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Pivotal Point Residential [2008] QBCCMCmr 55 (19 February 2008)

Last Updated: 17 April 2008

REFERENCE: 0603-2007


ORDER OF AN ADJUDICATOR


MADE UNDER PART 9 OF CHAPTER 6


BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997


Number of Scheme:
33550
Name of Scheme:
Pivotal Point Residential
Address of Scheme:
50 Marine Parade SOUTHPORT QLD 4215

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

Warren and Bente Tutton, the Owner(s) of lot 3801


I hereby order that the application, challenging by-law 16 of Pivotal Point Residential relating to the keeping of animals within the scheme, is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0603-2007


“Pivotal Point Residential” CTS 33550

Application

Pivotal Point Residential Community Titles Scheme (PPR) is a 102 lot scheme under the Body Corporate and Community Management Act 1997 (Act) and the Act’s Standard Module Regulation (Standard Module). The scheme is designed for residential purposes.


This application is by Warren and Bente Tutton, owners of lot 3801 (applicants) seeking orders against the body corporate for PPR (respondent). The applicants are seeking orders to invalidate the new by-law 16 of PPR relating to the keeping of animals.

Decision

Investigation and Submissions

Background

The new animals' by-law for PPR that is being challenged by the applicants was recorded on 25 July 2007 and states:


16. Keeping of Animals

16.1 Save as provided for in 16.5, an owner or occupier must not bring or keep an animal on the lot or common property or permit an invitee to bring or keep an animal on the lot or the common property.


16.2 A person mentioned in the Guide Dogs Act 1972, section 5, who has the right to be on a lot included in a community titles scheme, or on the common property, has the right to be accompanied by a guide dog while on the lot or common property.


16.3 A person mentioned in by-law 16.2 who is the owner or occupier of a lot included in a community titles scheme has the right to keep a guide dog on the lot.


16.4 A by-law cannot exclude or restrict a right given under section 5 of the Guide Dogs Act 1972.


16.5 This by-law takes effect from its recording in the Department of Natural Resources and Water, and does not apply to any approval that may have been given by the Body Corporate prior to the passing of this by-law.


16.6 Any approval given prior to the passing of this by-law shall only operate until the death of the pet so approved, or the owner having moved from the scheme.


16.7 For the purpose of this by-law, an animal is one that is mentioned or referred to from time to time by the Gold Coast City Council in its local laws relating to keeping and control of animals.


The previous by-law for PPR stated:

16. Keeping of Animals

16.1 Subject to this By-Law and the provisions of the Act, a Lot Owner or occupier is not to bring or keep an animal on the lot or on the Common Property without the Body Corporate’s written approval.
16.2 A Lot Owner of a Lot as at three (3) months following the date of establishment of the Scheme , or a Lot Owner, having purchased the Lot after the date of establishment of the Scheme, such Lot being owned by the original owner and not previously registered or owned by another owner may keep one (1) dog in the lot, so long as:

16.2.1.1 Provide to the satisfaction of the Body Corporate, evidence of past ownership of the dog, exceeding one (1) year prior to the earlier of the date of establishment of the Scheme or occupancy of their Lot;

16.2.1.2 Register with the Body Corporate, particulars of the dog, including name, sex, weight, description, breed and two coloured photographs, one showing the face, and one the side of the animal;

16.2.1.3 The dog be registered with the Gold Coast City Council and provide a copy of that registration to the Body Corporate, each year on renewal.

16.2.2 Is dry and free of sand, dirt or garden material;

16.2.3 Weighs less than ten (10) kilograms;

16.2.4 Does not disturb others;

16.2.5 Is a domesticated pet;

16.2.6 Is toilet trained;

16.2.7 Only passes over or through the Common Property for the purposes of ingress and egress to a lot and at all times kept on a lead which is no more than 1 meter in length;

16.2.8 Is kept healthy and free of parasites;

16.2.9 Where a lot is owned by one or more owners, only one animal per Lot is permitted;

16.2.10 No owner or joint owner of more than one Lot in the Scheme is permitted to keep a second or subsequent animal in their second or subsequent Lot;

16.2.11 This By-Law is for the personal benefit of a owner as defined in By-Law 16.2 above and lapses immediately upon the death of the dog or upon the sale of the Lot.

16.3 The Body Corporate may order an animal to be removed from the Scheme if the animal does not comply with all of the criteria set out in this By-Law.

16.4 However, a deaf or blind person, shall be permitted to keep or bring into a lot or onto the Common Property, a guide dog, as referred to in the Guide Dogs Act 1971.

16.5 The owner indemnifies and shall keep indemnified the Body Corporate against any loss, damage, injury or claim whatsoever made against the Body Corporate regarding any act on the part of the dog.


Grounds for application

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

Submissions

All owners were given an opportunity to provide written submissions resulting in a large number of submissions with some owners supporting the application and other owners opposing the application.


The body corporate manager has provided a submission, on behalf of the committee. This submission is to the effect that:

Submissions by owners in favour of the application were to the effect that:

Submissions by owners opposing the application were to the effect that:

Response to submissions

The applicants' response to the submissions is to the effect that:

Preliminary Issue

The applicant raised an objection to the body corporate manager making this submission on behalf of the committee due to concerns about the body corporate manager representing one particular opinion rather than acting on behalf of all owners. However, the body corporate manager is a non-voting committee member of PPR and the material indicates that the committee passed a resolution that the body corporate manager was to provide the submission on behalf of the committee.


All committee members, including the body corporate manager, have an obligation to act in the best interests of the body corporate (Act, Schedule 1 – Item3, Schedule 2 Item 3). However, I cannot see how this would prevent the committee or body corporate manager from making submissions regarding what it considers to be in the best interests of the body corporate even if that submission does not reflect the view of all owners, or even the majority of owners. The body corporate manager has provided a copy of a committee resolution requesting the manager prepare the submission, and I consider the submission to be properly made as a submission on behalf of the committee.


I note that any owners or committee members who do not share the view put forward in the submission prepared by the body corporate manager have had the opportunity to make their own individual submission in respect of the application.

Further enquires

The new by-law 16 prohibits animals, defining "an animal" to be "one mentioned or referred to from time to time by the Gold Coast City Council in its local laws relating to keeping and control of animals".


I therefore referred to the Gold Coast City Council Local Law No. 12 (Keeping and Control of Animals) 2007.[1] This law provides the local council’s general framework for the regulation of the keeping of animals. The term "animal" is defined to include "any live member of a species, including any mammal, reptile, amphibian, bird and fish but does not include an animal of a species excluded by local law policy from the application of this law".


I also referred to the Gold Coast City Council Subordinate Local Law No. 12 (Keeping and Control of Animals) 2007.[2] This local law policy does not specifically exclude any species from the operation of the Gold Coast City Council Local Law. However, apart from listing minimum standards for the keeping of any animal, this policy only seeks to regulate certain classes of animals. These classes of animals being dogs; horses, cattle and other animals of a similar size; sheep, goats, pigs and other animals of a similar size; cats; budgerigars, canaries and other birds of a similar size; cockatoos, galahs and other birds of a similar size; pigeons; bees; geese, ducks, chickens, turkeys and poultry; and roosters, peacocks, ostriches and emus.

Further discussions

I held a teleconference on 5 February 2008 with the applicants’ solicitor, the body corporate manager and a committee representative.


At this teleconference, both parties had the view that by-law 16 prohibited all animals as defined in the Gold Coast City Council Local Law No.12 and not only the classes of animals specifically regulated under the Subordinate Local Law No. 12. The use of the words "mentioned or referred to" in the by-law leads to some ambiguity about whether the by-law prohibits only those animals actually regulated by the council’s local laws as opposed to all animals that the local laws empower the council to regulate. However, I accepted the parties’ submissions that the by-law prohibits all "animals" as the term is defined in Local Law No. 12.[3]


Hypothetically speaking, both parties agreed that the keeping of a goldfish would be contrary to by-law 16 based on the definition of "animal" in Local Law No. 12. However, the teleconference proceeded on the basis that hypothetical examples such as goldfish could be taken into account in considering whether the by-law was oppressive or unreasonable in taking away rights of owners but that the applicants’ onus was to show the by-law was invalid in the present circumstances rather than in some possible hypothetical example. In particular, submissions on behalf of the body corporate indicated that a future issue about goldfish or other hypothetical situation could be properly dealt with through the processes of conciliation and adjudication offered by this office.

Issues for determination

Applicable law

The legislation includes provisions to the effect that:

Summary of issues

Based on the applicants’ submissions, the issues for determination are:

  1. Did the original by-law amount to a constitutional contract between the applicants and the body corporate that cannot be changed?
  2. Is the body corporate bound by the developer's initial representations?
  3. Does the new by-law discriminate between different types of occupiers?
  4. Is the change to the by-laws a fraud on the minority?
  5. Is the new by-law oppressive or unreasonable?

Special contract between the applicants and body corporate

Findings

I have reviewed the submissions and the terms of the original by-law. There are significant differences between submissions by different persons about the extent to which PPR was marketed as being "pet friendly" and the terms of the original by-law.


I accept that, at one extreme, a number of owners believed that PPR would eventually become "pet free" once all animals approved by the developer died. This view appears to be based upon a brochure issued by HSP Developments Pty Ltd to market the sale of units stating that "prospective owners who have a small domestic pet (dog or cat) may be permitted (with the approval of the Body Corporate) to have that pet reside in their apartment for the term of its life[4]".


I also accept that, at the other extreme, a number of owners believed that the building was "pet friendly" because the developer framed the original by-law to attract potential buyers who were downsizing from homes to apartments and wanting to keep their pet. This view is supported by submissions of an owner who is also a licensed real estate agent and acted as the marketing manager on behalf of the developer for sales off the plan. This person appears to have had direct knowledge of the circumstances and provided a reasonably detailed description of the circumstances.


Given this divergence of view, it is easy to understand that a number of owners feel they were misled by the developer. However, I do not intend to make any findings regarding whether there was any misleading conduct by the developer or whether the developer entered into any special contract about the keeping of pets within the scheme. This is because the developer is not a party to the present dispute, and because of findings below that the body corporate is not bound by any representations or contracts made by the developer on its own behalf.


The next question is whether the body corporate itself engaged in misleading conduct or entered into a special contract with the applicants, either at the time the body corporate was controlled by the developer or subsequently. The applicants appear to have the view that the body corporate promised them the right to keep a pet and that this right could not be taken away from them. In this respect, the conduct of the body corporate that is complained of by the applicant appears to be that the body corporate initially had by-laws allowing for the keeping of a pet, these by-laws were relied upon by the developer in providing the section 213 disclosure statement to the applicants, and this statement of by-laws formed a special contract with the applicants that cannot be unilaterally altered by the body corporate.


I do not accept that the copy of the by-laws provided to the applicants indicated that they had an absolute right to always keep a pet. As a matter of law, the previous by-law 16.2 did create a right for owners who purchased from the developer to keep a small dog. This right was, however, limited by a number of conditions including that it expired upon the death of the dog. Otherwise, the by-law gave the body corporate a discretion in whether or not to approve a pet. Certainly by the first annual general meeting on 3 February 2005 when the body corporate had refused to allow the applicants to keep their dog "Sissie" because they had not owned it for twelve months, the applicants would have been aware that part 16.1 of the by-law only allowed for a "right to apply" to keep a pet as opposed to always having a right to keep a pet. However, I consider it more likely than not that the applicants were aware of this discretion even at the time of purchase. This conclusion is based upon the letter provided by the applicants from Bob Rodger, Project Sales & Marketing Manager for Max Christmas Real Estate Pty Ltd confirming the applicants’ desire at the time of purchase to keep two dogs, and the possible need for the by-laws to be amended to allow for this. This indicates that the applicants would have been aware prior to purchase that the body corporate may refuse to approve an application for approval of a second dog under part 16.1 of the by-law.


However, I do accept that the copy of the by-laws provided to the applicants would have indicated that the applicants had a "right to apply" to keep any pet and that any application would be reasonably considered by the committee. The previous by-law 16.1 was, in fact, almost identical to the standard "animal" by-law under Schedule 4 of the Act. This by-law required that a person wanting to keep a pet would need to apply to the committee for written permission to keep the pet. The committee would then need to exercise its reasonable discretion to grant or refuse approval (Act, 94(2)).


The difficulty for the applicants is that I am not satisfied there is any evidence that establishes any special or individual contract between them and the body corporate in the terms of the original by-laws. Specifically, there are no factual circumstances that indicate that the disclosure statement did anything more than notify the applicants of the existing by-laws that would become binding as part of the usual statutory scheme upon their becoming members of the body corporate for PPR.

Relationship with body corporate regulated by by-laws rather than any “special contract”

There is some debate regarding whether by-laws are delegated legislation or a statutory contract.[5] However, even if by-laws result in a statutory contract arising individually between the applicant and the body corporate, I do not accept the submissions to the effect that the body corporate is unable to alter this individual contract. This is because the legislation specifies procedures by which the by-laws can be changed (Act 62(3), 179). Therefore, despite the by-laws taking effect as if they are mutual covenants signed under seal (Act, 59), the existence of specific procedures allowing for a change of by-laws weighs heavily against a view that the original by-laws form a special or individual contract that is unalterable (Act 62(3), 179).


The very nature of by-laws is that they are set by owners in order to regulate certain matters within the community titles scheme. Owners can vote to change the by-laws. It is not open for an individual to say they want to be governed by a previous by-law if a new by-law has been adopted.


The applicants argue some form of "special contract" arose between the body corporate and the applicants when they purchased their unit in the belief that the complex accepted pets, similar to the contract of medical insurance arising between Dr Bailey and the medical defence union of which he was a member in Bailey v New South Wales Medical Defence Union Ltd[6]. However, the applicants have not provided any evidence that satisfies me they are in any different position from any other owner who is bound by the by-laws under the statutory scheme established under the Body Corporate and Community Management Act 1997. There is no special or separate contract between the body corporate and the applicants on the terms of the original by-laws. Rather, the applicants were bound by the old by-laws until they were changed by a vote of owners and recording of a new community management statement (Act 62(3), 179). The applicants are then bound by the new by-laws from the date those new by-laws were recorded (Act, 179). The old by-laws will no longer have any statutory effect as a mutual covenant once those by-laws are no longer recorded and there is no evidence to support the old by-laws continuing to have effect between the applicants and the body corporate under the general law of contract.


The present situation is therefore more like Cachia v Westpac Financial Services Ltd[7] than Bailey v New South Wales Medical Defence Union Ltd[8]. The applicants are bound by any valid and recorded by-laws in the same way that other owners and occupiers are bound by the by-laws. Any old by-laws that are no longer recorded do not continue to have any effect. Evidence that a change of by-laws results in the removal of significant existing rights may be evidence that the new by-laws are oppressive or unreasonable and arguments to this effect will be considered subsequently. However, I am not satisfied that, once a by-law has been changed, an owner can rely on any special or individual contract to enforce rights under a previous by-law.

Conduct on behalf of the developer is irrelevant to the present dispute

As referred to above, I do not accept submissions to the effect that the body corporate is bound by representations made by, or on behalf of the developer, about the extent to which the building is "pet friendly".


The body corporate did not sell any lots in the scheme. Rather, the original owner or developer sold off the lots on its own behalf having created the lots and common property and established the body corporate to look after the ongoing administration of the scheme. I accept submissions from the applicants to the effect that the developer is the common law promoter of the community titles scheme.[9] However, this places special obligations on the developer regarding the developer's relationship to the body corporate and its initial members. Legal recourse for breach of the promoter's duties regarding any loss of rights by the applicants to own a pet or sell to a pet owner would be against the developer not against the body corporate.

Discriminatory

New by-law

The new by-law adopted by the body corporate for PPR prevents an owner or occupier from bringing or keeping an animal on the lot or common property. However, the prohibition is stated not to apply to any approval given by the body corporate prior to the by-law being passed, that approval continuing to operate until the death of the pet that was approved.


This means that occupiers who already have a pet approved will be able to keep the pet until it dies. Once their pet dies there would be no possibility to have another animal approved unless the new by-law itself is amended.

Legal test to be applied

The legislation provides that "a by-law must not discriminate between types of occupiers" (Act, 180(5)). The example given in the legislation is that a by-law can not provide that a common property swimming pool can only be used by owners and not by tenants.


The applicants submit that the by-law operates differently between different classes of persons, being those who do not have a pet and those who already had an approved pet when the by-law was adopted. However, I am not satisfied that this amounts to discrimination between "types of occupiers". The new by-law applies equally to owners and occupiers. Any difference in effect is based on an attribute of the person, being whether they are already an approved pet owner, rather than upon the "type" of occupier they are.


There may be some indirect discriminatory effect in that the result of the change to the by-laws means that some persons have pets and other persons are prevented from getting pets. However, the courts have regularly recognised the validity of by-laws that have a discriminatory effect.[10] It is only when the discrimination is between "types of occupiers" that the by-law needs to be struck down on the basis of discrimination.


The example of "types of occupiers" given in the legislation is a separation between "owners" and "tenants". I accept submissions from the applicants’ solicitor to the effect that an example in the legislation does not limit but may extend the meaning of the provision (Acts Interpretation Act, 14D). Construing the meaning of "types of occupiers" with examples of the same class as owners and tenants would indicate by-laws cannot discriminate between permanent residents, residents using the premises as a holiday home, lessees, sub-lessees, short term tenants, long term tenants, probably also commercial occupiers as opposed to residential occupiers. It is possible that the expression "types of occupiers" might also include a distinction between owners who purchased from the developer and owners who purchased subsequently, placing the validity of the original pet by-law into question. However, I do not think the expression "types of occupiers" could be extended to include classes of persons distinguished simply on the subject matter of the by-law itself. If so, that may place the validity of numerous by-laws accepted by the courts into question, not to mention every exclusive use by-law.[11] Even the standard by-laws would be discriminatory upon too wide a reading of "types of occupiers". For example, the by-law placing restrictions on the parking of vehicles could be seen as discriminatory against a class of persons who own vehicles as against those who do not, or against persons who own vehicles that are too large to fit in the regulated parking areas.[12]


Pivotal Point's new by-law treats all type of occupiers equally in a move towards a pet free building. No occupier will be able to be given approval to keep a pet as from the date of recording of the new by-law, regardless of the type of occupier. Approvals given prior to the new by-law being passed will continue in force, again irrespective of the type of occupier the approval was granted to. Even if this has an indirect discriminatory effect, I do not accept that the by-law discriminates between "types of occupiers".

Fraud on the minority

The applicants say that the new by-law constitutes a fraud on the minority in that it interferes with the applicants' proprietary right to use their unit for any purpose not contrary to law and does not have any real prospect of any legitimate advantage to the body corporate as a whole.


It is a well accepted principle of equity that a majority shareholder in a company cannot alter the rules by which the company is governed in a way that is oppressive to a minority shareholder or group of shareholders.[13] More generally, courts in equity have established the doctrine of ‘fraud on a power’ stating "a person having a power, must exercise it bone fide for the end designed, otherwise it is corrupt and void"[14] and establishing that the doctrine of fraud on a power "authorises intervention where the power is exercised in bad faith or for purposes foreign to the power"[15]. The New South Wales Court of Appeal has recognised this doctrine of fraud on a power as being of general application and, specifically, as applicable to bodies corporate under the Strata Titles Act of New South Wales.[16]


While the Body Corporate and Community Management Act 1997 does not expressly confer equitable jurisdiction on an adjudicator, an adjudicator is expected to make an order that is "just and equitable" to resolve a dispute (Act, 276). In considering whether the adoption of a new by-law is unreasonable it may be instructive to consider decisions of the courts that have found a change to the constitution of a company to be a fraud on the minority or have found a procedurally valid exercise of a power invalid on the basis it constitutes a fraud on the power. However, as an adjudicator, I do not consider that I have any general equitable jurisdiction to determine an application on this basis. Rather, it seems preferable that a claim on this basis be determined in a court or tribunal of competent jurisdiction.


The present claim based upon fraud on the minority appears to be a small and distinct alternative claim to the main cause of action argued by the applicants. I will therefore dismiss the application to the extent that it is related to a claim of fraud on the minority on the basis that this aspect of the dispute should be dealt with in a court or tribunal of competent jurisdiction (Act, 270(1)(b)). However, to the extent that the application seeks an order to overturn the by-law on the basis that is just and equitable in the circumstances, particularly where argued on the basis the by-law is oppressive or unreasonable having regard to the interests of all owners and occupiers of lots in the scheme, I consider it appropriate that I determine the application (Act 276, Schedule 5 – Item 20).

Oppressive or unreasonable

Legal test to be applied

An adjudicator can require a by-law to be removed if the by-law is oppressive or unreasonable having regard to the interests of all owners and occupiers of lots in the scheme (Act, Schedule 5 – Item 20).[17]


I do not consider there is any particular formula or test for reasonableness and note that the High Court has supported a view that a paraphrase can place an unwarranted gloss on relatively plain words applying a test of reasonableness.[18] The preferred approach is simply to objectively determine whether or not the by-law is unreasonable having regard to the particular circumstances. Similarly, it is appropriate to objectively determine whether the by-law is oppressive having regard to the particular circumstances.


Some questions may arise about what circumstances should be taken into account. As discussed below, it is probably possible to imagine hypothetical circumstances that would make any by-law seem oppressive or unreasonable in an individual’s circumstances. However, a by-law would not be oppressive or unreasonable having regard to the interests of all owners and occupiers simply because it operates unreasonably in the special circumstances of one particular applicant. The circumstances raised by other owners and occupiers would need to be balanced against the applicant’s particular circumstances to reach a conclusion regarding whether it is just and equitable in the circumstances of all owners and occupiers to make an order removing the by-law. Further, I consider that the requirement for an adjudicator to make an order that is "just and equitable in the circumstances" means that the circumstances should be limited to the actual or immediate circumstances raised in the application rather than purely hypothetical circumstances.

Findings

The applicants say that the new by-law only takes into account the interests of owners who do not want pets at all in the building and that it is unjust for a resident who has been allowed to have a pet to have the right to keep a pet taken away if their pet dies while they are still in residence. Other submissions opposing the new by-law are to the effect that people should be able to keep an animal and it is only if the animal is annoying people that a complaint should be made to allow the matter to be dealt with. It is also submitted that allowing pets is better for the value of the units.


On the other hand, there have been submissions that animals have caused problems at the scheme and that it is preferable that no animals be allowed.


As an example of the genuine differences of opinion, I accept submissions from the owner of a dog "Butch" to the effect that the dog is an important companion since her husband's stroke and normally does not create any disturbance to other occupiers. However, I also accept a submission from another owner to the effect that the dog "Butch" has barked on a number of occasions over the past several months causing a disturbance.


On the whole, I am satisfied from the submissions that dogs have caused disturbances at PPR in the past. The submissions also satisfy me that it is more likely than not that the approval of more dogs would cause some disturbances in the future, even if those disturbances are relatively minor such as occasional barking or some occupiers feeling discomfort in using the lift at the same time as a dog.


Another question was the extent to which the prohibition on pets may affect the value of units within PPR. The evidence provided in this respect is not comprehensive and consists mainly of general statements from real estate agents that are not specific to PPR. However, I accept that pet friendly buildings are likely to have a slightly higher value than schemes that do not allow pets, at least in a tight market with relatively few potential buyers.

Main submissions

The applicants’ submissions raise two main strands of argument that could, separately or together, properly found a finding that the new by-law prohibiting pets is oppressive or unreasonable in the circumstances. Firstly, it is arguable that a significant change to existing rights could render the change of by-laws oppressive or unreasonable even if there is some good reason for adopting the new by-law. Secondly, it is arguable that an anti-pet group has voted to absolutely prohibit pets without reason, justification or benefit.

1. Argument oppressive or unreasonable due to significant change to existing rights

The applicants’ first argument is that they have lost their conditional but valuable right to replace their dog with an appropriate pet when their present dog dies. The applicants say that the new by-law is oppressive and unreasonable as it only takes into account the interests of owners who do not want pets at all in the building and that it is unjust for a resident who has been allowed to have a pet to have the right to keep a pet (or the right to apply for permission to keep a pet) taken away if their existing approved pet dies.


I do not accept that a by-law is automatically oppressive or unreasonable simply because it changes existing rights. The legislation allows for flexibility in by-laws so that they can be changed to suit the majority of persons in the scheme. There is recognition that persons have bought into a scheme with particular by-laws in the sense that a special resolution is needed to change the by-laws rather than just a simple majority. However, a by-law is not oppressive or unreasonable simply because it is changed to stop persons doing something they were formerly allowed to do. In fact, the submissions indicate that the change to the by-laws was undertaken after significant discussion. Further, bringing about a change in the scheme by preventing occupiers from engaging in activities that are seen by the majority as detrimental or creating a disturbance to other occupiers is a proper purpose for a by-law.


For an example in a different context, consider changes to physical aspects of the scheme. All owners may have bought into a scheme in which the developer had installed tennis courts and these tennis courts may have been highlighted in the developer's promotional material. Owners may subsequently decide for good reason that the tennis courts are not desirable and vote by special resolution to have the tennis courts removed. Such a decision would not be automatically oppressive or unreasonable simply because the tennis courts were there when owners bought into the scheme or because the tennis courts were promoted in brochures issued by the developer.


Having said this, I accept that the removal or alteration of rights is a significant factor to consider in determining if a new by-law is oppressive or unreasonable. The circumstances of a person who is required to accept a change in lifestyle by operation of a by-law provide much stronger grounds for an argument that a by-law is oppressive or unreasonable than the circumstances of a person who chose to make a change of lifestyle by moving into a scheme that already had a by-law prohibiting pets. If the new by-law did not make allowance for pets that had already been approved and occupiers were left in a position of having to move out or make alternative arrangements for their existing approved pet then I consider the new by-law would have been oppressive and unreasonable. On the other hand, if the original by-law for PPR prohibited all pets then a person would have great difficulty arguing against a by-law that they should have been aware of prior to deciding to move into the scheme.


In the specific circumstances of this application, I accept that being able to keep a pet was an important factor in the applicants choosing to live at PPR. However, I have also concluded that the applicants initially wanted to keep two dogs at PPR but chose to live at PPR despite there being no guarantee that they could keep both dogs. I also conclude that the applicants willingly took the inherent risk in the initial by-law that their right to keep a dog was only until "the death of the dog"[19] and that any right to keep a subsequent pet was at the reasonable discretion of the body corporate. Having regard to the interests of all owners and occupiers in the circumstances, the applicants have failed to satisfy me that it was oppressive or unreasonable for owners to vote to alter rights from a position of occupiers being allowed to keep pets at the reasonable discretion of the body corporate to a position where the majority have decided that the scheme should be kept completely free of pets.

2. Argument pets prohibited without reason justification or benefit

A second argument is that owners purchased with the knowledge pets were permitted in the building, there has not been a breach of the by-law concerning pets, and that owners voted to prohibit pets without reason, justification or benefit. Despite some submissions to the contrary, I am satisfied by other submissions that dogs have contravened the by-laws in the past.[20] I consider the most significant of these past contraventions to have been the barking of dogs that has disturbed other occupiers and I also accept submissions to the effect that dogs have been a divisive issue and that it has been difficult for the committee to control by-law contraventions.


Having said this, the argument remains regarding whether owners voted to prohibit pets with insufficient reason, justification or benefit. Simply the potential disproportion between the limited problems caused by pets as against the absolute prohibition of pets is a matter that could tend to show the new by-law is oppressive or unreasonable.


Based on the findings above, I am of the view that the high rise nature of the scheme combined with the problems of barking dogs in the past would mean that the committee could have reasonably refused consent for any more dogs under the previous by-law. The above findings also provide reasonable grounds for the body corporate to have adopted a by-law for PPR that absolutely prohibited any more dogs, or other pets capable of causing noise likely to disturb other occupants. However, the new by-law is significantly more extreme than this in that it is an absolute prohibition on all types of pets. To the extent that the by-law appears to prohibit an occupier even keeping a single goldfish then it may be the case that the by-law operates in an oppressive or unreasonable manner due to the disproportion between the extent to which the by-law imposes upon an individual’s use of their lot as opposed to the limited possibilities of the keeping of a goldfish imposing upon other occupiers’ enjoyment of their own lots.


While it is not articulated particularly clearly, I am satisfied that the present application is about the applicants wanting to be able to replace their pet dog with a new pet dog if there existing dog dies. At its strongest, the application suggests that the applicants will want to sell if they are not allowed to replace their dog subsequently and that the prohibition on pets has reduced the value of their lot. The application could be looked at more broadly to determine if the by-law is unreasonable or oppressive in light of more hypothetical examples such as the applicants being unable to sell their unit to a pet owner or being unable to even keep a goldfish. However, as a matter of discretion, I consider it preferable to refrain from interfering with the affairs of PPR based on hypothetical examples.


I have considered all the submissions to the present application and have concluded that the applicants have failed to satisfy me that by-law 16 is oppressive or unreasonable in the present circumstances that involve the applicants wanting to ensure that they will always be able to keep a dog or will be able to sell to a dog owner. It is not unreasonable for the majority of owners to decide to prohibit dogs due to some occupiers having a concern about noise from barking, some occupiers being afraid of meeting the animals on common property, or some occupiers having a concern about offensive odours or lack of hygiene. All these concerns were reflected in the submissions. I have also taken note that the present by-law was adopted after significant debate, and I have noted that there have been some problems and divisive disagreements in the past about the keeping of animals within PPR. In light of these submissions it is reasonable for owners to adopt a by-law that absolutely prohibits dogs and the clear prohibition will avoid future disharmony about applications to keep dogs. Further, despite some evidence supporting the view that "pet friendly" apartments have a higher value, I am not satisfied that the new by-law results in such a significant decrease in the value or marketability of lots as to render this choice unreasonable.


There is a question about the reasonableness of the by-law due to the disproportion between the limited evidence of past problems caused by dogs as opposed to the absolute ban on all types of pets. Obviously there is a range of different by-laws that owners may choose to adopt for the regulation of animals including limitations on types of animals, the size of animals and number of animals. It is only when an applicant can demonstrate that the limitations in a by-law are outside the range of reasonableness that an adjudicator must alter or remove the by-law. The present by-law for PPR is arguably at one extreme of the spectrum of what is reasonable as it constitutes an absolute prohibition on all types of pets but the applicants have failed to demonstrate circumstances that show the by-law is unreasonable for a high rise scheme of the nature of PPR once the interests of other owners and occupiers are balanced against the applicants’ interests.


If the applicants, or another occupier, provide evidence showing at a later date that they genuinely wish to keep a goldfish or other animal of a species that is both suitable for confinement in a high rise scheme and virtually incapable of causing a nuisance to other occupiers then a new question may arise again about the reasonableness of the absolute prohibition on the keeping of pets. In fact, it is tempting to make an order requiring PPR to adopt a less extreme pet by-law to attempt to avoid any subsequent disputes. For example, I could order that occupiers can keep up to three fish in a small or medium tank provided it is kept clean and odour free. I could also order that occupiers could keep one cat provided it is of a breed suited to being kept confined within a unit, kept clean and treated for fleas and parasites, and carried over common property in a suitable container if it is necessary for it to be taken to or from the lot. Alternatively, I could provide for a more general by-law that owners are allowed to keep pets with consent provided they are kept confined within the lot or carried over common property and are of a species that is virtually incapable of causing any harm or nuisance to another occupier. A further alternative might be to allow suitable pets only where medical evidence adequately supports a claim that the keeping of a pet is reasonably necessary for the wellbeing and health of the owner.


However, as a matter of discretion, I consider it preferable to leave it to owners to propose further amendments to the by-laws or, if necessary, bring an application based on a desire to keep a different type of animal. This avoids the need to seek further submissions from all owners on the wording of an alternative by-law and allows for consideration at the relevant time of the reasonableness or otherwise of the chairperson’s concerns that someone may wish to keep two hundred goldfish raising concerns about water spills and bad odours, or concerns that someone might even wish to keep a tarantula giving rise to concerns if the animal should escape. It also pays due regard to the clarity and certainty in operation and enforcement of a by-law that absolutely prohibits all pets, even if that by-law is arguably at the extreme edge of what is reasonable. Ultimately, the present by-law prohibiting any animals was undertaken based on a vote by owners after significant discussion and the applicants have failed to establish that the by-law is unreasonable or oppressive in all the circumstances of the existing application.

Just and equitable order

As for most by-laws, it is possible to imagine hypothetical circumstances that would render it just and equitable to alter or remove by-law 16 as being oppressive or unreasonable. However, the applicants have failed to show that an order altering the present by-law 16 is required as being just and equitable in the interests of all owners and occupiers in the existing circumstances.


As discussed above, an adjudicator may make changes to a by-law, or perhaps require the insertion of a special circumstances proviso to allow for some discretion that will allow potential hypothetical circumstances of oppression or unreasonableness to be avoided.[21] However, at any time, owners can propose their own amendment to the by-law to seek to avoid any oppressive or unreasonable result. As a matter of discretion, I conclude that it is not just and equitable in the present circumstances to invalidate by-law 16 and that it is also not just and equitable to alter or invalidate by-law 16 based on possible future hypothetical circumstances. Specifically, any owner in the future who considers that circumstances have arisen that would establish by-law 16 has started to operate in a way that is unreasonable or oppressive can propose an amendment to by-law 16 at the relevant time.


The Court of Appeal for Ontario, Canada, when considering the validity of a rule adopted by the committee for a condominium that prohibited any pets weighing more than 25 pounds, made a statement that I consider to be pertinent to the present circumstances. This statement being, "There are, undoubtedly, different approaches the board could have taken to regulate the keeping of pets owned by residents, and it may be that the "25 pound rule" is not the best rule or the least arbitrary.  But this does not make it an unreasonable one.  The threshold for overturning a board's rules reasonably made in the interests of unit owners is a high one, and it has not been met in this case."[22]


While I do not consider the present by-law to be the least arbitrary or most reasonable by-law that owners could have adopted, I have concluded that the applicants have failed to show that it is just and equitable in the present circumstances for me to alter or invalidate by-law 16 for PPR on the basis it is oppressive, unreasonable, or otherwise contrary to law.

Order

For these reasons, the application is dismissed.



[1] http://www.goldcoast.qld.gov.au/attachment/Local_Law_No_12-Keeping_and_Control_of_Animals.pdf
[2] http://www.goldcoast.qld.gov.au/attachment/laws/Local_law_policy_No_12_animals.pdf
[3] I accept the applicability of this definition subject to homo sapiens being excluded as a prohibition against bringing people to the lot or common property would be absurd and obviously outside the contemplation of owners when voting in favour of a by-law regarding the keeping of pets.
[4] Emphasis added. Refer to the submission of Allan Hughes in this respect.
[5] The Owners of Strata Plan No 3397 v Tate [2007] NSWCA 207, Mason P McColl JA Harrison J, 16 August 2007 at paragraphs 36 to 72.
[6] High Court[1995] HCA 28; , (1995) 132 ALR 1, Brennan CJ, Deane, Dawson, McHugh and Gummow JJ, 3 November 1995.
[7] Federal Court[2000] FCA 161; , (2000) 170 ALR 65. Refer especially paragraph 64 contrasting Bailey’s Case (supra) with Pepe v City & Suburban Permanent Building Society.
[8] Supra.
[9] Community Association DP No 270180 v Arrow Asset Management Pty Ltd & Ors [2007] NSWSC 527, McDougall J, 30 May 2007.
[10] Sydney Diagnostic Services Pty Ltd v Hamlena Pty Ltd NSW(CA) 40548 of 1990, BC9101877, Meagher JA, Mahoney JA, Priestley JA at paragraph 3. See also McColl v The Body Corporate for Lake View Park [2004] QCA 44, de Jersey CJ, Davies & Williams JJ, 27 February 2004.
[11] Refer to McColl v The Body Corporate for Lake View Park [2004] QCA 44, de Jersey CJ, Davies & Williams JJ, 27 February 2004 for an example of a by-law that prevented occupiers apart from the letting agent from providing letting agent services. Refer to Lancet Pty Ltd v The Body Corporate for Village Square, District Court (Southport), 726/00, Boulton DCJ, 22 December 2000 for an example of an exclusive use by-law that was unreasonable and a proposed amendment that rectified this issue.
[12] Refer to the standard by-law regulating the parking of vehicles, Body Corporate and Community Management Act 1997, Schedule 4, Item 2.
[13] Gambotto v WCP Ltd (1995) 182 CLR 432.
[14] Aleyn v Belchier (1758) 28 ER 634.
[15] LGSS Pty Ltd v Egan, [2002] NSWSC 1171.
[16] Houghton & Anor v Immer (No. 155) Pty Ltd (1997) 44 NSWLR 46, referring to Free Church of Scotland v Overtoun [1904] AC 515 at 695.
[17] See also Lancet Pty Ltd v The Body Corporate for Village Square, District Court (Southport), 726/00, Boulton DCJ, 22 December 2000.
[18] McKinnon v Treasury [2006] HCA 45 per Hayne J at paragraph 61. Waters v Public Transport Corporation [1991] HCA 49; (1991) 173 CLR 349.
[19] Refer to the previous pet by-law, part 16.2.11.
[20] I accept submissions that dogs have disturbed others by barking contrary to the previous pet by-law, part 16.2.4. Based on the submissions provided, it also seems more likely than not that some owners of dogs have contravened parts 16.2.2 and 16.2.7 of the previous by-law.
[21] Refer to Grosvenor Apartments – Brisbane, Order 0709-2003A, Perry R, 9 December 2004 at page 9.
[22] York Condominium #382 v. Dvorchik, 1997 CanLII 1074 (ON C.A.), Morden A.C.J.O., Finlayson and Abella JJ.A, 6 February 1997.


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