One Park Road [2008] QBCCMCmr 3 (7 January 2008)

Last Updated: 22 February 2008

REFERENCE: 0597-2007

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 Queensland 4064

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Edith Dindas, the owner of Lot 27 and the company nominee of Edith Dindas Pty Ltd, the owner of Lots 1, 5, 6, 10, 11, 12, 13, 14, 15, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 30, 31, 32, 33, 35, 36, 37 and 40.

I hereby order that the application for an order by Edith Dindas, the owner of Lot 27 and the company nominee of Edith Dindas Pty Ltd, the owner of Lots 1, 5, 6, 10, 11, 12, 13, 14, 15, 17, 18, 19, 20, 21, 22, 23, 24, 25, 26, 27, 28, 30, 31, 32, 33, 35, 36, 37 and 40 against the Body Corporate for One Park Road community titles scheme 2114 seeking an order that Motion 5 of the Extraordinary General Meeting dated 25 June 2007 be deemed to have been carried, is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0597-2007

"One Park Road" CTS 2114

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

Application
This application is by Edith Dindas (Applicant) against the body corporate for One Park Road (Body Corporate) seeking an order that Motion 5 of the Extraordinary General Meeting dated 25 June 2007 (June EGM) be deemed to have been carried. Motion 5 proposed rescinding exclusive use By-Law 23 included in the community management statement (CMS) for the scheme and replacing it with a new By-Law 23 and a new By-Law 25. The Motion required a resolution without dissent and was not passed as there were 6 ‘no’ votes recorded.

The Applicant has named the owners of Lots 4, 7, 8, 16, 29 and 41 as affected persons. The meeting register provided by the Applicant shows ‘no’ votes were cast on Motion 5 for these 6 lots.

The Applicant claims the opposition was unreasonable stating:

• The total area of the proposed exclusive use being sought is a reduction in the area currently granted to lots the Applicant owns.

• The proposed new area better utilises the structural elements of the roof space in the building and the opposing owners always vote against or abstain from motions submitted by the Applicant for which they have no interest.

• As an indication of the unreasonableness of the opposing owners recent voting practices, in the last 12 months they have each voted against or abstained from the statutory motion for confirming the minutes of previous meetings, notwithstanding they attended the meetings, received copies of the minutes and have not recorded any complaint about the accuracy or otherwise of those minutes. The Applicant included a copy of the minutes of the extraordinary general meetings held on 30 October 2006 and 28 December 2006.

Submissions to the Commissioner
On 19 July 2007, the Commissioner provided a copy of the application to Statewide Body Corporate Pty Ltd (Statewide) for distribution to the owner of each lot (excluding the Applicant) and the committee, with an invitation to respond to the matters raised in the application (s243, Act). On 13 August 2007, the Commissioner extended the time for making written submissions and gave notice of the application to Holding Redlich Lawyers, Chi-Chang, Lee Li-Chu Chen, and to Statewide for distribution in the terms mentioned above. The time for making written submissions was subsequently extended by a further one day.

Submissions were made by the owner of Lot 3 and by Holding Redlich Lawyers, on behalf of the owners of Lots 4, 7, 8, 16 and 29.

The owner of Lot 3 opposed the application stating the proposed development takes over a large amount of common area which is being absorbed into the Applicant’s lots; that once this occurs, the rest of the roof space can be developed resulting in a large portion of the common property being lost; and the common area will be used to increase the Applicant’s proportion of the whole building.

Holding Redlich Lawyers made submissions to the effect:

• The reasons given by the Applicant to support her claim that there is no reasonable justification to vote against Motion 5 are not grounds for the order sought.

• Referred to paragraphs 23, 39 and 40 of the judgment of His Honour Wilson DCJ in Dindas^[1] stating an owner is entitled to exercise the owner’s right to vote in a particular way even though self interest may be the basis of that vote.

• To be successful, the Applicant must provide evidence the decision to vote against Motion 5 was motivated by fraud, personal or particular gain or was dishonest and there is no evidence of any of those things.

• There is reasonable justification for the owners to vote against the Motion. The proposed exclusive use allocation includes common property areas not subject to exclusive use. If the Motion is passed, lot owners will be deprived of the benefit of certain areas of common property which they presently own. No consideration or other benefit is provided to the Body Corporate, the opposing owners or other owners for the effective transfer of parts of common property to the sole use and enjoyment of the Applicant.

• Sections 35(1) and 152(1) of the Act make it clear common property is not to be altered purely on a proposal of a majority owner to serve that owner’s interest. Proposed By-Law 25 makes it clear the Applicant intends to use the roof space for commercial gain. Proposed By-Law 25(e) is intended to provide the Applicant the right to construct an office within the exclusive use area. It is not unreasonable to oppose the Motion even if that refusal deprives the Applicant of the ultimate commercial benefit which she seeks. The right to vote against the Motion is a right to vote in a way each owner thinks appropriate and the owners have merely exercised that right.

• The assertion that the Applicant seeks a reduction in the granted area does not support an argument that the owners should not have voted against the Motion.

• There is no evidence the proposed new area better utilises the structural elements of the roof space of the building and cannot be taken into account in determining whether owners have acted unreasonably. The evidence was not put forward at the June EGM and even if it is now, the owners were entitled to vote against the Motion.

• The manner in which owners voted at previous meetings is not a relevant consideration in the determination of the question in this application.

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 the investigative powers stated in section 271 of the Act:

•	On 12 November 2007, I requested Statewide provide a copy of the notice of the June EGM. The manager provided this documentation on the same date.
•	On 13 November 2007, I invited the Applicant to make submissions in response to the submissions made to the Commissioner. On 21 and 22 November 2007, Nicholsons Solicitors made submissions on behalf of the Applicant.
•	On 3 December 2007, I informed the parties that I would be inspecting scheme land on 5 December 2007 and I invited the parties to attend the inspection. The inspection was attended by the Applicant, Mr Kratz (representing the Body Corporate), Alice Chan (representing Lots 7, 8 and 29) and John Cavaleri of Lot 16.

Applicant’s submissions in reply

•	In relation to the cited paragraphs from the judgment of Wilson, J in Dindas, Holding Redlich do not explain how the paragraphs assist the respondent or how they are relevant to the issues raised in the application.
•	The statement concerning providing evidence the decision to vote against the motion was motivated by fraud, personal or particular gain or was dishonest was not part of the above judgment and is not a relevant consideration in determining whether the dissenting votes were unreasonable.
•	Insofar as is relevant to this application, Wilson. J stated an adjudicator has power to override the exercise of voting rights by owners provided the order does not "trample the appellant’s rights as lot owners". The dissenting owners have not demonstrated that their rights will be affected to any significant extent if the order sought is made.
•	In relation to the submission that owners will be deprived of the benefit of certain areas of common property; the area of common property being proposed in By-Law 25 is an open void in the roof space, part of which houses air conditioning ducts which connect to the Applicant’s lots. The only access to this space is by stairs that form part of the Applicant’s lot. The dissenting owners do not have access to this area nor do they derive any practical benefit from the area.
•	The order sought does not affect the ownership of common property.
•	There is no reason for consideration to pass between the Applicant and the Body Corporate or owners given that the Applicant is proposing to surrender a far greater area than which the Applicant seeks to obtain the benefit as exclusive use. The surrendering of the greater area is a commercial loss to the Applicant.
•	The dissenting owners history of voting against motions for no reason other than to oppose the voting of the Applicant is relevant to the determination. There is no requirement that "the circumstances" are necessarily those pertaining to the motion in question.

Inspection of scheme land
The plans of subdivision (BUP13555 and BUP102921) show the building is comprised of 3 levels (Levels A, B and C). Lots 15 to 37, 40 and 41 are situated on Level C. I inspected two sections of the space between the ceilings of the Level C lots and the roof of the building. These sections form part of the common property being referred to in By-Law 23 and proposed By-Law 25.

One section was accessed via stairs on Level C. A number of rooms have been built on this part of common property which is identified as ‘42J’ in proposed By-Law 25. While there was disagreement as to when construction took place, it would seem it occurred in 1999 or 2000.

The second section was accessed via a ladder. This section was approximately above Lot 21 on Level C. Other than the roof structure, structural elements evident included supporting framework and a firewall. Air conditioning infrastructure was also evident. It was stated: that air conditioning ducting is partly situated on part of the common property not subject to By-Law 23; that some of this common property is proposed to become part of ‘42K’; and that the infrastructure provides services to lots on Level C.

Background
By-Law 23
Schedule C of the scheme’s CMS recorded by the registrar of titles on 13 January 2000 includes Exclusive Use – Roof Space By-Law 23 stating:

(a) The Owner for the time being of each Lot together with their licensees and invitees shall be entitled to the exclusive use and enjoyment of that part of the Common Property immediately above their respective Lots between the upper boundary of such Lots and the roof of the building as identified in schedule E and on the attached sketch plan marked "D".

(b) Each owner to whom the exclusive use of an area is allocated pursuant to this by-law shall-

(i)	only use such area for office or storage purposes, and only after at his own expense in a proper and workman like manner carry out any necessary work to enable such area to be properly used strictly in accordance with the requirements of the local government or other relevant authorities and the architects, structural engineer and mechanical engineer of the Body Corporate first had and obtained
(ii)	be responsible for the performance of the duty of the Body Corporate to properly maintain and keep such area in a state of good and serviceable repair
(iii)	allow the Body Corporate to maintain within such area any existing services and to allow access to the same at all reasonable times for the purpose of carrying out inspections and repairs, and
(iv)	be responsible for making good any damage caused to existing services as a result of carrying out any work in or using such area.

The part of schedule E of the CMS relating to exclusive use of the roof space identifies Lots 15 to 37, 40 and 41. Plan "D" specifically identifies the parts of common property allocated to these lots. The total amount of common property allocated to lots in which the Applicant has an interest is 1126m2.

June EGM
The notice of the June EGM included:

•	Motion 2 proposing the amalgamation of Lots 15, 17 to 26, 30, 31, 33, 35, 36, 37 and 40 into Lot 42 on SP197434.
•	Motion 5 proposing rescinding By-Law 23 and replacing it with new By-Law 23 and new By-Law 25.
−	The new By-Law 23 proposed applying to the Owner for the time being of Lots 16, 29, 34 and 41 and contained conditions currently stated in By-Law 23(b). The revised Plan "D" did not change the current allocation of common property to these lots.
−	The new By-Law 25 proposed:
(c)	The Owner for the time being of Lot 42 together with its licensees and invitees shall be entitled to the exclusive use and enjoyment of that part of the Common Property as identified in Schedule E and on the attached sketch plan marked "F".
(d)	Each owner to whom exclusive use of an area is granted under this by-law shall:

(i) only use the area for office or storage purposes;

(ii) be responsible for the duty of the Body Corporate to properly maintain and keep the area in a state of good and serviceable repair;

(iii) not interfere with any utility infrastructure the responsibility of the Body Corporate;

(iv) allow the Body Corporate access to the area at all reasonable times to inspect and repair and maintain any utility infrastructure of the Body Corporate;

(v) insure any contents of the Owner; and

(vi) indemnify the Body Corporate for any damage caused to the Common Property arising out of the use of the area.

(e)	The Body Corporate grants to each Owner to whom exclusive use of an area is granted under this by-law the right to construct an office within the exclusive use area provided:

(i) all local government consents and permits are obtained before any work is commenced;

(ii) a copy of the plans and specifications are given to the Body Corporate or the Body Corporate Committee for finance approval before any works are commenced to ensure the aesthetic appearance of the building is not compromised;

(iii) all works, including any windows or skylights, to be constructed are to be certified by an engineer or other suitably qualified person they do affect the structural integrity of the building; and

(iv) the Owner takes out all relevant insurances during the construction period and, at the request of the Body Corporate Committee, provide certificates of currency of insurances.

Proposed Plan "F" identified common property areas marked ‘42H’, ‘42J’, ‘42K’ and ‘42L’, each of which included parts of some current exclusive use allocations and parts of currently unallocated common property. The total area of common property proposed to be allocated to the owner of Lot 42 is 657m2.

•	An explanatory note to Motion 5 stating The effect of this motion is to retain the existing exclusive use areas in the roof space held by owners other than Edith Dindas Pty Ltd and allow the exclusive use areas currently held by Edith Dindas Pty Ltd to have their boundaries changed and be held as exclusive use areas attached to the proposed new lot 42. The area of the proposed new exclusive use area is a realignment of boundaries where part of the existing exclusive use areas are rescinded and some new areas are included. The net effect is that Edith Dindas Pty Ltd will hold a smaller but more beneficial exclusive use area. The proposer believes that this change will not impact on any other owner or body corporate costs in any way.
•	An Integrated Planning Act 1997 Development Application proposing a material change of use by the addition of a mezzanine level on a gross floor area of 670sq.m. The plans of the proposed mezzanine floor describe the area as ‘proposed office space’.
•	A proposed new CMS accommodating the proposed lot amalgamation and the new By-Laws 23 and 25.

The minutes of the June EGM indicate other than the 29 lots owned by Edith Dindas or Edith Dindas Pty Ltd, Lots 3, 4, 7, 8, 16, 29, 34 and 41 were represented. Motion 2 was passed by ordinary resolution by 31 votes to nil with 6 abstentions. Motion 5 was not passed (contrary to the notation in the minutes) by resolution without dissent due to 6 ‘no’ votes being recorded.

Determination
Amalgamation of lots and the by-law changes
Motion 2 required an ordinary resolution indicating that the plan of subdivision for the amalgamation did not affect the common property and that the contribution schedule lot entitlements and interest schedule lot entitlements did not change in a material way (s62(4) and (5), Act). There have not been any submissions suggesting otherwise. In this instance, the Body Corporate’s consent to recording a new CMS to give effect to the amalgamation is primarily administrative as its interests are not affected by the amalgamation.

An amalgamation of lots may have a consequent impact on existing authorisations, including exclusive use allocations. In this instance, it would be prudent for the owner of the amalgamating lots to make appropriate arrangements about existing allocations. The Applicant could have sought to amend By-Law 23 limited to recognising the amalgamation and the Body Corporate’s consent to any such amendment could be viewed as also being of a routine administrative nature. However, Motion 5 proposed changes not limited to those which could be regarded as being consequential to the amalgamation. Firstly, the proposed allocations of common property encompass parts of common property presently allocated to lots not being amalgamated and parts of common property not presently allocated to any lot. Secondly, existing conditions in By-Law 23 are not mirrored in By-Law 25. For example: the terms of By-Law 23(b)(i) and (iv) are not reflected in By-Law 25. Also, By-Law 25(e) authorises the owner to make improvements to the allocated common property. By-Law 23 does not contain a similar provision.

Given the amendments proposed to By-Law 23 and the proposed new By-Law 25, Motion 5 required a resolution without dissent (s171(2)(a) and (b), Act).

Jurisdiction
An adjudicator may make an order that is just and equitable in the circumstances to resolve a dispute (s276(1), Act). Without limiting subsection (1), an adjudicator may make an order mentioned in schedule 5 (s276(3), Act). If satisfied a motion requiring a resolution without dissent was not passed because of opposition that in the circumstances is unreasonable, an adjudicator may make an order giving effect to the motion as proposed or a variation of the motion as proposed (schedule 5(10), Act).

There have not been any procedural questions raised regarding the calling and holding of the June EGM. Therefore, I do not consider it necessary to explore this aspect of the meeting. The question to be determined is whether the votes opposing Motion 5 constituted opposition that in the circumstances is unreasonable.

Opposition that in the circumstances is unreasonable
In making submissions about reasonableness, Holding Redlich cited the following paragraphs of the judgment in Dindas:

• Paragraph 23 where the Judge stated the "ethos" created under the legislation is not always one based upon an individual’s right to vote, but upon the property rights which accrue to lot owners.

• Paragraph 39 where the Judge stated an adjudicator’s powers under s276 to make a just and equitable order to resolve a dispute (does not) necessarily connote(s) the power to override other rights which lie behind, and form the basis of, voting rights.

• Paragraph 40 where the Judge stated the power arising under s276 may only ... be exercised if the orders which are made do not unacceptably trample ... rights as lot owners.

It is submitted that to be successful, the Applicant must provide evidence the decision to vote against the Motion was motivated by fraud, personal or particular gain or was dishonest.

The Applicant replied stating there is no explanation how paragraphs 23 and 39 assist the Body Corporate or how they are relevant to the issues raised in the application; and the statement concerning providing evidence the decision to vote against the motion was motivated by fraud, personal or particular gain or was dishonest was not part of the above judgment and is not a relevant consideration in determining whether the dissenting votes were unreasonable.

With the exception of the Judge’s statement at paragraph 40, the cited references to Dindas are largely confined in scope to the specific circumstances that were subject to the Appeal decision. It should also be noted Dindas left room for overturning a body corporate resolution where "justifiable interference" was warranted (para 46). In addition, the Judge said section 276 is posited on the existence of a dispute about legal rights arising within the parameters of the legislation and, hence, a just and equitable order made under the section is necessarily one made in accordance with the law (para 24).

There is legislative power to make an order about the subject of this dispute and there have been a number of adjudications dealing with schedule 5(10) and the issue of "reasonableness".

In Points North (paras 42 and 44) and Ocean Plaza Apartments^[2] (paras 23 and 26), the specialist adjudicator stated:

In determining whether such opposition was in the circumstances unreasonable, I do not consider that the "subjective intention" of each of the lot owners who voted in opposition is the appropriate test for the above criteria in Schedule 5 Order 10. Whether the opposition is in the circumstances unreasonable has to be considered "objectively" taking into account all relevant circumstances ... the appropriate test ... is whether opposition to a motion is unreasonable/reasonable when considered in an objective and fair manner in all of the circumstances. A test relying on a subjective intention to oppose a motion would make Schedule 5 Order 10 meaningless and inoperative.

In Zenith^[3] (where the above test was applied), the adjudicator stated the courts have held that where a statute expressly provides that a decision is to be made ‘reasonably’ or upon ‘reasonable grounds’, the test is an objective one that requires a balancing of factors in all the circumstances according to the ordinary meaning of the term ‘reasonable’.^[4] In this decision and in the decisions made to resolve disputes in Q1^[5] and Allen Court^[6], adjudicators also stated:

In determining whether votes against a motion constitute opposition that in the circumstances is unreasonable it is necessary to consider all the material facts. What is material will vary from case to case but typically the requirement for an adjudicator to make a just and equitable decision involves some balancing of the interests of the majority and minority and raises questions of fairness.

In Sirocco Resort^[7], reasonableness in the context of withholding approval was considered by the specialist adjudicator who stated:

• In general terms ... provided there are objectively established circumstances showing potential reasons, there could be "sufficient reasons for withholding consent" (para 56).

• My own conclusion, reached from a consideration of relevant authority and principle, is that where there has been a constructive, implied, or deemed, decision of a withholding of consent/approval, it is open to a body corporate ... to still rely upon the objectively established circumstances at the time to glean the existence of reasons, although a Court, or Specialist Adjudicator, might be able, in particular circumstances, to more readily imply that the deemed withholding was unreasonable. But each case would depend on its own set of circumstances (para 59).

• The question of whether the body corporate’s conduct was reasonable or unreasonable is one of fact to be decided by the adjudicator (para 64).

• In determining whether the conduct was reasonable, it is not necessary to determine that it was either right or justifiable, if the conclusions which led to refusal of consent might have been reached by a reasonable person in the circumstances (para 66).

• The essence of a reasonable decision is that there are reasons for it which can be justified at some level (even if only by showing the reasons are genuine and not wholly fanciful), what is not required is for those reasons to be justified by reference to some objective standard of correctness (para 67).

• The Applicant has not discharged its onus of establishing that the deemed withholding of the Respondent’s approval ... was unreasonable, given the actual circumstances that existed ... and given the advice on which it could rely which had been placed before it (para 108).

Is opposition to Motion 5 unreasonable?
The minutes of the June EGM indicate that Lots 4, 7, 8, 16, 29 and 41 voted against Motion 5. Holding Redlich Lawyers made submissions on behalf of the owners of Lots 4, 7, 8, 16 and 29. While Lot 3 abstained from voting on the Motion, the owner of Lot 3 made submissions to the Commissioner opposing the application. The submissions raise a number of grounds for opposing Motion 5. I have dealt with each ground separately.

1.	The amount of common property

There is a concern about the amount of common property proposed to be allocated under By-Law 25. Even though the Applicant is proposing to obtain the benefit of parts of common property not currently allocated as exclusive use, it is apparent the allocation proposed in By-Law 25 would constitute a reduction of some 469 square metres in the amount of common property in the roof space subject to exclusive use.

Another concern is that the current smaller allocations will become larger sized allocations. As I indicated earlier, it would have been reasonable for the Applicant to seek to amalgamate the exclusive use allocations (if possible) affected by the lot amalgamation. The amalgamation of existing allocations would have created larger sized allocations, some of which would be greater in size than the allocations being proposed in By-Law 25.

While section 171(2)(b) of the Act basically requires the relevant owner’s consent before an exclusive use by-law can be removed, common property allocated as exclusive use to a lot does not become absorbed into the lot.

In the circumstances, I am not satisfied this ground is an objective basis for opposing Motion 5.

2.	Additional common property

By-Law 25 proposes allocating common property not currently subject to exclusive use. It is claimed allocation of this area deprives owners of a benefit of common property. The Applicant replied the only current access to parts of the roof space is by stairs within a lot in which the Applicant has an interest or via a ladder; and the dissenting owners do not have access to this area nor do they derive any practical benefit from the area.

One section of the roof space I inspected has been built in. This structure would seem to have existed for approximately 7 years and is on that part of common property proposed to be identified as ‘42J’. While the structure may not have Body Corporate approval, nothing has been submitted indicating the structure causes detriment to the Body Corporate, an owner or an occupier. In addition, given the proposed allocations are in the roof space, it is clear owners and occupiers would not ordinarily have reason to access the space and even if they did, there is a question as to how they would traverse the space given the existing allocations and the location of infrastructure within the roof space. Further, it would seem there are limited means of accessing the roof space from Level C. Mr Kratz mentioned the possibility of a walkway and the possibility that other exclusive use owners may similarly want to use the unallocated common property. There is no indication these possibilities have been considered even though the allocations have been in place since 1995.

Given the configuration of the roof space and the time current exclusive use allocations have existed, objectively speaking, these grounds are not a reasonable basis for opposing Motion 5.

3.	No consideration or other benefit

The opposing owners express concern there is no consideration or other benefit being provided to the Body Corporate or other owners. The Applicant replied there is no reason for consideration given the Applicant proposes surrendering a far greater area than being sought.

Common property is owned by the owners of lots included in the scheme, as tenants in common (s.35(1) Act). A body corporate must act reasonably and for the benefit of owners (s94, Act). An exclusive use allocation alienates part of the common property for the benefit of an individual lot to the exclusion of other lots. In this case, it would seem likely the proposed allocations are intended to be used as office space. The scheme is commercially based and this is a use consistent with the current use of lots. Without information to the contrary, it would be reasonable to expect some benefit to flow to the owner of Lot 42 from additional office space. The extent of any benefit and whether this benefit exceeds that derived from existing allocations may be capable of assessment by a person with appropriate qualifications or expertise. While the Applicant mentioned a more beneficial exclusive use area in the explanatory note to Motion 5, the reply to submissions made on her behalf by Nicholsons Solicitors suggests the surrendering of common property is a commercial loss to the Applicant. Both statements were not supported by authoritative analysis. Further, it is evident nothing was presented to owners before or at the June EGM about whether the benefit to be gained by the proposed allocation was objectively calculable and if it was the extent of the benefit.

The Applicant sought Body Corporate support and the onus rested with her to provide the Body Corporate with information relevant to the proposal. The Applicant could have also sought to negotiate with the Body Corporate before submitting the proposal for approval. It is not apparent the Applicant sought to do so.

In the absence of any authoritative analysis or any attempt to consult with the Body Corporate about this issue, an owner would be justified to conclude from the limited material presented to the June EGM that it is likely a commercial benefit would be derived by the owner of Lot 42 from the proposed allocations and that the Body Corporate acting pursuant to section 94 could be expected to receive from the owner some form of consideration equivalent to the benefit. In the absence of a proper assessment, it cannot be objectively stated the reduction in the allocation of common property is to the detriment of the Applicant or that the Body Corporate or other owners will benefit.

In my view, the circumstances suggest it would be reasonable for an owner to oppose the Motion given the lack of information about this matter.

4.	Structural elements

The Applicant claims the proposed area better utilises the structural elements of the roof space. At the inspection, Ms Dindas stated that existing structural supports and a firewall would be incorporated into any construction. The opposing owners disagree.

As with the above Issue 3, there is an absence of objective, independent advice in relation to this issue. It would seem owners were given architect’s plans. However, it would be reasonable to question whether these plans satisfactorily explain the work being proposed should the Body Corporate approve the Motion, particularly when the work was proposed in the roof space of the building above lots and common property.

It is noted that By-Law 25(e) seeks to authorise the owner to make improvements on the allocated area in the form of an office (s104, Commercial Module). The By-Law includes provision about structural integrity. While this provision may be viewed as resolving issues owners may have about construction, it does not detail what is proposed. Once the Motion is passed, the control the Body Corporate may have over construction would appear to be less then currently exists. For example, By-Law 23(b)(i) contains significant conditions which do not seem to be reflected in By-Law 25. While the proposed By-Law contains an indemnity provision, it does not seem to provide any powers for the Body Corporate to be involved in the construction process. The Body Corporate has not been presented with any material suggesting the new conditions in By-Law 25 are more relevant or advantageous to it than those in By-Law 23. Further, there is no explanation why the proposed differences in the conditions should be consequent to the amalgamation of lots and different to those applying to Lots 16, 29, 34 and 41.

Given the proposed use of the roof space, the Body Corporate and owners are entitled to be informed about how the existing infrastructure within the roof space would be affected (if at all). Any construction work may require alterations to the infrastructure and By-Law 25(d)(iii) and (iv) includes conditions about infrastructure. The Applicant has not presented any material to owners to explain the work being proposed. It would be reasonable for an owner to be concerned about for example: the work likely to be done to the infrastructure; how the work would affect the enjoyment of lots and common property; and who would be responsible for its maintenance subsequent to its relocation.

Any construction work in the roof space as a consequence of By-Law 25 would seem to be quite extensive and could have a significant impact on the use and enjoyment of lots and common property and on the responsibilities of the Body Corporate. In these circumstances, it would be reasonable for lot owners to be given detailed information about the work being proposed (if any) should they approve the proposed By-Law. In the absence of this information, an owner may reasonably oppose the Motion, especially when it proposes, without explanation, dissimilar treatment for owners under By-Law 23 and the owner under By-Law 25.

5.	An owner is entitled to exercise the owner’s right to vote in a particular way.

Motion 5 required a resolution without dissent. Every lot owner had a right to vote on the Motion, including an owner who owed a body corporate debt at the time of the June EGM (s38, Commercial Module). The type of resolution required and the fact that an unfinancial owner could not be prevented from voting reflects the importance of the matter under consideration. While the Act allows the resolution to be reviewed, each owner had the right to consider whether to support or oppose the proposed Motion and self interest may well be a motivation for opposition. Whether objectively speaking, self interest is sufficient reason for opposition is to be determined by the circumstances.

It has not been shown by those opposing the Motion that their use and enjoyment of their lot and/or common property is likely to be affected by the proposed allocations. However, in the absence of information to the contrary, it is likely there will be a commercial benefit to the Applicant and in this circumstance, an owner could reasonably weigh up whether their interest in common property is appropriately recognised and/or compensated. Further, given the location of the proposed allocations, it would be reasonable for an owner to consider the effect the proposed use of these areas may have on the rights and obligations of the Body Corporate and that owner.

6.	The manner in which owners voted at previous meetings is not a relevant consideration in the determination of the question in this application.

The Applicant submitted the way the dissenting owners historically vote against the Applicant is relevant as there is no requirement that "the circumstances" are necessarily those pertaining to the motion in question.

It is evident that there is a history of disputes in the scheme. While the opposing owners may have opposed matters proposed by the Applicant or some administrative matters in the past, this is not particularly significant to the question raised in this application. It is noted however, that owners seemed to have opposed a similar proposal submitted by the Applicant to the Extraordinary General Meeting dated 28 December 2006.

7.	Issues raised at the inspection

At the inspection, Mr Kratz raised other reasons for opposing the Motion including:

(a)	The Body Corporate could not get the area back at a later time. The very nature of exclusive use is that unless there are appropriate conditions included in the by-law, the allocation will only be relinquished with the benefiting owner’s approval. Given that no basis was stated for regaining or using the area, I am not satisfied that, objectively speaking, this is a reasonable basis for opposition.
(b)	Ms Dindas could try, at some later time to get back the common property being relinquished. There is no suggestion that this will happen. It is not a reasonable basis for objecting to the Motion.
(c)	Other owners may want to use unallocated common property adjacent to their exclusive use areas for access purposes. This is supposition only. Even if it was contemplated, nothing has been presented to indicate this was a consideration of the relevant owners or that even if it was, these owners had some right to use the common property in preference to the Applicant. I am not satisfied this ground is a reasonable basis for opposing the Motion.

Conclusion
At the June EGM, the Applicant proposed changes to exclusive use by-laws necessitating Body Corporate approval by resolution without dissent. The relevant Motion 5 was not passed. The Applicant has sought adjudication under the dispute resolution provisions of the Act. An order may give effect to the Motion as proposed if I am satisfied the Motion was not passed because of opposition that in the circumstances is unreasonable. In my view, the appropriate test of reasonableness involves objectively taking into account all relevant circumstances as at the June EGM and given these circumstances, determining whether a reasonable person would have opposed the Motion.

Given the existing exclusive use allocations and that being proposed, it could be stated the proposed change is relatively minor or even to the Applicant’s detriment. However, the circumstances suggest otherwise. It is evident Motion 5 proposed reallocating exclusive use of the common property in the roof space of the building in a different way to existing allocations and proposed unique exclusive use conditions. The proposed allocations and conditions would seem to have been established by the Applicant without consultation or negotiation with the Body Corporate. In addition, the Applicant did not provide any assessment or information from a person/s with appropriate qualifications and expertise about the commercial benefit (if any) and about the nature of the work proposed on common property should the Motion be passed by the Body Corporate. Given that the work would be carried out in the roof space of a three level commercially based building, some need for consultation or independent authoritative analysis should have been reasonably foreseeable.

As a lay body, the Body Corporate was entitled to at least be given opportunity to discuss the issues with the Applicant or to obtain its own advice before formal presentation of the proposal to a general meeting. In lieu of any prior notification, the Body Corporate could have expected to be given the findings of an independent analysis of the proposal. There are a number of issues related to the Motion 5 proposal, including for example: the value of any benefit; the work proposed on common property; the effect that work may have on the building, infrastructure and the use and enjoyment of lots and common property; and the reasonableness or appropriateness of the proposed conditions stated in the proposed By-Law. Given the circumstances that existed at the June EGM, it would be reasonable for an owner to have concerns about these issues and in the absence of any authoritative advice, to vote against the Motion as proposed. In my view, the Applicant has not established the opposition to Motion 5 was unreasonable. There is no justifiable basis for overturning the resolution made on this Motion.

For these reasons, the application is dismissed.

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^[1] Dindas & Anor v Body Corporate for One Park Road CTS 2114 & Ors [2006] QDC, 25 August 2006.

^[2] Points North [2004] QBCCMCmr 423 (2 September 2004); Ocean Plaza Apartments [2004] QBCCMCmr 452 (23 September 2004).
^[3] Zenith [2007] QBCCMCmr 115 (28 February 2007).
^[4] Secretary, Department of Foreign Affairs and Trade v Styles [1989] FCA 342; (1989) 88 ALR 621.
^[5] Q1 [2007] QBCCMCmr 131 (8 March 2007).
^[6] Allen Court [2007] QBCCMCmr 297 (21 May 2007).

^[7] Sirocco Resort [2006] QBCCMCmr 426 (2 August 2006). This dispute did not give consideration to schedule 5(10). The decision related to the transfer of rights provisions in the Body Corporate and Community Management (Accommodation Module) Regulation 1997.