La Porte D'Or [2009] QBCCMCmr 102 (12 March 2009)

Last Updated: 29 April 2009

REFERENCE: 1020-2008

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	12681
Name of Scheme:	La Porte D’or
Address of Scheme:	3422 Surfers Paradise Boulevard SURFERS PARADISE QLD 4217

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

Reswick Pty Ltd, the owner of lot 5

I hereby order that the application for the following order: “That Schedule E of the Community Management Statement for La Porte D’Or Community Titles Scheme 12681 is amended to include that Lot 5 on BUP 2457 is entitled to the Exclusive Use Area of area 3 on the Sketch Plan 7779-3, which forms part of the current Community Management Statement, and that the Body Corporate record a new Community Management Statement with the amendment by affixing the common seal with any two committee members to a new Community Management Statement.” And that: “Motion 22 as voted on at the Annual General Meeting on 19 September 2008 be ruled out of order. This is because Motion 21 at the Annual General Meeting should have been passed by the Body Corporate by way of resolution without dissent.” Alternatively: “That the Community Management Statement for La Porte D’Or Community Titles Scheme 12681 is amended to include the following By-Law 51.4- 51.4 The area marked as car space (Area 3), on the Sketch Plan 7779-3 attached to this Community Management Statement is designated as a space which may be utilised for car parking by owners or occupiers of the residential lots in the scheme.” And the Body Corporate record a new Community Management Statement with the new By-Law by affixing the common seal to a new Community Management Statement with the signature of any two committee members.” And that: “Motion 22 as voted on at the Annual General Meeting on 19 September 2008 be ruled out of order. This is because Motion 23 at the Annual General Meeting should have been passed by the Body Corporate by way of resolution without dissent, and the area granted by way of Occupation Authority is to be used as a car space.” is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 1020-2008

“La Porte D’or” CTS 12681

APPLICATION

This application was made on 26 November 2008 by Reswick Pty Ltd, the owner of lot 5, against the body corporate, seeking the following order:

“That Schedule E of the Community Management Statement for La Porte D’Or Community Titles Scheme 12681 is amended to include that Lot 5 on BUP 2457 is entitled to the Exclusive Use Area of area 3 on the Sketch Plan 7779-3, which forms part of the current Community Management Statement, and that the Body Corporate record a new Community Management Statement with the amendment by affixing the common seal with any two committee members to a new Community Management Statement.”

And that:

“Motion 22 as voted on at the Annual General Meeting on 19 September 2008 be ruled out of order. This is because Motion 21 at the Annual General Meeting should have been passed by the Body Corporate by way of resolution without dissent.”

Alternatively:

If the Commissioner does not make the outcome sought, the Commissioner make the following order:

“That the Community Management Statement for La Porte D’Or Community Titles Scheme 12681 is amended to include the following By-Law 51.4-

51.5 The area marked as car space (Area 3), on the Sketch Plan 7779-3 attached to this Community Management Statement is designated as a space which may be utilised for car parking by owners or occupiers of the residential lots in the scheme.”

And the Body Corporate record a new Community Management Statement with the new By-Law by affixing the common seal to a new Community Management Statement with the signature of any two committee members.”

And that:

“Motion 22 as voted on at the Annual General Meeting on 19 September 2008 be ruled out of order. This is because Motion 23 at the Annual General Meeting should have been passed by the Body Corporate by way of resolution without dissent, and the area granted by way of Occupation Authority is to be used as a car space.”

BACKGROUND

The applicant provided the following information by way of background:

• The “Gateway Units Complex” was approved for development in 1974. The BUP was registered on 30 March 1977.
• In January 2005 the first Community Management Statement (CMS) was recorded for the scheme now known as La Porte D’Or CTS 16281 (also formerly the Golden Gate Building). The CMS did not record a car parking space for lot 5.
• Lot 5 was originally to be used for commercial use and was originally designated as a Hair Care and Beauty Centre for exclusive use by the occupants of the building.
• Around mid-late 2006, the Applicant made applications to the Council and the body corporate to have the use of lot 5 changed from commercial to residential. This change was approved by council pursuant to a “Generally in Accordance” application.
• The body corporate also accepted this change, and in late 2006 resolved to amend Schedule C (ByLaws) of the CMS (see by-law 32.6).
• By-law 51 provides as follows:
  

51. Exclusive Use – Car Parking Areas
    

The Owner for the time being of a unit in the building shall be entitled for himself, his agents, invitees, and licensees by way of grant from the body corporate (which grant shall not be refused save only on the ground that the relevant car parking space has already been previously allocated) to the exclusive use and enjoyment of such carparking space or spaces upon and forming part of the common property, the identifying numbers of which are set forth upon the sketch plan approved by the body corporate and held by the secretary and as identified in Schedule E of the Community Management Statement.

• On 19 September 2008 the body corporate voted as follows in relation to the applicant’s request for a car parking space to be made available to it.
  

21. AMENDMENT TO SCHEDULE E FOR EXCLUSIVE USE

Proposed by Neville Parton, Reswick Pty Ltd of Lot No.5

MOTION BY RESOLUTION WITHOUT DISSENT – LOST VOTING – YES 5 NO 24 ABSTAIN 7

That the Body Corporate for La Porte D’Or Community Titles Scheme 12681 agrees to amend Schedule E of the Community Management Statement to include Lot 5 on BUP 2457 as entitled to the Exclusive Use Area of area 3 on the sketch plan marked Diagram C attached (ie Area 3 of Sketch Plan 7779-3) for the exclusive use of the owner/s or occupier/s Lot 5 and the Body Corporate consents to recording a New Community Management Statement with the amendment and to affix its common seal with the signatures of any two members of the Committee.

22. ENTRY INTO COMMON PROPERTY OCCUPATION AUTHORITY

Proposed by the Body Corporate Committee for La Porte D’Or

RESOLVED BY ORDINARY RESOLUTION VOTING – YES 26 NO 4 ABSTAIN 6

That, subject to the Body Corporate not having granted any exclusive right to the area of common property described as Area 3 of Sketch Plan 7779-3 attached to the Occupation Authority circulated with this motion, the Body Corporate enter into a common property occupation authority with the Cleaning and Maintenance Manager, Delta Dies Pty Ltd CAN 006 551 462, for the length of the contract with the Cleaning and Maintenance Manager, (however, this area will always remain common property under the Body Corporate), in the terms of the Common Property Occupation Authority circulated with this motion and to commence on the date the Body Corporate resolves to enter into the Common Property Occupation Authority AND THAT any two members of the Committee be authorised to insert the commencement date into the common property occupation authority and to execute and affix the Body Corporate’s seal to the Common Property Occupation Authority.

22. AMENDMENT TO BY-LAWS TO INCLUDE A DESIGNATED CAR PARKING SPACE

Proposed by Nevill Parton, Reswick Pty Ltd of Lot No.5

MOTION BY SPECIAL RESOLUTION – LOST VOTING – YES 4 NO 24 ABSTAIN 8

That in the event of dissent in the previous motion, the Body Corporate for La Porte D’Or Community Titles Scheme 12681 agrees to amend its by-laws to include a by-law as follows:

51.4 “The area marked as car space (Area 3), on the basement plan annexed marked ‘Diagram C’ is designated as a space which may be utilised for car parking by owners or occupiers of the residential lots in this scheme”.

AND the Body Corporate consents to recording a new Community Management Statement with this amendment to the by-laws and affix its common seal with the signatures of any two members of the Committee.

• The applicant’s surveyor subsequently contacted the original architect of the scheme, who has provided advices that the Area 3 on the Sketch plan was clearly designed to be a lock up garage, and that such garage has been approved by the Gold Coast City Council in the building approval. The advice also states that the area is wider and longer than the minimum requirements, and is a suitable area in which to park a car.
  

The applicant’s grounds are to the following effect:

• The applicant is the owner of lot 5 and is a “resident” in the building known as La Porte D’Or, and has not been granted a car space by the body corporate.
• The by-laws of the scheme provide that where a car space is available to a resident, the body corporate shall grant to that resident a car space.
• The applicant has attempted through writing to the body corporate, and by submitting a motion to a general meeting, that the applicant be granted the car space known as Area 3 on sketch plan 7779-3.
• The area 3 on sketch plan 7779-3 has not been granted to any other lot owner in the scheme, and remains an area of common property.
• The surveyor’s report, along with the initial drawings of the building and council approvals, state that Area 3 on sketch plan 7779-3 is intended to be used for the parking of a car.
• For this reason, the motion submitted to the general meeting should have been passed by resolution without dissent, or alternatively the committee should have granted the applicant a car space based on the previous correspondence.
• Based on the by-laws to the scheme, and the fact that the applicant’s motion should have been passed at the general meeting, there are no reasons why the applicant should not be granted the car space.
• There is no other space suitable for the applicant to park their car.
  

SUBMISSIONS

In accordance with section 243 of the Act, a copy of the application was provided to Stewart Silver King & Burns, the body corporate manager, with an invitation to all owners (excluding the applicant) and the committee to respond to the matters raised in the application. Three submissions were made. All three submissions opposed any of the orders sought being made. Active Lawyers & Consultants made submission on behalf of the committee to the following effect:

• The applicant asserts that the bylaws for the scheme provide that where a car space is available to a resident, the body corporate shall grant that resident a car space. The applicant appears to assert its right to be granted the exclusive use of Area 3 is as a consequence of the wording of by-law 50.1. The committee disputes by-law 50.1 may be interpreted such that every owner has an automatic right to an exclusive use car space. By-law 50.1 relevantly and in essence provides that an owner shall be entitled by way of grant from the body corporate to the exclusive use of car parking spaces forming part of the common property, the identifying numbers of which are set forth in the sketch plan attached to the CMS and as identified in Schedule E of the CMS. To date the body corporate has not resolved to grant the owner of lot 5 the exclusive use of a car space. Section 62(2) of the Act effectively provides that a grant of exclusive use of common property may only be made by resolution without dissent. At the AGM of 26/09/08, the body corporate considered the applicant’s motion (being motion 21) but did not resolve by resolution without dissent to pass the motion. Nor did the body corporate pass motion 23 which was also submitted by the applicant. It is submitted that the words “which grant shall not be refused save only on the ground that the relevant car parking space has already been previously allocated” used in by-law 50.1 cannot override the statutory requirement that any grant of exclusive use must effectively be made by resolution without dissent. The applicant has not produced any evidence that the lot owners acted unreasonably in not passing motion 21.
• As a consequence of passing motion 22, motion 23 could not be lawfully considered.
• If the applicant’s apparent argument that the by-laws of the scheme provide that where a car space is available to a resident then the body corporate shall grant that resident a car space is accepted and if it is accepted the applicant’s argument is based on the wording of by-law 50.1 then the owners of lots 1 to 4 inclusive would also have an entitlement to an exclusive use car space as by-law 50.1 does not distinguish between a “residential” owner and a “commercial” owner.
• It is further submitted by the committee that the fact a previous CMS to the currently recorded CMS was amended to reflect that lot 5 may be used for commercial and/or residential purposes does not have the effect that an exclusive use car space should automatically attach to lot 5.
• At the time the applicant sought to have the use of lot 5 changed from commercial to residential the applicant would, or should, have been aware that the by-laws of the scheme did not provide that an exclusive use car space attached to lot 5.
• It is submitted that Motion 22 should not be ruled “out of order”, nor should it be declared void, on the basis that it should have been passed by a resolution without dissent and not by an ordinary resolution. The effect of motion 22 is for the body corporate to grant to Delta Dies Pty Ltd (Delta) a common property occupation authority of Area 3. Section 136 of the Standard Module relevantly provides that a body corporate may, by ordinary resolution give a person who is a service contractor an authority to occupy a particular part of the common property for purposes necessary to enable the service contractor to perform the obligations under the engagement as a service contractor. Delta falls within the definition of a service contractor as contained in section 15 of the Act. Area 3 is used by Delta for purposes associated with the duties it is required to undertake pursuant to its engagement with the body corporate. Such uses include but are not limited to the storage of tools and equipment and the use of Area 3 as an office/workshop.
• Historically, Area 3 has always been used for purposes associated with the caretaking and maintenance of the scheme.
• It is submitted that the body corporate has lawfully granted to Delta a common property occupation authority. As a consequence of Motion 22 being passed, the body corporate formally entered into a common property occupation authority agreement dated 26 September 2008. If the order or the alternate order sought by the applicant with respect to Area 3 is granted, the body corporate may be exposed to liability for breach of the common property occupation authority it has entered into with Delta.
  

The co-owners of lots 153 and 167 (Mr & Mrs Giorgio) made submission identifying some factual errors in the application, including the reference to the “first” CMS being recorded for the scheme in January 2005 failing to acknowledge that a standard CMS had in fact been recorded prior to that and that while the building is commonly referred to as the “Golden Gate” building, it has always been registered as “La Porte D’Or”. Further submission is made to the following effect:

• Lot 6, a residential lot in the scheme, was originally associated and required to be owned by the commercial lots 2 & 3 (reception) as the residence for the rental manager. In recent years the reception owners sold their residential lot 6 and subsequently purchased another residential lot in the scheme. The residential lot 6 was also never allocated a car parking space and its new owner then sought (through this Office – application 0636-2004) that it too be granted a car parking space by the body corporate. That application was dismissed.
• The body corporate complied with the applicant’s reasonable request (following approval by the local City Council) to change the by-laws to reflect that lot 5 become a residential lot. It does not follow that lot 5 be automatically granted a car parking space by the body corporate.
• While an architect may design a building it is the builder/developer who decides, based on the requirements of the Local City Council, which car parking spaces are allocated for the exclusive use of the respective lot owners, which areas are granted exclusive use for the running of the reception activities and which areas are reserved to house the necessary activities of the body corporate cleaners and maintenance workers and the safe-keeping of their associated tools of trade, machinery, spare parts, chemicals, paint etc.
• The building is 32 years old and has 181 lots spread over 33 floors. It is not unreasonable that such a building requires full time workers to clean over thirty levels of foyer carpets and tiles, maintain all other internal common areas and maintain gardens. There must be an appropriate area to house such an operation.
• The applicant purchased lot 5 between late 2005 and early 2006. The applicant knew no car space was allocated to lot 5. The purchase price would have reflected that fact. The body corporate does not have any car spaces available for allocation and the body corporate should not be required to grant, compensate, or improve the value of lot 5 by allocating it a car space. The percentage of no votes recorded against the applicants motion is evidence of the resolve of the body corporate. The percentage of no votes, in this instance, is higher than the percentage of no votes in 0636-2004.
• The body corporate has previously acted reasonably with the requests of many owners including lot 1 and lot 6. The body corporate has also acted reasonably in the present instance with regards to lot 5.
  

The owner of lot 173 (C J Franke) also made submission, along similar lines, to the following effect:

• The applicant was/is fully aware that lot 5 did not have a dedicated car parking space.
• All owners share the use and ownership of common property. Were the body corporate to accede to this application, a precedent would be set for wholesale distribution of the remaining common property.
• All lots were sold and purchased on an open market, taking into consideration the features, be they desirable or undesirable. If a lot did not have an allocated car parking space then this fact would have influenced its selling/buying price and therefore it is reasonable to suggest that the purchaser would have enjoyed a financial advantage.
• To “carve up” sections of common property for the exclusive benefit of any individual lot owner is not in the best interest of the majority of lot owners.
• The building’s service providers, maintenance staff and contractors cannot provide the required services to the building if there are no possibilities of parking vehicles on common property. In fact, the space which the applicant is seeking is one which is and has been used constantly by the building maintenance contractor.
• The applicant argues that the original developer should have allocated a parking space to the lot in question. While there may be some merit in that argument it does not overcome the fact that there wasn’t a space allocated so therefore there isn’t one.
• If this application were to succeed, it would deliver to the applicant a very desirable financial benefit not available to any other lot owner. Any difficulty which the owner may have at present as a result of not having an on-site dedicated car parking space, can be resolved in other more orthodox ways. The applicant has options which do not require the granting of common property to an individual lot owner.
  

The applicant’s solicitors inspected the submissions made and replied to the following effect:
In response to the submission by the committee:

• The applicant is not asserting that motion 22 should have been ruled out of order on the basis that it should have been passed by resolution without dissent. The applicant is asserting that motion 22 should have been ruled out of order on the basis that motion 21, or motion 23 should have been passed by the body corporate by way of a resolution without dissent.
• The Act provides that the outcome sought is within the jurisdiction of the Commissioner to award to the applicant. The Commissioner has the ability to make a just and equitable decision in regards to the dispute and also to require that a new CMS be recorded for the scheme, amending Schedule E.
• To the applicant’s knowledge, the applicant (along with the owner of lot 6) is the only resident of the scheme without a car space. To the applicant’s knowledge, all car spaces currently used in the basement are used by residents. The original approval for the scheme stated that 172 car spaces were designated for the basement (with 10 lock up garages located at the centre of the basement). Area 3 on plan 7779-3 has always been intended to be a car space.
• The applicant has always been of the understanding, according to advices from the original architect for the building, and also advices from the applicant’s Town Planning Advisor, that a space would be available in which to park the applicant’s car.
• The body corporate could by ordinary resolution approve another area of the common property to be used by the service contractor by way of Occupation Authority.
  

In response to the submission by H & CJ Franke:

• At the time of purchase of lot 5, lot 5 was designated for commercial use only. The body corporate has since resolved to permit the owner of lot 5 to use the lot for residential use. The applicant has relied on the by-laws and the original building approvals in the applicant’s belief that a car space would be granted to lot 5 upon it becoming a residential lot. Also, Annexure 1 to the applicant’s original submission provides that the granting of the GIA Notice to change the use of the lot was based on the Council’s intention that there would be a single car space available.
• Any allocation by the body corporate for exclusive use must be granted by way of a resolution without dissent by the body corporate. The applicant does not see how the granting of exclusive use in this instance would set a precedent. The applicant is asking the body corporate to grant to the applicant an exclusive use area which has already been identified by the body corporate as a car space, and is currently subject to by-law 50.1
• The applicant cannot see that the granting of one further car space in the scheme would prejudice the car parking of service providers.
• In regards to a similar application (0636-2004), the applicant submits that this case can be distinguished on the facts. In 0636-2004, the applicant sought to create an area which had not been designated on the original sketch plan as an area in which to park a car (known as area 181). The space in this instance has already been identified by the body corporate. In this case the applicant has converted lot 5 from a previously unviable commercial use lot to a residential lot at the applicant’s cost, enhancing the character of the building, and has always been of the belief that a car space should be available. Conversely, the lot owner in application 0636-2004 had purchased the lot knowing that there would not be a space allocated to them.
  

In response to the submission by Mr and Mrs Giorgio:

• The applicant agrees that a new CMS was recorded in January 2005.
• The original approval from the Council’s Implementation and Assessment Branch indicated that there would be 172 car spaces located in the basement, with 10 lock up garages located at the centre of the basement. Further, based on the applicant’s town planning advice the designation of one car parking space from the existing spaces will ensure that sufficient car parking spaces remains to meet the car parking needs of the occupants.
• The Act specifies that areas used by service contractors should be granted by way of Occupation Authority, if they are to be used on an exclusive basis by those service contractors. The body corporate failed to grant an Occupation Authority to those contractors before the previous general meeting.
• Based on the intention of the by-laws, the Gold Coast City Council building approvals, and the original architectural plans, the applicants sees it just and equitable that it should be granted a car space.
  

JURISDICTION

La Porte D’Or was registered as a building units plan (now known as building format plan) of subdivision on 30 March 1977 comprising 182 lots and common property. Due to the amalgamation of lots 98 and 99, the scheme now comprises 181 lots and common property. The scheme is regulated by the Body Corporate and Community Management Act 1997 (the Act) and the Body Corporate and Community Management (Standard Module) Regulation 2008 (the Standard Module).

This is a dispute between an owner and the body corporate and comes within the dispute resolution provisions of the Act (see sections 226, 227 & 228).

Section 276(1) of the Act provides that an adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the context of a community titles scheme, about-

(a) a claimed or anticipated contravention of the Act or the community management statement; or

(b) the exercise of rights or powers, or the performance of duties, under the Act or the community management statement; or

(c) a claimed or anticipated contractual matter about-

(i) the engagement of a person as a body corporate manager or service contractor for a community titles scheme; or

(ii) the authorisation of a person as a letting agent for a community titles scheme.

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

Without limiting the above, an adjudicator may make an order in schedule 5. Order 10 of Schedule 5 provides that an adjudicator may, if satisfied that a motion considered by a general meeting of the body corporate and requiring a resolution without dissent was not passed because of opposition that in the circumstances is unreasonable, make an order giving effect to the motion as proposed, or a variation of the motion as proposed.

DETERMINATION

The applicant appears to assert a “right” to an exclusive use car space, based solely on the wording of by-law 50.1 (incorrectly referred to as by-law 51.1 by the applicant), original building approvals and architectural plans and advice from its town planner.

In relation to the assertion of the applicant as to the meaning of by-law 50.1, I agree with the submission of the committee that by-law 50.1 cannot be interpreted such that every owner has an automatic right to an exclusive use car space, provided one is available. The wording used does no more, in my view, than allocate the car spaces identified in Schedule E of the CMS for the exclusive use of the particular lot owners identified in Schedule E. Even if by-law 50.1 did have the effect asserted by the applicant, I would regard it as inconsistent with section 62(2) of the Act which effectively provides that a grant of exclusive use of common property may only be made by resolution without dissent. On the basis of section 180(1) of the Act, by-law 50.1 would be invalid to the extent of the inconsistency with section 62(2). In my view, the only way the applicant could obtain the exclusive use of a car parking space is by the body corporate resolving by resolution without dissent to grant it. The applicant, itself, seems to acknowledge this fact in its reply to the submission by H & CJ Franke, when it refutes their assertion that the granting of an exclusive use car space to the applicant in this case would create a precedent by stating that “Any allocation by the body corporate for exclusive use must be granted by way of a resolution without dissent by the body corporate”. The body corporate has considered a motion to grant exclusive use of a car space to the applicant and overwhelmingly rejected it with only five votes for and 24 against motion 21 at the EGM of 19 September 2008. In such circumstances, I consider that the only option open to the applicant to challenge the decision of the body corporate at the AGM of 19 September 2008 was to argue that, in the circumstances, the opposition was unreasonable. However, the applicant has not advanced any arguments to the effect that the opposition to Motion 21 was unreasonable in the circumstances.

The arguments that were advanced by the applicant are, in my view, without merit and in some respects, irrelevant, in light of my comments above. I consider them to have been comprehensively and correctly refuted by those making submissions in opposition to this application. I do not consider that the applicant’s reply to submissions satisfactorily addresses the matters raised in the opposing submissions. I do not propose to give any further consideration to the applicant’s arguments, other than to comment as follows.

The fact that a previous CMS to the currently recorded CMS was amended to reflect that lot 5 may be used for commercial and/or residential purposes does not have the effect that an exclusive use car space should automatically attach to lot 5. I fail to comprehend the basis of such an argument. The reliance the applicant places on the original building approvals, advice of its town planner, architectural plans and intentions of the local council is unfounded and irrelevant in light of the registered and recorded CMS that does not and never has, allocated a car space for the exclusive use of lot 5.

In my view this application is flawed in other respects also. Specifically, the applicant has failed to address the fact that the area it seeks to have allocated exclusively to lot 5 for the purposes of car parking has, in fact, always been used for purposes associated with the caretaking and maintenance of the scheme and has not addressed the issue of where such activities could be relocated to other than to say, in its reply to submissions, that the body corporate could by ordinary resolution approve another area of the common property to be used by the service contractor by way of Occupation Authority, without identifying any specific area. Further, the applicant has failed to address the fact that the body corporate has formally entered into a common property Occupation Authority agreement with Delta dated 26 September 2008, the validity of which is not disputed by the applicant, and the fact that the body corporate may be exposed to liability for breach of this agreement, if the order sought were to be made.

I have dismissed the application in its entirety.