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Waterhaven [2009] QBCCMCmr 277 (4 August 2009)

Last Updated: 17 September 2009

REFERENCE: 0526-2009


ORDER OF AN ADJUDICATOR


MADE UNDER PART 9 OF CHAPTER 6


BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997


Number of Scheme:
36649
Name of Scheme:
Waterhaven
Address of Scheme:
12-14 Old Smithfield Road FRESHWATER QLD 4870

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

Catherine de Voil, the Owner of lot 10


I hereby order that the application for an order that approval be given for the prospective purchaser of lot 10 to keep a small de-sexed Maltese cross Chihuahua dog, in addition to a Persian cat
is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0526-2009


“Waterhaven” CTS 36649

APPLICATION

This is an application by the owner of lot 10, Catherine Ann De Voil (the Applicant), against the body corporate for Waterhaven (the Respondent), seeking an order that approval be given for the prospective purchaser of lot 10 to keep a small desexed Maltese cross Chihuahua dog and a Persian cat at lot 10.

The Applicant provides grounds to the following effect:


The Applicant’s initial request of the committee proposed the following motion:

1. APPROVAL FOR PET – UNIT 10

That upon settlement of lot 10, the purchaser be approved to house a four year old desexed dog Maltese cross Chihuahua on the premises with the following conditions:

Motion approved Yes ____ No ____

The secretary of the committee, Ms Angela Crawford, wrote to the Applicant on 16 May 2009 in response to the above request stating as follows:

The committee of the Waterhaven Body Corporate met at 1400hrs on 16th May 2009 to discuss your application to approve a small dog at unit 10/12 Old Smithfield Road, Freshwater. After due consideration the committee unanimously decided to reject the application.”

The by-law in relation to the keeping of animals which is recorded in the registered Community Management Statement is as follows:
12. KEEPING OF ANIMALS

12.1 Subject to Section 143 of the Act an owner or occupier of a lot may keep a cat as of right or other small animal which is approved by the Committee of the Body Corporate upon their lot or upon that part of the common property over which they have exclusive use.

CONCILIATION

The Applicant and some individual owners making submission in response to this application have made reference to things said and done during a department conciliation session that was held prior to this adjudication application being lodged. Because evidence of this is inadmissible in this proceeding[1], I have disregarded it.

JURISDICTION

“Waterhaven” was registered as a building format plan of subdivision on 19 March 2007 comprising 10 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 the owner of one lot 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)).

SUBMISSIONS

In accordance with section 243 of the Act, a copy of the application was provided to the body corporate manager, Michael Oliffe of Strataworks for distribution to all owners (excluding the Applicant) and the committee, with an invitation to respond to the matters raised in the application. Six submissions from individual owners were received as well as a submission from the committee. Two submissions support the Applicant. Five oppose the making of the order sought. The submission made by the committee was to the following effect:


The owner of lot 4 made submission to the following effect:


The owner of lot 3 made submission in support of the application to the following effect:


The secretary and owner of lot 2 made submission opposing the application on the following grounds:


The owner of lot 5 made submission supporting the application to the following effect:


The owner of lot 9 made submission to the following effect:


The owner of lot 6 made submission opposing the application to the following effect:


Issues for determination

Operation of by-laws

The Act gives the owners of units in a scheme the power to vote on what by-laws will apply to their scheme. All owners and occupiers are obliged to comply with registered by-laws, unless or until the owners vote to modify or remove a particular by-law (Act, 59). Modifications to the by-laws can be made by special resolution (Act, 62(3)) and take effect on the recording of the modified by-laws by the registrar of titles (Act, 179).

The body corporate has a duty to enforce the by-laws (Act 94(1)). Rights of individuals are protected to the extent that the body corporate is required to act reasonably in enforcing the by-laws (Act 94(2)).

Interpretation of By-Law 12.1
By-laws should be interpreted objectively by the meaning they would convey to a reasonable person and in a manner consistent with their statutory context. 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.”
Two different interpretations of by-law 12.1 have been proffered. One is that one cat is allowed as of right OR another small animal which the committee approves is allowed. Under this interpretation, an owner or occupier could not keep a cat AND another small animal. The other interpretation is that a cat is allowed as of right AND other small animal/s may be approved by the committee. Considering the principles outlined above, I prefer the second interpretation over the first; that is, that a cat is allowed as of right AND other small animals may be approved by the committee. The first interpretation, in not allowing any animal other than one cat, if adopted, could result in the by-law being considered oppressive or unreasonable. It would be difficult to comprehend, for example, an owner or occupier who has a cat being refused permission to also keep a gold fish.

I therefore consider that the fact that the potential purchaser of lot 10 has a cat and has an automatic right to keep it at lot 10 does not obviate the need for the body corporate committee to consider the request for a small dog to be kept within lot 10 and its exclusive use area.


Failure of body corporate to act reasonably

There is a general requirement that the committee and body corporate act reasonably in making a decision (Act 100(5), 94(2)). Where this does not occur, an adjudicator may intervene to make an order that is just and equitable to resolve a dispute, including to declare a resolution purportedly passed to be void or to give effect to a motion that was not passed (Act 276, Schedule 5 – Items 8, 10).

The law relating to “reasonableness” in decision making was the subject of a recent adjudication wherein the Adjudicator stated the following:[2]

Various cases under the general law, commonly relating to the reasonableness of a refusal to consent to the assignment of a lease, involve an element of subjectivity in referring to the necessity to work out the real and true reason for the decision[3] and stating that the essence of a reasonable decision is that there are reasons for it that can be justified as being genuine and not wholly fanciful rather than justified by reference to some objective standard of correctness.[4]  Some decisions refer to the need to look at reasonableness at the time the decision was made[5] with others allowing a landlord to rely upon a ground not taken at the time of refusal, particularly where there is no requirement for the landlord to provide reasons at the relevant time.[6] The landlord would normally be entitled to consider only their own interests but in some circumstances a disproportion between the benefit to the decision maker and the detriment to other persons may render the decision to be unreasonable.[7]

However, section 100(5) provides a statutory obligation upon the committee [section 94(2) for the body corporate] to act reasonably in making a decision.  The decision itself is made by a vote of individual committee members [or, in the case of a body corporate decision made at general meeting, individual owners] who are not themselves under any statutory obligation to act reasonably or to provide any reasons why they voted in a particular manner.  The relevance of decisions at general law on the reasonableness of a landlord’s refusal to the assignment of a lease can therefore be questioned. Rather, authorities indicate that a legislative obligation to act reasonably is satisfied if the decision is objectively reasonable[8] and that the objective test requires a balancing of factors in all the circumstances according to the ordinary meaning of the term ‘reasonable’.[9]  I therefore conclude that, contrary to the more subjective approaches adopted in common law cases concerning the reasonableness of a landlord’s refusal to consent to the assignment of a lease, it is appropriate to look at whether the decision of the committee is objectively reasonable including with respect to circumstances that may only have become apparent after the making of the decision.

Ultimately, the reasonableness of a decision is a question of fact.  There is no particular formula or test for reasonableness and the High Court has supported a view that a paraphrase can place an unwarranted gloss on relatively plain words applying a test of reasonableness.[10]  However, some guidance can perhaps be taken from legal authorities that articulate principles including that the expression 'reasonable' should be given a broad, commonsense meaning;[11] the question is not whether the decision was the "correct" one but whether it is objectively reasonable;[12] and a "logical and understandable basis for the decision" is a factor in determining the reasonableness or otherwise of a decision but does not necessarily mean the decision is reasonable as important matters may have been overlooked or discounted.[13]

I have applied the law, as stated above, to reach the findings below.

Findings

If I was applying a subjective test of reasonableness of reasons advanced by the committee and individual committee members for refusing to approve the keeping of Charlie on lot 10 then I would conclude the decision was unreasonable. It is both understandable and obvious that the committee failed to act reasonably under the operative by-law to consider whether to authorise the keeping of Charlie the dog when committee members had the views that were expressed in their submissions. The reasons for refusal expressed in the submissions, such as the setting of a precedent, the Applicant’s financial status, that the Applicant no longer residing at the scheme and that the Applicant’s lot is up for sale, with the approval of this dog being a condition of the sale, are irrelevant. Further, the record of the committee meeting of 16 May 2009, as communicated to the Applicant, demonstrated a failure on the part of the committee to weigh up the merits or otherwise of approving the dog.

The decision of the committee, at the meeting of 16 May 2009, to not approve the dog and provide no reasons for this was objectively unreasonable in all the circumstances. As a result, an appropriate order might be to require the committee to reconsider their decision. Reconsideration of the circumstances may resolve the dispute, for example if the committee approved the dog subject to reasonable conditions. On the other hand, it is quite possible, based on the submissions received, that the committee may reach another decision that the applicant does not consider to be reasonable and decides to again challenge.

An adjudicator is expected to make an order that is just and equitable to resolve a dispute regarding the reasonableness of a body corporate decision with example orders including to decide whether or not to declare a resolution purportedly passed to be void or to give effect to a motion that was not passed.[14]  The exercise of these powers has been described by the Court of Appeal as being of the nature of direct managerial intervention in the context of legislation designed to provide for flexible and contemporary arrangements for administration and management of community titles schemes.[15]  Specifically, the Court of Appeal commented that adjudicators powers are designed for objects including "flexible and contemporary communally based arrangements for the use of freehold land” and “to provide an efficient and effective dispute resolution process” and that “In this context it is not surprising to find a provision ... which permits a virtually direct managerial solution to defeat a certain type of unreasonable conduct that might otherwise frustrate an objective that could otherwise only be attained by a resolution without dissent. Such a power may seem to those used to the independent management of companies, but there seems little doubt that the legislature has here deliberately established a mechanism for the resolution of community titles scheme disputes in this way".[16]

In the present circumstances, I am satisfied that it is appropriate that I make a final order regarding approval of the dog and any appropriate conditions.

However, more information is needed to determine whether approval of the dog should be granted. Objectively speaking, matters relevant to whether or not the committee should approve the dog relate to the extent to which the approval is likely to adversely affect the interests of other persons associated with the scheme.

Further Investigation

To this end, I found it necessary to request further information from the Applicant in relation to the dog concerned, via letter dated 16 July 2009. The Applicant responded by email dated 22 July 2009 with emails from Charlie’s veterinarian and a recent neighbour of the potential purchaser of lot 10 as well as plans of lot 10. This information was forwarded to the committee on 23 July 2009, with an invitation to the committee to make submissions in response to the further information provided by the Applicant, by Friday 31 July 2009. Two committee members responded separately, by emails dated 31 July 2009.

It can probably be taken for granted that, generally speaking, dogs will bark from time to time and disturb others in close proximity. I accept submissions from Dr Max Fargher of Brinsmead Veterinary Surgery that from observations at their clinic, Charlie is a happy and well behaved dog. I note the submission of Keith and Irene Foxley who state that they have known Charlie since the potential purchaser of lot 10 first had him until they left 32 Ebony Street, Redlynch a few months ago. They state that during that time they “puppy sat” on numerous occasions. They consider him to be a very placid dog, barking no more than their beagles, who only alert them when people or other animals are outside their property. They further state that during the time that the potential purchaser of lot 10 was their neighbour, they had no cause for complaint over her actions or those of her family or her pet. Further, I accept that the exclusive use area of lot 10 (40 square metres) which is fenced, combined with the internal space of lot 10, is not an inappropriately sized place for a dog of Charlie’s size and breed.

However, this information has to be considered in light of the response to it by two individual committee members. The chairperson notes the character reference of Keith and Irene Foxley, Redlynch, Cairns for Charlie, referred to above. The chairperson states that the committee has provided information regarding the existing animals that already reside on the property behind the Eastern side of Waterhaven and directly behind lot 10. There is a wooden paling fence between the two properties however, the chairperson states that the house behind also has a raised patio on which there is a direct view into the exclusive use area of lot 10. The animals kept there have, states the chairperson, been the cause of considerable angst within Waterhaven as the noise they create has disturbed residents on numerous occasions. He states that they are loud, sensitive to the slightest disturbance (such as residents hanging up washing or loud televisions) and once they have begun barking take significant periods to stop. These animals are stated to be directly outside lot 10 and therefore, asserts the chairperson, as stated in the character witness, will cause Charlie to create noise and disturb residents at Waterhaven. Charlie is stated to bark “when people or other animals are outside the property”. At Waterhaven, the chairperson states that this would be all the time, as the animals behind lot 10 can roam their property at will and there will only a thin, wooden fence between them. Furthermore, states the chairperson, as there is a direct view, the animals will be able to see each other, which in turn will encourage barking.

The chairperson further advises that Lot 10 has on its Southern side a fence separating it from the complex swimming pool. Cairns, he states, is a tropical location, with high temperatures and humidity all year round and as there are several young children living in Waterhaven, the pool is used on a constant basis. The chairperson states that most, if not all afternoons in Winter, people utilise the pool and in summer, on a daily basis there will be someone in it from midday (and often earlier) until its closing time at 10pm. Anyone swimming in the pool is directly outside lot 10. The character reference openly states that Charlie barks when other people or animals are outside the property. This is direct evidence, asserts the chairperson, that it will be a nuisance, particularly, when combined with its physical proximity at Waterhaven to sources of agitation, and will disturb residents in an unfair and unreasonable manner.

The proximity of lot 10 to the pool and to a property which houses two other dogs that are known to be a nuisance to residents at Waterhaven was also mentioned by the secretary in the context of the comments by Keith and Irene Foxley that Charlie barks when other people or animals are outside the property.

In light of the further investigation, I consider it more likely than not that other persons associated with Waterhaven will be significantly affected by barking if Charlie is approved at lot 10.

From an objective point of view, the main concern with approval of the dog would be concern about the dog barking and disturbing other occupiers of Waterhaven. Whether or not this concern is sufficient that it is objectively reasonable for a committee to refuse permission for someone to keep a dog will depend on the circumstances. In the present circumstances, I am satisfied that it is objectively reasonable for the committee to refuse this permission, having now received further information from the Applicant about the dog concerned. This is based on the positioning of lot 10 and its proximity to the communal pool and an adjacent property that already houses two dogs which are considered a nuisance to residents at Waterhaven, and statements by former neighbours of the potential purchaser of lot 10 that the dog barks when people or other animals are around the property.

ORDER

For these reasons I have made the order above.


[1] Section 252E(5)
[2] Lake View Park [2009] QBCCMCmr 105 at pages 3 to 4
[3] Tamsco Ltd v Franklins Ltd [2001] NSWSC 205 at paragraphs 49, 54.
[4] NCR Ltd v Riverland Portfolio No. 1 Ltd [2005] EWCA Civ 312 at paragraph 31; Ashworth Frazer Limited v Gloucester City Council [2001] UKHL 59; [2001] 1 WLR 2180 at paragraph 5.
[5] JA McBeath Nominees [1992] 2 Qd R 121.
[6] Secured Income Real Estate (Australia) Ltd v St Martins Investments Pty Ltd [1979] HCA 51; (1979) 26 ALR 567 at 579-80.
[7] International Drilling Fluids Ltd v Louisville Investments (Uxbridge) Ltd [1986] Ch 513; NCR Ltd v Riverland Portfolio No. 1 Ltd [2005] EWCA Civ 312 at paragraphs 34 to 35.
[8] Greiner v Independent Commission Against Corruption (1992) 28 NSWLR 125.
[9] 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 paragraph 61.
[10] McKinnon v Treasury [2006] HCA 45 per Hayne J at paragraph 61.  Waters v Public Transport Corporation (1991) 173 CLR 349.
[11] Ashworth Frazer Limited v Gloucester City Council [2001] UKHL 59; [2001] 1 WLR 2180 at paragraph 5.
[12] Commonwealth Bank of Australia v Human Rights and Equal Opportunity Commission (1997) 150 ALR 1 at pages 34, 38.
[13] Commonwealth Bank of Australia v Human Rights and Equal Opportunity Commission (1997) 150 ALR 1 at pages 34, 38.
[14] (Act 276, Schedule 5 – Items 8 and 10).
[15] Independent Finance Group Pty Ltd v Mytan Pty Ltd & Anor [2001] QCA 306, at paragraph [31].
[16] Ibid, at [31].


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