Bowen Hills Business Centre [2009] QBCCMCmr 405 (20 October 2009)

Last Updated: 13 November 2009

REFERENCE: 0404-2009

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	5402
Name of Scheme:	Bowen Hills Business Centre
Address of Scheme:	31 Thompson Street BOWEN HILLS QLD 4006

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Leonard Walter and Anne Dowd, the owner of Lot 7

I hereby order that the application for an order by Leonard Walter and Anne Dowd, the owner of Lot 7 against the body corporate for Bowen Hills Business Centre community titles scheme 5402 seeking outcomes that the Body Corporate consent to exclusive use of the common property balcony to Lots 6 and 7 and to the erection of a screen along the balcony, is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0404-2009

“Bowen Hills Business Centre” CTS 5402

The scheme
“Bowen Hills Business Centre” community titles scheme 5402 is subject to the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Commercial Module) Regulation 2008 (Commercial Module).

Application
This application made on 28 April 2009 is by Leonard Walter and Anne Dowd, the owner of Lot 7 (Applicants) against the Body Corporate. The Applicants name Michael Alcorn, the owner of Lots 3, 4 and 6 as an affected person.

The Applicants seek the consent of the Body Corporate to give exclusive use of half of the balcony currently the common property of Lots 6 and 7. The Applicants say the other half of the balcony would become the exclusive use of Lot 6. The Applicants wish to erect a screen along the balcony for privacy and for the quiet use and enjoyment of Lot 7 and the balcony, and are willing to share equally the costs to register a new survey plan and to have a screen erected.

Submissions to the Commissioner
On 6 May 2009, the Commissioner provided a copy of the application to Mr Alcorn and to Body Corporate Services (Body Corporate Manager) for distribution to the owner of each lot (excluding the Applicants and Mr Alcorn) and the committee, with an invitation to respond to the matters raised in the application. (s 243, Act).

Mr Alcorn and Mr Ingram of Lot 8 made submissions. The Applicants made a written reply to submissions.

Adjudication
A dispute resolution recommendation has been made under section 248 of the Act referring the dispute to departmental adjudication.

Jurisdiction
An adjudicator may make an order to resolve a dispute about a claimed or anticipated contravention of the Act or the community management statement; or the exercise of rights or powers, or the performance of duties, under the Act or the community management statement (s 276(1), Act).

Investigation
In accordance with the investigative powers of an adjudicator stated in section 271 of the Act on 5 October 2009, I requested the Applicants provide the attachments referenced as ‘A’ to ‘G’ in the grounds to the application. The requested documents were provided on the same day. I have decided to determine the application without providing an opportunity for the Body Corporate or Mr Alcorn to make submissions with respect to these documents as attachments: ‘A’ and ‘B’ are Body Corporate meeting documents; ‘C’ and ‘D’ relate to an earlier conciliation process under chapter 6 of the Act; ‘E’ is a copy of Building Units Plan 9936, the plan of subdivision for the scheme; ‘F’ is a statutory declaration of Jason Mark Roberts, its absence or relevance has not been mentioned in submissions made in response to the application; and ‘G’ is a Certificate/Interim Certificate of Classification, its absence or relevance has not been mentioned in submissions made in response to the application.

Decision
Attachment A is a copy of the notice of the Extraordinary General Meeting dated 12 February 2009 (EGM) which includes an agenda containing three motions; the second and third submitted by the Applicants are relevant to this dispute. Motion 2 proposed: “That the balcony described as common property outside Units 6 and 7 on BUP 9936 be divided into two equal areas (more or less) and that each unit be allocated the exclusive use of the balcony are immediately adjacent to it.” Motion 3 proposed: “That the costs of and incidental to-drawing up a new survey plan, registration of the new plan, together with a new CMS, and having a screen erected to divide the balcony be shared equally between the proprietors of Unit 6 and 7.”

Attachment B is a copy of the minutes of the EGM indicating that: Lots 2 to 4 and 6 to 9 were represented; Motion 2 was lost by resolution without dissent with 2 yes votes and 4 no votes; and Motion 3 was lost by resolution without dissent with 2 yes votes and 3 no votes. The Applicants submit Mr Alcorn had 3 votes stating “hence both motions were lost.” In the reply to submissions, the Applicants stated that Mr Alcorn and Mr Ingram opposed their request. I am satisfied that both motions were lost by resolution without dissent (s 105, Act).

Motion 2 at the EGM sought exclusive use of common property. An exclusive use by-law 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 (s 170(1), Act). The common property to which an exclusive use by-law applies must be either specifically identified in the by-law or subject to an authorised or agreed allocation (s 171(1), Act). In the circumstance where the by-law specifically identifies the common property, the by-law may attach to a lot only if the lot owner agrees; either in writing or by voting (s 171(2)(a), Act). An exclusive use by-law that specifically identifies the subject common property is decided by resolution without dissent at a general meeting of a body corporate (ss 62(1)-(3) and 171(2)(a), Act). Given its context, it is apparent Motion 2 proposed making a by-law that would specifically identify the allocated common property.

Motion 3 contained two parts: the first appears to relate to procedures to formalise the exclusive use proposed in Motion 2; the second related to erecting a screen on common property. The Applicants seek outcomes in terms consistent with these proposals. The reason for requiring Motion 3 to be decided by resolution without dissent is unknown. I am not aware of a legislative provision (and one has not been identified) requiring the subject of this Motion to be decided by this type of resolution given that its first part was seem to be of a procedural nature and the second possibly related to an improvement to common property by a lot owner (s 159, Act and s 120, Commercial Module). There is nothing to suggest that the Motion could not have been decided by ordinary resolution. The question about the correctness of the type of resolution is insignificant in the determination of this application given that the Motion would have been lost on the indicated vote even if it had been decided by ordinary resolution (ss 108 to 110, Act). There is no disadvantage to any owner by the potential irregularity (Stainlay & Anor v Body Corporate Port Douglas Road Community Title Scheme 24368 Appeal 177 of 2006 White DCJ at p 11).

Mr Ingram questioned whether appropriate attempts were made at self resolution prior to the application being made against the Body Corporate. In the reply to submissions, the Applicants stated they caused a letter to be forwarded to each lot owner in time for the Annual General Meeting dated 18 July 2008 which was not signed at the meeting; they have met with Mr Alcorn; and their motion was lost at the EGM. The proposals submitted to the EGM indicate that the Body Corporate has given consideration to the issues in dispute. I am satisfied a dispute exists between the Applicants and the Body Corporate as a consequence of the decisions made at the EGM.

The Applicants have not disputed the way the EGM was called and have not raised specific questions about the voting on the Motions. For these reasons, I do not consider it is necessary to investigate or to give consideration to legislative provisions relating to procedures for calling and conducting a general meeting. Given it is undisputed that the Body Corporate has opposed the Applicants proposal; the question is whether that opposition is reasonable.

A body corporate’s functions include administering common property (s 94(1), Act). There is no question that the part of scheme land mentioned in the Motions is common property. The Applicants make the undisputed statement that Lots 6 and 7 share a common balcony described as common property on BUP 9936. BUP 9936 shows the lots and common property in the scheme. While the Applicants have not made any notation on the Plan or otherwise to identify the specific part of common property the subject of the resolutions, it is apparent from sheet 8 of the Plan that there is a marked area of common property to the east of the parts of Lots 6 and 7 on Level B.

A body corporate must act reasonably in anything it does under section 94(1), including making a decision (s 94(2), Act). In determining whether the Body Corporate acted reasonably in deciding Motions 2 and 3 it is appropriate to consider if the decisions are objectively reasonable: Greiner v Independent Commission Against Corruption (1992) 28 NSWLR 125. The objective test requires a balancing of factors in all the circumstances according to the ordinary meaning of the term ‘reasonable’: 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 p61). In addition, section 276(3) of the Act provides that without limiting section 276(1) and (2), an adjudicator may make an order mentioned in schedule 5 of the Act. Section 10 of the schedule contemplates an adjudicator making an order to give effect to a motion requiring a resolution without dissent that was not passed because of “opposition that in the circumstances is unreasonable”.

It is apparent from submissions that the common property balcony the subject of the Motions is only accessible from Lots 6 and 7. In their reply to submissions, the Applicants state because of its position, it is clear the balcony is not common property in the sense that every lot owner has access to it as it is common only to Lots 6 and 7. It would seem access to the common property adjacent to the parts of Lots 8 and 9 on Level B is similarly restricted. Mr Ingram submits he is in the identical situation; Lot 8 shares a common balcony with Lot 9. Exclusive use has not been granted with respect to this part of common property, nor is it sought. I do not consider the Applicants’ argument is itself a basis for claiming that the Body Corporate has unreasonably opposed the exclusive use proposal. Nothing has been presented to suggest that a body corporate acting reasonably would allocate a part of common property for the exclusive use and enjoyment of a particular lot for the sole reason that access to that part of scheme land is, at present, restricted. I am not satisfied from submissions that the proximity of the balcony to Lots 6 and 7 is a defining consideration. I do not consider it can be objectively concluded that the limited access to this common property balcony is so peculiar that it would be reasonably expected that this land would be allocated to the adjoining lots.

Common property is land owned by the owners of lots included in the scheme, as tenants in common (s 35(1), Act). An exclusive use allocation ordinarily (and in this case) alienates part of the common property for the benefit of a particular lot to the exclusion of other lots. This is an issue of some significance. Even though a lot owner may not be able to freely access the particular part of common property proposed to be allocated, that owner does have an interest in the proposal. It should also be noted that an exclusive use by-law that specifically identifies the allocated common property may only stop applying with the agreement of the lot owner (s 171(2)(b), Act). In effect, the part of allocated common property becomes annexed to the benefiting lot.

An argument of the nature mounted by the Applicants may have some persuasion if both owners were agreeable. However, it is clear that the owner of Lot 6 does not agree. Mr Alcorn opposes the outcome sought stating he opposed the proposal to protect his interests. He says he has continued to use and enjoy the balcony for occasional business and social purposes and he has never objected to the Applicants using and enjoying the balcony. Mr Alcorn states loss of the reasonable use of the whole of the balcony will be a significant detriment to him and will materially affect his use and enjoyment of his Lot. In the circumstances, this opposition is significant. Motion 2 proposed an exclusive use allocation for Lot 6. This proposal was made without the agreement of the owner of that Lot.

The consent of the owner is essential (s 171(2)(a), Act). I do not consider there is any basis for suggesting that an order can be made to compel the owner to accept exclusive use of common property against that person’s wishes.

The Applicants claim the balcony lends itself to creating a nuisance as Mr Alcorn and his guests can walk uninterrupted to Lot 7 and peer inside the unit, and the existence of common property allows an occupier to interfere unreasonably with the use and enjoyment of the other’s Lot. The Applicants provided five examples of occasions when they say Mr Alcorn and/or his invitees have breached section 167 of the Act. Mr Alcorn responded to each of the stated occasions. Mr Alcorn disagrees with the Applicants submitting they do not assert he has sought to create a nuisance to them in his use of the balcony; his use of the balcony has never been intended to create a nuisance to the Applicants; and the fact that common property adjoins a lot does not automatically mean that the existence of common property allows occupiers to interfere unreasonably with the use and enjoyment of the adjoining lot. The Applicants disagreed in the reply to submissions stating the question is whether in fact a nuisance has been created in the use of the common property or not, irrespective of the intent.

A concern about the way a person has used and enjoyed, or may use and enjoy, the common property is not a justifiable basis for claiming the Body Corporate has unreasonably opposed a proposal to in effect isolate that part of common property. Section 167 of the Act makes provision for nuisance. If an occupier of a lot believes another occupier’s conduct is in contravention of this provision and a dispute arises, a dispute resolution application may be made about the alleged nuisance. A dispute may be between the occupier of a lot and the occupier of another lot (s 227(1)(a), Act). There is no evidence of such a dispute being resolved under the dispute resolution provisions of the Act. Further, schedule C of the community management statement for the scheme recorded by the registrar of titles on 2 September 2008 (No. 711892070) includes by-laws relating to conduct and behaviour (for example: By-Laws 1, 3 and 6). A function of a body corporate includes enforcing by-laws (s 94(1)(b), Act). Sections 182 to 188 of the Act provide a framework for the enforcement of by-laws. There is no evidence that any complaint has been made about by-law contraventions. There is otherwise no evidence that satisfies me that isolation of common property in the way proposed is the only available option to ensure that the Applicants’ use and enjoyment of Lot 6 is not unreasonably interfered with.

In my view, the Applicants have not established the opposition to Motion 2 was unreasonable. There is no justifiable basis for overturning the resolution made on this Motion.

Motion 3 is directly related to Motion 2. The first part could only have effect if Motion 2 was deemed passed. The second part relating to the erection of the screen requires the consent of the owner of Lot 6; something which clearly has not been obtained. In addition, it would seem a part of common property would be alienated if the screen was built which would appear to necessitate a special right being sought and given by the Body Corporate. There is nothing in the material to suggest that the erection of the screen and a grant of exclusive use are mutually exclusive.

For these reasons, I have dismissed the outcomes sought.