Loch Rose [2009] QBCCMCmr 345 (11 September 2009)

Last Updated: 9 October 2009

REFERENCE: 0132-2009

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	16891
Name of Scheme:	Loch Rose
Address of Scheme:	5 Evans Street MAROOCHYDORE QLD 4558

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

Lisa Doggett, the Owner of lot 7

I hereby order that the application for An order to overturn motion 13 of the AGM of 14 October 2008 regarding the exclusive use of car-park for lot 7 is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0132-2009

“Loch Rose” CTS 16891

The Loch Rose community titles scheme (“Loch Rose”) consists of 7 lots and common property. The community management statement (“CMS”) for Loch Rose indicates that the Body Corporate and Community Management (Standard Module) Regulation 2008 (“Standard Module”) applies to the scheme. The Department of Environment and Resource Management records show the scheme is registered as Building Units Plan 102896.

APPLICATION

Pursuant to the Body Corporate and Community Management Act 1997 (“the Act”), this application was made by Lisa Doggett, Owner of Lot 7 (“the applicant”) on 13 February 2009. The applicant sought orders against the Body Corporate for Loch Rose (“the respondent”) in the following terms:

An order to overturn motion 13 of AGM of 14 October 2008 regarding the exclusive use car-park for lot 7.

PROCEDURAL MATTERS

Under section 243 of the Act, a copy of the application was provided to the body corporate, with an invitation to the Body Corporate Committee (“the committee”) and all owners to respond to the matters raised by the application. Submissions were made by the owners of lots 4 and 6, the Body Corporate Manager, namely Ms Michelle Williamson, and the committee via committee minutes. The applicant inspected the submissions received and made a written reply.[1]

A dispute resolution recommendation was made referring the dispute to departmental adjudication. I then investigated the dispute, pursuant to section 271 of the Act, which included reviewing the application, submissions and reply and seeking further information from the parties as detailed below.

On 27 August 2009, I requested that a staff member of our Office contact Ms Williamson and obtain a full copy of the minutes from the 2007 and 2008 Annual General Meetings (“AGM”), including all relevant attachments such as that mentioned in motion 13 of the AGM dated 14 October 2009. On 28 August 2009, Ms Williamson emailed these documents to our Office.

MATTERS IN DISPUTE

The application relates to the applicant’s request for motion 13 of the AGM dated 14 October 2008 (“Motion 13”) to be overturned. The facts of the dispute, as outlined in the application, submissions and reply to submissions, can be summarised as follows.

Motion 13 states “that the Body Corporate approve exclusive use of the common property at the end of Lot 7 as per the attached Plan”. This motion was defeated at the AGM with 3 lot owners voting for the motion, 1 lot owner voting against the motion and no lot owners abstaining. The applicant states that the single ‘no’ vote, by the owner of Lot 6 Margaret Cafarella, caused the motion to fail.

The applicant wants exclusive use of a ‘small single car park area which is located up the far end side of the unit block’. Prior to seeking exclusive use of the area, the applicant applied to make alterations to the space in the AGM dated 18 September 2007. This motion, requiring a special resolution, was also defeated.

In support of the application, the applicant states that the area in question is ‘away from other lots (at the other end of the block)’ and ‘no one is interested in its care or maintenance’. The applicant also states that the dissenting voter, the owner of lot 6, ‘is in no position to be affected by us being [sic] granted exclusive use. She rents her property out through a real estate agency, and is unaware of the present untidy nature of this area...’. The applicant states that the granting of exclusive use in this instance ‘will only add value to everyone’s property by improving the overall serviceable use of an area that otherwise is a waste of space and an eyesore, and will lift the overall value of the block’.

Submissions were received from the owners of lots 4 and 6, the Body Corporate Manager, Ms Michelle Williamson, and the committee (via committee minutes dated 6 April 2009) opposing the application.

Ms Williams and the committee submitted similar submissions stating the following:

• The applicant has been requested on a number of occasions to clean up the common property area in question as the applicant has been using this area to store personal belongings.
• The applicant currently has a boat, trailer and a four-wheel drive parked on common property without body corporate approval.
• The body corporate is interested in cleaning up this area however they have been waiting for the applicant to remove her personal items.
• The applicant’s current exclusive use area is ‘more than twice the size’ of that in the other units, yet the applicant is paying the same levies as other owners.
• The proposed exclusive use area would only increase the value of the applicant’s lot.
• Due to the applicant parking vehicles in the proposed exclusive use area, other vehicles (for example taxis and other occupiers’ vehicles) are unable to turn around and must back out onto the street.
  

It should be noted that there were two committee members present at the abovementioned committee meeting, the co-owner of lot 4 Brian Keayes and the owner of lot 5 Kathleen Taylor. Both committee members supported the above comments and voted unanimously to request that the applicant ‘remove the boat, trailer and 4 wheel drive off the common property and also to remove personal belongings and clean up the common property area by the end of April 2009’.

The co-owner of lot 4, Linda Keayes, made the following submissions:

• If the applicant was going to gain more land as an exclusive use area, the applicant should pay an increased amount of levies.
• The proposed exclusive use area is only going to add value to the applicant’s lot and thus is not in the best interests of all owners.
• The proposed exclusive use area provides a space for vehicles to turnaround. “It has been the case a number of times that when a few different residents have had more than one visitor coming and going at the same time and spaces at the front have been full, people have temporarily used the end of the driveway to make way for other cars pulling in and out.”
• Taking away the proposed exclusive use area would only put more pressure on the limited car spaces at the font of the building.
  

The owner of lot 6, Margaret Cafarella, mentioned some interpersonal issues between the parties and stated that if the applicant was granted the proposed exclusive use area she would have about twice as much land as anyone else in the complex’.

In response to the submissions, the applicant makes the following reply:

• The applicant was under the impression that all parties, excluding the owner of lot 6, were in favour of the exclusive use proposal.
• The applicant wants to ‘make good of an unused area’ and is ‘tired of house keeping for others’ stating that the maintenance of the area falls on her ‘shoulders alone’.
• The applicant wants to install a stratco carport on the area and states that this will add value to the whole complex.
• The area was never designed to be a ‘turn around area, for the whole time that I’ve lived here (4 YEARS) no one has done so’
• Accusations by the committee ‘that the applicant has been asked to clean up the area’ are untrue.
• The applicant says she has requested committee permission to park on the common property but to date has not received a response from the committee.
• The applicant will pay for all necessary costs of gaining the exclusive use area, including the cost of registering a new CMS.
  

JURISDICTION

I am satisfied that this is a matter which falls within the legislative dispute resolution provisions.[2]

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 CMS; or

(b) the exercise of rights or powers, or the performance of duties, under the Act or the CMS; or

(c) a claimed or anticipated contractual matter about -

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

(ii) the authorisation of a person as a letting agent.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order.[3] An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate.[4]

DETERMINATION

The main issue for consideration in this matter is whether Motion 13 should be overturned.

Allocating an exclusive use area

Sections 170 to 177 of the Act provide for making exclusive use by-laws. An exclusive use by-law is defined as a by-law that attaches to a lot and gives the occupier of the lot exclusive use to the rights and enjoyment of, or other special rights about, common property or a body corporate asset. In this instance, any common property to which exclusive use is given must be specifically identified in an exclusive use by-law that is registered in the scheme’s CMS. In order to incorporate a new by-law into a CMS, a new CMS must be recorded.

Sections 62(2) and 62(3) of the Act set out that a resolution without dissent must be passed before the body corporate can consent to recording a new CMS where the difference between the old and new CMS is a change in exclusive use by-laws. Moreover, section 171(2) of the Act states that the lot owner to whom an exclusive use by-law attaches must consent to the by-law either in writing before the passing of the resolution without dissent to record the new CMS incorporating the exclusive use by-law, or the lot owner must vote personally for the resolution.

Here, the applicant is seeking exclusive use of a section of common property at the end of the complex, next to her lot. The applicant attempted to gain this exclusive use area via the passing of Motion 13 as a resolution without dissent. This motion was defeated. The applicant has now lodged an application with the Commissioner’s Office seeking an order that the motion be overturned.

Overturning a resolution without dissent

If satisfied a motion requiring a resolution without dissent was not passed because of opposition that in the circumstances is unreasonable, an adjudicator may make an order giving effect to the motion as proposed or a variation of the motion as proposed.[5] Accordingly, I will consider whether the opposition to Motion 13 was unreasonable in the circumstances.

Adjudicator P Dowling[6] has summarised a number of decisions regarding the issue of “reasonableness”. This summary is set out below:

“In Points North (paras 42 and 44) and Ocean Plaza Apartments[7] (paras 23 and 26), the specialist adjudicator stated:

In determining whether such opposition was in the circumstances unreasonable, I do not consider that the “subjective intention” of each of the lot owners who voted in opposition is the appropriate test for the above criteria in Schedule 5 Order 10. Whether the opposition is in the circumstances unreasonable has to be considered “objectively” taking into account all relevant circumstances ... the appropriate test ... is whether opposition to a motion is unreasonable/reasonable when considered in an objective and fair manner in all of the circumstances. A test relying on a subjective intention to oppose a motion would make Schedule 5 Order 10 meaningless and inoperative.

In Zenith[8] (where the above test was applied), the adjudicator stated the courts have held that where a statute expressly provides that a decision is to be made ‘reasonably’ or upon ‘reasonable grounds’, the test is an objective one that requires a balancing of factors in all the circumstances according to the ordinary meaning of the term ‘reasonable’.[9] In this decision and in the decisions made to resolve disputes in Q1[10] and Allen Court[11], adjudicators also stated:

In determining whether votes against a motion constitute opposition that in the circumstances is unreasonable it is necessary to consider all the material facts. What is material will vary from case to case but typically the requirement for an adjudicator to make a just and equitable decision involves some balancing of the interests of the majority and minority and raises questions of fairness.”

Opposition to Motion 13

In determining whether the opposition to Motion 13 is unreasonable in the circumstances, it is necessary to consider whether detriment would be caused to other lot owners in the scheme by the proposed exclusive use allocation. In this regard, the submissions state that the proposed allocation of exclusive use would only increase the value of the applicant’s lot and would not increase the overall value of the scheme. The applicant however, states that the granting of exclusive use in this instance ‘will only add value to everyone’s property by improving the overall serviceable use of an area that otherwise is a waste of space’. It is beyond the scope of my jurisdiction or knowledge to determine whether particular property values will increase, decrease or have any change at all by the granting of the proposed exclusive use area. Further, no evidence has been provided to me from any party supporting either point of view in this regard.

Another issue argued in the submissions is that the proposed exclusive use area would deny other lot owners and their visitors’ a space for their vehicles to park and turnaround. In this regard, the owner of lot 4 states “it has been the case a number of times that when a few different residents have had more than one visitor coming and going at the same time and spaces at the front have been full, people have temporarily used the end of the driveway to make way for other cars pulling in and out.” Further, the committee states due to the applicant parking vehicles in the proposed exclusive use area, other vehicles (for example taxis and other occupiers’ vehicles) are unable to turn around in the common property space. In response, the applicant argues that the area was never designed to be a ‘turn around area’ and ‘for the whole time that I’ve lived here (4 YEARS) no one has done so’, that is, turn around in the proposed exclusive use area.

Regardless of whether the area has been used for the purpose of parking and turning around in recent times, I find that the proposed exclusive use area could be used for this purpose. One of the specified objects of the Act is to balance the rights of individuals with the responsibility for self management. Accordingly, when determining whether the opposition to Motion 13 is unreasonable, it is necessary to ‘weigh’ or ‘balance’ the rights of the applicant with that of the body corporate. After considering the ‘car parking and turning’ arguments, I am of the view, that allocating this area exclusively to one owner may disadvantage other lot owners by denying them this previously existing right. However, I am not satisfied that this factor alone is enough to demonstrate that the opposition was ‘not unreasonable’ in the circumstances.

Another factor to consider is the size and location of the proposed exclusive use area. In the matter of Carlisle,[12] the applicant wanted to gain exclusive use of a section of common property outside his lot so that he could reposition his front door onto the common property. There, the adjudicator stated, “I am satisfied that the small area of common property which would be lost to the body corporate if the door is relocated is immaterial, and that no detriment can be demonstrated, particularly since the applicant’s lot occupies the whole of that level, apart from a small area of common property. I therefore consider that the opposition to the motion...was unreasonable in the circumstances.”

The plans submitted by the applicant indicate that the proposed exclusive use area is approximately 5.6 metres in length and 4.66 metres in width, totalling approximately 26 square metres. Unlike the matter of Carlisle, I am not satisfied that the area of common property which would be lost to the body corporate if Motion 13 was overturned, is ‘small’ or ‘immaterial’. Further, unlike the matter of Carlisle where the common property area (being on a floor solely occupied by the applicant’s lot) was not readily accessible to other lot owners, the area in question is part of an open plan drive way / parking area and is, in my opinion, quite accessible to other owners. Therefore, despite the applicant’s arguments that the proposed exclusive use area is ‘away from other lots (at the other end of the block)’, I find that the area is not small or immaterial and due to its location could be utilised for the benefit of other lot owners. In fact, all submissions received by owners indicate they would like to use the area as a parking and turning area.

Another consideration in the determination of this matter is the level of opposition to Motion 13. Motion 13 was defeated at the AGM with 3 lot owners (the owners of lots 4 and 5 and the applicant) voting for the motion, 1 lot owner (the owner of lot 6) voting against the motion and no lot owners abstaining. While the single ‘no’ vote from the owner of lot 6 caused the motion to fail, it appears that the owner of lot 6 is not the only lot owner currently opposing the application. In fact, submissions were received from the owners of lots 4 and 6, the Body Corporate Manager, and the committee (via committee minutes dated 6 April 2009) opposing the application. Further, it should be noted that there were two committee members present at the abovementioned committee meeting, the co-owner of lot 4 and the owner of lot 5. Both committee members opposed the application and voted unanimously to request that the applicant ‘remove the boat, trailer and 4 wheel drive off the common property and also to remove personal belongings and clean up the common property area by the end of April 2009’.

Therefore, although initially the owners of lots 4 and 5 supported the application, it now appears that they oppose the application, with the remaining lot owners choosing not to make a submission or vote at the AGM.

In Oceana on Broadbeach,[13] the adjudicator stated, “another consideration in my dismissal of this application is the level of...opposition. 11 of 57 (19.3%) opposed the application and a further 4 owners abstained. Almost 1/5th of voting members to a motion is not an insubstantial amount of opposition.” Here, it appears that 3 out of 7 (43%) lot owners oppose the application and 3 out of 4 (75%) lot owners who voted at the AGM oppose the application. In applications of this nature the level of opposition is of significant importance to the determination of whether the opposition was in the circumstances unreasonable. The motion required a resolution without dissent. Given this requirement, I conclude that the level of dissent was not insubstantial and cannot be merely ignored or considered as inconsequential.

Therefore, after considering the size, purpose and location of the proposed exclusive use area as well as level of opposition in this matter, I find that the opposition to Motion 13 was not unreasonable in the circumstances. On this basis, I dismiss the application.

Remaining issues

The parties have raised a number of other issues, which whilst not directly relevant in the determination of the application, I wish to comment on.

Some submissions argued that the applicant is parking on common property without body corporate permission. Without making a finding of fact on this matter, if the body corporate believes an occupier of a lot is breaching the scheme’s by-laws, the body corporate may wish to issue the occupier with a contravention notice pursuant to sections 182 – 188 of the Act. Further, the parties may wish to view a publication by the Commissioner in this regard entitled: By-laws. This publication can be obtained from the information service provided by the Commissioner by calling 1800 060 119 or from the website: www.justice.qld.gov.au/bccm.

Further, the applicant states that since 2004 she has been ‘picking up rubbish blown over from the Maroochydore state primary, raking leaves from the tree which is bowing the fence line, pruning the limbs to keep it tidy, and managing a Golden cane plant which needs constant attention’. In addition, the applicant claims she has been ‘cleaning up the grey silty [sic] sand which spills over the poorly designed garden after rain which needs to be swept up and deposited in a bin’. Section 159 of the Act, states the body corporate is responsible for the maintenance of the common property. I am satisfied that the area in question is common property. Therefore, without making a finding of fact on this issue, the body corporate is responsible for the maintenance of the area, including the removal of rubbish, tree debris and loose soil and soot from the area.

While finally, the co-owner of lot 4, states that if the applicant was going to gain more land as an exclusive use area, the applicant should pay an increased amount of levies. Whilst it is not possible to increase the levy contributions of a lot owner to accommodate for the provision of exclusive use,[14] section 173 of the Act and section 173 of the Standard Module provide that exclusive use by-laws may include conditions and impose obligations upon the lot owner to whom exclusive use is given. Such conditions may include ‘requiring the owner to make a payment or periodic payments to the scheme’s body corporate or the owners of lots included in the scheme, or both’,[15] or require the lot owner to perform ‘obligations that would otherwise be obligations of the body corporate’[16] such as maintenance of the area.

Therefore, should the applicant choose to submit a further motion to a general meeting of the body corporate requesting an allocation of exclusive use, the applicant may wish to consider including conditions in the motion which could possibly make the allocation more favourable for the remaining lot owners.

Further, section 62(2) of the Act provides that a body corporate must normally consent to record a new CMS by passing a resolution without dissent. To ensure that all lot owners understand the full extent and ramification of any subsequent exclusive use motion, the applicant should include words giving effect to the registering of a new CMS and specifying (if necessary) who should bear the costs of the same.

CONCLUSION

After considering the size, purpose and location of the proposed exclusive use area as well as the ‘car parking and turning’ concerns raised in this application, I am of the view that the opposition to Motion 13 was not unreasonable in the circumstances. Further, I do not have a sufficient belief that the interests of the majority of owners would be met by making the orders sought. I find that the applicant is not seeking to have a "right" balanced against the responsibility for self management, but rather seeks to impose her opinion on fellow lot owners. Therefore, having appropriate regard to the purpose of the Act, which is to encourage self governance, as well as the absence of a convincing majority in favour of the proposed allocation of exclusive use, I am not inclined to make the order sought. On this basis, I dismiss the application.

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[1] See sections 246 and 244 of the Act respectively.
[2] See sections 227, 228, 276 and Schedule 5 of the Act.
[3] Section 276(2) of the Act.
[4] Section 284(1) of the Act.
[5] Schedule 5(10) of the Act.
[6] See Bayview Shores [2008] QBCCMCmr 309 (2 September 2008).

[7] Points North [2004] QBCCMCmr 423 (2 September 2004); Ocean Plaza Apartments [2004] QBCCMCmr 452 (23 September 2004).
[8] Zenith [2007] QBCCMCmr 115 (28 February 2007).
[9] Secretary, Department of Foreign Affairs and Trade v Styles (1989) 88 ALR 621.
[10] Q1 [2007] QBCCMCmr 131 (8 March 2007).
[11] Allen Court [2007] QBCCMCmr 297 (21 May 2007).

[12] PJ Hanly in Carlisle [2000] QBCCMCmr 655 (14 December 2000).
[13] RA Meek in Oceana on Broadbeach [2004] QBCCMCmr 51 (27 January 2004).

[14] See section 141(5) of the Standard Module.
[15] See section 173(1) of the Standard Module.
[16] See section 173(b) of the Act.