Surfers Plaza Resort [2008] QBCCMCmr 19 (17 January 2008)

Number of Scheme:	6388
Name of Scheme:	Surfers Plaza Resort
Address of Scheme:	4 Remembrance Drive SURFERS PARADISE QLD 4217

TAKE NOTICE that pursuant to an application made under the abovementioned Act by the body corporate for Surfers Plaza Resort community titles scheme 6388

I hereby order that the application for an order by the body corporate for Surfers Plaza Resort community titles scheme 6388 seeking an outcome that Crestden Pty Ltd, the owner of Lot 2 remove three signs erected on common property in contravention of By-Law 9(2)(a), is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0285-2007

"Surfers Plaza Resort" CTS 6388

Application
This application is by the Body Corporate against Crestden Pty Ltd, the owner of Lot 2 (Respondent) seeking an outcome that the Respondent removes signs from the common property and repairs any damage to common property at its own cost. A copy of a resolution of the committee by voting in writing indicates that committee members Ronald Power (22 June 2007), Joy Collins (undated) J Robertson (23 June 2007), Jurgen Ihle (24 June 2007), Graeme Newberry (24 June 2007) and Mark and Judy Trollope (22 June 2007) voted "That a dispute resolution application is to be lodged with the Office of the Commissioner for Body Corporate and Community Management regarding the owner of lot 2 and its continued breach of body corporate by-law 9(2)(a)".

The Body Corporate stated that in or about February 2007, it received a complaint from an owner that the Respondent had erected 3 large signs on a wall forming part of the common property outside the entrance to the scheme. It is claimed the Respondent is in breach of By-Law 9(2)(a) as the Body Corporate has neither been consulted nor has it given approval for the erection of the signs.

The Body Corporate submitted that on 12 March 2007, Hynes Lawyers (for the Body Corporate) served the Respondent with a Notice of Continuing Contravention of a Body Corporate By-Law. The copy of the Notice provided by the Body Corporate indicates that it was addressed to the Respondent, cited By-Law 9(2)(a), and stated "You are the owner of lot 2. The Body Corporate has become aware ... that three large signs being erected .... (on) part of the common property ... The Body Corporate was neither consulted nor gave approval ... for the erection of these signs ... you are in breach of by-law 9(2)(a). The Body Corporate notes that the signs are attached to the wall. Any damage done to the wall during removal of the signs must be repaired at your own cost to return the wall to its original damage". The Notice required the contravention to cease within 7 days of its receipt. The Notice was signed by Ron Power and Jim Robertson on 7 March 2007 under the seal of the body corporate.

The Body Corporate stated that to date the signs have not been removed.

Jurisdiction
"Surfers Plaza Resort" 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).

Submissions to the Commissioner
On 28 June 2007, a copy of the application was provided to the Respondent and to Stewart Silver King and Burns (Body Corporate Manager) for distribution to the owner of each lot (excluding the Respondent), with an invitation to respond to the matters raised in the application (s243, Act). The Respondent subsequently sought and was granted an extension of time to make submissions.

Submissions were made on behalf of the Respondent and by a lot owner. The Body Corporate inspected the submissions received and made a written reply (ss244 and 246, Act).

Kelvin Gersbach, Managing Director of the Respondent submitted the occupier of Lot 2 is the Gold Coast Commerce Club and the Club needs the signage to operate a Licensed Club. He says the Respondent and the Club believe there is previous reference in the minutes of meetings of the Body Corporate that permit signage subject of the dispute. He submits the Respondent has written to the Body Corporate Manager requesting a copy of all minutes of the Body Corporate since inception. A copy of letters dated 26 July 2007 and 7 August 2007 to Stewart Silver King and Burns relate to this request. The Respondent has not received a response and it has been unfairly disadvantaged by this failure. Mr Gersbach states that on 10 April 2007, the Club requested to have signage approved and it did not receive a response. A copy of the letter on the letterhead of the Gold Coast Commerce Club signed by Kelvin Gersbach for and on behalf of the Board of Directors to Hynes Lawyers makes reference to the contravention notice stating "there has always been a sign at the entrance to the Club. Prior to installation we asked Manager Allan Moore who said it was OK however he would mention it in despatches and if any problems arose he would come back to us ... the Club operates as a business and needs Commercial signage at its entrance as it is very confusing for unit-holders and guests when they enter the building to distinguish the Clubs foyer from the Surfers Plaza foyer ... the Board believe there has been prior approval recorded. Notwithstanding the Club would like to make formal application for approval. Could you please forward the relevant application so we may attend to asap."

By further submission dated 13 August 2007, Mr Gersbach added that By-Law 1(3) gives the Respondent the right to advertise on the exterior of the building and that as a matter of courtesy, the occupier sought Body Corporate formal acknowledgement for the signage.

Mark and Judy Trollope of Lots 141 and 142 submitted that the Respondent has erected signs on common property without committee approval. The by-laws are in place to ensure a relatively harmonious community living and are required to be enforced.

Reply to submissions
With respect to By-Law 1(3), it is submitted the purpose of the By-Law is to ensure the businesses operating from Lots 2 and 5 are able to advertise. The word ‘appropriate’ in the By-Law ensures the Body Corporate has some say in what is advertised and the method of advertising. The Body Corporate is reluctant to grant approval under By-Law 9.2(a) for the additional 3 signs because the occupier of Lot 2 has a number of existing signs on common property which clearly and appropriately displays their business.

The Body Corporate states the 3 signs are improvements requiring Body Corporate approval under section 114 of the Standard Module and that By-Law 1(3) can only operate if section 114 is complied with. Section 180 of the Act confirms that if a by-law is inconsistent with either the Act or the Module, then the by-law is invalid to the extent of the inconsistency. The Body Corporate states the Respondent must apply for its approval under section 114 and that it has not done so.

With respect to the 10 April 2007 letter, it is stated it was addressed to the Body Corporate solicitor, not the Body Corporate and did not seek approval in accordance with section 114. No advice was given to the Respondent as asked as the Body Corporate understands it would be a conflict of interest.

It is also stated the Body Corporate understands the Respondent has not made the correct request for copies of Body Corporate records. The Body Corporate included a copy of a letter to the Respondent from the Body Corporate Manager dated 10 August 2007 which states (in part) "Your request to obtain copies of Minutes dating back to 1^st January 1997 to current has been received". The letter acknowledges receipt of $11.40 to inspect the records, advises the respondent to make an appointment to view the minutes and that photocopying will be an extra cost.

It is stated the installed signs need to be removed and can only be reinstalled if approved by the Body Corporate by special resolution.

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

Section 269(1) of the Act provides The adjudicator must investigate the application to decide whether it would be appropriate to make an order on the application. In accordance with my investigative powers stated in section 271 of the Act, on 11 October 2007 I wrote to the Respondent stating (in part):

Firstly, section 244(3) states that the reply (to submissions) may only relate to issues raised by the submissions. The reply dated 3 September 2007 states (in part) that the erection of the signage required a resolution of the body corporate under section 114 of the Body Corporate and Community Management (Standard Module) Regulation 1997 and that the respondent has not sought approval in compliance with this provision. You are invited to make submissions about this aspect of the reply, a copy of which is attached.

Secondly, it is apparent that Lot 2 is occupied by the Gold Coast Commerce Club. Please make submissions about the installation of the three disputed signs, including whether the signs were installed by the respondent or by the Gold Coast Commerce Club.

Thirdly, it is clear that the respondent has sought to access body corporate records. The attached letter from Stewart Silver King and Burns dated 10 August 2007 acknowledges receipt of this request. It would seem that to date the respondent has not inspected the body corporate’s records or received a copy of a requested record or records. The information required by the respondent may help resolve some of the issues raised by the application. For this reason, I consider that it is justifiable to provide an opportunity for the respondent to obtain this information and to make submissions about for example, its relevance to the determination of the dispute.

The respondent has made a request pursuant to section 205 of the Act and paid $11.40. Section 205 allows a person such as an owner to request access to body corporate information stating that within 7 days after receiving a written request in accordance with section 205, the body corporate must do either or both of the following as requested ... permit the person to inspect the body corporate’s records; give the person a copy of a record kept by the body corporate (s205(2), Act). The respondent should now make a written request to the body corporate clarifying whether it intends to either inspect the body corporate’s records or be given a copy of a record kept by the body corporate; or to inspect the body corporate’s records and be given a copy of a record kept by the body corporate. The fee for obtaining a copy of a record kept by the body corporate is 50c for each page supplied (s151(1)(b), Standard Module).

To assist in the resolution of this dispute, submissions must be provided to me by Friday 2 November 2007.

By letter dated 2 November 2007, Porter Davies Lawyers (acting for the Respondent) stated:

On 9 November 2007, I provided a copy of the above submissions made by Porter Davies to the Body Corporate (care of Hynes Lawyers) and gave the Body Corporate an opportunity to respond to the submissions. The Body Corporate did not respond to this invitation.

On 3 December 2007, I required the Body Corporate to provide photographs (and any other relevant material) showing the signs that are the subject of the dispute; the part of scheme land on which the abovementioned signs have been erected; and other signs on scheme land advertising the businesses conducted (if any) on Lots 1, 2, 3 and 5. By letter dated 4 December 2007, Porter Davies Lawyers questioned this enquiry. On 10 December 2007, the Body Corporate provided photographs of the disputed signs, of signage for the ‘Computer Doctor’ and of a sign for the Gold Coast Commerce Club stated as being at the southern entrance to porte cochere from Remembrance Drive.

Determination
By-Law 9(2)(a)
The basis of the application made by the Body Corporate is that it seeks to enforce By-Law 9(2)(a) of the scheme by-laws against the Respondent. The Body Corporate states that after receiving a complaint from a lot owner, it gave a notice of continuing contravention of a by-law to the Respondent.

A function of a body corporate includes reasonably enforcing the community management statement (CMS) and the scheme by-laws (s94, Act). Sections 182 to 188 of the Act provide a comprehensive framework for dealing with by-law contraventions. Generally, an owner who is concerned that another owner or occupier has contravened a by-law must undertake the preliminary procedures stated in section 185 before that owner can make a dispute resolution application. The body corporate, after receiving a request under section 185, may give the accused person a by-law contravention notice under section 182. If the notice is not complied with, the body corporate may make a dispute resolution application.

In this case, the Body Corporate has demonstrated that it gave the Respondent a by-law contravention notice and that it relied on By-Law 9(2)(a) when giving the notice and when deciding to make this application.

By-Law 9 titled ‘Appearance of/Alteration to Lot’ contains three subsections. By-Law 9(1) regulates making changes to the external appearance of a lot. By-Law 9(2) contains 7 provisions. By-Law 9(2)(a) states The owner or occupier of a lot must not, without the Committee’s written approval display a sign, advertisement, banner or similar article if the article is visible from another lot or the common property, or from outside the scheme. The remaining provisions similarly require committee approval before: external blinds, aerials or clotheslines are erected; visible curtains are hung; making structural alterations to a lot; replacing carpets; installing air-conditioning; or enclosing a balcony. By-Law 9(3) regulates draping articles over balcony railings and hanging washing, bedding or a cloth article in a way visible from another lot or common property or outside the scheme.

The Respondent has questioned the application of By-Law 9(2)(a) saying it relates to displaying a sign on or within a lot.

Despite the claims made by the parties and the fact that it is not in dispute that there are signs on common property, neither party provided any material evidencing the location of the signs. For this reason, I considered it appropriate to firstly, obtain evidencing material in the form of photographs and secondly, to require the Body Corporate provide them. In the material provided by the Body Corporate dated 10 December 2007, it is stated the disputed signs are on the right of the front doors of Surfers Plaza Resort and of the Gold Coast Commerce Club. Given the submissions from the parties and the plan of subdivision (Building Units Plan 8913) I am satisfied the signs are situated on common property.

This circumstance does raise the question as to the applicability of By-Law 9(2)(a). By-Law 9 regulates and provides conditions about the appearance of a lot and about alteration to a lot. By-Law 9(2) may not specifically state for example, ‘on the lot’, but a logical interpretation is that the By-Law is limited to regulating the changes that may be made on or to a lot and the things an owner or occupier may do on or to a lot with committee approval. This is reflected in the By-Law title and in its conditions. The application of By-Law 9(2)(a) is demonstrated in the decision made to resolve a previous dispute in this scheme^[1] where the Body Corporate was successful in enforcing this By-Law against the owner of Lot 68 for displaying a visible flashing light, sign, advertisement, banner or similar article on the Lot without its approval.

In my view, the Body Corporate has incorrectly relied on By-Law 9(2)(a) in giving the Respondent the notice of continuing contravention of a by-law and then in relying on the Respondent’s non-compliance with the notice in seeking the outcome sought.

The installation of signs on common property
Common property for a scheme is owned by the owners of the lots included in the scheme pursuant to section 35(1) of the Act. The functions of the body corporate created for a scheme include administering common property for the benefit of the lot owners (s94, Act). The body corporate has all the powers necessary for carrying out its functions (s95, Act). Relevantly, a body corporate may make by-laws providing for the administration, management and control of common property and regulating the use and enjoyment of lots and common property (s169, Act).

A lot owner or occupier does not have a legislative right to use common property for that person’s own benefit without body corporate authorisation in accordance with the Act, or otherwise in accordance with a scheme by-law. For example, an owner may only make improvements to common property if authorised by the body corporate (s114, Standard Module), and may only have exclusive use to the rights and enjoyment of, or other special rights about common property if authorised by the body corporate (s170, Act). The scheme By-Laws 1, 3, 4, 5, 6, 8, 11, 12, 13 and 14 are examples of by-laws regulating the use and enjoyment of common property.

The Respondent has relied on By-Law 1(3) which provides The owners or occupiers of Lots 1, 2, 3 and 5 may display appropriate signs on the common property advertising the businesses conducted from those lots and such signs will in all respects be attractive and tasteful having regard to the visual and acoustic privacy of other Lots and the general aesthetics and amenity of the scheme land, and will not at any time, and from time to time be more, in terms of number and size, than is reasonably necessary. It is apparent this By-Law allows the owners or occupiers of four lots (including Lot 2) to display signs on common property. Given relevance of this By-Law to the disputed signs, there is a question as to why the Body Corporate chose to rely on By-Law 9(2)(a) instead of By-Law 1(3). The Body Corporate did not provide any explanation in the application made.

Rather, in its reply to submissions, the Body Corporate argued that By-Law 1(3) operates subject to section 114 of the Standard Module and that section 114 applied as the installation of the signs is an improvement to common property for the benefit of the owner and occupier. Section 114 allows a body corporate to authorise the owner of a lot to make an improvement to the common property for the benefit of the owners’ lot. Section 180(1) of the Act provides If a by-law ... is inconsistent with this Act (including a regulation module applying to the scheme) ... the by-law is invalid to the extent of the inconsistency.

The Body Corporate did not rely on section 114: when originally requiring the Respondent to remove the disputed signs; when deciding to make this application; or in the grounds for making the application. In effect, the reference to section 114 constitutes new grounds in support of the outcome sought. It is apparent the Body Corporate did not seek to change the application before the Commissioner made the dispute resolution recommendation that the application be subject to department adjudication. Given the relative informality of this jurisdiction and my investigative powers under section 271 of the Act, I made some preliminary enquiries about the new grounds by providing the Respondent with an opportunity to make submissions about the new grounds and I gave the Body Corporate the opportunity to respond to these submissions.

The Respondent does not consider the signs constitute an improvement to common property citing the ordinary meaning of ‘improvement’ and Brisbane City Council v Valuer-General for the State of Queensland. The Respondent did not refer to the definition of ‘improvement’ in the Act. ‘Improvement’ is defined to include the erection of a building; and a structural change; and a non-structural change, including, for example, the installation of air conditioning (Dictionary, Act). While this definition is not exhaustive, it does suggest additional matters to those which may fall within the ordinary meaning of the word and which were stated by the High Court. It is also noted the High Court had considered ‘improvement’ in the context of and within the meaning of the Valuation of Land Act 1944.

The Body Corporate did not reply to these submissions.

In the Body Corporate for The Phoenician community titles scheme 27745 v Herme Pty Limited BD2346/05, Judge Durward SC DCJ stated The meaning of the term "improvements" is to be ascertained by reference to the context in which it is used in "Part 8 - Property Management" of the module [para 43], and that Part 8 proscribes matters about property management for a community title scheme ... The context is clearly one of permanency and attachment to the land or the building, rather than some merely ephemeral addition or adornment. The term "improvement" is used in the module in the context of the common property: it denotes some physical thing that enhances the value of the property. The addition of a structure or a fixture to the land might constitute an "improvement" in this context. The mere placing of tables and chairs, which can be moved or removed at will and at any time does not constitute "an improvement" [para 44]. The Judge referred to the statement made in London and South African Exploration Company Limited De Beers Consolidated Mines Limited (1895) Appeal Cases 45 1 (at p 455) that The "natural or proper meaning of the expression.. .seems to be more applicable to something attached to and forming an integral part of the thing improved than to something which is merely added to it or placed upon it without annexation or union": [para 45]; and to the Commonwealth of Australia v Oldfled (1975-6) 13 CLR 612 where the High Court held that "improvements", in the context of payments made in respect of "improvements on or effected . . . to land, "meant the physical consequences which enured to the land of acts whereby the land attained a quality and usefulness additional to that which it had in its virgin state." [para 46].

There have been a number of adjudications where it was held that the erection or installation of a sign on common property was an improvement to common property subject to the improvement to common property by lot owner provisions of the applicable regulation module. In Noosa Place II^[2] and Palms Springs Residences^[3], the Adjudicators stated signs advertising the availability of holiday units was an improvement to common property by a lot owner. In Calypso Plaza Cairns Commercial^[4], it was held that an illuminated red and green sign affixed to the common property by a lot owner was an improvement to common property. In Ipanema^[5], the Adjudicator held the erection of a "Bar/Restaurant sign" on the common property foyer directing customers to the restaurant required body corporate approval pursuant to the applicable improvement provision.

In my view, there is scope for a sign erected or installed on common property by a lot owner to be an improvement to common property to which section 114 of the Standard Module would apply. Whether a sign could be deemed to be an improvement to common property by a lot owner is largely dependent on the material facts.

In this case, the Body Corporate did not initially consider the signs to be an improvement to common property. It subsequently stated, without any justifiable basis, that the signs constitute an improvement to common property. The Body Corporate did not respond to the contrary arguments presented by the Respondent on this point. The onus rested with the Body Corporate to demonstrate that section 114 applied and, in my view, it has failed to do so. The photographs I requested do not clearly demonstrate that the signs are an improvement.

In addition, while the Respondent contends By-Law 1(3) applies, the Respondent has not provided any objective material to support a view that the signs are appropriate, attractive and tasteful having regard to the visual and acoustic privacy of other Lots and the general aesthetics and amenity of the scheme land, and are not more in terms of number and size, than is reasonably necessary.

For these reasons and on the basis that the Respondent did not require Body Corporate approval pursuant to By-Law 9(2)(a) before erecting signs on common property, I have dismissed the application.

^[1] Surfers Plaza Resort [2004] QBCCMCmr 597 (30 November 2004); Application No. 0305-2004.
^[2] Application Ref.No. 0377-1999, 25 October 1999.
^[3] Palm Springs Residences [2002] QBCCMCmr 448 (15 July 2002), Ref.No.0302-2002.
^[4] Calypso Plaza Cairns Commercial [2005] QBCCMCmr 107 (28 February 2005), Ref.No.0361-2004.
^[5] Ipanema [2006] QBCCMCmr 738 (20 September 2006), Ref. No. 0471-2006.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Surfers Plaza Resort [2008] QBCCMCmr 19 (17 January 2008)