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Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders |
Last Updated: 9 June 2010
REFERENCE: 0599-2009
ORDER OF AN ADJUDICATOR
MADE UNDER PART 9 OF CHAPTER 6
BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997
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Number of Scheme:
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10614
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Name of Scheme:
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Elouera Tower
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Address of Scheme:
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81 Sixth Avenue MAROOCHYDORE QLD 4558
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TAKE NOTICE that pursuant to an application made under the abovementioned Act by
D & K Davis Pty Ltd (Owner of Lot 65), Arthur & Annabel Flower (Co-owners of Lot 66) & Richard James & Katrina O’Shea (Co-owners of Lot 64)
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I hereby order that the application for an order
That the owners of Lots 64, 65 and 66 be entitled to exclusive use of
carparks adjacent to their allotted carparks (see annuexure
H).
is dismissed.
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STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0599-2009
“Elouera Tower” CTS 10614
The Elouera Tower community titles scheme 10614 (“Elouera Tower”) consists of 66 lots and common property. The community management statement (“CMS”) for Elouera Tower 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 4574.
APPLICATION
Pursuant to the Body Corporate and Community Management Act 1997 (“Act”), this application was made by D & K Davis Pty Ltd (Owner of Lot 65), Arthur and Annabel Flower (Co-owners of Lot 66) and Richard James and Katrina O’Shea (Co-owners of Lot 64) (“the applicants”) on 26 June 2009. The applicants sought orders against the Body Corporate for Elouera Tower (“the respondent”) in the following terms:
That the owners of Lots 64, 65 and 66 be entitled to exclusive use of carparks adjacent to their allotted carparks (see annuexure H).
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 respondent. The applicant inspected the submissions received and made a written reply.[1] A dispute resolution recommendation was subsequently made referring the dispute to departmental adjudication.
MATTERS IN DISPUTE
The application relates to the applicants’ request to gain exclusive use of the car parks adjacent to their allotted car spaces. The facts of the dispute, as outlined in the application, submissions and reply to submissions, can be summarised as follows.
The applicants are penthouse owners within the scheme. The CMS for the scheme shows that each lot has been allocated one car parking space. However, there appears to be one car parking space spare adjacent to each of the penthouse owners’ registered car parking spaces (making three car parking spaces spare in total).
At the Annual General Meeting (“AGM”) dated 27 February 2009 a motion was submitted entitled “Exclusive Use of Car Space” seeking body corporate permission for the applicants to have exclusive use of the said three car parking spaces. This motion required a resolution without dissent to pass. The minutes of the meeting indicate that the motion failed with 18 votes in favour of the motion, 13 votes against the motion and 1 abstention.
The applicants argue that the motion should be overturned, thereby allowing them exclusive use of the respective car spaces, for the following reasons:
Submissions were received from Charmaine Guest and Stan Marinis (Co-owners of Lot 24), Dorothy Sack and Nicolas Vlandis (Owner of Lot 54) and Gary Humphrys (Owner of Lot 45) supporting the application. These lot owners make the following comments:
In addition, submissions were received from Diane Chisholm (Co-owner of Lot 58), Nadine Sullivan (Owner of Lots 1, 3 and 4), Ronald Scott (Owner of Lot 38), Victor Lilienthal (Owner of Lot 9), Rob Foster (Co-owner of Lot 34), Mary Gilchrist (Owner of Lot 4 at the time the submissions were requested), John Gilchrist (Owner of Lot 3 at the time the submissions were requested), Raymond Davies (Co-owner of Lot 11) and Ian Woollard (Owner of Lot 35 at the time the submissions were requested) opposing the application. These lot owners make the following comments:
In reply the applicants make the following comments:
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 the motion entitled “Exclusive Use of Car Space” (“the Car Space Motion”), should be overturned.
Allocating an exclusive use area
Sections 170 to 177 of the Act set out the requirements for 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. Pursuant to section 173 of the Act and section 171 of the Accommodation Module, an exclusive use by-law may include conditions and impose obligations upon the individuals to whom exclusive use is given.
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.
Here, the applicants are seeking exclusive use of three common property car parking spaces. The applicants attempted to gain exclusive use of these car spaces via passing the Car Space Motion as a resolution without dissent. However, the motion was defeated. The applicants have now lodged an application with the Commissioner’s Office seeking an order that the Car Space 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 the Car Space Motion 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 the Motion
In determining whether the opposition to the Car Space Motion is unreasonable in the circumstances, I have considered the arguments as contained in both the application and submissions, as set out below.
Information provided to the applicants at the time of purchase
Firstly, the applicants state they were informed at the time of purchase that, being penthouse owners, they were entitled to two car spaces. In support of this assertion, the applicants have provided letters from Margaret Short, Terry Weller and Andrew Bazley. In particular, the letter from Margaret Short (the previous owner of Lot 65) states that she purchased her lot off the plan (from the developers) and was informed at the time of purchase that there were two car spaces available for the penthouse units. Moreover, the applicants state that the by-laws do not specifically prevent the use of the vacant car parking spaces by the penthouse owners.
The opposing submissions however, state that it is the buyer’s responsibility to obtain proper information as to the rights they are buying at the time of purchase. In this regard, the opposing owners note that the CMS provides only one car space for each penthouse unit, and further, that the by-laws do not allow the applicants to have exclusive use of a second car parking space.
While I note the applicants’ arguments regarding the information they received at the time of purchase, I am not satisfied that these arguments form a reasonable basis for the granting of exclusive use in light of the arguments of the opposing owners; namely, that it was the applicants’ responsibility to obtain proper information regarding their rights under the CMS and by-laws at the time of purchase. Therefore, I am not satisfied that this particular opposition is unreasonable in the circumstances.
Intention of the original owner
Also, the applicants argue that the original plan lodged with the local council clearly shows, by its shading, that the developer intended the penthouse owners to have two car parking spaces. In further support of their assertions, the applicants say that “nowhere else on the [original or registered] plan is there vacant space adjacent to a lots car parking allocation”.
The opposing owners however, say that no documentation has been provided from the developer supporting the exclusive use of the car spaces. Further, the opposing owners state that the shading on the ‘original plan’ is unconvincing that the penthouse owners should have two car spaces because:
In addition, the opposing submissions argue that the original owners, by actually allocating some exclusive use roof areas to the penthouse owners, did turn their minds to the issue of exclusive use for the penthouse owners. Consequently, the submissions argue that the original owners did not intend the applicants’ to have the exclusive use of two car spaces.
While, I note the applicants’ arguments regarding the shading on the original plan and the positioning of the proposed exclusive use car spaces, I am not satisfied that these arguments show the opposing submissions to be unreasonable in the circumstances.
Past usage of the car spaces and estoppel arguments
Further, the applicants raise the issue of estoppel. In this regard, the applicants allege that since their individual dates of purchase (1998, 1991 and 2004) the three car spaces have been the property of the penthouse owners in that they have had exclusive use of those car parks. Consequently, the applicants’ claim that the body corporate is estopped from denying them the right to use the additional car parking spots.
The opposing owners however, say that the principals of estoppel do not apply as the applicants have not always exclusively used the car spaces in question. Rather, the opposing owners say that owners and tenants have parked in the car spaces from time to time.
Estoppel is a protection recognised both in common law and in equity. Estoppel prevents one party from altering a position where that alteration would detrimentally affect another party who had acted in reliance of the original position. For the applicants to be successful on an estoppel-type argument they would have to show that there was an ‘original position’ for the penthouse owners to be given exclusive use of an additional car space, that they would suffer a detriment if that were not the case and/or that they acted in reliance on the expectation that they were to have an additional car space.[12]
Therefore, the first question to be addressed is whether there was an ‘original position’ that the penthouse owners be given exclusive use of an additional car space. As set out above, the applicants say they were informed at the time of purchase that they were entitled to two car parking spaces. Further, the applicants have provided our Office with the original plan of the car parking area and say that this plan, by its shading, demonstrates the developer’s intention for the penthouse owners to have two car spaces.
The opposing owners however, argue that the CMS and by-laws do not provide the applicants’ with exclusive use of a second car parking space. Further, the opposing submissions point out several inconsistencies between the original plan and the registered plan. While I note the applicants’ arguments, I am not satisfied that any shading on the original plan or communications made to them at the time of purchase form an ‘original position’ for the penthouse owners to be given exclusive use of a second car space in light of the information contained in the by-laws and CMS.
Therefore, after considering the by-laws, CMS, information provided to the penthouse owners at the time of purchase and the original plan, I am not sufficiently satisfied that the applicants have demonstrated that the ‘original position’ was for the penthouse owners to have two car parking spaces. Accordingly, although the applicants may have had the benefit of two car spaces from time to time, I am not satisfied that they had any reasonable basis to ‘expect’, or act upon the assumption, that they in fact had two car spaces. Nor am I satisfied that the applicants past usage of the car spaces alone, is enough to demonstrate or establish that there was an ‘original position’ that the penthouse owners were to have exclusive use of a second car space.[13] Accordingly, I am of the opinion that the doctrine of estoppel does not apply in this instance.
Section 9 of the BUGTA
Further, the applicants make reference to section 9 of the BUGTA. In this regard, the applicants say “it is clear from the definitions contained within section 9 of the 1980 Act that the car parks adjacent to the penthouse unit holders marked car park forms part of that lot as a result of that definition and that accordingly they are entitled to that lot.”
While the scheme may have been originally registered under the BUGTA, when the Body Corporate and Community Management Act 1997 (“Act”) (referred to in the BUGTA as the BCCM Act) commenced in 1997, the scheme was given a CMS number (namely 10614) and each lot in the existing plan became a lot included in the new scheme. Therefore, no sections from the BUGTA apply, or have any relevance whatsoever to, the scheme in question.[14]
Further, even if section 9(5),(5A) and (5B) of the BUGTA were to apply, these sub-sections only make reference to what can be registered as part of a ‘lot’ in a building units plan of subdivision. These sub-sections do not, in my opinion, allow part of a building or common property which is not registered as being part of a lot, to be included, as part of a lot. Accordingly, I am not satisfied that section 9 of the BUGTA is of any relevance to the determination of this application.
Use of the proposed exclusive use areas
In addition, the applicants raise arguments regarding the ‘use’ of the proposed exclusive use car spaces. In this regard, the applicants state that access to the car park is via a security gate only. Therefore, the car spaces could not be used by visitors to the scheme, but only by owners and tenants of the premises who have access to the car park. The opposing submissions however, state that the car spaces should remain common property for the benefit of all owners and could be used by owners/tenants a loading zone, parking and turning area.
Regardless of whether the car spaces have been used by all lot owners/tenants as a loading zone, parking and/or turning area in recent times, I am of the opinion that the proposed exclusive use areas could be used for this purpose (despite access to the car park being via security gate only). 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 the Car Space Motion is unreasonable, it is necessary to ‘weigh’ or ‘balance’ the rights of the applicants with that of the body corporate. After considering the parties’ arguments, I am of the opinion that allocating this area exclusively to the applicants may disadvantage other lot owners by denying them of their previously existing right to the common property.
Size and location of the proposed exclusive use areas
Another factor to consider is the size and location of the proposed exclusive use area. In the matter of Carlisle,[15] 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 consists of three car parking spaces. Unlike the matter of Carlisle, I am not satisfied that the area of common property which would be lost to the body corporate if the Car Parking Motion 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 being part of an open plan car park is, in my opinion, quite accessible to other owners and/or their tenants. Therefore, I am of the opinion that the area is not small or immaterial and due to its location could be utilised for the benefit of other lot owners and/or their tenants. In fact, as stated above, the submissions from the opposing owners indicate that they would like to use the car spaces as a loading zone, parking and turning area.
Council requirements
Further, the opposing owners argue that the three car spaces in question should not be granted to the applicants as exclusive use areas, as the car spaces are required by council for use as casual off-street car parking. In addition, the opposing owners refer to the minutes of the committee meeting dated 2 June 2009 which state that professional planning advice was obtained to the effect that, “any reduction below the current number of seven unallocated spaces on titles would be a major problem for commercial owners”.
The applicants however, state that any submissions saying there should be “x” number of common property car parking spaces within the building are incorrect. Further, the applicants say there is no evidence to support any allegations that the car spaces are required to be common property pursuant to planning legislation.
The opposing submissions have provided no evidence or information to support their views regarding the number of common property car spaces allegedly required pursuant to council or planning legislation. Accordingly, I am of the opinion that this particular opposition may be unreasonable in the circumstances. However, I am not satisfied that this factor alone is enough to demonstrate that the total opposition is, in all of the circumstances of the matter, unreasonable.
Level of opposition to the Car Space Motion
Another consideration in the determination of this matter is the level of opposition to the Car Space Motion. The minutes of the AGM indicate that the Car Space Motion failed with 18 votes in favour of the motion, 13 votes against the motion and 1 vote abstaining from the motion.
In Oceana on Broadbeach,[16] 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 13 out of 32 (41%) lot owners who voted at the AGM opposed the Car Space Motion. 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.
CONCLUSION
In order, to overturn the dissenting votes of the Car Space Motion, I must be satisfied that the motion was not passed because of opposition that in the circumstances is unreasonable. Based on the information provided by the parties, I am not sufficiently satisfied that the opposition to the Car Space Motion was unreasonable in the circumstances. Accordingly, I am dismissing the application.
However, it should be noted that nothing in this order prevents the applicants’ submitting a further motion for exclusive use of the said car spaces to the body corporate. Section 173 of the Act and section 171 of the Accommodation 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’,[17] or require the lot owner to perform ‘obligations that would otherwise be obligations of the body corporate’[18] such as maintenance of the area. Therefore, should the applicants choose to submit a further motion to a general meeting of the body corporate requesting an allocation of exclusive use, the applicants may wish to consider including conditions in the motion which could possibly make the allocation more favourable for the remaining lot owners.
Further, nothing in this order prevents the applicants from seeking to buy or lease the proposed car spaces from the body corporate should they wish to do so.
[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] Kensington Gardens Retirement Village [2006] QBCCMCmr 271 (30 May 2006).
[13] This position
is further supported by Boulevard North [2007] QBCCMCmr 231 (24
April 2007) where the adjudicator stated, “for a long period of time
the respondents have had the benefit of a car space which they were not entitled
to and I do not consider
it is appropriate to legitimise that use because of the
time elapsed and the lack of previous Body Corporate
action”.
[14]
This view is further supported by section 5A of the BUGTA which states on
and from the commencement of chapter 8, part 1 of the BCCM Act, this Act applies
only for— the
operation of a specified Act, the registration of a future
1980 Act plan under the transitional provisions of the BCCM Act, and any
other
matter under the transitional provisions of the BCCM Act required to be effected
under this Act.
[15] PJ Hanly in Carlisle [2000] QBCCMCmr 655
(14 December 2000).
[16] RA Meek in Oceana
on Broadbeach [2004] QBCCMCmr 51 (27 January 2004).
[17] See section
171(1) of the Accommodation Module.
[18] See
section 173(b) of the Act.
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