West Burleigh Commercial Centre [2009] QBCCMCmr 38 (6 February 2009)

Last Updated: 9 March 2009

REFERENCE: 0944-2008

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	26954
Name of Scheme:	West Burleigh Commercial Centre
Address of Scheme:	109 West Burleigh Road BURLEIGH HEADS QLD 4220

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

Elephant Pil Pty Ltd, the Owner(s) of lots 9 and 10

I hereby order that the application for an order requiring the body corporate to authorise signage for lots 9 and 10 over the entire facia adjacent to lots 7 to 11, is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0944-2008

“West Burleigh Commercial Centre” CTS 26954

Application

West Burleigh Commercial Centre Community Titles Scheme (WBCC) is a 16 lot scheme under the Body Corporate and Community Management Act 1997 (Act) and the Act’s Commercial Module Regulation (Commercial Module).

The scheme is designed for commercial purposes and lot boundaries are designated under a building format plan.

This application is by Dr Keith Maitland on behalf of Elephant Pil Pty Ltd, owner of lots 9 and 10 (applicant) seeking orders against the body corporate for WBCC (respondent). The applicant has provided a photograph and submissions indicating that signage for lots 9 and 10 covered virtually the entire facia adjacent to lots 7 to 11 at the time that units 9 and 10 were purchased by the current owner. It is submitted that the current occupant of lots 9 and 10 has a right to signage on this same area but that the body corporate is unfairly restricting this signage.

Decision

Investigation and Submissions

Submissions

The main grounds in support of the application, provided on behalf of the applicant, were to the effect that:

• We believe the whole fascia was given to units 9 and 10 for two reasons. Firstly, these units have no window frontage facing the road. Secondly, the tower space that was meant to compensate units 9 and 10 for their lack of signage has been given to other units;
• Specifically, by-law 16 provides for tower space and by-law 18 shows the original signage over the entire fascia by units 9 and 10 was not merely temporary and illegally erected.
  

The body corporate an all owners were given an opportunity to provide written submissions. The main submissions were to the effect that:

• A large majority has previously supported arrangements where units 7 to 11 would share the fascia in question;
• The existing shared fascia arrangement as per the motion of 14 May 2004 is fair and equitable and should be maintained;
• Each purchaser of shops 7 to 11 knew of the restricted signage on the facade. These shops were compensated with an area on the signage tower but no other shop owners were. As acting chairperson I informed the new owner prior to purchase that the previous signage for the church was going to be removed. This church signage had been allowed because shops 7, 8 and 11 were unoccupied but the body corporate had said that when the other shops became occupied the signage would need to be removed; and
• As owner of lot 8, I was told by the agent upon purchasing that the existing facia sign was temporary and that unit 8 was entitled to a portion of the lower section of this facade.

Further enquires

I requested a copy of the motion of 14 May 2004 but note that this motion related to approval of works to be undertaken by Dr Aaron Atia that are unrelated to the present dispute.

Issues for determination

Applicable law

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

• A body corporate and its committee must act reasonably in administering the common property for the benefit of owners, including making or not making a decision (Act 94, 100, 152);
• The by-laws for a scheme may provide for the administration management and control of common property and regulation of lots and common property (Act, 169);
• The body corporate may authorise an owner to make an improvement to common property for the benefit of the owner’s lot (Commercial Module, 120).
  

By-law 8 provides that occupiers must not display signs without the body corporate’s written approval provided that such approval shall not be unreasonably withheld to the using or exhibiting of any sign customary and/or incidental to the occupier’s class of business if such advertisement or sign strictly complies with the by-laws of the local or other authorities.

By-law 16 gives the occupiers of lots 6 to 10 exclusive use of the top third of the advertising tower.

By-law 18 provides that occupiers shall be entitled to erect advertising signs on the roof at the front and rear of each lot provided that the body corporate’s written approval is obtained in relation to the size, material and colour scheme. Further, that the body corporate’s approval shall not be arbitrarily or unreasonably withheld.

Summary of issues

The main issues for determination can be summarised as follows:

1. Upon purchase, did shops 9 and 10 obtain the right to display signage over the entire fascia in front of shops 7 to 11?
2. Even if there was no pre-existing right to display signage, has the body corporate unreasonably refused the recent request to allow the occupier of shops 9 and 10 to use the entire fascia?

No right at time of purchase

The applicant has failed to provide any evidence that satisfies me that the owner of lots 9 and 10 obtained the right to display signage over the entire fascia in front of shops 7 to 11 at the time of purchase. The applicant states that Dr Aaron Atia believed at the time that he purchased lots 9 and 10 he also purchased the sign for those lots. However, as a matter of law, this purchase gave the incoming owner the benefit of the exclusive use signage area of lots 9 and 10 granted under by-law 16 but not the fascia signage in front of shops 7 to 11 which remained as a common property fixture unaffected by exclusive use (Act, 10(2)(b)).

There is no evidence of any resolution or representation from the body corporate to Dr Aaron Atia to the effect that he was purchasing a right to the fascia signage in front of shops 7 to 11. There is not even any evidence of a resolution of the body corporate giving the previous owner of shops 9 and 10 a right to advertise on the entire fascia. Even if a resolution had been passed there is provision for resolutions to be amended or revoked at a later time (Commercial Module, 62).

Based on the submissions, particularly those of Joseph Hart, I consider it more likely than not that the previous occupier of lots 9 and 10 had been informally allowed to use the entire fascia because shops 7, 8 and 11 were unoccupied at the time. There is nothing to suggest that this was a permanent arrangement or that the body corporate would give any subsequent purchaser the benefit of this arrangement once the other shops became occupied. Various body corporate records have been provided that give the applicant no assistance in this regard and, given the above submissions, it seems likely the arrangement was informal and any further investigation of body corporate records is unlikely to lead to any different conclusion.

Not unreasonable to refuse signage on entire fascia

The applicant has asked the body corporate to allow him to use the entire fascia in front of lots 7 to 11 for signage. No formal resolution of the body corporate refusing this request has been provided. However, the body corporate has effectively refused this request by failing to pass a resolution authorising the request. A body corporate is required to act reasonably in making, or not making, a decision relating to administering the common property (Act, 94). Further, an adjudicator may make an order that is just and equitable to resolve a dispute, including an order giving effect to a motion where the motion is not passed due to opposition that is unreasonable in the circumstances (Act 276, Schedule 5 – Item 10). It is therefore necessary for me to consider whether the body corporate has unreasonably refused to allow the applicant to display signage on the entire fascia area.

A statutory requirement to act reasonably is satisfied if the decision is objectively reasonable.[1] The objective test requires a balancing of factors in all the circumstances according to the ordinary meaning of the term ‘reasonable’.[2]

I have reviewed the plan and photographs of the scheme. These show that lots 8, 9 and 10 do not front onto the car park area that the remainder of the lots front onto. Therefore, the angled fascia across the corner of the two buildings is effectively in front of lots 7, 8, 9, 10 and 11.

I further note that the occupiers of lots 9 and 10 have rights of exclusive use over part of the advertising tower above lots 1 and 2. Simply because the applicant has failed to exercise these rights does not mean the applicant should necessarily have a right to advertise somewhere else. Further, documentation provided by the applicant indicates that, at the annual general meeting of 24 June 2004, the body corporate gave the owners of lots 7 to 11 permission to erect an advertising signage tower at their own cost subject to certain approvals. It is not apparent whether these lots have taken advantage of this permission to extend the existing tower or erect a new tower. This is something that the applicant may wish to clarify.

However, particularly given the location of the fascia in question, I do not consider it unreasonable for the body corporate to divide this fascia in a way that give approximately one fifth of the signage space to each of lots 7, 8, 9, 10 and 11. The opportunity for the applicant to insist on existing rights of exclusive use for signage and the possibility of erection of additional signage elsewhere in the scheme makes it even more difficult for the applicant to argue that the body corporate has acted unreasonably in failing to authorise signage for lots 9 and 10 that covers the entire fascia in question.

In conclusion, the applicant has failed to establish grounds for the orders sought and the application will be dismissed.

Order

For these reasons, the application is dismissed.

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[1] Greiner v Independent Commission Against Corruption (1992) 28 NSWLR 125.
[2] 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.