Kalimna [2008] QBCCMCmr 429 (18 November 2008)

TAKE NOTICE that pursuant to an application made under the abovementioned Act by John and Marlene Young , the owner of Lot 4

I hereby order that pending a final determination of this application, neither the body corporate for Kalimna community titles scheme 12015; Tuxen Investments, the owner of Lot 1; or Paul and Jennifer Champion, the owner of Lot 2 shall proceed with, implement, otherwise act upon or allow to be acted upon the resolution passed on Motion 15 on the agenda of the Annual General Meeting held on 9 September 2008.

This interim order has effect until 12 months have elapsed from the date of this order, a further interim or final order for the application is issued, or until the application is withdrawn, rejected or otherwise ended (whichever is the earlier).

The scheme
“Kalimna” community titles scheme 12015 is subject to the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Standard Module) Regulation 2008 (Standard Module).

Application
This application is made by John and Marlene Young , the owner of Lot 4 (Applicants) against the Body Corporate; Tuxen Investments, the owner of Lot 1; and Paul and Jennifer Champion, the owner of Lot 2.

The Applicants seek an outcome that the resolution made on Motion 15 at the Annual General Meeting dated 9 September 2008 (AGM) be declared invalid. The minutes of the AGM provided by the Applicants states:

That permission be given for the construction of an extra bathroom in the building void for units 1 and 2.

The Applicants also seek an interim order to restrain the Body Corporate and the owners of Lots 1 and 2 from implementing Motion 15.

Referring to section 171 of the Act, the Applicants state the Motion should have required a resolution without dissent and that they voted against the Motion. They say it is not fair to appropriate common property for the use of some owners. The Applicants submit that no plans, details, development application, costing estimates, environmental impact studies were submitted and no details were given as to the effect on Lots 3 and 4.

Jurisdiction
In accordance with section 247 of the Act, the Commissioner for Body Corporate and Community Management has referred the application to me even though affected persons have not been given notice of the application or afforded an opportunity to make submissions about the application.

Section 276(1) of the Act provides that an adjudicator may make an order that is just and equitable in the circumstances to resolve a dispute, in the context of a community titles scheme, about a claimed or anticipated contravention of the Act; or the exercise of rights or powers, or the performance of duties, under the Act. Section 279(1) provides that an adjudicator may make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances to which the application relates.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (s 276(2), Act). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (s 284(1), Act).

Investigation
In accordance with the investigative powers of an adjudicator stated in section 271 of the Act, on 5 November 2008, I invited submissions from the committee and the owners of Lots 1 and 2 regarding the interim order application, and a copy of the application was provided to Whittles Body Corporate Management (Body Corporate Manager) for distribution of the notice.

The owner of Lot 2 submitted the void has no practical use and the construction of an extra bathroom would vastly improve the amenity of Lot 2. It is stated there would be a rental premium if a second bathroom was available. In referring to a plan stated to be drawn by Mr Young, the owner says the construction would have little visual or other impact on Lots 3 and 4.

Determination
Given section 279(1) of the Act, it is necessary to determine at the outset whether, because of the nature or urgency of the circumstances relating to the application, an interim order is in fact necessary or appropriate. The examples included in the Act under section 279(1) are suggestive of the usual circumstances where an interim order might be made. Both examples are in the nature of injunctive relief. Whilst the range of matters which might be the subject of an interim order is not capable of definition, the Applicant does need to establish that the circumstances of the application warrant the making of an interim order.

The minuted resolution on Motion 15 approves carrying out work in the building void for two of the four lots included in the scheme. It would seem the work has not yet commenced. The Applicants question the resolution. In my view, the Applicant has demonstrated urgent circumstances to warrant consideration of the interim order application.

To assist me in determining whether it is just and equitable to grant relief at this stage, before full and final consideration of all the issues raised, I consider it relevant to briefly consider whether the Applicants raise any serious legal question that will need to be determined. If a serious legal question is raised, then it may be appropriate to make an interim order to attempt to preserve the integrity of the matters in dispute pending the final determination.

The Motion refers to a building void and the owner of Lot 2 has made reference to a plan drawn by Mr Young. The Applicants included in the application a sketch of the ‘Lower Ground’, the ‘Ground Floor’ and the ‘First Floor’. The ‘Lower Ground’ sketch identifies a ‘void’ between Unit 1 and a store room. The ‘Ground Floor’ sketch identifies a ‘void’ between Unit 2 and car spaces. The ‘First Floor’ sketch identifies a ‘void’ between Unit 3 and Unit 4.

A community titles scheme is comprised of lots and common property—other land that is not included in a lot (s 10, Act). The Body Corporate was created by the registration of BUP 3140 which is now known as a building format plan of subdivision. The plan identifies the lots and common property. The boundary of a lot separated from another lot or common property by a floor, wall or ceiling is the centre of the wall, floor or ceiling (s 49C(4), Land Title Act 1994). The plan shows the building on four levels, identified as “A” to “D”. Lot 1 is on level “A”, Lot 2 on Level “B”, and Lots 3 and 4 on level “C”. On the basis of the submissions and the abovementioned sketch, for the purpose of making an interim determination, I am satisfied the ‘void’ mentioned in the Motion is common property and that this part of common property is not subject to an allocation made under an exclusive use by-law.

Common property is owned by the lot owners as tenants in common (s 35(1), Act). The owners constitute a body corporate (s 31, Act). The general functions of a body corporate include administering common property for the benefit of lot owners (s 94(1), Act). A lot owner may ask the body corporate to authorise the owner to make an improvement to the common property for the benefit of the owner’s lot and this authorisation may be given by ordinary resolution (s 164, Standard Module). A body corporate may, by resolution without dissent, make an exclusive use by-law that attaches to a lot and gives the occupier of the lot exclusive use to the rights and enjoyment of common property (s 171, Act).
It would seem the work proposed in Motion 15 is of the nature of an ‘improvement’. Schedule 6 of the Act defines ‘improvement’ to include a structural or non-structural change. While the Motion required an ordinary resolution, there is a question as to whether the owner of Lot 2 provided sufficient details to owners about the proposed improvement. It would seem that major structural work is necessary to construct the bathrooms which may or may not affect the building and/or common property utility infrastructure. The Body Corporate has extensive duties about common property under section 152 of the Act and section 159 of the Standard Module. Nothing has been presented to demonstrate that owners were informed for example, of the extent of the proposed work, the impact the work may have on other parts of scheme land, and possibly the impact the work may have on the duties of the Body Corporate. The Applicants list information they consider should have been provided to owners. The owner of Lot 2 has not demonstrated that information of this nature was provided to the Body Corporate and to lot owners. In these circumstances, I consider the Applicants have raised a serious issue about the Motion.

There is also a question as to whether the construction of bathrooms effectively amounts to an allocation of part of common property to lot owners to the exclusion of another owner. An owner may be given exclusive use to the rights and enjoyment of common property by the body corporate under the terms of an exclusive use by-law. An exclusive use by-law that specifically identifies the common property to which it applies may attach to a lot if a resolution without dissent is passed to consent to the recording of a new statement to incorporate the by-law (s 171, Act). The by-law may also include conditions and obligations (s 173, Standard Module). The Applicants argue that the proposed work will appropriate common property for the use of some owners. They submit they opposed the Motion. If the Motion required a resolution without dissent, it would have been lost. The owner of Lot 2 has not disputed this view. I am satisfied the application raises a serious question to be determined which justifies injunctive relief.

For these reasons, I have made an interim order preventing the implementation of the resolution made on Motion 15 at the AGM. The Applicants have named the Body Corporate and the owners of Lots 1 and 2 as respondents. While the Motion appears to permit the owners of Lots 1 and 2 to each construct a bathroom, in the absence of arguments to the contrary, I have included the Body Corporate in the interim order. In my view, the likely inconvenience should no interim order be granted outweighs any inconvenience likely to result from the interim order. This application will now be administered in accordance with the Act and the normal processes of this Office. It will be finally determined in due course.

Number of Scheme:	12015
Name of Scheme:	Kalimna
Address of Scheme:	35 Picture Point Crescent NOOSA HEADS QLD 4567

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Kalimna [2008] QBCCMCmr 429 (18 November 2008)