Ironbark [2010] QBCCMCmr 409 (1 September 2010)

Last Updated: 11 October 2010

REFERENCE: 0640-2010

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	3120
Name of Scheme:	Ironbark
Address of Scheme:	28 Rudd Street, Broadbeach, QLD 4218

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

Neil Davidson, the Owners of lot 5

I hereby order that the application for an order to overturn the body corporate’s ruling and allow unit 5’s air-conditioner to stay where it is is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0640-2010

“Ironbark” CTS 3120

The scheme

Ironbark community titles scheme is regulated by the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Standard Module) Regulation 2008 (Standard Module). The 12 lots in this scheme were created under a Building Unit Plan of subdivision, now referred to as a Building Format Plan.

Application

This application dated 8 July 2010, is made under the abovementioned Act by Neil Davidson, the owner of lot 5, seeking the following final outcome:

Overturn the body corporate’s ruling and allow unit 5’s air-conditioner to stay where it is.

Background

The applicant is the owner of lot 5 and states that after his tenant requested the installation of air-conditioning in the unit, he sought quotes from two air-conditioning installers. Both installers recommended installation on the eastern wall above unit 1’s air conditioner instead of installation on the balcony. They recommended against installation on the balcony as they believed the heat and noise generated by the air-conditioner would make the balcony unusable as well as taking up space. The owner of lot 1 which is below lot 5, also raised concerns that if the unit was installed on the lot 5 balcony, the noise and heat would encroach on the lot 1 balcony.

He states that he was not familiar with the scheme by-laws and therefore sought advice from the committee secretary and believed that the majority of committee members approved the installation of the air-conditioning unit above the lot 1 air-conditioning unit.

However, two months later the Chairman wrote to the applicant stating that his air-conditioning unit had to be removed from the wall and installed on the lot 5 balcony. In response, the applicant submitted the following arguments:

• The majority of committee members agreed to the installation, and as the value of the improvement was less than $2,000 the committee was entitled to approve the installation;
• As a lot owner he is entitled to an easement over common property for the purpose of supplying a utility service to his lot;
• The cost of removing and reinstalling the air-conditioning unit would be onerous;
• No logical reason was given for the refusal to grant permission other than the chairman’s concern that it is visible. He believes that it can only be seen when specifically looking for it because it is hidden by foliage and tree branches and unit 1 was given permission to install a larger machine in a more prominent position;
• if an air-conditioning unit was placed on the lot 5 balcony the noise and heat generated by the unit would make the lot 5 balcony unusable;
• lot 5 is above lot 1 and the installation of the air-conditioning unit on the lot 5 balcony would involve encroachment of heat and noise as well as the presence of a drainage pipe along the front of lot 1;
• Unit 1 was given permission to install an air-conditioning unit on the eastern wall and unit 3 was given permission to install an air-conditioning unit on the back wall.
  

Eventually the matter went to a general meeting where owners were asked to decide whether the air-conditioning unit should be removed. The applicant states that his proxy vote was rejected and the result of the vote was 5 to 2 in favour of removing the air-conditioning unit.

Submissions

Pursuant to section 243 of the Act a copy of the application was circulated to the body corporate committee and all lot owners , with an invitation to make submissions.

Submissions were received from the body corporate committee as well as 6 individual lot owners.
The body corporate requested that the individual submissions from the Chairman, Mr Barker, Secretary, Ms Oates and Mr. Donaldson (an ordinary member) be accepted collectively as a submission from the committee.

One lot owner gave their unqualified support to the application as they believed the lot 5 air-conditioning unit is concealed by trees and to move the unit to the lot 5 balcony would create a nuisance to lot 1.

The owners of lot 11 opposed the application as they believed it was detrimental to other owners and create a noise nuisance.

Submissions made by the owners of lot 9 included the following:

• The applicant did not obtain formal permission from the body corporate prior to the installation of the Unit 1. the purpose of this requirement is to ensure that the work will be carried out to an acceptable standard and will not negatively impact on the building or the quality of life of other lot owners;
• The air-conditioning unit has been mounted on the outside wall of their unit and produces very loud fan noise and switching as well as vibration.
• This noise has destroyed their peace and quiet to the extent that it is difficult to sleep;
• The noise and vibration from the unit is accentuated by the installation of the unit on the brick veneer wall as the noise and vibration is transferred through the veneer “skin” of the building. The unit should be mounted on the ground in the same manner as the lot 1 air-conditioning unit;
• Otherwise the only appropriate place for installation would be the unit balcony;
• The body corporate is obliged to ensure the air-conditioning unit is removed because it was installed without permission and in its current location, is creating a nuisance for the occupants of lot 9;
• If the air-conditioning unit is allowed to stay in the current location, they intend to lodge an application seeking its removal;
• A small window mounted air-conditioner had previously been installed at the front of the building many years ago but has since been removed.
  

Submissions by the body corporate Chairman included the following:

• He accepts that under subsection 1150(1) of the Land Title Act an easement exists in favour of a lot for supplying utility services to a lot and this includes the installation of an air-conditioner. However, under subsection 1150(2) the exercise of rights under the easement must not interfere unreasonably with the use or enjoyment of the lot or part of common property against which the easement lies.;
• Where a lot owner proposes to make an improvement to common property and the value of the proposed improvement is $3,000 or less, section 164 of the Standard Module requires the body corporate committee to authorise the improvement. Where the value of the improvement is more than $3,000 the improvement must be authorised by an ordinary resolution;
• In November last year the applicant informally approached the secretary about the possibility of installing an air-conditioning unit for unit 5 but did not mention that it would be mounted on the side of the building;
• Neither he nor Mr. Donaldson of lot 1, were contacted by the applicant regarding the installation of the air-conditioning unit and he strongly disputes the claim that the installation was approved by the majority of the committee;
• The air-conditioning unit for lot 1 is located at ground level, is obscured by foliage and a garden wall while the lot 5 air-conditioning unit is attached to the side of the building some 5 metres off the ground;
• The electrical tubing attached to the exterior wall for the benefit of lot 1 was not installed to supply power to the air-conditioning unit but rather, was installed by a previous owner of lot 1 so that a power source was available in his garage for the operation of a washing machine;
• He was obliged to reject the applicant’s proxy as it contained two sets of handwriting and alterations were not initialled;
• He does not believe that relocation of the air-conditioning unit to ground level would seriously compromise the operation of the unit;
• The occupants of lot 9 complain that the noise from the unit reverberates through the wall, disturbing their sleep.
  

Submissions made by the owner of lot 1 included the following:

• The applicant did not obtain committee approval as required by the by-laws;
• While he did not originally have concerns regarding the location of the air-conditioning unit on the wall, he has since become aware that it is causing a disturbance to the occupants of lot 9;
• He would be concerned if the air-conditioning unit was relocated to the lot 5 balcony because it could create a potential nuisance to lot 1 due to the heat and noise generated by the unit.
• His preference would therefore be for the installation of the unit at ground level next to the lot 1 air-conditioning unit.
  

Submissions by the secretary included the following:

• She had an informal discussion with the applicant regarding the installation of the air-conditioner but at no time did she purport to approve the installation;
• The applicant subsequently engaged tradesmen to install the unit on the wall;
• Attempts to contact the applicant were unsuccessful so it was decided to hold a general meeting so all owners could vote on the matter. The result of the voting was 5 votes to 2 in favour of removing the air-conditioning unit from the wall.
• She believes that the unit should be removed an installed either at ground level next to the lot 1 unit or on the lot 5 balcony;
• The lot 1 air-conditioning unit has been in place for 6 years and there has been no tampering or vandalism of the unit during that period of time;
  

Jurisdiction

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 community management statement; or

(b) the exercise of rights or powers, or the performance of duties, under the Act or the community management statement; or

(c) a claimed or anticipated contractual matter about-

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

(ii) the authorisation of a person as a letting agent for a community titles scheme.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 276(2)). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (section 284(1)).

Determination

This application involves a dispute regarding the installation of an air conditioning unit without body corporate approval. As the parties have been unable to reconcile their differences, the matter has now come to me for adjudication.

In summary, the owner of lot 5 raises the following arguments in support of his application:

• The majority of committee members agreed to the installation;
• he is entitled to an easement over common property to access a utility service;
• The cost of removing and reinstalling the air-conditioning unit would be onerous;
• No logical reason was given for the refusal to grant permission other than the chairman’s concern that it is visible.
• Unit 1 was given permission to install an air-conditioning unit on the eastern wall and unit 3 was given permission to install an air-conditioning unit on the back wall.
  

The Body Corporate and Community Management Act 1997 and the Body Corporate and Community Management (Standard Module) Regulation 2008 contain a number of legislative provisions that are applicable to the installation, or “making an improvement” such as an air-conditioning unit.

Firstly, each lot owner in a community titles scheme is required to comply with the scheme by-laws. In this instance it is claimed that the applicant has installed an air conditioning unit without body corporate approval, and thereby breached the scheme by-laws.

The by-laws include by-law 9(b) which provides:
An occupier of a lot must not, without the body corporate’s written approval, mark, paint, drive nails or screws or otherwise damage or deface a structure that forms part of the common property.

The by-laws also include by-law 18 which provides as follows:
No structural alteration shall be made to any unit (including any alteration to gas, water or electrical installations) without the prior permission in writing of the Body Corporate.

Secondly, under section 164 of the Standard Module an improvement to the common property by a lot owner must be authorised by the body corporate. Where the improvement has an installed value of $3,000 or less, does not detract from the appearance of the scheme, and is not likely to promote a breach of the owner's duties as an occupier, the approval may be given by the committee. Where the improvement has an installed value of more than $3,000, the approval must be given by way of an ordinary resolution.

Thirdly, section 94 of the Act sets out the obligations of the body corporate including enforcement of by-laws but requires the body corporate to act reasonably.

Finally, section 167 of the Act provides that the occupier of a lot must not use the lot or the common property in a way that causes a nuisance or hazard or interferes unreasonably with the use or enjoyment of another lot.

It is evident to me that the applicant did not formally seek committee permission for the installation of the air-conditioning unit. While he may have indicated his intentions on an informal basis, and no objection was raised at that point in time, this cannot amount to committee approval. In order for the committee to make a considered decision in relation to such matters it needs to be appraised of all details regarding the proposed installation including details of the type of unit to be installed, proposed installation site, possible noise impact and visual impact of the condenser unit, wiring, refrigerant line and condensation drainage pipe.

Accordingly, it is my view that the air-conditioning unit was installed in contravention of the scheme by-laws and authorisation of the body corporate was not obtained by the applicant in accordance with section 164 of the Standard Module.

The next matter that arises for my consideration is whether, having regard to all the circumstances the decision of the body corporate to require removal of the air-conditioning unit was unreasonable.

The Act gives the owners of lots the power to vote on what by-laws will apply to their scheme. All owners and occupiers are obliged to comply with registered by-laws, unless or until the owners vote to modify or remove a particular by-law (Act, 59). Modifications to the by-laws can be made by special resolution (Act, 62(3)) and take effect on the recording of the modified by-laws by the registrar of titles (Act, 179).

The body corporate has a duty to enforce the by-laws (Act 94(1). However, the rights of individuals are protected to the extent that the body corporate is required to act reasonably in all that it does, including the making of by-laws and the enforcement of the by-laws (Act 94(2)). Reasonableness is a question of fact and having regard to recent case law, the test to be applied in determining reasonableness is an objective test.[1] An objective test requires a balancing of factors in all the circumstances according to the ordinary meaning of the term ‘reasonable’.[2] The question is not whether the decision was the "correct" one but whether it is objectively reasonable.[3]

By-law 9(b) provides as follows:
An occupier of a lot must not, without the body corporate’s written approval, mark, paint, drive nails or screws or otherwise damage or deface a structure that forms part of the common property.

By-law 18 provides as follows:
No structural alteration shall be made to any unit (including any alteration to gas, water or electrical installations) without the prior permission in writing of the Body Corporate.

By-laws such as by-law 9(b) and by-law 18 are commonly included in community management statements for community title schemes. Clearly, it is important that the body corporate maintain control over any structural alterations to the building as well as ensuring that the visual amenity of the building is maintained. Accordingly I can see nothing unreasonable about the content of these by-laws.

The next matter for consideration is whether the body corporate has acted unreasonably in exercising its powers under the Act and regulation Module. In my view the decision of the body corporate to require removal of the air-conditioning unit cannot be regarded as unreasonable. While subsection 1150(1) of the Land Title Act states that an easement exists for supplying utility services to a lot, this does not preclude the operation of section 164 of the Standard Module and further, subsection 1150(2) provides that the exercise of rights under the easement must not interfere unreasonably with the use or enjoyment of the lot or part of common property against which the easement lies. It is evident that the unit is causing a noise nuisance to the occupants of lot 9 who have indicated their intention to make application for an order requiring the removal of the air-conditioning unit if it remains in its current location.

I believe that the body corporate has acted quite reasonably in the circumstances. It is not insisting that the air conditioning unit be relocated to the applicant’s balcony and is prepared to allow the applicant to install the air-conditioning unit on the ground level next to the lot 1 air-conditioning unit. With respect, the applicant’s arguments against relocation of the air-conditioning unit to ground level are unconvincing.

For the above reasons the application is dismissed.

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[1] McKinnon v Treasury [2006] HCA 45 per Hayne J at paragraph 61.
[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.
[3] Commonwealth Bank of Australia v Human Rights and Equal Opportunity Commission (1997) 150 ALR 1 at pages 34, 38.