Platinum on the River [2009] QBCCMCmr 319 (27 August 2009)

Last Updated: 28 September 2009

REFERENCE: 0753-2009

INTERIM ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	35342
Name of Scheme:	Platinum on the River
Address of Scheme:	166 Oxlade Drive NEW FARM QLD 4005

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

Christorina Pty Ltd. (Receivers and Managers Appointed), the Owner of lot 7

I hereby order that the application for the following interim order To prevent the new CMS being lodged for registration; or in the alternative If the new CMS has been registered, that the Body Corporate be required to lodge a further CMS re-allocating the exclusive use areas to reflect the current registered CMS. Is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0753-2009

“Platinum on the River” CTS 35342

Platinum on the River community titles scheme consists of 11 lots and common property. The community management statement for the scheme indicates that the Body Corporate and Community Management (Standard Module) Regulation 2008 (Standard Module) applies and Queensland Land Registry records indicate that the scheme is registered on a Building Format Plan (previously known as a Building Unit Plan).

APPLICATION

By way of an application dated 13 August 2009 the applicant seeks the following interim order:

To prevent the new CMS being lodged for registration;

or in the alternative

If the new CMS has been registered, that the Body Corporate be required to lodge a further CMS re-allocating the exclusive use areas to reflect the current registered CMS.

The applicant is also seeking the following final outcomes:

That either:

(a) the body corporate for Platinum on the River be prevented from lodging the new CMS with the department of Environment and Resource Management;
(b) the body corporate for Platinum on the River be prevented from acting upon the resolution entitled “Transposition of Car and storage Spaces” passed on 4 August 2008;

or alternatively

(c) if the new CMS has been registered, that an order be granted that a further CMS be registered on the same terms as the current registered CMS

Until either

(d) the Commissioner for Body Corporate and Community Management issues a final determination on:

(i) whether the resolution “Transposition of Car Storage Spaces” passed on 4 August 2008 was validly resolved notwithstanding that only one committee member attended the committee meeting;

(ii) whether the body corporate is entitled to lodge a new CMS on the basis of the resolution passed on 4 August 2008;

(iii) whether the voting outside committee notice re-issued by the Body Corporate on 29 July 2009 and minutes of the resolution validly entitle the body corporate to lodge the new CMS.

BACKGROUND

The applicant seeks an order that the resolution passed on 4 August 2008 is invalid as more than 3 months have passed since the resolution and the new CMS was not registered within the statutory timeframe required by the Act.

A contract of sale has been entered into for the sale of lot 7 by Christorina Pty. Ltd. (Receivers and Managers Appointed). The buyer entered into this contract on the basis that of the exclusive use allocations shown on the currently reguiistered CMS. Schedule E of the currently registered CMS allocates 2 car spaces and one storage area for the exclusive use of lot 7.

However, it would appear that at the time of signing the contract, the person who signed the contract on behalf of Christorina Pty. Ltd. (Receivers and Managers Appointed) was not aware that on 4 August 2008 the body corporate committee resolved, by means of a vote upon a motion outside a committee meeting, as follows:

That the body corporate approve the request from the owners of Lots 7, 11 and 4 to transpose their allocated car spaces and storage spaces as noted in correspondence circulated to the committee and that any 2 committee members be authorised to sign and seal a new Community Management Statement to reflect the above changes.

Also in July/ August 2008, Agreements for Transposition of Exclusive Use Carspace were entered into as follows:

• between the owner of lot 11 and the owner of lot 4;
• between the owner of lot 17 and the owner of lot 11;
• between the owner of lot 11 and the owner of lot 7.
  

At that point in time a new Community Management Statement (CMS) was prepared which recorded the carpark and storage space transposition as follows:

Carspace No.	Existing lot	Owner	New Lot	owner
14 & 15	7	Christorina P/L.	11	Christorina P/L.
10 &11	11	Christorina P/L.	7	Christorina P/L.
16 & 17	4	Eric Koundooris	11	Christorina P/L.
8 & 9	11	Christorina P/L.	4	Eric Koundooris
Storagespace No.	Existing lot	Owner	New Lot	owner
2	7	Christorina P/L.	11	Christorina P/L.

However it subsequently came to light that the amended CMS approved by committee resolution on 4 August 2008 was not submitted for registration with the Queensland Land Registry.

Solicitors for the applicant argue that the buyer of lot 7 entered into the contract on the basis of the exclusive use allocations shown on the currently registered CMS. If the new CMS is registered, lot 7 will no longer be entitled to the exclusive use of the car parks and storage areas provided for in the contract of sale . The current registered owner of lot 7 therefore faces the prospect of having the contract terminated if the new CMS is registered.

The applicant’s solicitors also believe that the exclusive use allocations to lot 7 as recorded in the CMS could only be changed by means of a resolution without dissent (rather than a resolution of the committee) to the recording of a new CMS. community management statement. Therefore, it is argued, not only is the new CMS not approved by a resolution without dissent, but the body corporate also failed to record the new CMS within 3 months after the resolution was alegedly carried, as required by section 176 of the Act.

Finally, it is argued that the owners of lots 4, 7 and 11 must consent in writing to the exclusive use allocations. While the owners of lots of lots 4, 7 and 11 signed transposition agreements some time in 2008, it is argued that those agreements are no longer valid because lots 4 and 11 have been transferred to new registered owners. It is also argued that as the owner of lot 7, Christoria Pty. Ltd. is in receivership, and the persons who originally executed the agreement on behalf of lot 7 no longer have authority to execute on behalf of that company.

SUBMISSION BY BODY CORPORATE

At this point in time I am considering the request for an interim order and therefore sought submissions only from the body corporate committee.

The Chairman of the body corporate committee has advised as follows:

• Platinum is a block of 11 units developed by Christoria Pty Ltd, a subsidiary of the Raptis Group, and to date all lots have been sold by Christoria Pty Ltd with the exception of lot 7;
• It is the understanding of current residents of lots 4 & 11 that the applicable arrangements for parking and storage are as recorded in the “Agreement for Transposition of Exclusive Use Carspace” dated 28 July 2008, the resolution of the committee dated 4 August 2008 and the new (albeit unregistered) CMS.
• On 7 August 2008 the first AGM was held and the committee was elected. Lot owners were informed that the purpose of the transposition was to enhance the marketing campaign and finalise the sales of units;
• Units 4 & 11 were purchased in good faith on the basis of the exclusive use allocations recorded in the committee resolution dated 4 August 2008 and were entitled to believe that the new CMS recording these changes would be registered in due course;
• It has since come to light that the body corporate manager failed to lodge the new CMS within the 3 month timeframe;
• It is submitted that the re-allocation arrangement as agreed to by resolution of the committee on 4th August 2008 is in the best interests of all owners.
  

JURISDICTION

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 authorization 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)).
Sub-sections 279(1) & (2) provide that -
(1) The adjudicator may make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances to which the application relates.
Examples
1. The adjudicator may stop the body corporate from carrying out work on common property until a dispute about the irregularity of proceedings has been investigated and resolved.
2. The adjudicator may stop a general meeting deciding or acting on a particular issue until it has been investigated and resolved.
(2) An interim order
(a) has effect for a period (not longer than 1 year) stated in the order; and
(b) may be extended, varied, renewed or cancelled by the adjudicator until a final order is made; (c) may be cancelled by a later order made by the adjudicator; and
(d) if it does not lapse or is not cancelled earlier, lapses when
(i) the application is withdrawn; or
(ii) the commissioner gives the person who made the application a written notice under section 241 rejecting the application; or
(iii) a final order is made by an adjudicator to whom the application is referred. ...

DETERMINATION

The applicant seeks the following interim order:

To prevent the new CMS being lodged for registration;

or in the alternative

If the new CMS has been registered, that the Body Corporate be required to lodge a further CMS re-allocating the exclusive use areas to reflect the current registered CMS.

At this point in time, I am concerned with the application for interim orders and whether an interim order is warranted in the circumstances. An interim order will not be granted unless is it necessary due to the nature or urgency of the circumstances to which the application relates.[1] For it to be just and equitable to grant injunctive relief pending a final determination, I would need to be satisfied that the balance of convenience between the parties justifies the grant of injunctive relief. That is, I would need to balance the inconvenience of granting relief now if final orders are ultimately refused against the inconvenience of refusing relief now if final orders are ultimately granted.

This application has been made because the owner of lot 7, Christorina Pty. Ltd. (Receivers and Managers Appointed) has entered into a contract to sell lot 7 on the basis that of the exclusive use allocations shown on the currently registered CMS i.e. showing that lot 7 is entitled to parking spaces 14 & 15 as well as storage space no.2.

The original exclusive use by-laws for this scheme identify the areas of common property that relate to each lot. However, the Act specifically provides that exclusive use areas can be reallocated.

Section 171 of the act provides as follows:
Requirements for exclusive use by-law
(1) The common property or body corporate asset to which an exclusive use by-law for a community titles scheme applies must be—
(a) specifically identified in the by-law; or
(b) allocated—
(i) by a person (who may be the original owner or the original owner’s agent) authorised under the
by-law to make the allocation (an authorised allocation); or
(ii) by 2 or more lot owners under a reallocation agreement (an agreed allocation).
(2) An exclusive use by-law that specifically identifies the common property or body corporate asset to which it applies, other than an exclusive use by-law contained in the first
community management statement for the scheme—
(a) may attach to a lot only if the lot owner agrees in writing before the passing of the resolution without dissent consenting to the recording of the new community management statement to incorporate the exclusive use by-law, or the lot owner votes personally in the resolution; and
(b) may stop applying to the lot only if the lot owner agrees in writing before the passing of the resolution without dissent consenting to the recording of the new community management statement that does not incorporate the exclusive use by-law, or the lot owner votes personally in the resolution.
(3) If an exclusive use by-law authorises the allocation of common property or a body corporate asset for the purpose of the by-law—
(a) the by-law may attach to a lot on the basis of an authorised allocation only if the lot owner agrees in writing before the allocation of the common property or body corporate asset to which the by-law applies; and
(b) the by-law may stop applying to the lot only if the lot owner agrees in writing before—
(i) the allocation is revoked under the by-law (if the by-law provides for the revocation of an
allocation); or
(ii) the passing of the resolution without dissent—
(A) consenting to the recording of the new community management statement that does
not incorporate the exclusive use by-law; or
(B) in which the lot owner voted personally.

I have been provided with a copy of the committee resolution dated 4 August 2008 whereby it was resolved as follows:

That the body corporate approve the request from the owners of Lots 7, 11 and 4 to transpose their allocated car spaces and storage spaces as noted in correspondence circulated to the committee and that any 2 committee members be authorised to sign and seal a new Community Management Statement to reflect the above changes.

I have also been provided with copies of the following Agreements for Transposition of Exclusive Use Carspace:

• between the owner of lot 11 and the owner of lot 4;
• between the owner of lot 7 and the owner of lot 11; and
• between the owner of lot 11 and the owner of lot 7.
  

Secondly, with respect to the applicant, I am unable to agree that the reallocation of exclusive use areas requires a resolution without dissent by the body corporate in general meeting.

In this regard section 62 of the Act provides as follows:

Body corporate to consent to recording of new statement
(1) This section provides for the form of the consent of the body corporate for a community titles scheme to the recording of a new community management statement for the scheme in the place of the existing statement for the scheme.
(2) The consent must be in the form of a resolution without dissent.
(3) However, the consent may be in the form of a special resolution if the difference between the existing statement and the new statement is limited to the following—
(a) differences in the by-laws (other than a difference in exclusive use by-laws);
(b) the identification of a different regulation module to apply to the scheme.
(4) The consent to the recording of a new community management statement need not be in the form of a resolution without dissent or special resolution if the new statement is different from the existing statement only to the extent necessary for 1 or more of the following—
(a) compliance with a provision of this Act under which the body corporate is required to lodge a request to record a new statement for a purpose stated in the provision;
(b) compliance with the order of an adjudicator, the District Court or the CCT made under this Act for the lodging of a request for the recording of the new statement;
(c) changing the community titles scheme to give effect to an approved reinstatement process;
(d) changing the community titles scheme to reflect a formal acquisition affecting the scheme;
(e) recording the details of allocations of common property or body corporate assets made under an exclusive use by-law;
(f) implementation of development proposed under the existing statement or under the provisions of a community management statement to which the existing statement is subject;
(g) showing the location of a service easement for the community titles scheme by including a services location diagram;
(h) amalgamating or subdividing lots included in the community titles scheme;
(i) reproducing the existing statement without any change of substance.
(5) However, subsection (4)(h) applies only if the associated plan of subdivision—
(a) does not affect the common property; and
(b) does not change—
(i) the contribution schedule lot entitlements, or interest schedule lot entitlements, for lots included
in the scheme (other than the lots being amalgamated or subdivided under the plan); or
(ii) the total of the contribution schedule lot entitlements for the lots included in the scheme; or
(iii) the total of the interest schedule lot entitlements for the lots included in the scheme.
(6) Also, the consent to the recording of a new community management statement need not be in the form of a resolution without dissent or special resolution if the consent is required to be endorsed under section 57.
(7) A consent to which subsection (4) or (6) applies must be given by ordinary resolution if, under the regulation module applying to the scheme—
(a) consenting to the recording of a new community management statement is a restricted issue for the body corporate’s committee; or
(b) the body corporate has engaged a body corporate manager to carry out the functions of a committee, and the executive members of a committee, for the body corporate.
(8) In this section—associated plan of subdivision, for a proposed new community management statement, means the plan of subdivision proposed to be lodged with the request to record
the statement.

Where an updated CMS is prepared pursuant to section 62, and the change recorded in the CMS does not involve a restricted issue for the committee, the committee can consent to a new CMS rather than the body corporate.[2]

It is not disputed that a new Community Management Statement (CMS) was prepared which recorded the carpark and storage space transposition as follows:

Carspace No.	Existing lot	Owner	New Lot	owner
14 & 15	7	Christorina P/L.	11	Christorina P/L.
10 &11	11	Christorina P/L.	7	Christorina P/L.
16 & 17	4	Eric Koundooris	11	Christorina P/L.
8 & 9	11	Christorina P/L.	4	Eric Koundooris
Storagespace No.	Existing lot	Owner	New Lot	owner
2	7	Christorina P/L.	11	Christorina P/L.

The material which I have received to date indicates that the “new CMS” recording the above re-allocations of exclusive use areas was not submitted for lodgement with the Queensland Land Registry within the 3 month period referred to in subsection 175(3) of the Act. However failure to comply with the 3 month time limit is not necessarily fatal because the Act specifically provides that the 3 month time limit can be extended by order of an adjudicator. At this point in time the 3 month period for lodgement of a new community management statement has expired and no request has been made for an order extending the time in which it can lodge this new community management statement. As an adjudicator has power to order that the time for lodgement by the body corporate of the CMS showing the “further allocation” be extended, lodgement of the updated CMS could still take place, and in consequence, the “agreed allocation” would have effect notwithstanding that the 3 months have expired..

Section 176 of the Act specifically provides for such power,:

176 Notifying further allocations
(1) Within 3 months, or a longer time stated in an order of an adjudicator under the dispute resolution provisions, after the taking effect of a further allocation, the body corporate must lodge a request to record a new community management statement showing all allocations currently in

place when the body corporate consented to the recording of the new statement.
(2) If the body corporate fails to comply with subsection (1), the further allocation ceases to have effect.
(3) An order mentioned in subsection (1) may be sought or made before or after the 3 months mentioned in the subsection end, and if the order is made after the 3 months end, the allocation is taken to have remained in effect despite the 3 months having ended.
(4) In this section—
“further allocation” means an agreed allocation, other than an allocation shown in a subsequent statement under section 175(1) or (2).

It should be noted that section 176 places the obligation on the body corporate, and not an individual owner, to lodge the request for recording of the new CMS showing the “further allocation”. However the recording of a new CMS evidencing an agreed allocation between 2 or more owners is a matter of little relevance or significance to the body corporate as a whole as it affects the individual owners notwithstanding that the body corporate which is required to lodge the new CMS within what is a reasonably limited timeframe. One can easily envisage situations where a body corporate fails to lodge the new CMS for recording within the requisite time. This might easily occur simply through oversight, as would appear to have occurred here, but the consequences of that “oversight” are potentially very significant for the parties to a re-allocation agreement. I suggest that this is the reason why there is specified power under section 176 of the Act for an adjudicator to extend the relevant time for lodgement of the new CMS containing the variations agreed to in an “agreed allocation”. The basis for the exercise of such power is whether it is just and equitable in the circumstances that the order sought by the applicants be made.
My preliminary view is that the circumstances of the present case would justify an order by an adjudicator extending the period of time for lodgement of the updated CMS.

While the applicant states that they may suffer certain consequences if the CMS is registered, there is no mention of the prejudice that will be suffered by the owners of lots 4 & 11 who purchased their lots in good faith on the basis of the exclusive use allocations recorded in the committee resolution dated 4 August 2008 and were entitled to believe that the new CMS recording these changes would be registered in due course.

I have been provided with copies of the following Agreements for Transposition of Exclusive Use Carspace which I believe were entered into in July 2008:

• between the owner of lot 11 and the owner of lot 4;
• between the owner of lot 7 and the owner of lot 11;
• between the owner of lot 11 and the owner of lot 7.
  

Notwithstanding that there may have been a change of company officers and employees, the fact remains that a company has perpetual succession i.e. the company’s existence continues despite a change in membership or control of the company. Accordingly, it is difficult to accept any argument to the effect that the applicant did not have notice of the reallocation agreement.

For the above reasons, I intend to dismiss the application for interim orders as sought by the applicant. This dispute resolution application will be further dealt with in accordance with the usual processes undertaken by this office which may include seeking further submissions from the respondents and other lot owners. A final order regarding the application will be made in due course.

---

[1] Section 279 of the Act
[2] See Ros Janes 1998,The BCCMA Herd & Janes, Brisbane at p.50