Sanctuary Cove Principal Body Corporate [2008] QBCCMCmr 352 (24 June 2008)

Last Updated: 30 October 2008

REFERENCE: 0034-2008

ORDER OF A REFEREE

MADE UNDER PART V

BUILDING UNITS AND GROUP TITLES ACT 1980

Number of Plan:	GTP 220
Name of Building or Parcel:	Sanctuary Cove Principal Body Corporate
Address:	SANCTUARY COVE, QLD 4214

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

Plumeria Body Corporate

I hereby declare that the special resolutions passed by the Sanctuary Cove Principal Body Corporate (PBC) on 20 March 2006 and 26 May 2008 do not give the PBC authority to transfer any part of the secondary thoroughfare or amalgamate it with lot 90 on GTP 3441 without the consent of the The Proprietors – Plumeria Group Titles Plan No. 2207. I further order that, within six months or such other time agreed by the parties, the PBC must ensure that all occupiers have a right of way over the secondary thoroughfare between lot 90 on GTP 3441 and lot 50 on GTP 2207 as required by section 56 of the The Sanctuary Cove Resort Act 1985 (SCRA), except for any parts of this area that have ceased to be secondary thoroughfare. I further order that the application is otherwise dismissed

STATEMENT OF REFEREE’S REASONS FOR DECISION - REF 0921-2007A

“Sanctuary Cove Principal Body Corporate”

Application

Plumeria Body Corporate (Plumeria) has brought this application against the Sanctuary Cove Principal Body Corporate (PBC). The applicant is seeking orders in relation to dealings with part of a secondary thoroughfare lot controlled by the PBC.

Background

The Sanctuary Cove Resort Act 1985 (SCRA) provided the legal structures for the development of the Sanctuary Cove Resort. The registration of the initial plan of survey resulted in the creation of the Sanctuary Cove Primary Thoroughfare Body Corporate (PTBC). The members of the PTBC were, directly or indirectly, made up of the owners of lots in the initial plan of survey. Owners of lots in the non-residential zones automatically became members of the PTBC. Owners of lots in residential zones instead automatically became members of the Sanctuary Cove Principal Body Corporate (PBC) and this PBC then became a member of the PTBC.

Subsequent subdivisions have resulted in a number of additional residential bodies corporate (RBC’s), each of which became a member of the PBC. Plumeria is one of these RBC’s, with the members of Plumeria being the owners of the 88 residential lots shown in group titles plan 2207.

One of the members of Plumeria is Sonja Trott (Trott), the owner of lot 90 on group titles plan of resubdivision 3441, being a resubdivision of group titles plan 2207 (lot 90). Submissions indicate that Trott’s house encroaches upon part of one of the secondary thoroughfare lots controlled by the PBC that services lots within Plumeria. This secondary thoroughfare lot is lot 70 on group titles plan 2207 (the secondary thoroughfare lot). Submissions further indicate that the PBC has proposed to transfer part of the secondary thoroughfare lot to Trott but that Plumeria has lodged the present application to seek to prevent the PBC from doing this.

Jurisdiction

The jurisdiction of a Referee under the Building Units and Group Titles Act 1980 (BUGTA) to make orders concerning bodies corporate within the Sanctuary Cove Resort has been considered in a number of previous orders of referees.[1]

Section 77(1) of the BUGTA provides for the general power of a referee to make orders, being:

A referee may, pursuant to an application of a body corporate, body corporate manager, a proprietor, a person having an estate or interest in a lot or an occupier of a lot in respect of a parcel, make an order on any person entitled to make an application under this subsection or on the chairperson, secretary or treasurer of the body corporate for the settlement of a dispute, or the rectification of a complaint, with respect to the exercise or performance of, or the failure to exercise or perform, a power, authority, duty or function conferred or imposed by this Act in connection with that parcel.

However, this power of a referee to make orders about powers, authorities, duties or functions under BUGTA is extended to a power to make orders about the SCRA due to section 5A of BUGTA, which preserves the operation of BUGTA for the SCRA, and section 104A of the SCRA that deals with disputes and provides that:

Unless otherwise provided in this Act, a dispute about the operation of this Act or the rights and obligations of persons under this Act may be dealt with under the Building Units and Group Titles Act 1980, part 5.

The SCRA sets out a number of matters for the regulation of the PTBC and the PBC. The RBC’s are then separate bodies corporate regulated under BUGTA. In this respect, the second reading speech for the SCR Act indicated that residential developments would be established under BUGTA with their own group titles plan[2] and section 325(2) of the Body Corporate and Community Management Act 1997 (BCCMA) provided that BUGTA continued in force where the registration of the plan for the body corporate had been for a specified Act including the SCRA.

The present application is by Plumeria against the PBC, seeking an order to stop the PBC from entering into deeds or agreements with Trott in respect to a transfer or other dealing with part of the secondary thoroughfare lot. I am satisfied that Plumeria is both a body corporate and a person having an interest in a lot who is seeking an order against the PBC, as a body corporate, regarding the exercise or performance of a power or function conferred on the PBC by the SCRA. As a referee I am therefore satisfied that I have jurisdiction to determine the present dispute due to section 104A of the SCRA and section 77 of BUGTA.

Submissions

The registered plans show the secondary thoroughfare lot runs along the northern side of Plumeria parallel to the Coomera river but with a small section about 8 metres wide and 38 metres deep running down to the Coomera River between lot 90 and lot 50. This small section of approximately 310 square metres is shown as easement D (Easement D). Easement D is an easement over part of the secondary thoroughfare lot for drainage purposes for the benefit of lot 90.

The main grounds in support of the application, provided on behalf of Plumeria, were to the effect that:

• Easement D was granted for the benefit of lot 90 for drainage purposes only, although there are early indications that the purpose of the easement was originally for landscaping and beautification;
• The area covered by Easement D has been landscaped and fenced by the owner of lot 90, preventing other land owners from accessing it;
• Original plans submitted by the then owner of lot 90 showed that the building construction would encroach on to the areas of the secondary thoroughfare lot covered by Easement D and that proposed landscaping would restrict the residents’ rights to access this area. Subsequent plans removed the encroachment and provided for less obstructive landscaping. However, a fence and landscaping has been constructed over this area in contravention of the grant of easement and in contravention of section 56 of the SCRA that provides "every person who lawfully occupiers any land within the site or adjacent site has a right of way over ... the secondary thoroughfare";
• On 20 March 2006 the PBC passed a special resolution that:
  • [With reference to McCullough Robertson Explanatory notes] That the Principal Body Corporate negotiates with the Grantee [Trott] to obtain the Grantee’s consent to the proposal.
  • That the Principal Body Corporate obtains the consent of Council to the transfer of the Relevant Part and its ultimate amalgamation with Lot 90 [the Relevant Part being that part of the Servient Tenement on which the fencing is located, the Servient Tenement being the part of Lot 70 described as Easement D on RP 90475].
  • That the Principal Body Corporate enters into a written agreement with the Grantee, on terms to the PBC’s satisfaction, which incorporates the negotiated terms.
  • That the Principal Body Corporate negotiates with the Bodies Corporate in respect of GTP 2207 and GTP 3441 [Plumeria], to obtain their consent in the required form to the arrangements.
  • That the Principal Body Corporate executes a partial surrender of the Easement to the extent it burdens the Relevant Part.
  • That the Principal Body Corporate causes the preparation of, and to sign as registered owner of Lot 70, a survey plan and any related transfer documents, which will have the effect of converting the Relevant Part to common property in GTP 2207.
  • That the Principal Body Corporate signs and accepts the grant of a new easement for drainage purposes over the new lot created through the amalgamation of the Relevant Part and lot 90, on terms to the PBC’s satisfaction.
  • That the Principal Body Corporate undertakes such further action as the PBC considers necessary to achieve the purpose identified in the Explanatory Notes.
• This resolution does not clearly disclose that part of the secondary thoroughfare was to be transferred directly to lot 90 absolutely;
• This resolution does not describe the process the PBC now appears to be undertaking. In particular, the proposed transfer now being undertaken by the PBC is without power, not approved by the local council, not approved by Plumeria, and in breach of section 63 of the SCRA;
• In May 2006 McCullough Robertson advised the PBC that the process proposed and agreed to in the above special resolution was not necessary for the transfer and provided a new proposal. This new proposal is now being followed by the PBC but without any further special resolution approving the process. This proposal involving a new easement deed is without power and in breach of section 63 of the SCRA;
• In any event, the resolution of 20 March 2006 was passed as a result of misleading and incorrect information;
• Further, the PBC is failing to control, manage and administer the secondary thoroughfare for the benefit of its members are required by section 33 of the SCRA; and
• The applicant has no objection to the beautification of the area in question but requires that the right of way be restored so that residents may fully access the area in question.
  

Submissions by the PBC were to the effect that:

• The PBC resolved by special resolution on 12 August 1996 to grant an easement over part of the secondary thoroughfare to lot 90 for the purposes of landscaping and beautification, subject to overland flow of water being unaffected;
• The PBC initially granted the easement over the secondary thoroughfare for the benefit of lot 90 on 19 August 1996 for the purpose of ‘landscaping and beautification’. The easement was subsequently re-executed for the purpose of ‘drainage’ on 26 March 1997;
• The PBC does not believe that Plumeria is able to positively assert that the construction of the fence and landscaping is in contravention of the easement as minutes of meeting indicate this work was contemplated;
• The landscaping and beautification is not in contravention of section 56 of the SCRA as the area in question was being used for drainage and was not being used for access or right of way by residents. It is not a traditional right of way that would allow people to pass from point A to point B over the easement;
• The special resolutions passed by the PBC on 20 March 2006 clearly referred to the transfer of the relevant part and its amalgamation with lot 90;
• The process is not in breach of section 63 of the SCRA as the PBC has consented by way of the special resolutions and the consent of the Albert Shire Council is being sought, and will be sought prior to any transfer;
• Subsequent legal advice did not say that the process agreed by the PTC was unnecessary. It simply said that two of the eight agreed steps were unnecessary, being the conversion of the land to common property and the approval of Plumeria, and that the process agreed to by special resolution should be followed except for these two steps. There is no misleading conduct or incorrect supporting material;
• The PBC voted for the amalgamation of the easement area with lot 90 and had the opportunity to consider all relevant considerations including loss of access to the river when the vote was taken. Plumeria did not vote in opposition to this decision and Plumeria lacks the lot entitlements to have the decision overturned.
  

Submissions by Trott were to the effect that:

• Section 56 of the SCRA does not apply to the easement area. Firstly, the easement area was included as secondary thoroughfare, not as a road, but only for drainage. Secondly, the operation of section 56 has been removed by a valid grant of an easement under section 18 of the SCRA or by way of an implied easement under section 16 of the SCRA;
• The easement area was included in the secondary thoroughfare lot, not as road, but for control over the overland flow path and underground storm water drains;
• By approving the landscaping and erection of a front fence on 16 October 2001, the PBC varied the easement by equitable agreement to include a right in favour of the grantee to restrict access;
• The PBC has acted within power in resolving to transfer the easement area to Trott. It decided to transfer the whole area and did not proceed with a proposal to only transfer part of the area to Trott due to the unsuitability of constructing a dividing fence for the area over the underground stormwater pipe;
• The easement area does not provide access to any person’s property so the consent of the PBC to the transfer of the area is sufficient under section 63 of the SCRA and the transfer does not require the consent of Plumeria body corporate or any individual proprietor;
• The transfer of the easement area by the PBC to Trott is in the best interests of the PBC’s members to avoid litigation, regularise the terms of the easement, and avoid any potential liability in respect of the encroachments; and
• Trott will suffer material prejudice if the orders sought by the applicant are granted including loss in value of property, loss of privacy, and loss of security. There is no benefit to Plumeria in retaining the right of way because the easement is narrow and small in size, and the easement does not provide a right of way to any destination as it terminates at the Coomera River.
  

All owners were given an opportunity to provide written submissions. The main submissions by owners were to the effect that:

• Our lot does not have water frontage and access through the area in question would be helpful to us as it would allow our grandchildren to fish in the river;
• When the owners of Lot 90 purchased, reasonably competent searches would have identified that the easement area was not for their exclusive use. All residents should have access to the easement area and Lot 90 would still have the advantage of overlooking a small landscaped park rather than being directly adjacent to another house;
• This piece of secondary thoroughfare land should remain available for the enjoyment and use of all residents as was originally intended; and
• As much open space as possible is needed for children to play games instead of them playing out on the road.
  

A reply to submissions on behalf of Plumeria was to the effect that:

• It is surprising the vote of the Plumeria representative at the PBC meeting of 20 March 2006 is listed as "abstain" for the special resolutions regarding the easement area as the representative has confirmed he was aware that Plumeria required him to vote against the resolutions;
• It is claimed that the placing of the seal of the PBC on the landscaping plan that included a fence restricting public access to the area is prima facie evidence of PBC approval. However, there is no mention in the records of a resolution being passed to approve the plan or affix the seal and it is noted that Plumeria objected on 16 May 2001 to the erection of the unapproved fence and the plan was only sealed on 18 October 2001;
• The current PBC policy is to provide landscaping and beautification on floodway easements for the enjoyment of all residents. This was shown for and easement adjacent to Lot 1 The Circle within Acacia body corporate; and
• It was suggested that there is a similar easement to the riverbank a few hundred metres along Marine Drive East that has already been landscaped and is available to all residents. However, this other floodway easement is not secondary thoroughfare owned by the PBC but is residential body corporate common property within Washingtonia body corporate so is not really available for full access by the proprietors of Plumeria; and
• The resolutions at the PBC extraordinary general meeting on 20 March 2006 were drafted and worded incorrectly and should be withdrawn. It is possible, with goodwill, that an arrangement can be reached that will provide security and privacy for Lot 90 while restoring legal right of way to the residents of Sanctuary Cove. Plumeria wishes to have a contributing role in such efforts.
  

A further reply to submissions on behalf of the PBC was to the effect that:

• Plumeria abstained from voting on the special resolutions of 20 March 2006 despite having an opportunity to vote ‘no’;
• Plumeria has failed to provide evidence of any misleading or deceptive information or any motivations as to why members of the PBC voted in favour of the motions;
• The PBC has since affirmed these special resolutions at a meeting on 26 May 2008 at which it was resolved that "Without contravening the interim order of the BCCM, the PBC wishes to reaffirm its previous resolutions to transfer at cost (being PBC’s costs and expenses including all legal fees) the relevant section of Lot 70 (as marked on the map below – between Lot 90 and Lot 50 Plumeria) to Lot 90 Plumeria".

Determination

Applicable law

The legislation includes provisions to the effect that:

• The PBC must control, manage and administer secondary thoroughfares for the benefit of its members (SCRA, 33(1));
• Subject to the by-laws, every person who lawfully occupiers any land within Sanctuary Cove has a right of way over the primary and secondary thoroughfares (SCRA, 56(1));
• No part of a secondary thoroughfare may be subdivided, transferred or leased without the prior approval of the Albert Shire Council and of the PBC by special resolution (SCRA, 63);
• The PBC may, by special resolution, execute a grant of easement (SCRA, 18).

Summary of issues

The main issues for determination are:

1. Is the landscaping and fencing of the easement area unlawful?
2. Is the proposal to transfer part of the secondary thoroughfare to Lot 90 without authority?
3. Is it contrary to section 33 of the SCRA to transfer part of the secondary thoroughfare?

Landscaping and fencing of Easement D

Findings

Certain of the issues are not really in dispute. Based on the submissions I am satisfied that:

• On 17 June 1996 a proposal was put forward at a PBC meeting that the easement area be beautified for the benefit of the adjacent lot 90;
• On 12 August 1996 the PBC adopted a resolution to grant an easement over the easement area for the purpose of landscaping and beautification. This was provided that the existing profile of the area be maintained for the purposes of overland drainage. The Architectural Review Committee (ARC) minutes of 20 June 1996 and the PBC Minutes of 12 August 1996 were referred to in this respect;
• Easement No 702758408 for the benefit of lot 90 over Easement D on RP904745 was eventually recorded on 29 September 1998 but had been amended to be for "drainage purposes" rather than "landscaping and beautification purposes" by that date. Relevantly, the terms of the easement include that the PBC would maintain the easement area "in good repair and condition and keep it cleansed, properly lighted, and unobstructed at all times subject to the Grantee’s obligation to pay the costs and expenses in relation to such upkeep and maintenance.";
• The owner of lot 90 at the time subsequently submitted building plans for lot 90 and a landscaping plan for lot 90 and the adjacent easement area;
• A copy of the landscaping plan for lot 90 and the easement area has been reviewed and appears on its fact to have been stamped as approved by the PBC on 18 October 2001. However, there is no record of any resolution around this date specifically approving this landscaping plan.
  

I note that the approved plan shows a pedestrian pathway along almost the entire western length of the easement, although for a short segment most of this pathway is on lot 90. Further, it is obvious from the plans and photographs provided that public access along this pathway would have significant privacy implications for the occupants of lot 90. Otherwise, the landscaping plan and photographs indicate that access from the road to the easement area is obstructed by electrical infrastructure to near the middle of the easement. A fence and some bushes then obstruct access along the eastern side of the easement.

Having considered the submissions, it seems more likely than not that the landscaping plan was validly approved. In this regard, I note the PBC resolution of 12 August 1996 to grant an easement over the area for the benefit of lot 90 for landscaping and beautification purposes. Even if there was no subsequent resolution specifically authorising the PBC to affix its seal to the landscaping plan, it appears that the body corporate did seal that plan on 18 October 2001, that the approval would have been largely consistent with the longstanding intention to allow for landscaping and beautification of the area, and that Trott would have relied upon the landscaping having been approved when purchasing her lot.

On the other hand, I am not satisfied that Trott has any right to restrict access to the easement area by any person. In particular, I can see no basis for an argument that approval of the landscaping plan varied the easement by equitable agreement to include a right in favour of the grantee to restrict access. I note that a stamp on the plan states that the plan is "SOLEY for the purpose of ensuring that the work done pursuant to these plans conforms with the current Sanctuary Cove Principal Body Corporate Development Control By-laws". Further, the plans show a pathway that does give access along effectively the entire length of the easement and it is not obvious on the face of the plan that this access way would be restricted. Also, the explicit terms of the registered easement require the PBC to keep the easement area unobstructed at all times. I further note that a statutory declaration provided by John Reid indicates that he participated in the executive committee meeting on 17 June 1996 and that the original proposal for landscaping put forward at that meeting on behalf of Austek Enterprises was progressed subject to the condition that the relevant portion of lot 70 remained public space.

I also accept arguments that, even if it could be argued that the PBC impliedly granted exclusive use of the area by approval of the landscaping plan, the PBC had no power to do this except by by-law due to section 56 of the SCRA. In particular, section 56 provides that, subject to the by-laws, every person who lawfully occupiers any land within Sanctuary Cove has a right of way over primary and secondary thoroughfares (SCRA, 56(1)). The easement area is part of a secondary thoroughfare and there are no by-laws restricting pedestrian access to this area. Further, it would be arguable that any by-law that did restrict pedestrian access to the area would unreasonably restrict access and require the consent of affected persons (SCRA, 56(2)). As a matter of law, I do not see any inconsistency between an area of secondary thoroughfare being available for drainage purposes, for landscaping and beautification for the benefit of an adjacent lot, and also as parkland for the general benefit of occupiers within Sanctuary Cove. In particular, given other parts of the secondary thoroughfare are available for use as parkland rather than as a traditional right of way from one point to another, I do not accept the argument that restriction of access to the easement area does not contravene section 56 of the SCRA because it is not a traditional right of way allowing people to pass from point A to point B over the easement. Rather, I consider section 56 of the SCRA provides for access by occupiers to all parts of the primary and secondary thoroughfares. In fact, to the extent to which the PBC failed to take adequate account of section 56 of the SCRA in approving the landscaping plan without ensuring all occupiers had suitable access without the need to cross over the adjacent lot 90, that consent would have been unlawful. However, as stated above, it seems more likely that the consent to the landscaping plan was for the limited purpose of confirming compliance with by-laws and the PBC had not intention to approve any exclusive use of the area for the benefit of lot 90.

In conclusion, I am not satisfied that the PBC’s approval of the landscaping and fencing of the easement area was unlawful. However, as it stands, all occupiers have a right to access the area and the PBC should have ensured that the landscaping and fencing did not prevent occupiers from accessing the area. I am therefore prepared to order that the PBC must reconsider the landscaping plan and require amendments that facilitate access to the area by occupiers of Sanctuary Cove. This could be done quite simply by ensuring occupiers can access the path with some small modifications of the path and plantings so that occupiers to not stray onto the adjacent lot 90. Alternatively, it could be done by altering the plantings on the eastern side and removal or alteration of the fencing to allow access along the eastern side.

Unfortunately, I acknowledge that either of these actions alone are likely to have a significant impact upon the privacy of occupants of the adjacent lot 90. In this respect, I note the obligation of the PBC to control, manage and administer secondary thoroughfares for the benefit of its members (SCRA, 33(1)). In this respect, it might be more appropriate that the entire area be re-landscaped to open up access to the river but also include some fencing, hedging or privacy screening adjacent to the living area at the rear of lot 90. In this respect, I note a submission by Trott regarding the unsuitability of constructing a fence along the length of the easement due to the underground stormwater pipe. However, I see very little weight in such a submission due to the wide availability of different types of fences and privacy screening and the possibility that any fencing can be temporarily removed if necessary for access to the stormwater pipe. In fact, it seems obvious that the existing fence between the road and the easement would need to be temporarily removed if it was necessary for digging machinery to access the easement area. Under the terms of the existing agreement it also appears that the PBC would be entitled to remove any fence as necessary and then seek any additional costs from Trott.

Finally, I note that these orders requiring the PBC to ensure access to the easement area by occupiers of Sanctuary Cove should be subject to any potential transfer of the easement area to lot 90, as discussed below.

Proposal to transfer easement area

Findings

It is not in dispute that, on 20 March 2006, the PBC resolved by special resolution, with reference to a proposed Easement Deed:

1. [With reference to McCullough Robertson Explanatory notes] That the Principal Body Corporate negotiates with the Grantee [Trott] to obtain the Grantee’s consent to the proposal.
2. That the Principal Body Corporate obtains the consent of Council to the transfer of the Relevant Part and its ultimate amalgamation with Lot 90 [the Relevant Part being that part of the Servient Tenement on which the fencing is located, the Servient Tenement being the part of Lot 70 described as Easement D on RP 90475].

100. That the Principal Body Corporate enters into a written agreement with the Grantee, on terms to the PBC’s satisfaction, which incorporates the negotiated terms.

4. That the Principal Body Corporate negotiates with the Bodies Corporate in respect of GTP 2207 and GTP 3441 [Plumeria], to obtain their consent in the required form to the arrangements.
5. That the Principal Body Corporate executes a partial surrender of the Easement to the extent it burdens the Relevant Part.
6. That the Principal Body Corporate causes the preparation of, and to sign as registered owner of Lot 70, a survey plan and any related transfer documents, which will have the effect of converting the Relevant Part to common property in GTP 2207.
7. That the Principal Body Corporate signs and accepts the grant of a new easement for drainage purposes over the new lot created through the amalgamation of the Relevant Part and lot 90, on terms to the PBC’s satisfaction.
8. That the Principal Body Corporate undertakes such further action as the PBC considers necessary to achieve the purpose identified in the Explanatory Notes.
   

I do not accept submissions on behalf of Plumeria that these resolutions do not disclose that part of the secondary thoroughfare was to be transferred to lot 90 absolutely. Based on the wording of the resolutions, the attached easement deed, and particularly the explanatory notes to the motions, it should have been obvious to the persons making the decision that the proposal involved a transfer of part of the secondary thoroughfare to the owner of Lot 90, albeit after an initial conversion of the relevant part to common property.[3]

I also do not accept submissions to the effect that the PBC is now planning to undertake the transfer without the consent of the local council. Plumeria has provided nothing to support this submission, the PBC has submitted that local council consent is being sought, and it seems unlikely any transfer could be registered without local council approval.

I do, however, accept the submission to the effect that the PBC is now intending to follow a different process from that agreed by special resolution but without any further special resolution approving the new process. The applicant refers to advice dated 10 May 2006 from McCullough Robertson to the effect that "As it is not intended to transfer land between different group title schemes, it is not necessary to go through a process of converting the land to common property or obtaining the approval of the relevant body corporate." Submissions on behalf of the PBC then confirm it has the view that two of the eight agreed steps for transfer of the land were unnecessary and a transfer of the area directly to lot 90 and without the consent of Plumeria is now proposed.

I also note that Plumeria has not consented to the transfer, as envisaged in the 20 March 2006 resolutions and that the PBC has passed a further special resolution on 26 May 2008 at which it was resolved that "Without contravening the interim order of the BCCM, the PBC wishes to reaffirm its previous resolutions to transfer at cost (being PBC’s costs and expenses including all legal fees) the relevant section of Lot 70 (as marked on the map below – between Lot 90 and Lot 50 Plumeria) to Lot 90 Plumeria.". This subsequent resolution does clarify that the entire easement D area was proposed to be transferred but purports to reaffirm the transfer process adopted in the previous resolutions rather than revoking or amending those resolutions to specifically provide for the transfer to take place without the consent of Plumeria.

It is perhaps able to be argued that the PBC can act on 6 of the 8 special resolutions passed in order to transfer the easement area to Trott and simply ignore the two resolutions that the PBC now considers to be unnecessary. However, having considered the circumstances and particularly the explanatory notes provided with the resolutions, I am satisfied that the meeting of 20 March 2006 adopted eight steps the PBC was to follow to resolve a particular problem and that a significant change to this approach that avoids the need to obtain the consent of Plumeria requires new special resolutions that amend this earlier decision.

In particular, the changes to the procedure adopted by the majority of PBC members on 20 March 2006 are significant. Members of the PBC might think quite differently about a proposal that authorises the PBC to alienate part of the secondary thoroughfare of one of its members with the consent of that member, as opposed to a proposal that authorises the PBC to alienate part of the secondary thoroughfare of one of its members against that member’s wishes. I therefore consider the PBC should be restrained from proceeding with the transfer without the consent of Plumeria unless further special resolutions are adopted that specifically authorise that transfer without consent. I do not consider the special resolution of the PBC of 26 May 2008 is sufficient for that purpose.

Alternatively, I accept arguments from Plumeria to the effect that the resolutions of 20 March 2006 were based on misleading and incorrect information if the PBC intends to rely on those resolutions to effect the transfer without the consent of Plumeria when those resolutions clearly indicated that the consent of Plumeria would be required.

In conclusion, I am satisfied that the decision of the PBC to transfer part of the secondary thoroughfare to Trott was on the basis that Plumeria would consent to this transfer. I consider it appropriate to make an order that the PBC not take any further steps to transfer the easement area pursuant to the resolutions of 20 March 2006 or 26 May 2008 without the consent of Plumeria. If the PBC wishes to pursue the transfer without the consent of Plumeria then the PBC will need to pass a new special resolution to that effect.

Failure to properly control, manage and administer the secondary thoroughfare

Findings

Submissions on behalf of Plumeria raise serious questions regarding whether the transfer of part of the secondary thoroughfare to Trott, without charge, contravenes the requirement that the PBC control, manage and administer the secondary thoroughfare for the benefit of its members (SCRA, 33(1)(a)).

The explanatory notes supporting the proposal make reference to the damage to some of the fencing and the risk of the PBC being subject to a claim brought by the condition of the fencing or the easement area. However, there is no evidence of consideration of the extent of this potential liability as against a similar potential liability for all other parts of the secondary thoroughfare. There is also no consideration of the extent to which this risk would be covered by any insurance policy as required by the legislation in respect of damage, death or injury occurring on the secondary thoroughfare (SCRA, 37).

The explanatory notes supporting the proposal also make reference to ongoing maintenance obligations but fail to refer to the terms of the existing agreement which provide the PBC’s responsibility to maintain the area in good repair and condition is subject to the owner of lot 90’s obligations to pay the costs and expenses in relation to such upkeep and maintenance.

These explanatory notes are also unclear on the basis for which it is thought the PBC cannot accept payment for the transfer of part of the secondary thoroughfare but can recover its costs.

Reference is also made to the lack of any express provision in the existing easement requiring the owner of lot 9 to maintain the profile of the area for overland flow purposes but no reference is made to ensuring the transfer and new easement results in the profile of the area being kept suitable for overland flow and the costs of doing this. Perhaps this is as a result of a letter dated 18 January 2006 from Burchill Partners Pty Limited, Civil and Structural Consulting Engineers and Planners, indicating that the overland flow path can be removed provided all driveway accesses maintain the standard footpath profile. However, it is not apparent from the submissions that this issue has been considered in detail.

The submissions generally tend to indicate that the PBC has not properly considered the extent to which the transfer of the area will benefit its members as opposed to the transfer of only part of the area or some other arrangement. From looking at the submissions, photographs and plans as a whole, it seems obvious that if occupiers are to have access to the river via this part of the secondary thoroughfare then Trott should be entitled to fence off a section of area closest to her home to provide privacy, security and pool safety. However, I am far from satisfied that it would not be possible to re-landscape the area to allow all occupiers of Sanctuary Cove access to the majority of the easement area and to the river. In particular, there is no reason the remainder of the area could not be re-landscaped as necessary to ensure appropriate overland drainage despite the fencing off of part of the area. It is also very difficult to belief that a suitable fence could not be erected in a way that does not interfere with the underground stormwater pipe and could not be removed on the rare occasion that access was needed to a relevant part of the stormwater pipe. In fact, during a teleconference, a representative for Plumeria referred to another similar location where the owner of the adjacent property had been given permission to erect pool-style fencing to allow them to enjoy the amenity of the adjacent park area and a representative of the PBC indicated that this type of fencing could be erected without damage to the stormwater pipe and be removed relatively easily if it was necessary for digging an access to the pipe.

Occupiers of Sanctuary Cove who would be prevented from accessing the easement area by a proposal of the PBC’s to transfer the area to lot 90 therefore do have some arguments that the PBC is failing to control, manage and administer the secondary thoroughfare for the benefit of its members as required by section 33 of the SCRA. This is particularly given the lack of evidence that the PBC has given real consideration to other possibilities including a re-landscaping of the area, a transfer of only part of the area, the likely consequences of encroachment proceedings, and the extent to which insurances and existing easement terms might protect the body corporate against expenses and liabilities associated with use of the area. However, I note that the occupiers who are most likely to be significantly affected by the PBC’s proposal are the occupiers living in the immediate area, being those within lots included within Plumeria. If the proposed transfer involved the consent of Plumeria or the representative for Plumeria voted in favour of the proposed transfer then it would seem strange for Plumeria to now raise the argument that the transfer was contrary to section 33 of the SCRA. This would seem to be the case with the resolutions passed by the PBC on 20 March 2006 and confirmed on 26 May 2008. Therefore, if the PBC does wish to proceed with the transfer in the manner outlined in the resolutions and explanatory notes of 20 March 2006 and Plumeria does in fact consent to the transfer on whatever conditions can be agreed then I do not see that section 33 of the SCRA would prevent the transfer. I will therefore provide for final orders that allow for the transfer to proceed if Plumeria consents. However, if the PBC decides instead to proceed with the transfer without the consent of Plumeria it would be open for Plumeria to challenge any proposed transfer under section 33 of the SCRA.

Costs

The applicant also seeks its costs of making this application. However, a referee has no jurisdiction to make an order for the payment of costs (BUGTA, 75(7)).

Order

In conclusion, the applicant has not satisfied me of any valid objection to the body corporate proceeding to transfer the easement area to Trott as proposed by special resolutions of 20 March 2006 and 26 May 2008. If this proposal was to proceed then the occupiers’ right to use the secondary thoroughfare as provided by section 56 of the SCRA would not be contravened because the area in question would no longer be secondary thoroughfare. Further, I would not be satisfied that the alienation of this part of the secondary thoroughfare would, contrary to section 33 of the SCRA, amount to a failure by the PBC to control, manage and administer the secondary thoroughfare for the benefit of its members because the proposal involves the consent of the persons potentially most disadvantaged by the proposal.

However, the applicant has also provided evidence that satisfies me the PBC is intending to transfer the easement area to Trott without the consent of Plumeria. This would be a process substantially different from the process agreed in the special resolutions of 20 March 2006 and confirmed by the special resolution of 26 May 2008. In the circumstances, I am satisfied that it is appropriate to make a declaration that the special resolutions passed by the PBC on 20 March 2006 and 26 May 2008 do not give the PBC any authority to transfer the easement area to Trott without the consent of Plumeria.

I also consider it appropriate to order the PBC to ensure that all occupiers have a right of way over the easement area as required by section 56 of the SCRA. The submissions of Trott do not satisfy me that there has been any action by the PBC or Plumeria that gives Trott the right to restrict access to this area. However, I am aware that access to this area has been restricted for practical purposes for some time and that access by other occupiers to this area will have privacy implications for the occupiers of lot 90. Further, submissions indicate that the PBC may wish to seek to procure the consent of Plumeria to transfer of part of this area to Trott or the PBC may wish to pass further special resolutions that will authorise the transfer of the area to Trott without the consent of Plumeria. In the circumstances I am satisfied that it is appropriate to allow a period of six months, or such longer time agreed by the parties, before requiring the PBC to ensure occupiers have a right of way over the easement area. After that time, the PBC will be required to grant access and may need to pass further resolutions altering the landscaping and fencing approvals for the easement area. Even if this results in a risk of a compensation claim by Trott, this right of way is required by section 56 of the SCRA and I therefore make the orders above.

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[1] See, for example: Roystonia and Colvillia, Order 0377-2004, CG Young, 12 January 2005. See also Araucaria, Order 0686-2006, P Dowling, 28 November 2006.
[2] Page 2192 of the second reading speech to the Sanctuary Cove Resort Bill, the Hon. Russ Hinze.
[3] Although, there does seem to be some ambiguity about the boundaries of the “relevant part”.