Riveria Terraced Villas [2009] QBCCMCmr 325 (28 August 2009)

Last Updated: 28 September 2009

REFERENCE: 0746-2008

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	24462
Name of Scheme:	Riviera Terraced Villas
Address of Scheme:	50 Lower River Terrace SOUTH BRISBANE QLD 4101

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

Schadd Montgomery, the Owner(s) of lot 10

I hereby order that, within four months, the body corporate must remove the ladders and gantries installed in front of lots 10 and 20.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0746-2008

“Riviera Terraced Villas” CTS 24462

Application

Riviera Terraced Villas Community Titles Scheme (Riviera) is a 38 lot scheme under the Body Corporate and Community Management Act 1997 (Act) and the Act’s Standard Module Regulation (Standard Module). The scheme consists of three residential buildings that are terraced up a hill behind each other.

Applications 745-2008 and 746-2008 both concern the same subject matter. These applications are respectively by Lesley Hope, owner of lot 20 in the rear building and Schadd Montgomery, owner of lot 10 in the middle building (applicants). The applicants are seeking orders against the body corporate for Riviera (body corporate) for the removal of the ladders and gantries installed to allow access to the rooftop of each of the buildings in front of their respective lots.

All owners have had the opportunity to, on request, inspect the material for both of these applications and all owners have been given the opportunity to make submissions in respect of these applications. This order is to resolve the disputes in both related applications and these reasons for decision apply to both applications.

Decision

Investigation and Submissions

Submissions

The applicants’ submissions indicate that concerns were expressed over a number of years regarding access to the roof of the buildings. It is submitted that owners voted on 26 February 2008 to install ladders and gantries to allow roof access. However, it is submitted that there was no consultation regarding the positioning of these ladders and the ladders were subsequently installed directly in front of the balconies of lots 10 and 20. It is submitted that this significantly impacts on the view from these lots as well as invading the privacy of the occupants of these lots by giving anyone accessing the roof by these ladders a clear view of the living areas, bedrooms and bathrooms in these units.

Submissions on behalf of the body corporate are firstly to the effect that the applicants have not provided any good reason for failing to challenge the resolution allowing installation of the ladders within the three month time limit provided by the legislation. Further, that consultation was undertaken by the chairperson distributing a letter inviting input regarding the proposed location of the ladders. These submissions also dispute the ladders have any major obstruction to views. Further, that contractors service the rooftop at the same frequency regardless of the position of the ladders and these contractors will have access to the entire rooftop so their presence will not impact lots 10 and 20 more than any other lots on the same level. Finally, it is submitted that the resolution to install ladders was necessary to enable compliance with workplace health and safety legislation and that the resolution was not unjust and inequitable. It is also submitted that it would not be just and equitable to make an order requiring removal of the ladders without first giving the body corporate an opportunity to decide the preferred location at general meeting.

All owners were given an opportunity to provide written submissions. All submissions are available for inspection by interested persons and it is unnecessary to summarise the submissions here.

A reply from the applicants regarding the issue of the time limit was to the effect that the resolution in question only authorised the funds for the proposed ladders and that no time limit applies as no resolution was ever passed in relation the installation of the ladders at a particular location. In any event, it is submitted that the applicants acted quickly to try to resolve the issue once the location became apparent. Regarding impact on views, it is submitted that this impact is significant particularly as the ladders are installed at the closest point between the buildings. Further, that a number of residents and committee members were shocked at the appearance of the installed ladders with the large enveloping cages and height extending 1.5 metres above the roof as no design details had ever been provided to the committee or owners generally. Regarding impact on privacy, it is submitted that the location of the ladders means that the line of sight of workmen will be into the applicants’ units at least twice during every job irrespective of where the work task on the roof is. It is submitted that no owner would be similarly affected if the ladders were relocated to the driveway side of the building or access via an internal manhole was provided.

Investigations following receipt of submissions

The above submissions were received through the legislated processes for inviting written submissions from the body corporate and any persons affected by a community titles scheme dispute (Act, 243). Even where the body corporate makes a submission, it is not unusual for a large proportion of owners to also make their own individual submission. Each person who makes a written submission is effectively joined to the proceedings and given a right of appeal (Act, 289). This overcomes any concern that the particular position advanced in the name of the body corporate only reflects the views of a couple of committee members.

The legislation does not provide for a formal hearing at which the various persons affected by the dispute can further argue their case. In some circumstances it is appropriate for an adjudicator to make a determination based solely on whatever written submissions have been provided.[1] However, an adjudicator will need to undertake appropriate investigations if there is insufficient material for the adjudicator to make an express finding on relevant matters.[2] In carrying out these investigations, the adjudicator must act as quickly and informally "as is consistent with a fair and proper consideration of the application" (Act, 269(3)(b)). Despite this need to act quickly and informally, a teleconference or a further round of written submissions may be necessary to allow relevant persons to respond to any significant information obtained in these investigations (Act, 269(3)(a)).

On 28 November 2008 I requested the body corporate provide information regarding access to the roof prior to the ladders being installed and regarding any alternative locations for installation of the ladders.

On 15 December 2008 the body corporate responded to the effect that access was previously via a free standing ladder contrary to workplace health and safety regulations. Further, that the committee had considered all possible locations and all suitable locations would have some impact on the view of one or more lots.

On 17 December 2008 I provided the body corporate’s response to the applicants and requested the applicants provide information regarding the suitability and cost of relocating the ladder or providing alternative access through the roof.

On 16 March 2009 the applicants provided a detailed response regarding three alternative options. Firstly, construction of manhole access. Secondly, purchase of a scissor lift. Thirdly, hire of a scissor lift. The applicants further submitted that, while the ladders were justified on the basis of workplace health and safety requirements, these ladders do not of themselves provide a safe working environment and anchor points for a harness or adjustable lanyard would need to be installed whenever persons were working within 2 metres of the roof edge.

On 26 March 2009 I provided the above information to the body corporate. I also requested the body corporate provide details of the approximate date, duration and reason for visits to the roof and whether access via a scissor lift or manhole would have been unsuitable.

On 29 June 2009 the body corporate responded to the effect that the caretaker carries out a monthly inspection of the roof and that contractors have carried out repairs approximately four times in the last twelve months. It was submitted that access via a manhole may have been suitable but there would be difficulties in locating a scissor lift for operation and problems with emergency access. Further submissions were made about the possibility of modifying the existing ladders so they did not protrude above the height of the roof parapet.

On 26 March 2009 I also requested the applicants provide expert evidence of the estimated quantum of the alleged decrease in value of their units as a result of the installation of the ladders and gantries.

On 30 June 2009 the applicants’ responded with a report from Bristow & Associates, Registered Valuers & Property Consultants (Bristow report) stating an estimated loss in value of unit 10 of between $50,000 to $110,000 and a loss of value of unit 20 of between $55,000 to $115,000. Further submissions were made indicating that the applicants had investigated the option of modifying the existing ladders so they did not protrude above the height of the roof but that this was not viable as it would require the installation of a railed platform two metres from the rooftop on the side of each building and that this would increase the visual impact of the ladders.

On 6 July 2009 I wrote to all owners informing them of provisional views that:

• The installation of the ladders and gantries had resulted in a loss of value to each of units 10 and 20 in excess of $50,000;
• It was not possible to relocate the ladders to a different position without causing a similar loss of value to other units;
• Alternative safe roof access by manhole would be viable at a cost of installation at around $25,000 per building (or around $1,300 per unit);
• That the body corporate has failed to act reasonably by adopting a method of enabling roof access that detriments two individual units in a significant way when an alternative, albeit more expensive, method of access is available;
• That if I remained of this view following further submissions that I was likely to allow the body corporate four months to remove the ladders and decide upon an alternative method of access.
  

A response from the body corporate was to the effect that the location of a manhole for the lower building would be against the parapet and a railing of height of at least one metre would therefore need to be erected to comply with workplace safety requirements. Further, a report from Stephens Valuers was provided (Stephens report) stating that there has been no loss in value of units 10 or 20 as a result of the installation of the ladders.

Responses from owners were to the effect:

• I strongly object to contributing $1,300 to cut a hole in the roof for access;
• The ladders in dispute were erected after full discussion at the annual general meeting;
• There is no need for any roof access as contractors could just be called in as required;
• It would be easy to negate the need for permanent roof access. The caretaker could view the roof top areas from the elevated block at the rear. Any required work could be performed by a building professional. Building professionals regularly access roofs of residential homes up to 8.5m which is greater than the height of the rooftop of the front building. Access to the roof of this building by manhole via the landing would not be suitable as the area is too small and emergency exits and equipment would be obstructed.
  

On 15 July 2009 the body corporate requested an extension until 28 September 2009 to allow the body corporate to consider motions in general meeting to attempt to resolve the dispute. This extension request was opposed by the applicants. Given the substantial length of time that the dispute has been ongoing and the distinct possibility that owners may not be able to reach a resolution in general meeting that would resolve the dispute, this extension request was refused.

Findings regarding factual background to dispute

From the submissions and further information provided I am satisfied that:

• The committee discussed the installation of ladders at committee meetings on 11 September 2007, 27 November 2007, and 22 January 2008. In late November 2007, the chairperson had distributed a letter seeking input from owners regarding the ladders and suggesting the southwest corner of the Jasmine building as a possible location. Based on the submissions received it seems more likely than not that this letter was not received by all owners;
• On 26 February 2008 the body corporate resolved that the committee "engage a contractor to undertake the construction, supply and installation of two (2) powder coated ladders and gantries to access the roof tops of two (2) buildings within the scheme";
• The ladders were installed on 26 and 27 May;
• Soon after the ladders were installed the applicants commenced discussions with the body corporate seeking the relocation or removal of the ladders. On 19 August 2008 the committee formally rejected a request to remove the ladders. The present applications were lodged on 3 September 2008.
  

In relation to the key question of whether the installation of the ladders and gantries unreasonably interferes with the views and privacy of the applicants, I am satisfied of the following:

• That photographs demonstrate clearly that the top of the ladder and gantry interferes significantly with the view from the applicants’ lots;
• The submissions and photographs satisfy me that occupants of the applicants’ lots reasonably believe they have reduced privacy as a result of the ladder and gantry. This perception of a loss of privacy is reasonable based upon the increased likelihood of workmen accessing that area of the roof without notice, even though theoretically workman could access any part of the roof regardless of where access was initially gained; and
• The Bristow report satisfies me that it is more likely than not that each of the applicants has lost in excess of $50,000 in value of their unit as a result of the installation of the ladders and gantries. My preference for the Bristow report over the Stephens report is primarily due to some logical inconsistencies in the Stephens report. Firstly, as a matter of common sense, any significant interference with city or river views would be expected to have some impact upon the value of a residence. Secondly, the Stephens report concludes the ladders and gantries have no negative effect while making other statements that imply an acceptance of some negative affect in terms of a "suggested remedy for the problem" and "traffic noise...has a more negative effect".
  

Based on allegations made and the absence of any contradictory statements, I am further satisfied that:

• At no time prior to installation had any detailed drawings or designs of the ladders and gantries had been provided to all owners or even all committee members;
• At no time prior to installation had any formal resolution been passed that decided the location at which the ladders were to be installed; and
• That not all owners or committee members appreciated the extent to which the installation of the ladders and gantries might affect the view or privacy of occupants of adjacent units.

Issues for determination

Applicable law

Legislation relevant to the present dispute has provisions to the effect that:

• The body corporate must administer common property reasonably and for the benefit of owners (Act 94, 152);
• A body corporate cannot delegate its decision making powers except in specific circumstances (Act 97);
• A decision of the committee is a decision of the body corporate and the committee must act reasonably in making a decision (Act, 100); and
• An application seeking to declare void a resolution of the committee or body corporate generally must be made within three months of the resolution being made (Act, 242).

Summary of issues

The main issues for determination can be summarised as follows:

1. Is the application barred by the lapse of time?
2. Were the ladders installed without a proper body corporate decision?
3. If so, can the body corporate rectify this?

Time limit

In terms of the applicants argument that there was never any body corporate decision regarding the position the ladders were installed, no time limit applies. However, the applicants also seek a more general order to declare void the annual general meeting motion authorising the committee to "engage a contractor to undertake the construction, supply and installation of two (2) powder coated ladders and gantries to access the roof topes of two (2) buildings within the scheme". Any such application should be made within three months of the resolution being passed (Act, 242). However, an adjudicator can waive non-compliance with this time limit for good reason (Act, 242(4)).

In the circumstances of the application there is good reason to waive non-compliance with this time limit. Firstly, I am not satisfied the applicants would reasonably have been aware of the extent to which this decision affected them until the ladders were actually installed. Secondly, a substantial amount of the delay resulted from one of the applicants attempting to resolve the dispute informally with the committee. Internal dispute resolution of this nature is something the legislation requires in most circumstances (Act, 238). I am therefore satisfied that there is good reason to extend the time limit.

Were the ladders installed without a proper body corporate decision?

I am satisfied that owners voted in general meeting on 26 February 2008 to authorise the committee to engage contractors to construct and install the ladders. However, I am also satisfied that most owners were not aware of the design of those ladders, where those ladders would be installed, and the extent to which the installation of the ladders and gantries might affect the view or privacy of occupants of adjacent units.

I am not satisfied that the annual general meeting resolution is void because owners were unaware of these details. Rather, I consider the resolution authorised the necessary expenditure and left it to the committee to make any necessary decisions regarding the finer details. However, any significant decision would need to be made by committee decision rather than at the individual whim of any individual committee member.

A body corporate resolution can authorise individual committee members to act as agent of the body corporate to implement a resolution. In doing so, the individual committee member will have implied authority to do all acts which are necessary or ordinarily incidental to the exercise of the express authority. Some basic decisions about the design or colour of the ladders may have been incidental to the resolution passed by the general meeting. However, I am not satisfied that a decision as to the location to install the ladders is ordinarily incidental in the circumstances to a decision to install ladders. In particular, there is evidence that there was some consideration and discussion regarding the preferred location for the ladders but no resolution was ever passed to set the location. In the circumstances, I consider that the location for installation of the ladders should have been decided by resolution of the committee rather than by any individual committee member.[3] No valid decision regarding the location of the ladders was ever made as the body corporate did not, and could not, delegate this decision to one individual (Act, 97).

In conclusion, there was a decision to purchase the ladders but no decision of the general meeting or committee meeting regarding the location to install the ladders. The ladders were therefore installed in front of lots 10 and 20 without a proper body corporate decision authorising the installation in those locations.

Can the body corporate rectify the failure to decide the location?

Possibility of regularising decision

A question arises as to whether the body corporate can rectify the failure to decide upon an appropriate location for installing the ladders. Generally speaking a body corporate could seek to ratify the decision made regarding the location of the ladders even if that original decision was not made according to proper procedures.[4] However, the body corporate must administer common property reasonably and for the benefit of owners (Act 94, 152). If the applicant establishes that these actions taken on behalf of the body corporate were objectively unreasonable then the decision by the body corporate to ratify these actions may also be unreasonable or ineffective.[5]

Decision potentially unreasonable due to prejudice to the applicants

Individual owners who vote at a general meeting are not under any statutory obligation to act reasonably or to provide any reasons why they voted in a particular manner. However, section 94 provides a statutory obligation that the body corporate act reasonably in making a decision. This statutory requirement is only satisfied if the ultimate decision is objectively reasonable.[6] Reasonableness is a question of fact. The objective test requires a balancing of factors in all the circumstances according to the ordinary meaning of the term ‘reasonable’.[7] The question is not whether the decision was the "correct" one but whether it is objectively reasonable.[8]

The body corporate has submitted that the ladders and gantries have been installed at the most suitable place and that this installation is necessary for workplace safety reasons. However, the applicants have provided details of alternative means of access that would not disadvantage other owners by interference with views. Other submissions indicate that the body corporate does not need to arrange permanent access to the rooftop areas but can leave it for contractors to arrange their own access as necessary.

I have come to the view that the installation of the ladders and gantries interferences significantly with views from the applicants’ lots and has resulted in a loss of over $50,000 in the value of each of those lots. Objectively speaking, it is not reasonable for the body corporate to ratify the installation of these ladders in their present location unless there is no reasonable alternative. The installation of the ladders may benefit the majority of owners. However, this decision has resulted in a disproportionally large disadvantage to two owners. It would be objectively unreasonable, and a fraud on the minority,[9] to allow the body corporate to decide to leave the ladders in position unless there was no reasonable alternative. In this instance, there are reasonable alternatives.

Firstly, I am satisfied that, in respect of the middle building, the installation of a manhole would provide suitable permanent access at a cost of around $25,000 or only around $650 per owner. It would therefore be objectively unreasonable for owners to allow the ladders on the middle building to remain in place given the loss of over $50,000 in the unit behind. Secondly, it appears that permanent access to the rooftop is unnecessary.
There may be a contractual requirement for the caretaker to regularly inspect the rooftop but the body corporate need not insist upon this if it is expensive or inconvenient for the body corporate to arrange roof access for the caretaker. Instead, the caretaker could visually inspect from the buildings to the rear or arrange for a suitable contractor to inspect the roof each year after the contractor has arranged for his or her own access. Further, submissions suggest that contractors performing work on the roof can arrange roof access in a manner suitable to their needs depending upon what work is required.

In respect of the front building, it seems likely a manhole may not be suitable given the relatively small size of the upper foyer area and the possibility that a railing would need to be installed on the roof. However, submissions indicate that this front building is not very tall and that alternative access is likely to be available for individual contractors as necessary. In particular, submissions indicate that contractors could hire a scissor lift or use a temporary ladder as necessary.

In summary, while permanent roof access may be desirable there is nothing in the submissions that indicates it is necessary. If permanent roof access cannot be achieved without significantly disadvantaging some owners then the only reasonable alternative is for the body corporate to continue to arrange for temporary roof access as needed.

Conclusion

I have concluded that it would be unreasonable for the body corporate to allow the ladders and gantries to remain due to the disproportionate disadvantage caused to the applicants. Even if the ladders were modified to reduce impact on views, the privacy concerns in themselves would appear to cause significant disadvantage to the occupiers of lots 10 and 20. Permanent access to the rooftop via a manhole may be reasonably available without causing significant disadvantage to any owners and owners can vote on this at the upcoming general meeting. Otherwise, there would be alternative temporary means of access that could be utilised as necessary.

An adjudicator may make an order that is just and equitable to resolve a dispute (Act 276, Schedule 5). I propose to order the body corporate remove the ladders and gantries. I will allow a period of four months for the body corporate to do this.

Order

For these reasons, I make the order above.

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[1] Hablethwaite & Anor v Andrijevic & Ors [2005] QCA 336, Jerrard JA, Keane JA, Cullinane J, 9 September 2005, per Keane JA at paragraph 31.
[2] Johnston v The Body Corporate for Waterside Runaway Bay CTS 34678 [2009] CCT KA008-08, KD Dorney QC, 6 February 2009 at paragraph 25.
[3] See generally Northside Developments Pty Ltd v Registrar-General [1990] HCA 32; 93 ALR 385 at 425 regarding a director acting individually having no usual authority to make binding decisions on a corporation.
[4] Warren v Body Corporate for Buon Vista Community Titles Scheme 14325 [2007] QCA 160 at paragraph 12.
[5] Refer generally Angas Law Services Pty Ltd v Carabelas [2005] HCA 23; (2005) 53 ACSR 208 per Gleeson CJ and Heydon J as to inability to ratify a breach of statutory duties.
[6] Greiner v Independent Commission Against Corruption (1992) 28 NSWLR 125; Commonwealth Bank of Australia v Human Rights and Equal Opportunity Commission (1997) 150 ALR 1 at page 12.
[7] 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.
[8] Commonwealth Bank of Australia v Human Rights and Equal Opportunity Commission (1997) 150 ALR 1 at page 34.
[9] Lin v The Owners - Strata Plan No. 50276 [2004] NSWSC 88.