the form of a resolution without dissent (section 62(2), Act) unless section 62(3), (4) or (6) applies.
Relevantly, section 62(4)(h) provides that neither a resolution without dissent or a special resolution is required and the consent may be otherwise given "if the new statement is different from the existing statement only to the extent necessary for 1 or more of the following...amalgamating or subdividing lots included in the community titles scheme". Section 62(5) states that "subsection (4)(h) applies only if the associated plan of subdivision does not affect the common property and does not change" the lot entitlement arrangements.

My reading of the plan of subdivision presented to the EGM (SP 197434) indicates that the plan cancels a number of lots and amalgamates those lots into a Lot 42. It is not evident from the plan that the common property for the scheme is affected. Nor has it been claimed that the actual amalgamation as indicated by the plan has affected common property. Further, it is clear from the words in the Motion that there will not be a change in lot entitlements other than to reallocate the entitlements of the amalgamated lots to Lot 42.

The applicant says that the amalgamation will affect the allocation of car parks on common property pursuant to By-Law 21. This By-Law enables the building manager to designate common property for the parking of motor vehicles (see below under Motion 4). In my view, Motions 3 and 4 are mutually exclusive and the terms of Motion 4 do not affect the type of resolution required to pass Motion 3. Motion 3 is not subject to Motion 4 and a resolution made on Motion 3 could have been implemented even if Motion 4 was not passed (if this was the situation, the occupier of new Lot 42 would be able to park only one vehicle free of charge on designated common property). In addition, I do not agree that the resolution required for Motion 3 was subject to other motions which may have been on the agenda of the EGM relating to making changes to the existing CMS for the scheme. This Motion proposed a change to the CMS limited to the circumstances stated in section 62(4)(h) and (5). Therefore, I agree with the committee and am of the view that the Motion submitted to a general meeting required an ordinary resolution.

In reading the Motion and the plan, it appeared to me that it was also proposed to amalgamate Lot 30 into Lot 42, but that this Lot was not recognised in the Motion or the plan. The committee has confirmed that this Lot was intended to be included in the amalgamation and Edith Dindas of Edith Dindas Pty Ltd has agreed with this submission. It appears to be accepted by the parties that the exclusion of this Lot affects the Motion. Given that a fundamental element of the Motion and the plan is that every lot proposed to be cancelled is identified, the exclusion of one lot does bring into question the validity of the Motion and the resolution made. For the reason that existing Lot 30 was not identified in the proposed Motion or the proposed plan of subdivision, I have ordered that the resolution on the Motion is void.

Motion4
Motion 4 on the agenda of the EGM sought to change By-Law 21. This By-Law states "The Occupier of each Lot together with their invitees shall be entitled to park free of charge one motor vehicle in such area of the Common Property designated for such purpose from time to time by the building manager appointed by the Body Corporate. The Body Corporate shall have the right to grant exclusive use of any car space to an owner on such terms in respect of maintenance and rights of transposition as may be determined at the time of the granting of such exclusive use".

The Motion proposed to amend the By-law to insert after "building manager appointed by the Body Corporate", the words "except where lots are amalgamated or subdivided, in which case, the original allocations based on the lots shown on BUP 13555 shall apply".

The applicant submits that the by-laws are stated in the CMS and as the Motion involves the creation of a new CMS a resolution without dissent was necessary (section 62, Act). The committee submitted that Motion 4 sought to maintain the status quo for car parking in the event that Motion 3 was passed. The committee say that a special resolution is required as By-Law 21 is not an exclusive use by-law (section 62(3), Act). In the reply to submissions, the applicant stated that By-Law 21 is an exclusive use by-law within the meaning of section 170 of the Act.
The applicant states that the By-Law is concerned with the allocation and use of common property; it attaches to a lot and gives the owner exclusive use of the common property allocated by the building manager; and it purports to allocate common property as stated in section 171(1)(b) of the Act.

Section 169(1) of the Act provides that the by-laws may provide for the administration, management and control of common property; and may regulate the use and enjoyment of common property. Section 170 provides that an exclusive use by-law attaches to a lot and gives the occupier of the lot exclusive use to the rights and enjoyment of common property. Section 171 of the Act makes provision for the requirements for an exclusive use by-law. Relevantly, subsection (1) states that the common property to which an exclusive use by-law applies must be (a) specifically identified in the by-law; or (b)(i) allocated by a person authorised under the by-law to make the allocation. The Act refers to a section 171(1)(b)(i) allocation as an authorised allocation. Section 174(1) provides that an authorised allocation has no effect unless details of the allocation are given to the body corporate. Also an authorised allocation has no effect unless the allocation is made in the period ending 1 year after the relevant CMS is recorded (section 174(2)(a), Act). The body corporate has an obligation under section 175 to have authorised allocations shown in the scheme’s CMS.

In my view, By-Law 21 regulates the way in which the occupier of each lot (and their invitees) may use common property and entitles the person to park one vehicle free of charge on common property as designated by the building manager. I do not agree that the entitlement is of the nature of exclusive use as argued by the applicant. There is no indication that the By-Law necessitates an allocation of a specific area of common property for exclusive use as contemplated by the Act. Further, the applicant has not demonstrated that any allocation made from time to time by the building manager is of the nature of an authorised allocation.

The By-Law provides an entitlement to the occupier of each lot. When the By-Law was initially registered on the plan on 28 September 1995 there were 39 lots in the then parcel as Lots 38 and 39 on BUP 13555 had (in August 1995) been re-subdivided into Lot 41 by BRP 102921. It would seem therefore that when the By-Law was registered, the occupiers of 39 lots had an entitlement to park one vehicle free of charge on common property. It does not seem that any recognition was given in the By-Law to the subdivision of 2 lots into Lot 41.

The amendment to the By-Law proposed in Motion 4 acknowledges amalgamated or subdivided lots by seeking to maintain an entitlement that an occupier of each amalgamated or subdivided lot had prior to the amalgamation or subdivision. The proposal does not relate to a particular amalgamation or re-subdivision and does not provide an additional benefit to an occupier of any particular lot. Further, I do not consider that the amendment could be seen as being to the detriment of other owners, occupiers or their invitees. In my view, the amendment seeks to continue the intention of the By-Law when it was first made, that being that the occupier of each initial lot has an entitlement to park a vehicle free of charge on a designated part of common property. I do not consider it significant that the By-Law now seems to recognise Lot 41.

For these reasons, I agree with the committee that a special resolution is sufficient to consent to a new CMS containing the difference in By-Law 21. Therefore, the outcome sought with respect to this Motion is dismissed.

Motion 5
The Minutes of the EGM indicate that Motion 5 was not passed. In the reply to submissions, the applicant states that "final orders in relation to Motion 5 are no longer required because the amended motion was not passed at the EGM". Consequently, no further consideration is given to this matter.