Portside Noosa Waters [2010] QBCCMCmr 419 (9 September 2010)

Number of Scheme:	16592
Name of Scheme:	Portside Noosa Waters
Address of Scheme:	4-6 Portside Court NOOSAVILLE QLD 4566

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Geoffrey Knott, the owner of Lot 4 and Harold Hayden, the owner of Lot 5

I hereby order that the application for an order by Geoffrey Knott, the owner of Lot 4 and Harold Hayden, the owner of Lot 5 against the body corporate for Portside Noosa Waters community titles scheme 16592 seeking to reverse $1485.00 from the Body Corporate accounts for the refurbishment of an advertising sign and to recover the reversal amount from the letting agent, is dismissed.

The scheme
“Portside Noosa Waters” community titles scheme 16592 is subject to the Body Corporate and Community Management Act 1997 (Act) and the Body Corporate and Community Management (Accommodation Module) Regulation 2008 (Accommodation Module).

Application
This application made on 12 May 2010 is by Geoffrey Knott, the owner of Lot 4 and Harold Hayden, the owner of Lot 5 (Applicants) against the Body Corporate seeking to reverse $1485.00 from the Body Corporate accounts for the refurbishment of an advertising sign and to recover the reversal amount from the letting agent.

Submissions to the commissioner
On 19 May, the commissioner provided a copy of the application to the Body Corporate for distribution to the owner of each lot (excluding the Applicants) and the committee, with an invitation to respond to the matters raised in the application (s 243, Act). Submissions were made by 12 owners (including a late submission) and the committee. 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 that is just and equitable in the circumstances to resolve a dispute about a claimed or anticipated contravention of the Act; or the exercise of rights or powers, or the performance of duties, under the Act (s 276(1), Act).

Investigation
In accordance with the investigative powers of an adjudicator stated in section 271 of the Act, on 12 August I requested the Body Corporate provide a copy of particular Body Corporate records and make submissions to help resolve issues raised by the application. The Body Corporate responded on 18 August. On 20 August, I invited the Applicants to respond to the submissions made by the Body Corporate. The Applicants responded on 30 August.

Decision
In the application, the Applicants sketched the approximate position of three signs on a site plan and provided photographs of three signs (attachments 2, 2a, 2b and 2c). The position of the signs shown in the photographs has not been disputed in submissions. The plan provided by the Applicants is of land of a shape which is consistent with the scheme land described in the plan of subdivision (BUP 103414). On the basis of the information stated in BUP 103414, it is apparent each sign is on common property.

A body corporate must administer the common property for the benefit of the owners of lots, enforce the community management statement and carry out other functions given to it under the Act or the community management statement (s 94(1), Act). The body corporate has all the powers necessary for carrying out its functions and has the other powers given to it under the Act or another Act (s 95, Act). It must administer, manage and control the common property reasonably and for the benefit of lot owners (s 152, Act).

This application does not relate to two of the common property signs. The Applicants question the sign which given attachment 2 faces onto Gibson Road and is photographed in attachments 2c and 3iii. The Applicants dispute the Body Corporate paying for the current artwork on the sign which states ‘Portside Noosa Waters’ (the identifying name shown in the community management statement) and ‘Absolute waterfront resort’. The sign displays four stars and has capacity for inserting a ‘no vacancy’ sign.

It is apparent from the material this artwork and work to the other two signs was completed in 2009. The reason for the work is explained in submissions. Mr and Mrs Wagner (Mrs Wagner is stated as being a committee member) said the committee decided to install uniform signs given the condition of the replaced signs. Mr and Mrs Adams (current letting agent) submit all signage was replaced at the same time presenting a unified appearance. The committee states it aims to upgrade the scheme to return it to the boutique resort it once was and the replacement of the signage is a part of the process. It says the new signs were in keeping with a new image and were of a unified style.

A question has been raised about the decision to authorise signage work. The Body Corporate has provided a copy of votes outside a committee meeting seemingly from or for five committee members in February 2009 agreeing to accept a quote from Sumner Signs for $2722.50 (s 54, Accommodation Module). A committee decision is a decision of the body corporate (s 100(1), Act). A committee can authorise spending that is within its spending limit. Unless another amount has been set (not argued), the relevant limit for committee spending is $4000 (s 149 and dictionary, Accommodation Module). The Body Corporate provided a copy of an invoice from Sumner Signs dated 19 March 2009 for work for the quoted amount. As the Applicants do not question the invoiced amount or the work to two signs, I do not consider there is reason to further investigate the authorisation of the work even though the Applicants expressed concerns about the absence of a Body Corporate record of the decision. In regards to keeping records of a motion voted on other than at a committee meeting, section 55(1)(b), (2), (4) and (5) of the Accommodation Module should be noted. The Body Corporate has paid the invoiced amount, including the amount being disputed by the Applicants.

The invoice from Sumner Signs included an amount of $1485.00 to supply sign panels, paint background and vinyl graphics, paint framework, and interchangeable no vacancy panel. The Applicants question the Body Corporate’s obligation to pay this amount saying the sign was provided by the original letting agent, it is the responsibility of the current letting agent, and the refurbishment advertises the complex for prospective tenants for the letting agent’s business. The Body Corporate has stated it has no records regarding who erected the structure in 1995 or who put the artwork in place although it appears the then resident manager was responsible.

The Body Corporate was created by the registration of BUP 103414 on 23 October 1995. The Body Corporate provided a copy of the minutes of the committee meeting dated 20 December 1995 which indicate it was resolved to consent to the application from the resident manager to erect a 2x3 metre painted sign on the Gibson Road boundary of the property conditional on the manager assuming all costs and liabilities. The decision and the sign are recorded in the ‘Register of Authorisations Affecting Common Property’ currently maintained by the Body Corporate. This is a register which must be kept by a body corporate to record each authorisation given for the owner of a lot to make an improvement to common property for the benefit of the owner’s lot (s 197, Accommodation Module). On the basis of the material, I am satisfied the sign authorised by the committee in 1995 to be erected by the resident manager is that to which the disputed work was carried out.

The Applicants submit the sign was erected by Malcolm Shand and Pamela Castle who they say was the original letting agent. Given the certificate of title for Lot 21 on Building Units Plan of Resubdivision 103695 (previously Lot 12 on BUP 103414), these persons owned the lot in or around 1996 through to 1998. In 1995, a body corporate could authorise a proprietor (now called an owner) to effect improvements to common property for the benefit of that proprietor (s 27(3), 37 and 37A, Building Units and Group Titles Act 1980).

The Applicants state the sign’s artwork has been changed (including the disputed work) three times; the Body Corporate and the current letting agent indicate two changes have been made. The number of changes to the artwork is not significant. It is relevant that the previous artwork displayed the name of the building shown on the building units plan, listed characteristics of the resort and lots, stated a phone number and made provision for vacancies. It is noted that the phone number stated on the previous artwork is the same as the number given by the current letting agent and resident of unit 12 in submissions (the certificate of title for Lot 21 shows that Jeanette Adams is the current owner of the lot). It is also noted the lot has been previously owned by persons who the Applicants submit (without question) were previous resident managers. The circumstances indicate the sign was for the benefit of the proprietor (or owner) of Lot 21.

Given the material presented, particularly the undisputed record in the ‘Register of Authorisations Affecting Common Property’, the sign continues to be recognised as an improvement to common property by an owner. Unless excused by the body corporate, the proprietor shall be responsible to maintain the improvement and keep it in a state of good and serviceable repair (s 37A(2), BUGT Act). A body corporate may also authorise an owner to make an improvement to the common property for the benefit of the owner’s lot under the current legislation (s 159, Act and s 162(1), Accommodation Module). An owner who is given an authority to make an improvement to common property must maintain the improvement in good condition unless excused by the body corporate (s 162(4), Accommodation Module). The ‘Register of Authorisations Affecting Common Property’ currently states the resident manager will be “assuming cost”, which given the 1995 decision is “all costs and liabilities”.

Even though there is no evidence the Body Corporate has excused the owner, there is no doubt it funded the disputed work and earlier work in 2006. In the circumstances and given the legislative framework, there is a question about the Body Corporate’s power to fund this work. The new artwork in 2006 displayed similar information to that which had been replaced and the lot owner at the time was the then resident letting agent. There is nothing to suggest the intent of the sign was different to that for which the 1995 authorisation had been given. While the liability for the expense incurred in 2006 is not a matter for determination in this application, I do not believe the February 2006 committee decision is justification for the Body Corporate accepting responsibility for the disputed work.

It has been determined previously under the dispute resolution provisions of the Act: that a body corporate was responsible to maintain a sign on common property constructed by the developer that contained information of a similar nature to the previous artwork on the disputed sign (Alexandra On The Pacific [2001] QBCCMCmr 156 (15 March 2001)); and that a body corporate could decide to erect a sign that provided information about letting lots provided the detriment to an owner or a minority of owners did not outweigh the benefits to others (Northcliffe [2003] QBCCMCmr 318 (8 January 2003)). In Northcliffe, the adjudicator considered the reasonableness of the cost of the sign and stated: “such signs are not unusual in buildings...heavily let. Perhaps it could be argued that such a sign is necessary to attract holiday makers to the building. Indirectly this might beneficially affect the value of all lots in the building in that the value of units might be increased or sustained by good rental returns”.

A body corporate is responsible for the maintenance of a sign on common property not constructed by a lot owner even though that sign may provide information about letting lots included in the scheme. Consistent with its powers, the body corporate could make decisions about the sign, including about maintaining it or changing the information displayed on the sign. Moreover, a body corporate could decide to erect a sign which, as in this case, contains information about letting lots included in the scheme. However, any decision it makes must be reasonable (s 94(2) and 100(5), Act).

At first glance, I believe the Body Corporate could decide to display a sign of the nature which is disputed in this application. It is predominantly consistent in appearance with other signs on common property which the Body Corporate has had constructed. It is different to the other signs in two areas: it displays four stars and has capacity for vacancy notification.

I do not consider the Body Corporate cannot decide to display such material and as found in Northcliffe, the circumstances do not demonstrate the Body Corporate would be acting unreasonably including these elements on a sign. It is apparent the Body Corporate wants to control the material displayed on signage, the scheme is in an area which would be attractive to tourism and short-term letting, and the Body Corporate has authorised a person to conduct a letting agency on scheme land. I do not believe the Body Corporate could reasonably compel the owner of Lot 21 to display this material, particularly given the context of the material previously displayed and which it would seem was permitted by the Body Corporate.

However, while both of the abovementioned adjudications touch on issues relevant to this application, the circumstances of both disputes did not involve the issue which is significant in this application: the sign being erected on common property by a lot owner with Body Corporate authorisation. Given this circumstance, the Applicants are entitled to be concerned. The Body Corporate has paid for work on a sign which is recognised as an improvement to common property by a lot owner and for which it is acknowledged the owner would assume the cost. The Body Corporate has not provided any basis for it taking on the responsibility for the sign notwithstanding the 1995 decision and the information stated in the ‘Register of Authorisations Affecting Common Property’. The Body Corporate has stated it funded the ‘no vacancy’ sign as part of the sign refurbishment, it is body corporate property and it has not given any authority as to who has the right to attach or remove the sign. It would seem the Body Corporate suggests, without any basis, it has control over the use of the improvement including being able to direct the letting agent about attaching the ‘no vacancy’ sign. I do not believe the Body Corporate can claim it has such control or responsibility for the artwork.

Notwithstanding the 1995 decision and the information in the ‘Register of Authorisations Affecting Common Property’, the Body Corporate could (with the agreement of the owner of Lot 21) for example, decide that the sign is Body Corporate property or excuse the owner from being responsible for the maintenance of, or particular maintenance of, the improvement. If the sign is no longer regarded as an improvement to common property by a lot owner, it should be removed from the register.

The outcome sought seeks to obligate the resident manager to be responsible for the work. This is understandable given the material suggests, as the Applicants submit, the sign is the property of the resident manager. However, I do not consider it is appropriate in the circumstances to make an order in the terms sought. The Body Corporate (through its committee) has shown intent to administer, manage and control the sign. I do not consider the order should be made just because the Body Corporate has not made a specific decision about the management of the improvement or continues to maintain a record indicating the sign is an improvement to common property by a lot owner. In my view, the Body Corporate should not be compelled to do what is sought by the Applicants without having opportunity to make an appropriate decision/s. While I do not consider it is necessary to make an ancillary order requiring the Body Corporate to do something, I would suggest the Body Corporate (in consultation with the owner of Lot 21) needs to give consideration to taking the necessary steps to clarify the issues relating to the control and management of the sign.

Queensland Body Corporate and Community Management Commissioner - Adjudicators Orders

Portside Noosa Waters [2010] QBCCMCmr 419 (9 September 2010)