Air on Broadbeach [2008] QBCCMCmr 138 (22 April 2008)

Last Updated: 1 May 2008

REFERENCE: 0995-2007

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	34509
Name of Scheme:	Air on Broadbeach
Address of Scheme:	159 Old Burleigh Road BROADBEACH QLD 4218

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

the Body Corporate for Air on Broadbeach

I hereby order that the respondent, Wayne Ballin of Lot 3202, shall, within three months of the date of this order, submit a motion to a general meeting of the Body Corporate for Air on Broadbeach, seeking approval for the retention of the storage cabinet installed by him on common property adjacent to the exclusive use car park space allocated to Lot 3202. I further order that the Body Corporate for Air on Broadbeach shall include any motion submitted by Wayne Ballin in regard to the storage cabinet on the next general meeting agenda after receipt of the motion on which is it is practicable to include the motion. I further order that, if Wayne Ballin fails to submit a motion in regard to the storage cabinet within three months of the date of the order, then Wayne Ballin shall, within six months of the date of this order and at his own expense, remove the storage cabinet and make good any damage to common property. I further order that, if the Body Corporate for Air on Broadbeach fails to pass a motion submitted by Wayne Ballin for approval of the storage cabinet, then Wayne Ballin shall, within three months of the date of the meeting and at his own expense, remove the storage cabinet and make good any damage to common property. I further order that, if a motion submitted by Wayne Ballin in regard to the storage cabinet is considered by a general meeting, a copy of this order and the statement of reasons shall be included in the meeting notice.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0995-2007

“Air on Broadbeach” CTS 34509

Air on Broadbeach community titles scheme (Air on Broadbeach) consists of 133 lots and common property. The community management statement (CMS) for Air on Broadbeach indicates that the Body Corporate and Community Management (Accommodation Module) Regulation 1997 (Accommodation Module) applies to the scheme. Department of Natural Resources and Water records show the scheme is registered as Survey Plan 149735.

APPLICATION

Pursuant to the Body Corporate and Community Management Act 1997 (Act), this application was made by the Body Corporate for Air on Broadbeach (applicant) on 17 December 2007. The application was authorised by the Committee by a resolution on 5 June 2007.

The applicant sought an order against Wayne Ballin, Owner of Lot 3202 (respondent) in the following terms:

That the owner of lot 3202 be ordered to remove the storage cage that he has erected on common property adjoining the exclusive use car park allocated to lot 3202.

PROCEDURAL MATTERS

The applicant lodged a conciliation application on 12 November 2007 but this application was deemed to be not appropriate for conciliation by the Conciliator on 29 November 2007. Accordingly this application was lodged.

After receiving requested clarification of the application, on 20 February 2008 the Commissioner provided a copy of the application to the respondents, and invited the respondents and all owners to respond to the matters raised by the application. Submissions were made by the respondent and the owners of 16 other lots. The applicant did not avail itself of the opportunity to inspect the submissions received or make a written reply.[1]

A dispute resolution recommendation was made referring the dispute to departmental adjudication.

BACKGROUND

The application relates to the installation of a storage shed/cabinet by the respondent on common property adjacent to the respondent’s car park space. The facts of the dispute, as outlined in the application and submissions, can be summarised as follows.

On 13 February 2006 the Body Corporate Management (BCM) wrote to the respondent requesting that he remove the storage shed. On 24 March 2006 the BCM wrote again saying that if the shed was not removed by 6 April 2006 the matter would be referred to the Commissioner. A similar letter on 4 July 2006 set a deadline of 21 July 2006. On 21 September 2006 a Committee meeting resolved to send a contravention notice on the issue.

Related matters were discussed at a Committee meeting on 19 December 2006. It indicated that some owners had installed storage area with the consent of the developer (apparently most on allocated car spaces). In response to a proposal by two lot owners, the meeting resolved to reimburse the construction costs to any owner who was requested to remove storage cages provided that an invoice for the construction costs was provided.

On 6 March 2007 a Committee meeting noted that two lots had removed storage cages and been reimbursed, but two further lots (including Lot 3202) had not. It also noted that Lot 3202 still had a shed on common property and that a contravention notice would be sent. The application includes a copy of a Notice of Continuing Contravention of a Body Corporate By-law[2] apparently issued to the respondent on 29 May 2007. It alleged that the respondent had breached by-laws 2.2 and 3.1 by constructing a shed on common property. It requested action within 28 days.

On 5 June 2007 the Committee again noted that two lots still had storage sheds on common property. On 18 September 2007 a Committee meeting item said a contravention notice had been sent and the matter would be referred to the Commissioner if a response was not received in 28 days. While the heading refers to Lot 3202 the text refers to Lot 1605 only.

The submission from the respondent includes the following chronology of events and argument:

• His purchase of Lot 3202 settled on 24 October 2005;
• On 23 November and 13 December 2005 he discussed a proposed shed with Mark Jewel, of THL Broadbeach Development Pty Ltd (the developer), and consent was verbally given by Jewel who at the time was chairman, secretary and treasurer of the Body Corporate;
• Jewel did not document his approval but the Body Corporate has not disputed that he gave approval to the respondent and to other owners;
• The shed was installed in January 2006;
• Three letters were received from the BCM in early 2006 requesting the removal of the shed;
• On 2 October 2007 the respondent’s solicitors wrote to the BCM asking that the matter be tabled at the next general meeting and seeking advice on steps to gain approval for the shed;
• On 3 October 2007 the BCM advised that the Body Corporate would not grant permission for a shed on common property and that if approval for a storage shed was requested it would be granted for installation on the car space of Lot 3202 only and subject to Body Corporate approved guidelines. The 13 guidelines were included in the letter;
• On 23 October 2007 the respondent’s solicitors wrote advising that the respondent had developer approval and again asking for the matter to be tabled at a general meeting;
• The cabinet should be allowed to remain because:
  • ­ it is out of sight and not an eyesore;
  • ­ it is of high quality professional metal construction in as new condition;
  • ­ it is located in an area which, because of a 5 feet wide pylon, could not be used by anyone for any other purpose and serves no other useful purpose;
  • ­ it is positioned so the adjoining owner could construct a cabinet of equal size;
  • ­ there are a number of large downpipes and cross pipes at the at the head of the parking allocation, making it impossible to install a cabinet of the type approved by the Body Corporate for other owners, particularly with a medium to large car; and
  • ­ it does not pose a fire hazard, does not affect the sprinkler system, is made of metal and so is better for fire protection, and the Body Corporate can inspect the contents;
• He claims that a lot owner has told him that they were asked to sign a form by the Body Corporate saying that they directly affected by the cabinet but they refused as they were not;
• It was not his intention to be in conflict with the Body Corporate but the Body Corporate has refused attempts to communicate and table the matter at a general meeting.
  

All of the submissions from the owners of 16 lots support the application.[3] Many of the submissions provide the same information in that several cages were installed in the car park area with approval from the developer prior to the handover to owners. They say the cages consist of lockable chain wire fence covered in shade cloth. They say it later became apparent that the cages caused problems with vision impairment contributing to vehicle accidents, restricted access to car spaces, traffic hindrance when cage doors were open, inhibited access to shopping centre services, and insurance risk if stored items were combustible. One says the cages are unsightly.

While the Body Corporate did not inspect or reply to submissions, I forwarded the respondent’s submission to them and invited them to comment on the contents and the scope to negotiate use of the space. A response was received from the Committee Secretary. The response says:

• The car park is 25 years old and was build as a public car park for the Oasis Shopping Centre, with a portion given over to residents of Air on Broadbeach.
• Before an owners committee was formed, the developer’s representative gave written permission for full height lockable cages to be built on car park spaces to some 16 owners.
• Cages have been built from wire mesh and covered with hessian or shade cloth.
• It soon became apparent that the construction of cages did not allow spaces to be used as car parks because the spaces then became too tight to allow reasonable access to car doors, they caused obstruction to other users when the gates were open, and they were a hazard to traffic line of sight.
• The scheme insurance company has raised concerns regarding public liability and fire risk.
• Building managers have been unable to access the cages to clean the car park, check the sprinkler system, or change lights.
• Only 2 or 3 owners have not accepted the Committee offer to remove the cages in exchange for a reimbursement of repayment of their expenses. The respondent is one of these.
• The respondent built his cage on one side of the allocated car space and placed storage cabinets in this area.
• The Committee is concerned about the principle of someone taking a larger area of car park for themselves and creating a precedent for the future.
• They hope that the respondent will remove the cage as well as the storage cabinet but will be lodging a separate application for the removal of the cage.
• At no time has the respondent expressed the need for these cabinets over the prescribed storage boxes over stilts that sit over the bonnet of a car parked in an allocated car space. They say they were not aware of a problem and “...if there is a problem with the positioning of our prescribed storage box, then I am sure that a compromise can be reached”.
• They believe that the space by the pillars could also be claimed by the neighbouring lot. While the respondent claims the current neighbour is happy with the situation a new owner may have a problem with access to the space.
• The Body Corporate does not submit the plan of the car park and storage cabinet location submitted by the respondent.[4]
• The Committee has mixed views on whether the respondent received verbal approval from the developer. They query why, as the developer gave written approval for the cages, he did not similarly give written approval for the storage cabinets on common property.
• The Committee is not aware that any other sheds, cabinets, cupboards or similar have been constructed on common property and certainly not without Body Corporate approval.
• In regard to any potential adverse impact of the respondent’s storage cabinets, the Committee is concerned that future neighbours may object to the location, that their insurance company may have concerns that the capacity of storage is out of kilter with the allowance to other residents.
  

JURISDICTION

I am satisfied that this is a matter which falls within the legislative dispute resolution provisions.[5]

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 CMS; or

(b) the exercise of rights or powers, or the performance of duties, under the Act or the CMS; or

(c) a claimed or anticipated contractual matter about the engagement of a person as a body corporate manager or service contractor; or the authorisation of a person as a letting agent.

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)).

DETERMINATION

Scope of the dispute

In the first instance I note that there seems to be significant confusion about the subject of this dispute. This confusion has been fuelled by the inconsistent and imprecise language used in the application, Committee minutes and Committee correspondence. However, on the basis of the material before me (particularly the scope of the by-law contravention notice issued on 29 May 2007, the correspondence from the Body Corporate Secretary on 14 April 2008, and the respondent’s submission) I am satisfied that that the subject matter of this application is limited to the construction of a storage space (variously referred to as a shed or cabinet) on the common property adjacent to the car park space allocated to the exclusive use of Lot 3202.

It appears that in addition to the storage cabinet, the respondent also has a cage constructed around all or part of his allocated car park space. It is somewhat unclear from the material provided whether this cage encroaches on the common property beyond the exclusive use area allocated to Lot 3202, although it is not necessary in the circumstances for me to investigate that. Many of the submissions from owners refer only to the cage. None comment on the storage cabinet. However it is clear from the correspondence from the Body Corporate Secretary on 14 April 2008 that the Body Corporate’s desire for the respondent’s car park cage to be removed is to be the subject of a separate application.

Accordingly, the first issue for consideration in this matter is whether the respondent had valid authorisation for to install the storage cabinet on common property adjacent to his car space. If there was no valid approval, the second issue is whether it is just and equitable in the circumstances for the cabinet to be removed.

Authority for improvements to common property

It is not disputed that the cabinet was installed by the respondent and that it is located on common property. Section 113 of the Accommodation Module provides as follows for improvements to common property by an owner:

113 Improvements to common property by lot owner—Act, s159 [SM, s 114]

(1) The body corporate may, if asked by the owner of a lot, authorise the owner to make an improvement to the common property for the benefit of the owner’s lot.

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

(a) the improvement is a minor improvement; and

(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.

(3) An authorisation may be given under this section on conditions the body corporate considers appropriate.

(4) The owner of a lot who is given an authority under this section—

(a) must comply with conditions of the authority; and

(b) must maintain the improvement made under the authority in good condition, unless excused by the body corporate.

I do not consider that the installation of a comparatively large storage cabinet is a minor improvement. For that reason I am of the view that the cabinet is an improvement which required a special resolution at a general meeting.[6]

It is clear that the Body Corporate has not approved the installation of the cabinet. Although the respondent has no evidence to support his claims, it may be that the developer’s representative purported to give him verbal approval for the cabinet. While the developer’s representative may well have held all committee positions at the relevant time, this was not a decision that the committee could make. Even if the developer was the majority owner at the relevant time, the matter should still have been remitted to a general meeting for a minuted resolution. While I sympathise with the respondent if in fact he acted in good faith in reliance on verbal comments from the developer’s representative, I am not satisfied that the installation of the cabinet was validly authorised.

Alleged by-law contravention

The by-law contravention notice issued on 29 May 2007 alleges a breach of the following by-laws contained in the CMS for Air on Broadbeach:

Structures

2.2 Subject to by-law 2.3 and any law, an Occupier must not alter, operate, damage or deface any Asset or structure that forms part of the Common property without the written consent of the Body Corporate.

Obstruction

3.1 Occupiers must not obstruct lawful use of the Common Property by another person.

When a body corporate is pursuing a by-law issue, the first step is generally to issue a contravention notice. The contravention notice, which must state certain things including the nature of the breach, must be given to the person who the body corporate believes is breaching the by-law. If the issuing of a contravention notice does not rectify the matter, the body corporate can either commence proceedings in the Magistrate’s Court or may lodge a dispute resolution application in the Commissioner’s Office. I am satisfied that the Body Corporate has complied with the required process.

I am satisfied that the installation of the cabinet is an ‘alteration’ to common property. In the absence of written consent to the cabinet from the Body Corporate the cabinet breaches By-law 2.2 in addition to being contrary to section 113 of the Accommodation Module.

However the Body Corporate has provided no evidence that any person is actually being obstructed by the existence of the storage cabinet. The respondent claims that no-one else can use the space and that access to it is prevented by the existing pylon. No submission has reported any obstruction by the storage cabinet (as opposed to the cage which is not the subject of this application). Accordingly I am not satisfied that By-law 3.1 has been breached.

Proposed removal of the storage cabinet

As indicated I am satisfied that the respondent has not received valid approval for the storage cabinet and also that, in the absence of approval, the respondent is in breach of By-law 2.2. The next question is whether it is just and equitable in the circumstances to require the removal of the cabinet, as the Committee requires, or whether some other course of action might be appropriate.

This dispute appears to have been exacerbated by poor communication and inaction on the part of both parties. The Body Corporate has given little explanation for why it did not issue a contravention notice against Lot 3202 until some eight months after the Committee apparently resolved to do so, and then took over five months after that to lodge a conciliation application in this Office. Similarly the respondent seems to expect that action on the issue should cease during his apparently lengthy overseas trips.

The Committee appears to have little knowledge of the nature and even the exact location of the storage cabinet. However the respondent does not appear to have actually communicated to the Committee why he does not consider that the Body Corporate approved storage boxes are feasible in his car space, and why he considers that he should be able to retain the cabinet. While the respondent’s solicitor’s requested that the Committee table the issue at a future body corporate meeting, the respondent does not appear to have taken the logical step of submitting a motion himself to a general meeting. I am of the view that the onus for taking this step rests, and has always rested, with the respondent rather than the Committee.

None of the submissions raise any specific objection to the storage cabinet (as opposed to the cage), other than the ‘legality’ of the installation. It is not clear whether this is because no owner has any other objection or because the thought the dispute was about the cage rather than the cabinet. It appears from the photographs provided by the respondent that the cabinet is not visible when the cage gates are shut and is so many owners may not even realise the cabinet is there.

Aside from setting a precedent, the Body Corporate does not appear to have any specific objection to the storage cabinet other the risk that some future neighbouring owner might object and that their insurance company might have some unspecified concern. If, as the respondent claims, the cabinet only takes up half the space between the Lot 3202 car space and the adjacent space, it is hard to see how a future neighbour could have a justifiable concern if they were allowed similar use of their side of the space. In the absence of any proper explanation from the Body Corporate it is difficult to see what objection an insurer would have to the cabinet (as opposed to a cage). The Body Corporate has not disputed the respondent’s claims that the space on which the cabinet is located is not reasonably able to be used by anyone else, that the cabinets present no adverse visual impact[7], and that the cabinets do not present a fire hazard.

The next logical formal step is the respondent to submit a motion to a general meeting for approval to retain the cabinet. However the respondent would be well advised to make direct contact with the Committee prior to his forthcoming overseas trip to explain his difficulties with the Body Corporate approved storage boxes, and seek to negotiate the terms under which the Committee might support his proposal. The Secretary has suggested the potential for a ‘compromise’. The respondent has suggested a willingness to discuss a rental, and it may be that a lease, license, grant of exclusive use or other right of access could be considered. As it seems the Committee and several owners are most concerned about the cage, the respondent might find that greater cooperation on that issue might assist his negotiations regarding the cabinet.

Conclusion

I find that the respondent has not received valid approval for storage cabinet and that, in the absence of valid approval, the respondent is in breach of By-law 2.2. However, in the circumstances, I do not consider that it is appropriate to require the removal of the cabinet until the issue has been considered by all owners at a general meeting.

I propose to order that the respondent submit a motion to a general meeting seeking approval to retain the cabinet. Pursuant to section 40C of the Accommodation Module the respondent can include an explanatory note (not longer than 300 words), explaining his justification for retaining the cabinet. It will depend on the specific nature of the proposal what type of resolution will be required to pass the motion, but if the respondent only seeks approval for an improvement on common property then a special resolution will be required.

When voting on the question at a general meeting, owners should have regard to section 94(2) of the Act that requires a Body Corporate to act reasonably, including in making decisions. If the Body Corporate fails to approve a motion submitted by the respondent on this issue, it would be open to the respondent to lodge a further application seeking to overturn the decision on the basis that opposition to the motion was not reasonable. Whether or not it would be reasonable for the Body Corporate to refuse motion may depend on the terms of the motion. The fact that the respondent did not previously have authorisation for the cabinet is arguably not justification to refuse approval for the cabinet now. Concerns about setting a precedent over use of and improvements to common property may only be relevant if it is not possible to limit the justification for any approval in this case to the specific circumstances. Considerations that may be relevant include whether any other owner will be adversely affected by the retention of the cabinet, the ongoing responsibility for maintenance of the cabinet, and any terms offered by the respondent in regard to the request for approval.

Given the length of time that this matter has taken to date, I do not consider it appropriate to wait until the respondent returns from his forthcoming overseas trip to progress this matter. As indicated, there may be some negotiations that the respondent can pursue directly before his departure. After that, if the respondent is unable to pursue the matter adequately through telephone, email and post then he could arrange for a representative (such as his solicitor) to act for him. It is not necessary for the respondent to be personally present at any meeting at which his motion is considered, but he could appoint a proxy to argue his case at a meeting. Having said that, as the Committee has not indicated any particular urgency and in view of delays that can occur with long distance communications, I have allowed considerably longer for the respondent to pursue this matter than would otherwise be the case.

I have ordered that the respondent should submit a motion on this issue within three months of the date of the order. The Committee should then include this motion on the next general meeting agenda which (having regard to relevant notice periods and when agendas are set) it is practical to include the motion.

If the motion fails to pass, the respondent will be required to remove the cabinet and make good the common property within three months of the date of the meeting which considered the motion. Similarly, if the respondent fails to submit a motion within three months he will then be required to remove the cabinet within a further three months.

Finally, if the Body Corporate wish to pursue the issue of the cage apparently installed by the respondent on his exclusive use car park area, the onus is on the Committee to lodge a further dispute resolution application on that matter. The Body Corporate Secretary indicates that the Committee intends to pursue such action.

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[1] See sections 243, 246 and 244 of the Act respectively. On 14 April 2008 the Body Corporate Secretary stated that he had not been aware that the Body Corporate had not taken the opportunity to inspect and respond to submissions, and that he had not received any correspondence on the matter since the conciliation session did not proceed. For the record I note that since the closure of the conciliation application the Body Corporate (through the BCM) lodged the adjudication application and the Commissioner’s Office has written to the Body Corporate on six separate occasions before I commenced my investigation of the dispute. This included letters on 20 February and 14 March inviting the Body Corporate to inspect and respond to the submissions received.
[2] BCCM Form 10, pursuant to section 182 of the Act

[3] A submission cover sheet was received from a further owner but no comments in respect of the application were received from that owner, despite them being contacted by Commissioner’s Office staff.

[4] The application claims to include a plan of the car park but this was not actually supplied. The Body Corporate was advised of this but did not submit a copy of the plan.
[5] See sections 227, 228, 276 and Schedule 5 of the Act

[6] I note that for improvements to areas of common property allocated under an exclusive use by-law, such as the cages installed on exclusive use car park spaces, section 123 of the Accommodation Module would apply. This allows improvements to the exclusive use area in accordance with any authorisation included in the relevant exclusive use by-law, or otherwise the improvement must be authorised by the Body Corporate. That authorisation must be by special resolution if the value of the improvement is over $250.
[7] Even if the cage was removed it is not apparent that the cabinets would have a negative visual impact.