Junction Place [2008] QBCCMCmr 28 (29 January 2008)

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

I hereby order that, within six months, the body corporate for Junction Place must lodge a request to record a new community management statement (new community management statement) replacing community management statement dealing number 710819165 (current community management statement).

I further order that, unless each respective owner has agreed in writing to relinquish their exclusive use areas or voted personally in favour of a resolution without dissent that removes their exclusive use areas, the new community management statement must grant the owner the same exclusive use that they held under community management statement dealing number 708676672.

I further order that this order does not prevent the body corporate consenting to and lodging a request to record a new community management statement that contains alterations other than those required by this order, provided that those alterations are made in accordance with the Body Corporate and Community Management Act 1997.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0793-2007

"Junction Place" CTS 34006

Junction Place Community Titles Scheme (Junction Place) is a 7 lot scheme under the Body Corporate and Community Management Act 1997 (Act) and the Act’s Commercial Module Regulation (Commercial Module).

This application is by Piggsy Piggason Productions Pty Ltd, owner of lot 6 (applicant) seeking orders against the body corporate for Junction Place (respondent).

The applicant says that its exclusive use areas have been removed without authority and seeks orders requiring the body corporate to lodge a new community management statement that restores the applicant's exclusive use areas.

The main grounds in support of the application, provided on behalf of the applicant, were to the effect that section 171(2)(b) of the Act prevents the body corporate from altering the applicant's exclusive use allocation without the lot owners' consent in writing or the lot owner personally voting in favour of the change as part of a resolution without dissent.

The body corporate manager has provided a submission that agrees that the requirements of section 171(2)(b) were not met. However, it is submitted that the matter is far more complicated than it first appears and a hasty decision without meeting with owners may result in the local council effectively closing down business that have been long established within the scheme. This submission is supported by a submission on behalf of the owners of lot 1 indicating the changes were as a result of the requirements of the Gold Coast City Council in relation to the Certificate of Classification as Proposed Warehouses.

The owner of lot 4 has provided a submission that the developer mislead purchasers and that there are insufficient parking spaces to simply reallocate spaces to each lot. It is submitted that any decisions in regard to parking should be made only after a meeting of all lot owners. The owners of lot 2 have also provided a submission requesting a meeting of all lot owners be called before the matter is adjudicated.

The owner of lot 5 has provided a submission fully supporting the application. This owner states that he has not been asked at any time about the car parking areas he has under his sales contract, has not agreed to give up his exclusive use areas, and does not know how these areas could be removed without his agreement.

A response on behalf of the applicant is that the only issue in dispute is that the body corporate has failed to comply with the statutory regime. This response argues that attempting to blame the developer or say that owners should not challenge the change to exclusive use to avoid council repercussions does not justify the removal of the exclusive use without consent.

An exclusive use by-law attaches to a lot in the scheme and gives the occupier of the lot for the time being exclusive use to the rights and enjoyment of that area of common property (Act, 170). The exclusive use area is intrinsically joined to the lot to which it has been granted. The by-law creating the exclusive use may stop applying to the lot only if the lot owner agrees in writing before the passing of the resolution without dissent consenting to a new community management statement that does not incorporate the exclusive use by-law, or if the lot owner votes personally in the resolution without dissent (Act, 171(2)(b)).

All submissions agreed in substance that the proper procedures were not followed for the extinguishment of the exclusive use. In particular, I am satisfied by the submissions of the owners of lot 5 and 6 and the body corporate manager that the current community management statement dealing number 710819165 purported to extinguish exclusive use areas without the proper authorisation (Act, 171(2)(b)).

The submissions of the owners of lots 1, 2 and 4 satisfy me that there may be good reasons for changing the exclusive use areas due to local council regulations. However, very little information was provided about these possible good reasons. As best I can surmise from the submissions made, there is a problem with the amount of available car parking. For example, if the scheme was developed for warehouse use then only one car park parks might be needed for every 50 square metres of floor area but if units were being used for a service industry then a car space might be needed for every 40 square metres of floor area or for every 15 square metres of floor area if used as a shop.

These local council issues are issues that I could potentially investigate further. However, I agree with the applicant's submissions to the effect that potential problems with developer or local council issues do not justify removal of owners' exclusive use areas in contravention of the body corporate legislation. I am therefore satisfied that the applicant is entitled to an order requiring restoration of the exclusive use areas unless owners otherwise consent as provided by the Act. It is therefore unnecessary for me to carry out any further investigation of the application.^[1]

An adjudicator must make an order that is just and equitable in the circumstances to resolve a dispute. The applicant is entitled to an order that owners exclusive use areas be restored unless they properly consent otherwise. However, I acknowledge that owners may have a number of issues to consider. I therefore will allow a period of six months to give owners time to potentially reach some consensual decision about the issues involved.

These issues might include obtaining a traffic impact report, contributing towards the costs of additional on street car parking, considering a reallocation of exclusive use, considering restrictions on use of lots, and considering legal action against the developer.

These issues may take some time to consider and I would urge all owners to meet as soon as possible to try to resolve the issues. In my view, it is too early for an adjudicator to take part in this process. However, solutions can be put to a body corporate meeting and an adjudicator may be able to intervene subsequent to that meeting if the solution is not adopted because of opposition that in the circumstances is unreasonable (Act 276, Schedule 5 – Item 10).

For the above reasons, I make the orders above requiring the restoration of exclusive use areas for persons who have not consented to their removal. I have allowed six months for this process to take place. However, to allow time to implement an alternative solution, and to allow for the potential need for further dispute resolution, the body corporate should seek to hold an extraordinary general meeting to consider any alternative solutions within the next two or three months. The body corporate should therefore seek to engage all owners in informal discussions immediately with a view to proposing suitable motions for the extraordinary general meeting.

^[1] Hablethwaite & Anor v Andrijevic & Ors [2005] QCA 336, Jerrard JJA, Keane JJA, Cullinane J, 9 September 2005 at paragraphs 31 and 17.

Number of Scheme:	34006
Name of Scheme:	Junction Place
Address of Scheme:	32 Junction Place ANDREWS QLD 4220

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Junction Place [2008] QBCCMCmr 28 (29 January 2008)