Beattie Place South [2009] QBCCMCmr 27 (30 January 2009)

Last Updated: 19 February 2009

REFERENCE: 0857-2008

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	32844
Name of Scheme:	Beattie Place South
Address of Scheme:	Beattie Road COOMERA QLD 4209

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Michael and Laura Byrnes, the owner of Lot 9

I hereby order that the application for an order by Michael and Laura Byrnes, the owner of Lot 9 against the body corporate for Beattie Place South community titles scheme 32844 seeking outcomes that By-Law 12 be removed on the basis that it is oppressive and unreasonable, that the previous By-Law 12 be reinstated, and that they can keep their dog on the Lot, is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0857-2008

“Beattie Place South” CTS 32844

The scheme
“Beattie Place South” community titles scheme 32844 is subject to the Body Corporate and Community Management Act 1997 (Act).

Application
This application is by Michael and Laura Byrnes, the owner of Lot 9 (Applicants) against the Body Corporate seeking outcomes that:

1. By-Law 12 be removed on the basis that it is oppressive and unreasonable.
2. The original by-law be reinstated.
3. They can live in their home with their dog named Benson.
   

The current community management statement for the scheme (Dealing 710242025) was recorded by the registrar of titles, Department of Natural Resources and Water on 20 April 2007. By-Law 12 of schedule C contained in this CMS states:

“12. Keeping of animals

12.1 NO ANIMALS ALLOWED

12.2 That a sub-clause be added to cover existing approved animals in:-

(a) That the approval pertains only to the animal which the approval was given and this approval does not extend to replacement or additional animals.

(b) The occupier of a lot must ensure that:-

i. animals are to be kept within their respective lots

ii. animals are not allowed to roam free day or night on the common property or another lot.

3. animals when upon the common property must be carried or be on a lead/leash, with the exception of the pool/BBQ area where no animals are allowed under any circumstances
4. animal owners must ensure if they are walking their pet through the complex that they have the means available to clean up any mess made by their pet.

v. If their pet is a cat it is fitted with a bell or suitable warning device that will alert native wild life of its presence within the lot”

The CMS which previously applied to the scheme (Dealing 708133629 - recorded on 21 October 2004) included By-Law 12 stating:

“12.1 The occupier of a lot must not (subject to the provisions of the Guide Dogs Act 1972 and sub by-law 2 below) keep any dogs, cats, birds or other animals on the lot or common property without prior written consent of the body corporate, which consent may be withheld in the absolute discretion of the body corporate.

12.2 A lot owner who upon taking possession of the lot has an animal which is a pet which is under 10 kg may with the prior written approval of the Body Corporate keep that animal on the Lot. Provided however that upon the death of that animal the Lot owner must reapply for Body Corporate approval for any replacement animal.”

The Applicants submit they purchased and moved into Lot 9 in December 2007. They say they moved into the Lot with the dog. The Applicants have shown that, by letter dated 28 March 2008, the Body Corporate informed them of By-Law 12 and required the dog be removed within 7 days of the letter. They have shown that the committee, on 21 April 2008, allowed the dog to remain on the Lot for three months while they sought to sell. They have also shown that: on 3 July 2008 they notified the Body Corporate they would experience financial hardship if they sold the Lot within one year of ownership; and that on 11 August 2008, the committee resolved to give them a notice of by-law contravention notice requiring the removal of the dog within seven days. The Applicants provided a copy of a ‘Notice of Continuing Contravention of a Body Corporate By-Law’ dated 20 August 2008 citing By-Law 12 and requiring the removal of the dog.

The Applicants submit that in the interest of justice and fairness, By-Law 12 is restrictive, oppressive and unjust. They refer to paragraph 38 of Tutton v Body Corporate for Pivital Point Residential CTS 33550 [2008] CCT KA005-08 stating by-laws must be interpreted objectively and by definition all animals including goldfish would be deemed in contravention of By-Law 12 which is oppressive and unreasonable. The Applicants say the committee has informed them that the reason for By-Law 12 is that a previous occupier misused the then applicable by-law and kept 2 dogs. The Applicants refer to section 180(5) of the Act stating a by-law must not discriminate between types of occupiers. The Applicants also refer to section 180(1) of the Act.

The Applicants state that by a reasonable rationale it would be appropriate for their dog to remain on the Lot as the previous by-law accommodated animals under 10kg. They say the dog is a Papillon x Shi Tzu that weighs 4.5kg, is quiet by nature, is never heard, never sets foot on common property and is not a nuisance to lot owners.

Submissions to the Commissioner
The Commissioner provided a copy of the application to Body Corporate Services (Body Corporate Manager) for distribution to the owner of each lot (excluding the Applicants) and the committee, with an invitation to respond to the matters raised in the application (s 243, Act).

Submissions were made by 27 lot owners and the committee. All of these submissions opposed the application.

The opposition by the committee was on the basis that allowing the dog would create a precedent.

The owner of Lot 34 submitted that their purchase is a key part of their long-term retirement plans and has come at some financial sacrifice and difficulty; they seek to protect their investment; to reduce risks of damage and wear and tear to the Lot and to manage maintenance costs, they do not allow tenants to have pets; and if the By-Law is changed there will be difficulty enforcing a no pet policy which will have a detrimental impact on the property.

The owner of 38 and the building manager submitted that they have over 70 units in their letting pool and every owner has indicated that they do not wish to have any animals on their premises.

The owner of Lot 61 stated she does not want anyone renting the lot to have a pet and she feels that if a precedent is set, she will not be able to deny a tenant from bringing an animal onto the premises and the animal could cause unnecessary damage to the property including an odour which is difficult to remove and may deter potential tenants. She also said that noisy dogs have the potential to deter potential tenants decreasing her ability to rent the lot.

The owner of Lot 83 stated making the requested by-law change will eventually adversely affect leasing his Lot and the value of his Lot.

Other submissions by owners also opposed the application, being that:

• The Applicants should have checked the by-laws before they purchased.
• No other animals resided in the scheme when the Applicants moved in and they did not seek permission to keep the dog until 3 months later.
• Keeping the dog is not in the best interests of the community or for the future financial appeal of the properties. Allowing pets will degrade the appeal of the complex.
• The value and rental appeal of a lot could be affected by the dog’s barking.
• The unnecessary burden on management to deal with complaints.
• The scheme is not appropriate for keeping dogs and cats.
• The negative impact caused by nuisance and noise.
• There is a concern about precedent which would open the floodgates for others to do the same causing problems keeping pets under control.
• The Applicants have not demonstrated the by-law is restrictive, oppressive or unjust.
• The By-Law is not open to interpretation and is no more restrictive or oppressive than other by-laws established to restrict behaviour for the benefit of the community. The By-Law can be interpreted objectively to mean no animals allowed.
• It is unjust and unfair to current residents/owners who have abided by the by-laws.
• It would be oppressive and an injustice to all other owners to be subject to a condition to which they unanimously agreed they did not want because one owner decided to ignore the By-Law.
  

The Applicants made a written reply to submissions stating the Pivital Point Residential scheme is a high-rise building and it was considered adequate for animals to reside in; a bird is being kept on one lot; all owner occupiers have the right to choose if their lot is pet friendly; and investor owners can stipulate they do not want their lots to be pet friendly to their rental clients as part of their rental agreement. The Applicants state they have never received a complaint regarding their dog ‘Benson’.

Adjudication
A dispute resolution recommendation has been made under section 248 of the Act referring the dispute to departmental adjudication.

Jurisdiction
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 CMS; or the exercise of rights or powers, or the performance of duties, under the Act or the CMS (s 276(1), Act).

Without limiting section 276(1), an adjudicator may make an order mentioned in schedule 5 (s 276(3), Act). Clause 20 of schedule 5 provides:

“If satisfied a by-law is, having regard to the interests of all owners and occupiers of lots included in the scheme, oppressive or unreasonable—an order requiring the body corporate to lodge a request to record a new community management statement—

(a) to remove the by-law; and

(b) if it is appropriate to restore an earlier by-law, to restore the earlier by-law.”

Investigation
An adjudicator must investigate the application to decide whether it would be appropriate to make an order on the application (s 269(1), Act). An adjudicator’s investigative powers are stated in section 271 of the Act.

I reviewed the CMS and title details for Beattie Place South. The scheme is a subsidiary scheme in a layered arrangement (s 18, Act). The CMS for Beattie Place South therefore has effect subject to the CMS for the principal scheme — Beattie Place community titles scheme 32843 (s 58, Act). I have examined the CMS for the principal scheme and can find nothing in this statement which would affect the CMS for the subsidiary scheme for the purposes of determining this dispute.

Apart from this, further investigation was not necessary.

Decision
Applicable law
By-laws for a scheme are stated in the CMS (s 66(1)(e) and s 168(1), Act). A by-law comes into force on the day the registrar records the CMS containing the by-law (s 179, Act). Relevantly, the by-laws may only provide for the “regulation of, including conditions applying to, the use and enjoyment of lots included in the scheme” (s 169(1)(b)(i), Act).

Section 180 of the Act makes provision for limitations for by-laws and relevantly states: if a by-law is inconsistent with the Act or another Act, the by-law is invalid to the extent of the inconsistency (s 180(1)); and a by-law must not discriminate between types of occupiers (s 180(5)).

Pivital Point Residential
In arguing that the By-Law is restrictive, oppressive and unjust, the Applicants rely in part on the comments by the Commercial and Consumer Tribunal in Pivital Point Residential, a decision made on an appeal against an order of an adjudicator made under the dispute resolution provisions of the Act [Pivotal Point Residential [2008] QBCCMCmr 55 (19 February 2008)].

The appealed adjudicator’s decision dismissed an application seeking to invalidate a by-law relating to the keeping of animals. The relevant by-law contained a provision prohibiting keeping an animal on a lot or common property and provided saving provisions for animals kept at the time the by-law was made, including provisions recognising approved animals prior to the by-law being made.

As indicated by the Tribunal [at 17], “many issues were canvassed before the Adjudicator”. Of relevance to this dispute, the adjudicator stated:

1. Consideration of the question involves objectively determining whether or not the by-law is oppressive or unreasonable having regard to the particular circumstances. [p. 13]
2. A by-law would not be oppressive or unreasonable if it operates unreasonably in the special circumstances of one particular person. The circumstances raised by other owners and occupiers would need to be balanced against that person’s particular circumstances and the circumstances should be limited to the actual or immediate circumstances raised rather than purely hypothetical circumstances. [p. 13]
3. A by-law is not oppressive or unreasonable if it stops persons doing something they could previously do. Preventing occupiers from engaging in activities that are seen as detrimental or creating a disturbance to other occupiers is a proper purpose for a by-law. [p. 14]
4. 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 the new by-law would have been oppressive and unreasonable. [p. 14]
5. If the by-law prohibited pets then a person would have difficulty arguing against a by-law that they should have been aware of prior to deciding to move into the scheme. [p. 14]
   

The Tribunal focussed on two issues [at 17]: firstly, “is the new by-law unreasonable in the sense that it does not apply to all residents equally and is it “unjust” to owners and occupiers? As to oppression, the argument is whether that is satisfied because the new by-law merely takes into account the interests of owners who do not want pets in the building and, or alternatively, whether 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 that pet dies?”; and secondly, “does the extent of the prohibition mean that all “animals” (as the term is defined in Local Law No 12) are prohibited, having the effect that unreasonableness arises because it could, for instance, ban the keeping of a goldfish...?” The Tribunal stated [at 19] “concentration will be focussed primarily on the matter of reasonableness”.

With respect to the first issue, the Tribunal considered an issue not raised before the adjudicator. The issue was whether the disputed by-law actually treated all residents who had dogs under the previous by-law equally (even though this issue was not argued before the adjudicator, he discussed the effect such a treatment could have on a by-law – see point 4 above). As a consequence of its consideration of the new issue, the Tribunal found the disputed by-law did not preserve a right provided under the previous by-law and did not equally treat all residents who had dogs validly, concluding [at 26] that: “it is clear that a “new” by-law which does not preserve such a right must offend the requirement of reasonableness”. For this reason, the Tribunal found “the Adjudicator has erred in law in determining that the new by-law 16 is reasonable...it becomes unnecessary to consider whether there is oppression as well, at least in the terms formulated in the grounds of appeal and the written Submissions” [see 23 to 27].

The Tribunal then discussed [at 28] “whether the blanket ban on all defined “animals” effected by the new by-law...is itself unreasonable” stating: “if in the determination of this proceeding it can be held that the meaning given to “animal” in the new by-law...is a meaning which makes the particular provision “unreasonable” because it has the effect that an animal such as a gold fish is also the subject of the absolute ban once all “prior” approvals have been spent, it is open to the Tribunal to decide that the provision is invalid as being unreasonable” [at 34] and “Since there is clearly no rational basis upon which it can be said that the keeping of a gold fish in a safe and healthy environment could be a matter which could cause any difficulty to any other lot owner, yet is the subject of an “absolute” ban, the conclusion is fairly open that such a by-law is “unreasonable”: [35]. The Tribunal accepted [at 38] “the analysis by McColl JA, with Mason P agreed, in Owners of Strata Plan No. 3397 v Tate [2007] NSWCA 207 that by-laws...should be interpreted objectively by what they would convey to a reasonable person: at [71]”. The Tribunal concluded: “The analyses just undertaken are, it is repeated, unnecessary for the determination of this application/appeal; but they were done because the considerable effort by both parties deserved some treatment by the Tribunal”: [40].

Is By-Law 12 oppressive or unreasonable?
It is clear that in Pivital Point Residential, the Tribunal reached its decision on the reasonableness of the disputed by-law on the basis of an issue not raised before the adjudicator and that the hypothetical scenario discussed by the adjudicator was not considered when the decision was made. After it made its decision, the Tribunal then analysed the question of prohibition on all animals reacting to the hypothetical scenario due, it would seem, to the effort of the parties to the appeal. It could be, for example, that the Tribunal’s discussion of this point was limited in context to the submissions made by the parties to the appeal. I do not agree with the Applicants that it can be necessarily concluded from the scope of its focus and the resulting discussion, that the Tribunal formed the view that a by-law prohibiting animals is necessarily oppressive and unreasonable. In my view, the decision did not go so far as to decide the issue in relation to whether, in every case, such a by-law would be oppressive or unreasonable.

The adjudicator outlined the analysis he considered necessary to determine whether a by-law was oppressive or unreasonable (I have referred to relevant matters discussed by the adjudicator on page 4). I could not find anything in the appeal decision to suggest the Tribunal found examining the question of oppression or unreasonableness applying the test discussed by the adjudicator to be incorrect. I consider this analysis is appropriate in this case.

It should be noted that my consideration as to whether By-Law 12 is oppressive or unreasonable is limited to By-Law 12.1. No submissions have been made questioning By-Law 12.2. There is no argument of the nature raised before the Tribunal that the By-Law did not equally treat all occupiers who had animals when it was made. This savings provision is not applicable to the Applicants as they did not own a lot in the scheme, nor did they occupy a lot in the scheme when the By-Law came into force.

The Applicants refer to paragraph 38 of Pivital Point Residential saying the By-Law must be interpreted objectively. I do not consider there is any question about the interpretation of By-Law 12.1. Its meaning and intent is clear. No animals are allowed. Specifically, the Applicants are prohibited from keeping their dog. In the absence of other arguments, I am not satisfied any interpretation could objectively be placed on By-Law 12.1 which would lead a reasonable person to a different conclusion as to its intent.

The By-Law applied when the Applicants purchased and moved into the Lot. There is ample opportunity for a person who is considering buying a lot in a scheme to become aware of the by-laws made by the relevant body corporate. The Act contains a number of provisions in favour of a buyer including for example: requiring the seller to give the buyer information which (in part) informs the buyer about by-laws; and allowing a buyer to search body corporate records. The CMS containing the by-laws is held by the registrar of titles and a copy of this document is available to anyone for a fee. In my view, any arguments about lack of knowledge of the By-Law when the Applicants purchased and moved into the Lot are irrelevant. The Applicants were expected to have knowledge of the scheme by-laws before they bought the Lot and they should have referred to these by-laws before deciding to keep the dog.

In determining whether the body corporate acted reasonably in deciding to adopt By-Law 12.1 it is appropriate to consider that a statutory requirement to act reasonably is satisfied if the decision is objectively reasonable: Greiner v Independent Commission Against Corruption (1992) 28 NSWLR 125. The objective test requires a balancing of factors in all the circumstances according to the ordinary meaning of the term ‘reasonable’: Secretary, Department of Foreign Affairs and Trade v Styles [1989] FCA 342; (1989) 88 ALR 621 (see also McKinnon v Treasury [2006] HCA 45 per Hayne J at p61).

The submissions made by owners explain the reasons the Body Corporate voted to make By-Law 12. It is relevant that 25 of the 27 owners who made submissions are non-resident and that the building manager has stated 70 non-resident owners have indicated that they do not want an animal being kept in their lots.

Even though By-Law 12.1 applies to all animals, owners are particularly concerned about dogs and cats being kept on lots including by tenants. While owners who lease their lots could impose conditions upon tenants to prohibit keeping an animal, a prohibition by the Body Corporate in terms of its by-laws may provide a more practical means of policing this condition. Submissions also provided general support for a view that a by-law prohibiting animals could enhance the value of the owner’s investment and retain the appeal of the complex. It is not clear whether owners consider the By-Law makes the scheme more attractive for prospective purchasers, or perhaps for prospective tenants who might be prohibited from keeping an animal by the terms of their lease and may also prefer that any owner occupiers not keep animals either. There is no objective evidence to establish whether a prohibition of animals does actually enhance the appeal of the complex. However, it is not my role to embark on a far ranging investigation of these issues in the circumstance where the Applicants have failed to argue or provide evidence that the prohibition on animals does not help retain the appeal of the complex.

Further, there is some merit in submissions to the effect that the absolute prohibition of animals is necessary to avoid precedents that could open the floodgates to allowing numerous animals. A by-law of the nature of By-Law 12.1 adds to certainty in that, if the animal by-law provided discretion of the nature of the previous by-law, the Body Corporate will have difficulty applying the seemingly ‘no pets’ stance of its member owners. This is notwithstanding the previous by-law purported to allow consent to be withheld at “the absolute discretion of the body corporate”. A body corporate must act reasonably in enforcing the by-laws (s 94, Act). A committee must act reasonably in making a decision (s 100(5), Act). If the Body Corporate sought to apply the policy and refused permission to a particular occupier, that person can dispute that decision under the dispute resolution provisions of the Act. Recent decisions made by adjudicators under the dispute resolution provisions of the Act suggest a body corporate cannot refuse permission without good reason. A ‘no pets’ policy does not constitute a reasonable basis for refusing permission. In most cases, consideration is given to the effect the animal has or may reasonably have on another person’s use and enjoyment of their lot or common property given the nuisance provisions of section 167 of the Act. It would seem that the committee would need to act on the merits of the individual case and could not rely upon views of owners generally that the value of their investment is better protected by a ‘no pets’ policy or that such a policy provides greater certainty in terms of protecting the condition of their lots. In these circumstances and given the submitted arguments on this point, the Applicants have not satisfied me that the By-Law is unreasonable or oppressive. It is not oppressive or unreasonable to provide certainty. The Body Corporate can, at any time, resolve to consent to a new CMS containing a change in the By-Law if the owners at that time believed that such a change was warranted.

In conclusion, given the arguments made by the Applicants and the submissions made in response to the application, I do not consider there is a justifiable basis to find, having regard to the interests of all owners and occupiers of lots included in the scheme, that By-Law 12.1 is oppressive or unreasonable.

Other grounds
The Applicants also refer to section 180(1) and (5) of the Act. The onus rested with the Applicants to substantiate the claims being made and simply making a statement does not constitute a basis for finding in their favour. In referring to section 180(1), the Applicants have not demonstrated that the By-Law is inconsistent with the Act or another Act. The Tribunal in Pivital Point Residential did not conclude that the disputed by-law was inconsistent with legislation, or that for example, a body corporate did not have the power to make a by-law of this nature. With respect to section 180(5), the Applicants seem to make reference to a problem with a previous occupier keeping animals. I do not consider this reference is a basis for finding the By-Law breaches this provision. In my view, the Applicants have not demonstrated how the By-Law discriminates between types of occupiers. A plain reading of the By-Law is that it applies to all occupiers, and does not for example; treat owner/occupiers differently to non-owner/occupiers.

Conclusion
On the basis of the arguments made by the Applicants and given the submissions made in response to the application, I am not satisfied it is warranted to make an order that By-Law 12 be removed for the reasons stated in clause 20 of schedule 5 of the Act.

For this reason, I have dismissed the first outcome sought. As the second outcome sought is conditional on the first outcome sought, it is also dismissed. Further, in the circumstances where the By-Law applied when the Applicants purchased and moved into Lot 9, there is no basis for making an order of the nature of the third outcome sought. Given the terms of the By-Law, the characteristics and behaviour of the dog are not relevant.