Villa Catalina [2008] QBCCMCmr 246 (21 July 2008)

Last Updated: 3 September 2008

REFERENCE: 0560-2008

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	16992
Name of Scheme:	Villa Catalina
Address of Scheme:	10 Tasman Court BANKSIA BEACH QLD 4507

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

Margaret O’Keefe, the Owner of Lot `

I hereby order that, pending a final determination of this application, the Owner of Lot 2, Philip Hawkey, must not take or allow any further action to remove or modify the common property garden. This interim order has effect until six (6) months have elapsed from the date of this order, a further interim or final order for the application is issued, or until the application is withdrawn, rejected or otherwise ended (whichever is the earlier).

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0560-2008

“Villa Catalina” CTS 16992

Villa Catalina community titles scheme 16992 (Villa Catalina) consists of two lots and common property. The Community Management Statement (CMS) for Villa Catalina indicates that the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module) applies to the scheme. Department of Natural Resources Mines and Water records show the scheme is registered as Building Units Plan (BUP) 102711.

INTERIM APPLICATION

This is an application for interim orders lodged by Margaret O’Keefe, Owner of Lot 1 (applicant) on 8 July 2008 under the Body Corporate and Community Management Act 1997 (Act). The applicant sought the following interim order against Philip and Pamela Hawkey, Owner and Occupants of Lot 2 (respondents):

Mrs O'Keefe would like the owner to be prevented from doing anything further to the gardens until the matter has been determined.

The application also seeks the following final order:

Mrs O'Keefe would like the gardens as they are & not be removed by the owners of unit 2.

PROCEDURAL MATTERS

In accordance with section 247 of the Act, the Commissioner for Body Corporate and Community Management has referred the application to me to decide whether the nature or urgency of the circumstances of the application warrant an interim order. The Commissioner has referred the application notwithstanding that affected persons have not been given notice of the application or afforded an opportunity to make submissions about the application (section 247(3)).

The respondents provided written confirmation that they would cease work on the garden to allow time to clarify the issue. On that basis, a copy of the application was provided to the respondents allowing one week to make a written submission in response to the dispute prior to consideration of the interim order. A written submission was received from the respondents.

MATTERS IN DISPUTE

This application relates to proposed modifications to a garden in the scheme. The circumstances of the dispute can be summarised as follows.

The application states that when the respondents moved into Lot 2 in mid 2007, they indicated that they would like to make some changes, including removing a garden to enable them to put a 20 foot caravan down the side of the Lot. Other potential changes included adding a carport to the front of Lot 2 and additional rooms to the rear of the Lot. The applicant says her partner expressed his opposition to these changes shortly before his death in lat November 2007.

In December 2007 the respondents apparently said that they planned to remove the garden in early January. The applicant said she was not happy about the removal of the garden and, as she was about to leave the scheme for three weeks, asked them to leave it until she returned and they could discuss it. On her return she says the matter was discussed during several informal meetings. The applicant claims that the respondents said that no one was going to tell him what he could or could not do with his property.

Three formal meetings were held on 18, 19 and 25 February 2008. The meetings discussed whether the garden area was on common property and details of the proposed alterations to the garden. The second meeting agreed that the garden was on common property. The minutes of the 25 February 2008 meeting record that a vote was taken, with the applicant voting against a motion that the respondents modify the garden as per discussions with three metres to be removed from the western end. The respondents then said that because consensus could not be reached, he would modify the garden although the work would not be commenced before 31 March 2008. The applicants say that on 29 June 2008 the respondents removed all of the plants from the area of the garden bed that they are seeking to remove.

The applicant argues that the removal of the garden would adversely affect the presentation, character and value of the units. She disputes that the respondents need to remove the garden for vehicle access or parking, indicating that they have previously accommodated three cars and a 7+ metre boat and trailer on the scheme.

The respondents’ submission includes the following comments:

• Lot 2 was rented out from the time of their purchase in 2002 until they returned in 2007.
• During this time the applicant and her partner made modifications to their property and the gardens, and installed a shed, rainwater tank and bore pump. They modified the front garden to park a camper trailer and boat, which was parked there for several years.
• The respondents were not notified of any of these modifications but consider that they enhanced the property and that ‘morally’ they were the applicant’s property.
• When the respondents moved in they discussed some modifications with the applicant and her partner, including a carport, modifying the garden to allow access, installing a rainwater tank and a possible covered entertainment area. No objection was raised at the time.
• On 23 December 2007 the applicant rang to say she had an issue with the garden modification and asked that they not proceed over Christmas until her return from holidays.
• On her return they say the applicant refused to talk to them on several occasions. They rang her son out of desperation because they were concerned for her wellbeing. They express regret that this upset the applicant. Other than ringing the son to tell him they would deal with the applicant’s representative, they have had no other contact with the applicant’s son.
• The applicant then discussed the garden modification only to say that she would not approve it and did not approve of a caravan being parked on the property.
• A vote on the issue was held and no agreement was reached. They said that they would not commence work until after 1 April to allow the applicant time to appeal. When no correspondence was received they commenced the removal of the garden in July.
• By the time they were contacted about the application they had already removed the plants.
• They wish to modify the garden to enable access to the side of the property to allow for two additional car/caravan spaces up the side as currently there is only one garage. They intend to erect a carport to accommodate those vehicles. When they have visitors they require additional off-street parking as the narrow street and footpath are not suitable for parking.
• They enclose photographs of the property showing the enhancements made to Lot 1 and the reason for the modifications sought by them.
• They have tried to resolve this matter and believed they were following the correct procedure.
• They only wish to improve the value and appeal of Lot 1 which would also reflect on Lot 1.
• They do not understand the applicant’s objections. She has been unwilling to negotiate and simply says she doesn’t want change despite extensive changes to Lot 1.
• The changes to Lot 1 have been complementary to both lots and Lot 2 also needs enhancements because it is looking neglected after years of tenants and water restrictions.
• Although the area is common land there is a distinct land use separation and modifications on each lot do not affect the other lot.
• They would not do anything to devalue their lot. They would use professional tradespeople for the garden modifications and any future work.
• Most houses in this residential family area have caravans, boats and cars in their yards.
• They allege that the applicant’s partner indicated he was in favour of the garden modification but as he was not the owner of Lot 1 they do not consider that his views are relevant.
  

JURISDICTION

I am satisfied that this is a matter which falls within the legislative dispute resolution provisions.[1]

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 claimed or anticipated contravention of the Act or the CMS; or the exercise of rights or powers, or the performance of duties, under the Act or the CMS; or 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.[2] An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate.[3]

Section 279(1) of the Act allows an adjudicator to make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances.

DETERMINATION

Urgent interim relief

At this time, I am concerned with the application for an interim order and the threshold issue of whether interim orders are warranted. An interim order will not be granted unless is it necessary due to the nature or urgency of the circumstances to which the application relates.[4] Any order granted must be just and equitable in the circumstances.[5] The examples in section 279 of the Act indicate the usual circumstances where an interim order might be made and are in the nature of injunctive relief. While it is not possible to define the range of matters that might be the subject of an interim order, an applicant needs to establish that the circumstances warrant an interim order.

An interim order will not be made if the only urgency relates to an applicant’s desire to resolve or expedite the matters in dispute, or where the nature of the circumstances are such that the matter is not capable of being dealt with in the context of an interim order.

It is not appropriate to consider the substantive issues in the application in detail at this time. But to determine whether it is just and equitable to grant interim relief, it is relevant to briefly consider the issues raised in the application. As an interim order can be considered on an ex parte basis, an adjudicator must be satisfied that the application raises serious legal questions and that the balance of convenience between the parties justifies injunctive relief. That is, an adjudicator must balance the inconvenience of granting relief now if final orders are ultimately refused against the inconvenience of refusing relief now if final orders are ultimately granted. Of particular relevance is evidence that an interim order is necessary to prevent serious or irreparable harm.

Serious legal question

It is clear from the registered plan that the garden in dispute is on common property. The parties do not dispute this. I note, for the parties’ information, that their lots only comprise the interior of the building[6] and the exterior of the building and all the grounds are common property.

On that basis, any change to the garden, including the removal of any part, by the respondents would amount to an improvement to common property by an owner.[7] Section 114 of the Standard Module provides as follows for the approval of an improvement to common property by a lot owner.

114 Improvements to common property by lot owner—Act, s 159

(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.

Unless an improvement falls within the scope of the three conditions in section 114(2), a special resolution is required. Otherwise, a committee resolution or an ordinary resolution at a general meeting would be sufficient. In this scheme the distinction is irrelevant because a motion would need to be approved by both owners to achieve either an ordinary or special resolution.

Aside from questions of the validity of the meeting procedures for the meetings conducted in February, which it is not necessary to consider here, it is clear that a motion to approve the modification of the garden was not passed on 25 February 2008 or at any other time. Prima facie then, the respondents have not received valid authorisation to make a change to common property.

In that circumstance it was inappropriate for the respondents to ignore the decision of the Body Corporate to not approve the motion, and to then change common property knowing that they did not have approval for that change. The onus was on the respondents to ‘appeal’ the Body Corporate’s decision not to approve the motion, rather than to assume that they could proceed because the applicant had not lodged a dispute challenging them.

Even if each side of the common property is only used by the lot on that side, the common property belongs to the Body Corporate as a whole and so the applicant legitimately has an equal right and interest in what happens on the common property. But this does not mean that one owner in a duplex like this is always entitled to block the proposals of the other. Section 94(2) of the Act requires that a Body Corporate must act reasonably in anything it does, including in making or not making a decision for the scheme. If an owner considers that a Body Corporate has acted unreasonably in refusing to pass a motion, and that opposition is unreasonable in the circumstances, they can seek an order of an adjudicator to deem the motion passed.

The reasonableness of the opposition to this motion can be considered further in the context of any determination of the final order in this application. One factor to consider will be the reasonableness of the applicant’s opposition to modifications to common property by Lot 2 if in fact several modifications have been made by the applicant without notification or approval. I note that any modifications made by the applicant to common property on her side of the scheme would, prima facie, also have required Body Corporate approval through a general meeting resolution.

Inconvenience from an interim order

I do not consider that any inconvenience suffered by the respondents by the granting of this interim order outweighs the inconvenience if the respondents proceeded to remove the garden. While the respondents have clearly had a desire to make the modification since late 2007, they have known since the end of February that the proposal had not been approved by the Body Corporate but they took no action since to overturn that decision. However, if the garden was removed now and ultimately it was determined that the respondents were not entitled to remove the garden, the respondents may face the costs of having the garden reinstated.

Conclusion

I am satisfied that the application to have no further work undertaken on the garden until a final order is made is warranted. Although there may be questions about the reasonableness of the Body Corporate decision, it is clear that the respondents were not given permission to alter the common property garden. Accordingly the respondents have no authority to change the garden unless the Body Corporate reconsiders the matter or an adjudicator makes an order overturning the Body Corporate decision.

I am of the view that this dispute would benefit from a conciliation session conducted by the trained conciliators in the Commissioner’s Office. Conciliation is a normal requirement of most disputes lodged in the Commissioner’s Office. While I appreciate that the owners have discussed this issue several times, I consider that the matter could be progressed more constructively with the assistance of an independent conciliator and in light of the information outlined above.

The parties should bear in mind that the applicant’s has succeeded in this interim order to allow the matter to be conciliated and properly investigated. The outcome in this order should not be interpreted as an indication of the likely success or otherwise of the final orders sought.

Effect of an Interim Order

The matter will now proceed in accordance with the normal processes undertaken by this Office. In the first instance I intend to refer the application to the Commissioner with a recommendation that conciliation be conducted in respect of the dispute. If conciliation is unable to resolve the dispute, the matter will proceed to the investigation of the final order, including calling further submissions.

All parties should note the provisions of section 279(2) of the Act, which provides that:

(2) An interim order—

(a) has effect for a period (not longer than 1 year) stated in the order; and

(b) may be extended, varied, renewed or cancelled by the adjudicator until a final order is made; and

(c) may be cancelled by a later order made by the adjudicator; and

(d) if it does not lapse or is not cancelled earlier, lapses when—

(i) the application is withdrawn; or

(ii) the commissioner gives the person who made the application a written notice under section 241 rejecting the application; or

(iii) a final order is made by an adjudicator to whom the application is referred.

I have provided that this interim order has effect for a period of not longer than six months. It is the responsibility of the applicant to apply to extend this order if no final determination has been made within that period. This Office will not automatically renew an interim order and the order will automatically lapse upon a final order being made or this application being withdrawn.

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[1] See sections 227, 228, 276 and Schedule 5 of the Act
[2] Section 276(2) of the Act
[3] Section 284(1) of the Act
[4] Section 279 of the Act
[5] Section 276 of the Act

[6] As this scheme is a building format plan, sections 48C and 49C(4) of the Land Title Act 1994 provide that the boundary between a lot and another lot or common property is the centre of the floor, wall or ceiling.

[7] The definition of “improvement” in Schedule 6 of the Act includes a structural or non-structural change. “Change” is defined in section 36 of the Acts Interpretation Act 1954 as including a change by “addition, exception, omission or substitution.”