The Bay Apartments [2010] QBCCMCmr 41 (3 February 2010)

Number of Scheme:	1592
Name of Scheme:	The Bay Apartments
Address of Scheme:	43 The Strand NORTH WARD QUEENSLAND 4810

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

I hereby order that the application for an order that “the owners of unit 23 Mr Stephen Smith and Mr Ermanno Franco undo their external renovations and return the unit back to its original form immediately as they did not have written Body Corporate approval.”

is dismissed.

This is an application dated 15th June 2009 and amended on 21st July 2009 by the body corporate for Bay Apartments CTS 1592 (the body corporate) against Stephen Smith and Ermanno Franco, co-owners of lot 23 (the respondents) for an order that the respondents undo their external renovations and restore lot 23 to its original form with immediate effect, the external renovations being as follows –

“The Bay Apartments” CTS 1592 is a community title scheme governed by the Body Corporate and Community Management Act 1997 (the Act) and the Body Corporate and Community Management (Standard Module) Regulation 2008 (Standard Module). There are 27 lots in the scheme created under a Building Unit Plan of subdivision.

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

(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)).

The respondents refer to a prior conciliation session carried out in this Office. This application is “de novo” in that it is an entirely new application in which the body corporate must prove its case. I have no knowledge of, or access to, any information or documents used at the conciliation session which must remain confidential.

The body corporate say that the respondents had been asked to stop work during the renovations in May 2008 because they did not have body corporate approval for what they were doing. The respondents refused to do so.

On 27th February 2008 Mr Smith of the respondents wrote to the body corporate manager but the request was “vague and incomplete”. The plan he referred to in the letter was never presented to the body corporate. The body corporate attaches a copy of an email which says –

We are considering gutting this unit and refurbishing. I am applying to put in new windows as well as replacing the sliding door panel and kitchen window. I will drop a plan and materials into you today.

We will also be installing two split systems into the back bedrooms similar to the ones there (sic) in other units.
All installations will be professionally installed and at the cost of the unit owner lot 23.
Can you please seek approval ASAP as the unit is now vacant awaiting a new ceiling.”

The respondents provided a brochure about Crane Windows’ sliding doors. The respondents did not provide a plan or drawing of the works to be carried.

On 8th May 2008 the body corporate manager sent a letter to the respondents asking them to stop the work in progress, and saying that there had been complaints received and items not mentioned in the email of 27th February 2008 being constructed/appearing. The letter referred to body corporate by-laws which require written approval from the body corporate for alterations.

On 12th May 2008 the body corporate manager forwarded a letter from the committee by recorded delivery mail to the respondents asking them to stop immediately, and asking them to submit plans to the committee for discussion, as well as provide colours and materials to be used, under threat of legal action and costs.

On 13th May 2008 the body corporate manager also wrote to the builders asking them to stop works and saying that the works had not been approved.

On 5th September 2009 a BCCM Form 1 was sent by the body corporate manager to the respondents quoting a by-law headed “Second Schedule item 4” as follows –

“Except so far as any rules and regulations from time to time made by the Council may permit and except in accordance with the provisions of any such rule or regulation a lot proprietor shall not erect or permit to be erected or to remain any fixture or fitting of any kind whatsoever on any external part of any lot or on any part of the common property.”

The body corporate is concerned that despite requests to stop, the damage has now been done.

In accordance with section 243(2)(b) Act submissions were invited from all lot owners.

Beth Ollason, simply returned a copy of the application although when contacted, she said she supported the body corporate.

Rolf Petheridge, owner of Lot 22, also supported the application. He says that over the years many owners have made changes in the scheme some of which probably have needed approval, but none have had the impact that the renovations now made by Lot 23 have had. Also no other owner has ignored a request to stop work. The committee’s efforts to adhere to the regulations should be upheld, even if past committees have been less vigilant.

The respondent Stephen Smith (Mr Smith) sent various photos in support of other alleged by-law breaches in the scheme.

He says that in February 2009, a motion (motion 15) was put to the AGM for approval of all works to unit 23, but it was ruled out of order by the chairman. The motion was that the body corporate “approves all the professionally installed works to this unit which have been installed with the very best intentions. Approx $70,000 of work has been completed to totally refit this unit.”

The motion carried an explanatory note that the respondents had sought permission but that there was no response from the body corporate.

The chairman ruled this motion out of order because “Motion 15 required written approval before the work could be entered into” and that the chairman must rule a motion out of order if it is conflict with the by-laws, quoting “section 81”. The chairman said that the motion was “ designed to defeat the legislation.” Mr Smith says that the votes for Motion 15 were in favour.

The body corporate exercised its right of Reply in response to the submissions. It says relevantly that the other airconditioners in the scheme referred to by the respondents were originally in the building and they are “window airconditioners” which require no approval when being replaced. They do not need holes in the wall drilled to accommodate them, and they are not new features

The body corporate intends to treat all owners equally and if owners want to make changes, they should seek permission in writing from the body corporate, and many have done so and the committee has been able to enter into discussion with these owners, sometimes effecting a compromise situation.

The alleged breaches referred to by Mr Smith such as hanging washing over a railing and keeping bikes on a balcony are easily rectified and not of the magnitude of Mr Smith’s renovations. Mr Smith’s submission makes vast generalisations which do not address the issue.

I sought clarification from the body corporate about its by-laws and those quoted to the respondents in the contravention notice. I also asked the body corporate on which sections of the legislation it was relying for the submission that the respondents required permission from the body corporate to effect renovations.

The body corporate provided a copy of its by-laws from First Schedule Building Units Titles Act 1965 and a “Second Schedule” to that Act “as varied expressly or by implication” with a list of 23 by-laws.

The committee maintains that the renovations made to the exterior of Lot 23 have considerably altered the appearance of the building and common property with fixtures and fittings as well as an alteration to the exterior brickwork which has changed the structural appearance of the exterior in contravention of By-law 4 of the Second Schedule as stated.

In this application the body corporate seeks an order that renovations done by the owners of Lot 23 without the approval in writing of the body corporate should be “undone”, and the lot restored to the way it was before the renovations took place.

It is not disputed that the renovations took place in May 2008, now over a year and half ago. Nor does it appear to be in dispute that the body corporate attempted at the time to stop the work. It wrote at least two letters to the respondents asking them to stop the work; sent a letter to the respondents’ builders; and sent a notice about a contravention of a body corporate by-law in September 2008.

In respect of that notice, I have two concerns. Firstly, section 182 Act requires that a continuing contravention notice sets out particular information, such as is to be found on a form BCCM 10. In order to be effective, a by-law contravention notice must state that the body corporate believes that the person is breaching a by-law, what by-law is being contravened, the text of the by-law, the period in which the contravention must be stopped, and that if the person does not comply with the notice, the body corporate may without further notice start proceedings in the Magistrates Court or make an application to this Office for resolution of a dispute. (Section 182(4) Act.)

The form sent by the body corporate was a form BCCM 1, which is a prescribed form used by a person who is reporting an alleged breach and asking the body corporate to send a notice to the offender. It does not contain the information required by section 182 Act, and was therefore not effective.

Secondly, I am of the view that the by-laws now presented by the body corporate in this application, are, or are no longer, the by-laws applicable to this scheme. The by-law relied upon is listed as by-law 4 of the Second Schedule as amended under the Building Units Titles Act 1965.(BUTA)

The Second Schedule of BUTA contained only two by-laws. By-law 1 is repeated as items 1a) and 1b) of the stated Second Schedule by-laws on p. 6 of the document provided. By-law 2 said only –

“A proprietor shall not keep any animals on his unit or the common property after notice in that behalf from the council.”

All the other by-laws listed under the words “Second Schedule” of the document provided by the body corporate manager on 29th January 2019 must at some time have been passed as special resolutions of the body corporate to be effective. The body corporate was not at that time required to register in the Land Titles Registry any approved changes to the Second Schedule by-laws.

With the introduction of the Building Units and Group Title Act 1980 (BUGTA) the first by-law of the Second Schedule became inapplicable because it was incompatible with the provisions of BUGTA. This means that by-laws 1a) and 1b) were then no longer valid.

On 3rd October 1988, BUGTA was amended to include the following provisions at section 5:

5(10A) It is hereby declared that, notwithstanding any addition to or amendment or repeal of any of the by-laws set forth in the Building Units Titles Act 1965, schedule 2 or, as the case may be, in the Group Titles Act 1973, schedule 2 before the appointed day, those by-laws were part of the former by-laws relating to a former plan.

5(10B) However, if, at any time before the expiration of 6 months after the commencement of the Building Units and Group Titles Act Amendment Act 1988, section 5, the body corporate lodges with the registrar of titles a notification in the prescribed form of any such addition, amendment or repeal (having been made before that commencement by a by-law or former by-law that was valid at the time it was made) upon the registrar of titles recording the notification on the corresponding plan, those by-laws as added to, amended or repealed as particularised in the notification shall be deemed to be part of the former by-laws relating to the former plan.

5(10C) In relation to that plan those by-laws shall be deemed to be the by-laws set forth in schedule 3 and the provisions of this Act shall apply thereto.

The body corporate therefore had up to 6 months to register any amendments which it had already made to the Second Schedule of BUTA. There is no record of any such registration in the Land Titles Registry.

The only registered by-laws for this scheme were recorded on 13th July 1974 and were amendments to the First Schedule BUTA. First Schedule by-laws under BUTA have not been applicable since the introduction of BUGTA. They no longer applied since they were incompatible with BUGTA, for example, the new provisions for the requirements for a committee, and for holding meetings etc.

The body corporate’s contention is that the respondents may not make changes to the external appearance of their lot without the prior permission in writing of the body corporate, by which it means the committee. However, the regulation or legislation on which it relies for this contention is nowhere stated in the application. The letter sent to the respondents asking them to stop work says -

“ it is clearly a breach of the procedures as set out in the legislation. The Committee and in some instances all owners of the Body Corporate need to approve such works.”

No “procedures” are referred to or evidenced in this application, nor are any sections of the legislation on which the body corporate relies referred to. There is nowhere in the legislation a requirement for unanimity by the body corporate which the second sentence might imply.

Prior to 31st August 2008, “improvements to common property” which means a structural or non structural change including the installation of air conditioning (see “Dictionary”- Act), generally needed to be approved by special resolution at a general meeting unless they were of very minor value and impact. Since that date, in accordance with section 164 Standard Module, an improvement to common property for the benefit of an owner’s lot may be approved by ordinary resolution. The committee may also approve an improvement if it costs less than $3,000 to install, does not detract from the appearance of any lot or the common property; and is not likely to breach the owner’s duty as an occupier (to other lots in respect of their enjoyment and use of them.)

From the photographs provided by the body corporate, it does not appear to me that some of these items are “improvements to the common property” such that they need approval in accordance with section 164 Standard Module.

The sliding doors are within the respondents’ lot from the interior to the balcony, as is the window shown if that is the kitchen window. The downlights are also within the respondents’ lot.

The photographs of the rear of Lot 23 do not focus on the rear windows so much as a block pillar described as “new blockwork” and an air conditioner installed on brackets affixed to the exterior wall. In a Building Unit Plan of subdivision, the exterior wall is common property by virtue of section 49C(4) Land Titles Act 1994. The respondents should therefore have sought the approval of the body corporate at a general meeting prior to doing any blockwork, and affixing brackets and conduits to the wall, and installing the air conditioner.

In respect of the rear windows, by section 159(2) Standard Module, the body corporate is liable to maintain in good condition “doors, windows and associated fittings situated in the boundary wall separating a lot from common property.” The body corporate is not liable to maintain fixtures or fittings installed by the occupier for his benefit (section 159(3)(a) Standard Module).

On 5th February 2009, the respondents put a motion for retrospective approval to a general meeting but it was ruled out of order because the respondents had failed “to obtain approval for the works in writing before proceeding....in conflict with both the Act and the By-laws....”

I find the ruling by the chairperson to have been quite nonsensical. If prior approval is required, and is not sought, the person who has made renovations then has no opportunity of remedying his or her mistake, even if the body corporate is in favour of the renovations. The opportunity for prior approvals is over and that is the reason the applicant seeks approval after the event.

Section 81 Standard Module requires the chairman to rule a motion out of order if the motion if carried would be unlawful or unenforceable; or if it is conflict with the Act, regulations or by-laws. The motion, if carried, would appear to have been to comply with the legislation, albeit retrospectively. It is the work done which was allegedly unlawful, not the motion seeking approval of the work. It cannot be contrary to the legislation to seek to comply with the legislation.

Further, when a chairperson rules a motion out of order, he is obliged to give reasons for the ruling. The chairperson did not refer to any particular sections of the Act and/or the By-laws, so it would have been difficult to give any informed reasons for his decision. The chairperson must also inform the meeting that it may if it wishes by ordinary resolution, reverse his ruling (section 81(2) and section 81(3) Standard Module) which it is apparent he did not do.

In conclusion, I find that the by-laws on which the body corporate sought to rely are not applicable. The body corporate has quoted no section of the legislation which requires the respondents to seek approval for making renovations for their unit. Section 164 Standard Module requires a lot owner to seek the approval of the body corporate before making an improvement to common property, and in as much as the back wall is common property, the respondents should have sought the approval of the body corporate for the air conditioner and for the addition of the blockwork. In fact, the respondents did this retrospectively, but their motion was improperly ruled out of order. There was no need to seek approval for the front facing doors, the front facing windows, or the downlights, none of which are an improvement to common property.

The respondents say that had the motion been allowed, the vote would have been in favour of it. They have supplied no evidence to that effect.

However, it is a matter for the body corporate to prove its case, and I am not satisfied it has provided evidence of any detriment to the scheme owing to the respondents’ renovations or that the body corporate has not subsequently approved the renovations. There were only two submissions in favour of the committee’s application.

The dismissal of this application leaves the respondents with no recorded approval for improvements to common property.

I do not have enough evidence about the rear windows. I suggest that any future or retrospective approval should contain a condition that the successive owners of Lot 23 in future be responsible for the maintenance of these windows, their installation and fittings pursuant to section 159(3)(a) Standard Module.

End note.
What are by-laws for this scheme?
In accordance with section 5(10C) BUGTA quoted above, the scheme by-laws would appear to be the remaining by-law 2 of the Second Schedule of BUTA ( the animal by-law as stated above) and the by-laws set out at Schedule 3 BUGTA as are not inconsistent with the former by-laws (section 5(10) BUGTA).

Schedule 3 BUGTA sets out 11 by-laws, the 11th of which “Keeping of animals” would be inconsistent with the BUTA Second Schedule by-law 2 stated above.

By-law 8 “Appearance of Building” might be relevant to this application, but I am of the view, that the Schedule 3 BUGTA by-laws, even if applicable, cannot now be relied upon in this application without recommencing the entire process.

The body corporate should take steps to review its by-laws and record a first community management statement.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders