Maison La Plage [2009] QBCCMCmr 349 (11 September 2009)

Last Updated: 9 October 2009

REFERENCE: 0613-2009

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	6489
Name of Scheme:	Maison La Plage
Address of Scheme:	5 Hastings Street NOOSA HEADS QLD 4567

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

John Scanlan as Co. Nominee for Rummage Market Pty Ltd, the Owner of lot 20

I hereby declare that Motion 10, considered at the Annual General Meeting of the Body Corporate for Maison La Plage dated 27 March 2009, regarding the changing of the name of the Body Corporate to the Body Corporate for Maison Noosa, was not passed because of opposition that was unreasonable in the circumstances. I hereby order that Motion 10, considered at the Annual General Meeting of the Body Corporate for Maison La Plage dated 27 March 2009, regarding the changing of the name of the Body Corporate to the Body Corporate for Maison Noosa, is deemed to be passed. I further order that the Body Corporate for Maison La Plage shall, within three (3) months of the date of this order and at the expense of the Body Corporate, prepare and lodge with the Registrar of Titles a request to record a new community management statement which reflects the change of the Body Corporate name.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0613-2009

“Maison La Plage” CTS 6489

The Maison La Plage community titles scheme (“Maison La Plage”) consists of 29 lots and common property. The community management statement (“CMS”) for Maison La Plage indicates that the Body Corporate and Community Management (Accommodation Module) Regulation 2008
(”Accommodation Module”) applies to the scheme. The Department of Environment and Resource Management records show the scheme is registered as Building Units Plan 8810.

APPLICATION

Pursuant to the Body Corporate and Community Management Act 1997 (“Act”), this application was made by John Patrick Scanlan, as company nominee for Rummage Market Pty Ltd, owner of Lot 20 (“the applicant”) on 2 July 2009. The applicant sought orders against the Body Corporate for Maison La Plage (“the respondent”) in the following terms:

1. That motion 10 of the annual general meeting held on 27 March 2009 and requiring a resolution without dissent, regarding the change of the body corporate’s name from ‘Maison La Plage’ to ‘Maison Noosa’ was not passed because of opposition that in the circumstances is unreasonable.
2. That motion 10 of the annual general meeting held on 27 March 2009 is deemed to be passed.
3. That the body corporate is deemed to have consented to a new community management statement to record the change of name to ‘Maison Noosa’ as a consequence of the passing of motion 10 and that the body corporate prepare and lodge a new community management statement consistent with this consent in accordance with the Body Corporate and Community Management Act.
   

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 committee and the owners of lots 23, 22 and 1. The applicant did not inspect the submissions received or make a written reply.[1]

A dispute resolution recommendation was made referring the dispute to departmental adjudication.

MATTERS IN DISPUTE

The application relates to the applicant’s request for motion 10 of the Annual General Meeting (“AGM”) dated 27 March 2009 to be overturned. The facts of the dispute, as outlined in the application and submissions, can be summarised as follows.

The applicant states that in 2006 the body corporate commenced a major renovation of the common property which included a proposal to rename the building ‘Maison Noosa’. The applicant alleges that the purpose of this ‘re-branding’ was to recognize the extensive refurbishment and to dispel any negative associations with the old ‘Maison La Plage’.

On 29 September 2006 the body corporate convened an adjourned Extraordinary General Meeting (“EGM”) with motion 3 (“Motion 3”) and motion 4 (“Motion 4”) dealing with the change of name proposal. Motion 3 was an ordinary resolution which sought the owners’ approval to change the name of the building. Motion 4 was a resolution without dissent which sought the owners’ approval to change the name of the body corporate to match the name of the building. Motion 4 was dependent on Motion 3 being passed.
Should Motion 3 pass and Motion 4 fail, the building would be renamed ‘Maison Noosa’, but the legal name of the body corporate would remain as ‘Maison La Plage’.

Motion 3 passed with 13 lot owners voting for the motion, 1 lot owner voting against the motion and no lot owners abstaining. Motion 4 failed with 19 lot owners voting in favour of the motion, 1 lot owner voting against the motion and no lot owners abstaining. The applicant states that the single ‘no’ vote came from the owners of lot 1, David Power, Peta Power and Virgil Power, and that no reasons were given for the objection.

At the AGM on 27 March 2009, the committee again submitted a motion (“Motion 10”) seeking a resolution without dissent to change the name of the body corporate to ‘Maison Noosa’. Motion 10 failed with 12 lot owners voting in favour of the motion, 1 lot owner voting against the motion and no lot owners abstaining. The applicant states that the single ‘no’ vote came from the owners of lot 1, David Power, Peta Power and Virgil Power, and that no reasons were given for the objection.

The applicant seeks an order overturning the resolution of the body corporate with respect to Motion 10. In support of the application, the applicant argues the following:

• “Uncertainty exists over the destination point for visitors, tradesmen, local authority personnel, emergency services (fire and the like).”
• “Accounts and Statements issued to owners by the body corporate and the resident unit management entity are issued under different names for the same premise. This creates the need for substantiation in the preparation of taxation documents and other accounting material, unnecessarily complicating the documents.”
• “Accounts and Statements issued to the body corporate by tradesmen and others involved with the complex are issued under different names for the same premise. This creates the need for substantiation in the preparation of taxation documents and other accounting material, unnecessarily complicating the documents.”
• “A co-ordinated approach to the building identity and name ensure the integrity of the refurbishment is retained.”
• There were no reasonable grounds for the owners of lot 1 to object to the change of name.
  

Submissions were made by the committee as well as the owners of lots 23 and 22 supporting the application.

A submission opposing the application was made by the owners of lot 1, David Power, Peta Power and Virgil Power. The owners of lot 1 make the following comments:

• “The name Maison La Plage has particular significance to us as it represents the place or home on the beach at Noosa Heads.”
• “La Plage is the French word for the beach and Maison signifies a home or place. Being on the beach at Noosa Heads has much more significance than simply being at Noosa. There are many properties in Noosa but only a small number which are situated [sic] on the beach at Noosa Heads. To delete the reference to the beach from Maison La Plage to suit the whim of the majority of other owners is against the spirit of the BCCM Act.”
• “The attempt by the current committee and in particular the applicant herein to change the name of the building by stealth is both legally and morally wrong. In this regard the signs depicting the name of the building have been changed by the committee using their numbers and in an attempt to use that as a reason for changing the name of the building.”
• “The name of the scheme should have been changed first before the signage was changed. The signage should be changed back to reflect the name of the Scheme.”
• Lot 1 is entitled to vote against the motion and does not have to give reasons.
• It does not follow that the name of the scheme should be changed because the body corporate ‘illegally’ changed the name of the building.
• The argument that accounts and statements issued to owners by the body corporate and the resident unit management entity under different names is spurious.
• The resident unit manager issues accounts for the letting of residential apartments and the body corporate issues levy notices.
• As a minority owner, the owner of Lot 1 still has rights.
• “...the Body Corporate is being unreasonable when it changes the signage of the Scheme, paid for by myself and other owners and without being legally able to do so, then complains because I refuse to change the name of the Scheme to suit their illegal acts. Clearly, the Body Corporate should have changed the name of the Scheme first and when that could not be done, it should have left the signage to reflect the name of the Scheme which is Maison La Plage – Beach House.”
  

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 10 should be overturned.

Motion 10 seeks that the name of the body corporate be changed from ‘Maison La Plage’ to ‘Maison Noosa’. This would require a new CMS to be lodged for the scheme. In accordance with section 62 of the Act, the body corporate must obtain consent in the form of a resolution without dissent to record a new CMS. At the AGM on 27 March 2009, the body corporate sought to pass the required motion by a resolution without dissent. This motion was defeated. The applicant has now lodged an application with the Commissioner’s Office seeking an order that Motion 10 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 10 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 10

In considering whether the opposition to Motion 10 was unreasonable in the circumstances, it is necessary to consider the opposing arguments contained in the submissions. In this instance, the opposing arguments are contained in the submission of the owners of lot 1. I will address these arguments below.

Significance attributed to the name ‘Maison La Plage’

Firstly, the owners of lot 1 have stated, “the name Maison La Plage has particular significance to us as it represents the place or home on the beach at Noosa Heads...La Plage is the French word for the beach and Maison signifies a home or place. Being on the beach at Noosa Heads has much more significance than simply being at Noosa. There are many properties in Noosa but only a small number which are situated [sic] on the beach at Noosa Heads. To delete the reference to the beach from Maison La Plage to suit the whim of the majority of other owners is against the spirit of the BCCM Act.”

As stated above, when determining whether opposition to a motion is unreasonable in the circumstances, it is not the ‘subjective intention’ of each lot owner which is considered, but whether the opposition is unreasonable when considered in an ‘objective and fair manner’. The lot owners’ concerns in this instance, namely that “the name Maison La Plage has particular significance to us....”, and their partiality to the French interpretations of the current body corporate name, are based on their personal preferences or fondness to the original name of the scheme. While the owners are entitled to their views, I do not consider this ground to be an objective basis for refusing Motion 10, having regard to the interests of all owners.

Changing the name of the building

Another issue raised by the owners of lot 1 is their objection to the body corporate changing the name of the building from Maison La Plage to Maison Noosa. In this regard the owners of lot 1 state, “the attempt by the current committee and in particular the applicant herein to change the name of the building by stealth is both legally and morally wrong...the signs depicting the name of the building have been changed by the committee using their numbers...”. Further, the owners of lot 1 state, “...the Body Corporate is being unreasonable when it changes the signage of the Scheme, paid for by myself and other owners and without being legally able to do so...”.

I note the comments from the owners of lot 1, that the body corporate’s attempt to change the name of the building is ‘legally and morally wrong’ and “...the Body Corporate is being unreasonable when it changes the signage of the Scheme...”. This issue was considered in Motion 3 and was passed by an ordinary resolution of the Body Corporate. However, the question for determination in this application is not whether Motion 3 (concerning the name of the building) was reasonable, but whether the opposition to Motion 10 (regarding the name of the body corporate) is unreasonable in the circumstances. Here, the arguments put forth by the owners of lot 1, relate more to the reasonableness of Motion 3 rather than setting out their opposition to Motion 10. As the reasonableness of Motion 3, is not part of this application, I am unable to consider these arguments further. On this basis, I do not consider these arguments to be an objective basis for refusing Motion 10.

Correlation between the name of the building and the name of the body corporate

A further issue submitted by the owners of lot 1 is that the “name of the scheme should have been changed first before the signage was changed” and that “the signage should be changed back to reflect the name of the Scheme”. While changing the name of the scheme prior to (or concurrently with) changing the name of the building, may well have been a valid consideration for the body corporate, there is no such requirement in the Act. Further, although changing the name of the building to reflect the current name of the body corporate may be one conclusion to this matter; it is not the outcome which is the subject of this application. Rather, the issue in question is whether the opposition to Motion 10 was unreasonable in the circumstances. Therefore, despite the requests by the owners of lot 1 to change the name of the building to reflect the name of the body corporate, this is not the issue for determination in this application.

Rights of minority owners

The owners of lot 1 have also raised issues regarding their rights as minority owners in the complex. The owners have stated that they are entitled to vote against the motion and do not have to give any reasons for their decision.

One of the objects of the Act is to balance rights of individuals with the responsibility for self management within the scheme.[12] Accordingly, when determining the ‘reasonableness’ of the opposition to Motion 10, it is necessary to ‘weigh’ or ‘balance’ the rights of the owners of lot 1 with that of the body corporate. The owners of lot 1 have quite correctly stated that they are entitled to vote against the motion and have rights as minority owners. However, I am empowered to balance the rights of individuals against the interests of the scheme as a whole. After balancing the above interests, I am of the view that the owners of lot 1 have not provided sufficient evidence or reasons to demonstrate that their rights would be unreasonably affected by the passing of Motion 10 in these circumstances.

Operation of the scheme

The applicant has provided several reasons as to why he believes the opposition to motion 10 was unreasonable in the circumstances. These include:

• “Uncertainty exists over the destination point for visitors, tradesmen, local authority personnel, emergency services (fire and the like).”
• “Accounts and Statements issued to owners by the body corporate and the resident unit management entity are issued under different names for the same premise. This creates the need for substantiation in the preparation of taxation documents and other accounting material, unnecessarily complicating the documents.”
• “Accounts and Statements issued to the body corporate by tradesmen and others involved with the complex are issued under different names for the same premise. This creates the need for substantiation in the preparation of taxation documents and other accounting material, unnecessarily complicating the documents.”
  

In response to these issues, the owners of lot 1 state, “the argument that accounts and statements issued to owners by the Body Corporate and the resident unit management entity are issued under different names is similarly ‘spurious’”. The owners of lot 1 further state that the resident unit manager issues accounts for the letting of residential apartments and the body corporate issues levy notices.

The key issue for determination in this matter is whether the opposition to Motion 10 was unreasonable in the circumstances. To support his arguments, the applicant has listed a number of occasions where confusion or difficulty may be generated by the scheme and the building having two different names. Opposing this argument, the owners of lot 1 have explained that the body corporate issues levies under one name and the rental statements under another, and owners should be able to differentiate between the two statements. While I accept that owners should be able to differentiate between their statements, I do not consider this argument to be a reasonable basis for the refusal of Motion 10. Further, I am of the view that having the same name for the building and the body corporate in this instance is of benefit to the owners and their dealings with third parties. Of course, this outcome could also be achieved by returning the building name to ‘Maison La Plage’.

Other issues

In their submissions, the owners of lot 1 have requested an order “for costs against the applicant because of the applicant’s failure to attempt conciliation”. Adjudicators can only make orders derived from a dispute resolution application. No such dispute resolution application has been lodged by the owners of lot 1 in this instance. Further, pursuant to section 276 of the Act, an adjudicator can only make orders where there is a contravention of the Act or CMS. The alleged contravention here is a failure to attempt conciliation on behalf of the applicant. Section 248 of the Act, states that the Commissioner may make one or more dispute resolution recommendations for an application, including conciliation and/or adjudication. In this instance the Commissioner did not require the parties to attempt conciliation in the first instance and consequently there has been no such contravention of the Act by the applicant.

CONCLUSION

While I note that the owners of lot 1 have put forth a number of arguments questioning the reasonableness of Motion 3 and requesting that the name of the building be ‘changed back’ to correspond with the existing name of the body corporate, this is not the outcome which is the subject of this application. Rather, the issue in question is whether the opposition to Motion 10 is unreasonable in the circumstances.

After considering all the arguments raised by the owners of lot 1, I am not satisfied they have substantiated any genuine basis to oppose Motion 10 regarding the changing of name of the body corporate. Further, I do not have a sufficient belief that the interests of the majority of owners would be met by dismissing the orders sought. I find that the owners of lot 1 are not seeking to have a ‘right’ balanced against the responsibility for self management, but rather seek to impose their own opinions 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 any objective arguments substantiating that the opposition to Motion 10 was ‘not unreasonable’, I am inclined to make the order sought. On this basis, I am deeming Motion 10 to be passed.

Further, as the body corporate will need to record a new CMS reflecting the change of name, I have allowed three months from the date of this order for the body corporate to prepare and lodge a new CMS at its expense with the Department of Environment and Resource Management.

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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] Section 4 of the Act.