Turtle Beach [2010] QBCCMCmr 439 (24 September 2010)

Last Updated: 8 October 2010

REFERENCE: 0047-2010

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	28995
Name of Scheme:	Turtle Beach
Address of Scheme:	2343-2362 Gold Coast Highway MERMAID BEACH QLD 4218

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Miranda Wentworth, the Owner of Lot 121

I hereby order that all lot owners and all occupiers with a lease of three or more months duration shall be entitled to elect to have their electronic keycards coded with an expiry date of a period of up to twelve months from the date of issue, providing first that they advise the Body Corporate for Turtle Beach in writing of the period. I further order that the Body Corporate for Turtle Beach is not entitled to impose a requirement that 24-hour notice be given for a new or replacement electronic keycard to be issued. I further order that the Body Corporate for Turtle Beach shall amend the document ‘Policy and Procedure for Security/Key System’ dated September 2008 to reflect the above requirements.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0047-2010

“Turtle Beach” CTS 28995

Turtle Beach community titles scheme 28995 (Turtle Beach) consists of 149 lots and common property. The community management statement (CMS) for Turtle Beach indicates that the Body Corporate and Community Management (Accommodation Module) Regulation 2008 (Accommodation Module) applies to the scheme. Department of Environment and Resource Management records show the scheme is registered as Survey Plan 133857.

APPLICATION

Pursuant to the Body Corporate and Community Management Act 1997 (Act), this application was made by Miranda Wentworth, Owner of Lot 121 (applicant) on 14 January 2010. The applicant sought orders against the Body Corporate for Turtle Beach (respondent) in the following terms:

1. An order declaring that the resolution passed at an extraordinary general meeting of the body corporate on 21 November 2008 approving a policy and procedure document dated September 2008 for the security key system is void; and
2. An order that the electronic security key card system installed and owned by the body corporate be operated by the onsite manager for the time being in accordance with the "Policy and Procedure Security/Key System dated September 2008" carried as follows: -

(a) Deleting all text under the subheading "Procedure - owner occupiers and apartments managed offsite"; and

(b) Inserting the following text under the subheading "Procedure - owner occupiers and apartments managed offsite":-

“1. Keys are not to contain any text identifying the apartment number or the name or location of the resort and not to contain any other text except with the express agreement of the apartment owner.

2. Unless otherwise agreed with the apartment owner all keys are to be coded indefinitely.
3. Lost or stolen keys shall be reported to the building manager or their representative as soon as is practicable and:-

(a) The Manager will code new cards for the apartment on an indefinite basis (which will the automatically deactivate the previous cards issued when the new cards are used on the apartment door)

(b) The manager will recode all stairwells and common ground area receivers relating to the re-coded card.”

3. That the above orders are to have effect as ordinary resolutions of the body corporate as at the date of the orders.
   

PROCEDURAL MATTERS

Initially the applicant lodged an application for conciliation (reference 0947-2009). The Commissioner’s Office conducted a conciliation session to assist in the resolution of this dispute but unfortunately this was not successful in resolving the dispute. On 17 November 2009 the Conciliator issued a certificate confirming that no agreement was reached at conciliation.

Under section 243 of the Act, a copy of the application was provided to the Body Corporate, with an invitation to the Committee and all owners to respond to the matters raised by the application. Submissions were made by the Committee and 31 owners. The applicant did not avail herself of the opportunity to inspect and respond to the submissions received.[1]

A dispute resolution recommendation was made referring the dispute to departmental adjudication. I then investigated the dispute, pursuant to section 271 of the Act, which included reviewing the application and submissions and seeking further information from the parties as detailed below.

I note that a similar application (reference 0051-2010) was lodged with this Office at the same time by owners within Turtle Beach II CTS 30054. That is an adjacent scheme which is managed by the same caretaking service contractor (also referred to as the resident manager) as Turtle Beach, that being Sands Management Pty Ltd (Sands). As the issues in each matter are identical, I have determined the applications concurrently.

MATTERS IN DISPUTE

The application relates to the Body Corporate’s policy regarding security keys and particularly a resolution of the Body Corporate purportedly passed at an Extraordinary General Meeting (EGM) on 21 November 2008. The circumstances, as outlined in the application, are as follows.

The EGM in November 2008 considered Motion 2 submitted by the Committee. The following motion was passed with 57 votes in favour, 6 against and 2 abstentions[2]:

THAT following the installation of the security system as previously approved by the Body Corporate at general meeting, the Body Corporate approve the policy and procedures for operating the new system and the issuing of keys to owners, guest and others set out in the document circulated with this motion headed “Policy and Procedure for Security/Key System” subject to any minor variations to that, as the Committee from time to time determines to be reasonable, to protect the interests of owners and occupants.

The explanatory material for the EGM motion noted that the previous general meeting had approved a new security system to overcome problems of unlawful entry to and theft from apartments. The motion sought to set basic procedures for the operation of the new system.

The circulated Policy and Procedure for Security/Key System referred to both schemes and was dated September 2008. It states that keys are issued by Sands pursuant to the terms of their management agreement. The document outlines who keys are issued to and particularly the differing procedures for allocation of keys to apartments that are let out, depending on whether the apartments are managed by the resident manager or by an owner or an external booking provider or other off site manager.

Turtle Beach and Turtle Beach II first operated as two resorts but are now operated as one and managed by one onsite manager, Sands. Originally the administration and issue of keys was undertaken by Sands at the reception areas in each resort and now it occurs just from Turtle Beach. Under the previous arrangements, Sands held master keys and copies of keys for each lot in the letting pool and lot owners held their own set of keys. Offsite agents held three to four sets of keys for the lots they managed, and ordered additional/replacement keys from Sands with replacements charged to the lot owner. There was unrestricted access to common property and lots by offsite agents. Owners were permitted to hold up to eight sets of keys.

Under the new system, the applicant asserts that:

• The Committee agreed to, and paid for, Sands’ request to print Sands’ branding on all cards.
• Master keycards are issued daily to Sands staff, who sign for receipt and return.
• For lots in the letting pool, a keycard is validated and issued to each guest upon check-in and the expiry date is set as the guest’s departure date.
• Offsite letting agents are given two master cards, valid for one month. Agents must order and collect up to four cards, validated for 14 days, from Sands. Guests cannot collect cards.
• On many occasions cards have not worked and the agent or guest needs to return to reception to exchange the card.
• Owner occupiers are issued with up to four new cards each month in return for the previous month’s allocated cards. Reception is open from 7am-7pm Sunday to Thursday and 7am-9pm Friday and Saturday. If an owner returns to the scheme outside these business hours they cannot access their home if their card has expired in their absence.
  

After the motion passed, the affected owners attempted to cooperate with the onsite manager regarding the implementation of the new policy. The application says that, despite their best endeavours, there have been continued difficulties and substantial inconvenience. They attempted to rely on the part of the motion that said the committee could make minor variations, but requests for such variations have been refused or ignored. Copies of correspondence detailing these attempts and related concerns are provided.

The applicant asserts that in passing the EGM resolution the Body Corporate has failed to administer, manage or control the common property and body corporate assets reasonably and for the benefit of lot owners[3]. In particular the applicant asserts that:

• The security system was purchased by the Body Corporate and is owned by the Body Corporate as a body corporate asset principally installed on common property.
• The obligation to act for the benefit of lot owners extents to all owners, not just the majority.
• The majority of lot owners (approximately 270 lots out of 300 in both schemes) have lots in the letting pool managed by Sands or by the Accor Vacation Club letting pool. Although Accor is an off-site letting agent it does not object to the security system policy.
• The remaining lots either have owner-occupiers or are managed by other off-site agents.
• The owners of these approximately 30 lots previously enjoyed unrestricted access to their lots by traditional key and lock systems. The new security system policy restricts their access in a manner that is not reasonable and is not for the benefit of affected lot owners.
  

The application seeks to vary the key policy as it relates to the procedure for owner occupiers and apartments managed offsite. It proposes that:

• Keys not contain any text identifying the number, name or location of the resort or any other text without the express agreement of the apartment owner.
• All keys be coded indefinitely unless otherwise agreed with the owner.
• Lost or stolen keys be reported to the building manager or their representative as soon as practical, with the manager then recoding new cards for the apartment and recoding all common area receivers relating to the recoded card.
  

The applicant asserts the proposed changes will minimise inconvenience to the affected owners while not inconveniencing the majority or compromising security. In particular she asserts that:

• There will be no change for the majority of owners. Any owner who wishes to retain more restrictive key policies can simply agree to those with the building manager.
• Under the current policy all cards have an expiry period of up to 14 or 30 days. Therefore the lost or stolen card still provides access to common areas for up to 30 days. Under the proposal these cards would be recoded immediately which would maintain security.
• The proposal would reduce the workload for onsite and offsite management staff involved in recoding and obtaining new cards every two to four weeks.
• The pre-existing access rights enjoyed by owners and offsite managers will be preserved and the problems faced by owners returning to their lots with their cards expiring will be avoided.
• The change will enable offsite letting agents to deal with late check-ins and cleaning apartments for late bookings without requiring advance notice.
  

Submissions

The submission from the Body Corporate opposes the application and asserts that:

• The key policy was adopted in an attempt to better secure the resorts and prevent and deter break-ins which had been occurring on a regular basis.
• The new electronic key system (EKS) is operated by Sands.
• The keycards feature Sands brand name but do not identify the apartment number or common property area.
• The Body Corporate is very happy with the EKS, and believes the vast majority of owners are similarly satisfied. Only 22 owners support changes.
• If guests have problems with the EKS card they can exchange them at reception.
• Break-ins, which were a problem, have been eliminated.
• They dispute that the proposed changes would enhance security or reduce workloads.
• The proposed changes have not been submitted by the applicant to a general meeting.
• The Body Corporate acted reasonably by installing and operating the EKS to enhance security for all owners. It has acted in the interest of and to the benefit of all owners.
• Altering the policy would jeopardise the security of all for the convenience of a minority.
• Coding keycards on an indefinite basis would compromise the EKS. It would return to the previous system where unreported lost keys jeopardised the scheme’s security indefinitely. The time limit minimises any compromise to security from any period of unreported lost keys.
• The requirement to regularly collect re-issued keys inconveniences owner occupiers and offsite letting agents, but a uniform approach is essential to maintaining a secure complex.
• The two applications were lodged over 12 months after the 3 month time limit for an application to challenge a general meeting resolution. The applicants failed to give adequate reason for this delay. They have not suggested they have only just uncovered an irregularity or that they were unable to take action until recently. The respondent will be prejudiced by the delay in that the policy has been introduced, is understood by all, and is working to the satisfaction of the majority. There are no grounds to set aside non-compliance.
• The applicant is seeking to rewrite a resolution which will significantly change the existing procedure that is not supported by the majority. It is an attempt to displace the legitimate will of the majority. As such it would not be just and equitable to make the orders sought.
• The applicant has failed to state any basis that an adjudicator can make the order sought.
  

The submission from Sands opposes the application and comments that:

• Coding keys for an indefinite period, instead of 30 days, would result in a significant reduction in security for both schemes, and ‘extreme’ disruption to lot owners and their guests, for the “self-interested gain for a small number of unit owners”.
• The EKS was approved for installation in November 2008, replacing all traditional keys. The electronic locks, card system and coding software is owned by the Body Corporate and administered by Sands under the Caretaking Agreement.
• The EKS was agreed to by an overwhelming majority to address the large number of break and enters, general thefts and vandalism. Since the EKS the number of burglaries and unauthorised entry incidents has reduced from three a week to four in the last six months.
• If an individual unit keycard is lost it can be re-issued for that unit and, once swiped, will override the code for the individual unit but the previous key will continue to access common area locks. Anyone finding a lost card will have access to all public areas including car parks until the card expires. To change the code for public and common area locks (to render a lost card ineffective) would invalidate every card (about 800) previously issued to be immediately ineffective. The operations of the resort would grind to a halt to enable the re-issuing of new cards to the entire resort at the one time.
• The Committees of both schemes, local Police and industry experts recommended the 30-day limit as the best practice to minimise the risks from lost keys.
• Owner occupiers and permanent tenants only require a couple of minutes a month to replace their cards and visiting lot owners can collect cards at reception or through the night safe facility adjacent to reception.
• Glen Archer and Nicole Bujayer (applicants in the related application) have lost or mislaid a number of keycards since the system was introduced. They also have ‘loose’ systems for the management of keys such as departing guests leaving keys in a nominated mailbox with Sands staff witnessing guests reaching back into the mailbox to retrieve cards.
  

Twenty-two submissions were made by owners opposing the application:

• Many state that they oppose (in some cases very strongly) changes to current arrangements and support the actions of the Body Corporate and its Committee.
• Some comment that they consider the system is operating satisfactorily.
• Several argue that if keys are indefinitely coded the security of the whole scheme would be compromised, and that the rules are there to protect everyone.
• Several noted that the benefits of the EKS are evident with a reduction in crime.
• Some submissions indicate concern at attempts by a small number to downgrade the security of the resort for their own interests.
• Some noted the cost and difficulty in recoding all cards every time one is lost or stolen.
• One submission says they were robbed in their apartment and support the use of time limited keycards, as suggested by the Police and agreed to by the majority of owners.
• One comments that only one off-site owner (Blue Sky Holidays) has complained about the EKS, and not all of the small number of owner-occupiers object to the present arrangements.
• One argues that no-one is restricted from accessing their unit.
• Another notes there was ample time to voice concerns before the vote in November 2008.
• One says that any inconvenience to a few is far outweighed by the inconvenience and cost in needing to recode all cards every time one is lost or stolen.
• One comments that the monthly recoding takes very little effort.
• Another notes that considerable effort went into researching and implementing the EKS.
  

Seven submissions were made by owners in support of the application:

• One owner says she was locked out of her unit on three occasions and if this occurred when the security officer was off duty she wouldn’t be able to access her lot. On one occasion she was told her card would be valid until the 4th but it expired before that date. The manager told her the new cards would always be ready on the first Monday of each month but in February she was told they were not ready and she would have to come back on Wednesday or Thursday, and so multiple trips to reception were required. The old manager required cards to be collected a few days before the end of the month, but when the system changed owners were not notified. The EKS is extremely inconvenient for owner occupiers.
• Another submission argues they previously had 24/7 unrestricted access to their unit and could go on holidays without needing to report to reception. They do not always know in advance when their time allows them to visit. The current system restricts their ability to use their apartment, because they need to give 24 hours notice to order keys and they sometimes wish to arrive outside of office hours. They agree security is paramount for everyone but say the current set up does not meet everyone’s needs and expectations.
• Another raises similar concerns that they cannot visit their lot whenever they want because they need to give 24 hour notice of any visit.
• One owner contends that the current system is unfair and discriminatory. He says needing to ask ‘permission’ to enter his own property each month is stressful, uncomfortable and unfair. If he visits his unit outside office hours he has to wait for security to open the office and change his cards and if he doesn’t have both cards with him he has to go back again to change his card. His flatmate works long hours and finds it difficult to visit the office during business hours to change their cards. In January he tried to change his cards but they were not ready. He went again twice and each time was told that he had to return the next day.
• One submission noted that they had been informed by Sands that their agent and guests were not welcome to use Sands operated facilities including the reception area, mini golf and pizza bar. They say they have experienced rudeness and discrimination from Sands, who do not have the interests of guests and the scheme at heart.
• Each supporting submission supports indefinitely coded key cards.
• Three submissions also argue that the cards should be plain white, with no logos or text, for security reasons like other secure complexes. Another comments that the cards should not have text identifying the number or location of the resort except with the express agreement of the lot owner and should not be colour coded to differentiate between types of owners.
  

One submission lodged did not include any comments in respect of the application.

I note for reference that in the related application (0051-2010), the submissions from 10 owners supported the application, 12 owners opposed the application, and two made no comment. The nature of the comments and issues in the submissions were similar.

It is also noted that at the Annual General Meeting on 16 April 2010 the Body Corporate passed a motion (Motion 12) to approve the access control system and standard operating system, by 56 votes in favour and 6 against[4]. The motion was in the same terms as the November 2008 EGM resolution but added the text that the Body Corporate use only one master key system for all locks which is to be held in a secure place by the building manager or his deputy.

Investigations

Pursuant to my investigative powers under section 271 of the Act, on 11 May and on 16 June 2010 the Body Corporate was asked to provide information on various matters. The response included:

• The keycards for all holiday letting guests expire at the end of their stay. If a guest stayed longer than 30 days the card would be recoded after 30 days. Owners and permanent tenants have a 30 day limit but if the 30 days ends on a Saturday, Sunday or a Public Holiday, the expiry is the next working day.
• The approved procedure requires 24-hour notice to supply a coded keycard. The only reason for 24 hour notice is that it is in the approved procedure.
• Reception is open from 7am to 9pm, 7 days and security officers provide cards after hours.
• A card is issued by reception once identification of the owner or guest is sighted. If the guest arrives after hours, the process could take a maximum of 15 minutes to issue the card by security officers (depending on where the security officer is). It may take 5-10 minutes for security to reach reception, depending on where they are in the scheme.
• If there has been no notice given, a card can be issued in 5-10 minutes by reception or a maximum of 15 minutes by a security officer after hours (depending on where the officer is).
• The same process exists for a walk-in tourist, once a suitable room has been located and the booking procedure occurs.
• The process of loading the software and coding the keycard takes about one minute.
• The Body Corporate has not received any correspondence of complaints regarding residents not receiving their key cards.
• The Committee is unaware of problems with cards expiring before the notified expiry date. It may be a software malfunction and if it occurred the card would immediately be replaced.
• The Committee is unaware of problems with cards being coded incorrectly, but this could arise as human error. If it occurred the card would immediately be replaced.
• All replacement cards are coded and placed in individual envelopes, with the apartment number, expiry date, and number of cards written on the front.
• The cards are branded blue for the letting pool and black for others. The colours are necessary to identify to service staff who can access charge-back facilities for guests who occupy units in the letting pool. There is no discrimination against different occupiers.
• There is no reason for the Sands and scheme names to be on the key card. To date there have been no security concerns regarding the branding of cards.
• The Body Corporate does not have records of the break-ins prior to the introduction of the EKS but the Queensland Police, usually Broadbeach Station, were notified of all incidents.
• There is “no doubt” from an operational point of view that the EKS has “drastically” reduced the number of thefts and break-ins at the schemes.
• Minutes of committee meetings dated 22 August 2008 were provided, which record discussions with officers from Broadbeach Police. These state that the Police said 59 break and enters had been reported so far that year[5]. The minutes also include a manager’s report indicating 24 incidents over the previous three months of items allegedly stolen from guests.
• A break-in occurred on 22 May 2010 in which an intruder accessed the property over an adjoining fence, climbed a balcony and entered an apartment through unlocked sliding doors.
• Turtle Beach is in some 8 acres of gardens with 10 two story town house blocks and 287 apartments in three-story walk-ups. All parking is in two large underground car parks. The key cars are used to access security gates leading to two front main gates, the car parks, particular stairwells, recreational and other common areas, and apartments.
• There are over 700 individual card readers in the scheme.
• Staff and management use the same system and their cards are re-coded each month.
• If an unlimited coded card were lost, the solution to prevent illegal access would be to re-code that type of card and then it would need to be swiped against every single card reader in the resort to override it. All other key cards would then have to be recoded. This would be very expensive and the resort would grind to a halt while this was carried out.
• The Body Corporate decided that the risk of an unlimited keycard being lost was too great and the majority of owners approved the procedure and ratified it on two occasions.
• Sands experienced many problems with Blue Sky Holiday Group who lost their master key and supplied the incorrect key to their cleaning staff and some guests.
• The monthly procedure for a small number of owners is no burden. All replacement cards are pre-coded and waiting for them to collect at the nominated date. It takes 30 seconds at reception or no more than 10 minutes after hours.
• As a compromise the Committee could consider a proposal that owner occupier cards be code for a three month period but this is not preferred.
• The current system has been installed at considerable cost to the Bodies Corporate and the cost of altering the software (if possible) would be a considerable added expense.
• Sands is not aware of other comparable properties with a similar key card system.
  

I then sought information from the company who supplied, installed and maintains the EKS. Peter Smith, General Manager of Safeport Security Solutions provided the following written advice:

• When a guest card is created for an individual apartment, it is assigned a deactivation date and time. If the card is lost, then a new card can be issued which will immediately deactivate the previous card once the new card is presented to the apartment door lock. But there is no way to deactivate a lost card in respect of common doors around the property (including car park entry gates, the gymnasium and stairwell doors). Therefore the card will continue to be active on all common doors until it reaches its pre-assigned deactivation date and time.
• While there may be potential to modify the software, they have not been advised of any software upgrades or modifications in the last two years and it is a ‘static’ product.
• They could not estimate the cost to modify the software and are not willing to approach the manufacturer with such an inquiry.
• Comments are made on the rationale for time limited cards.
  

In response to the further information from the Body Corporate and Safeport, the applicant says:

• The different coloured cards discriminate against owners.
• It is her legal right to access her unit 24/7 and not rely on a third party.
• She doesn’t understand why she should be put to this inconvenience when she is not in the letting pool.
• Not all unit owners are happy with recoding their cards each month.
• She doesn’t see why it should matter if her cards are coded indefinitely as it does not contain the address of the complex; she would need to notify the scheme to get a new card; and she would not need to inconvenience anyone when she occupiers her unit.
• She does not consider that it would reduce security. Temporary swipe cards have not reduced theft and they advertise Sands which would be an invitation if the card was found.
• At her last visit she had two televisions stolen along with her car registration and cover removed. There were no signs of forced entry.
• She would like to install a deadlock on her lot, with the consent of the Fire Brigade.
• In regard to the suppliers claim that lost cards are not reported, she has only ever been issued with two cards and it would be detrimental to her not to report and replace lost cards. Letting pool tenants would need to return their cards on checking out.
• Currently a colleague is using her lot and he was unable to access it because a battery had corroded. Fortunately this was during reception hours but she queries what action had been taken to ensure this does not occur again and whether other owners had been informed of it.
• She should have uninterrupted use of her unit, feel safe when doing so, and be the only person able to access her unit.
  

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 claimed or anticipated contravention of the Act or the CMS; or the exercise of rights or powers, or the performance of duties, under the Act or the CMS; or a claimed or anticipated contractual matter about the engagement of a person as a body corporate manager or service contractor; or 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.[6] An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate.[7]

I am satisfied that this is a matter which falls within the legislative dispute resolution provisions.[8]

However, a preliminary issue that arises is whether the applicant has complied with the time limit for making an application. Section 242 of the Act provides:

242 Time limit on certain adjudication applications

(1) This section applies to an adjudication application for an order declaring void—

(a) a meeting of the committee for the body corporate, or a general meeting of the body corporate; or

(b) a resolution of the committee or body corporate; or

(c) the election of an executive or other member of the committee.

(2) The adjudication application must be made within 3 months after—

(a) If subsection (1)(a) applies—the meeting; or

(b) If subsection (1)(b) applies—the meeting at which the resolution was passed or purported to be passed; or

(c) if subsection (1)(c) applies—the meeting at which the executive or other member was elected.

(3) A person is taken to have complied with subsection (2) for a dispute if the person made a conciliation application for the same dispute within the time mentioned in the subsection for the dispute.

(4) However, if the making of the adjudication application does not comply with subsection (2)—

(a) the commissioner must deal with the application (including making a dispute resolution recommendation for the application) as if the making of the application complied with subsection (2); and

(b) an adjudicator to whom the application is referred for specialist or department adjudication may, for good reason, waive the noncompliance.

On its face, this application seeks to invalidate a resolution at the AGM on 21 November 2008. This application was lodged on 14 January 2010, which is clearly more than three months after the meeting. Pursuant to section 241(3), the date for calculating the time limit is in fact the date that a conciliation application for the same dispute was lodged. In this matter an application for conciliation was lodged on 6 October 2009. Accordingly, proceedings were commenced in this Office just over 10 months after the meeting in question, outside the legislative time frame.

In accordance with section 242(3)(a), the Commissioner has dealt with the application as if the application was in time and it is now necessary for me to consider whether there is good reason to waive the time limit. In an appeal of a previous adjudicator’s order to the District Court[9], Judge Dodds set out the basis for waiving compliance with the time limit. His Honour stated:

“As to waiving compliance for good reason ... the objects of the Act, for instance section 5(a) and (h) mitigate against too strict or legalistic a view about good reason for waiving non-compliance with the time limit. What will be required is a balancing of the length of the delay; the reason for the non-compliance; the effect of delay on others who are affected by the matter in dispute and importantly, whether apart from the question of non-compliance with the time requirement, an applicant will be entitled to the relief sought. The applicant, being the person seeking the waiver, will have the task overall of satisfying the adjudicator that the time limit should be waived in all the circumstances.”

The application indicates that initially owners sought to work within the scope of the policy approved at the 2008 AGM, and relied on the provision in the resolution that minor variations would be made to the policy as the committee from time to time determined to be reasonable, to protect the interests of owners and occupants.

The delay in lodging both applications is not insignificant, but the steps taken by the applicants and other owners in the intervening time does not indicate that they were tardy in pursuing their concerns. Aside from the general interest in the certainty of decisions, I am not satisfied that the Body Corporate or any owner would be disadvantaged by the delay in the commencement of proceedings. The most important criterion established by Judge Dodd is whether, apart from the non-compliance with the time requirement, an applicant would be entitled to the relief sought. This appears to require a merits assessment of whether the applicants would ordinarily have been entitled to the outcome sought, if the application had been lodged in time.

But even without determining whether the applicant would be entitled to the relief sought, based on the information provided regarding the delay in commencing proceedings I am of the view that the there are good reasons for waiving the time limit. While the application technically seeks to void the resolution, what she is seeking in essence is a modification of the resolution which she and others thought (based on the wording of the motion) included scope to negotiate with the Committee. She is not opposing the technical validity of the motion but the reasonableness of the detail of the policy approved by the motion as it is being applied to a small number of owners. It has logically taken time to ascertain how the policy would work in practice and whether there was scope to negotiate modifications or concessions with the Committee. I am satisfied that the issue in question relates to the fundamental rights of the applicant and a small number of other owners regarding their access to their lots and common property.

DETERMINATION

This application disputes the validity of the resolution passed at the EGM of 21 November 2008 to approve a policy and procedure for the EKS (which has since been confirmed at the AGM on 16 April 2010), and seeks to modify the policy and procedure document.

The application does not assert that there is any procedural or other technical issue with the conduct of the EGM or the specific motion. Rather, the objection to the policy and procedure document relates to the fairness and reasonableness of the requirements contained in it. The key issues are whether owners should be entitled to have their card coded indefinitely rather than for a one month maximum; the practice for handling lost cards; and whether key cards should contain identifying text. I will also consider other issues regarding accessing cards.

Body corporate responsibilities generally

Section 94 of the Act sets out the general functions of bodies corporate and subsection (1)(a) provides that a body corporate must “administer the common property and body corporate assets for the benefit of the owners of lots included in the scheme”. It has been held by adjudicators on many occasions that “for the benefit of lot owners included in the scheme”, means for the benefit of all lot owners included in the scheme, and that a body corporate cannot differentiate or discriminate between lot owners, intentionally or otherwise.

Furthermore, section 94(2) of the Act provides that “(t)he body corporate must act reasonably in anything it does under subsection (1).” One of the elements of a reasonable decision is that it is in the interests of all owners. The mere fact that the majority of owners support a course of action is not necessarily sufficient, if the action would be an unwarranted interference with or denial of the rights of others. Therefore an adjudicator must determine the balance between the need to protect the genuine interests of minority owners, and upholding the justifiable position of the majority in the face of unfounded or vexatious opposition.

Providing access to and security for the scheme land, including locks and keys, falls within the scope of administering the common property for the benefit of owners. In this regard, it is appropriate for a body corporate to exercise some control over when and how security access cards are issued, to ensure an appropriate level of security for individuals on the scheme and the property belonging to the Body Corporate and individuals. In doing so, however, the Body Corporate must act for the benefit of all owners.

Accordingly, the issue here is whether the Body Corporate has acted reasonably and for the benefit of all owners in approving the requirements of the key system policy and procedures.

Authorities indicate that a legislative obligation to act reasonably is satisfied if the decision is objectively reasonable[10] and that the objective test requires a balancing of factors in all the circumstances according to the ordinary meaning of the term ‘reasonable’[11]. Ultimately, the reasonableness of a decision is a question of fact. There is no particular formula or test for reasonableness and the High Court has supported a view that a paraphrase can place an unwarranted gloss on relatively plain words applying a test of reasonableness.[12] Principles articulated in other authorities include that the expression 'reasonable' should be given a broad, commonsense meaning[13]; that the question is not whether the decision was “correct” but whether it is objectively reasonable[14]; and that a "logical and understandable basis for the decision" is a factor in determining the reasonableness of a decision but does not necessarily mean the decision is reasonable as important matters may have been overlooked or discounted[15].

I will consider that test in assessing the disputed aspects of the key policy.

Notification of lost keys

One of the applicant’s requests is that the key policy be amended so that lost and stolen keys are reported to Sands, and then new apartment cards are issued and all receivers are recoded with the new card.

The Body Corporate strongly objects to this proposal on the basis that a lost card would need to be recoded and be swiped against every one of the 700 card readers in the entire resort, and that all other key cards would need to be recoded to allow them access. The Body Corporate then says that “The resort would literally grind to a halt whilst this was carried out; not to mention the cost of such an operation.” The supplier and installer of the EKS did not in fact confirm this procedure when I queried him on it, but rather said that there was a misunderstanding regarding the function and capabilities of the system and that “There is simply no way to stop any keycard working on the common area doors and gates before its coded expiry date.”

Frankly I am surprised that an electronic security system for such a large scheme would be installed which did not enable lost cards to be easily and immediately deactivated. With so many guests passing through the scheme, it would presumably be common for key cards to be lost. If there is nothing that can be done until the card expires, regardless of the duration of the expiry period and whether or not the loss is reported, there appears to be an ongoing security risk. However I must take on face value the correspondence from the supplier and installer of the system who advises that this is in fact the case[16].

However I am curious then as to why the key policy states that external providers and owner occupiers must advise Sands of any lost keys as soon as possible “...to ensure jeopardy to the security of the complex is limited” and that fees apply for reprogramming proximity locks. Given that the Body Corporate and the supplier assert that there is nothing that can be done to deactivate a lost key, and the Body Corporate and submissions talk at length about the cost and difficulty of reprogramming locks, these statements are inexplicable. How can notifying Sands or not have any effect on security if there is nothing that Sands can practically do?

If it is practical to reprogram the proximity locks for a new key (despite advice to the contrary), then this should be done as soon as any key is reported lost (regardless of the expiry date). This obligation should exist for letting pool lots as well as non-letting pool lots. Any reasonable, actual costs could potentially be charged to the person responsible for losing the card, but such charges would need to be imposed equally to all lots and not just imposed on non-letting pool lots as is implied by the key policy. Conversely, if it is not possible or reasonably practical to recode proximity readers for a lost key then there can be no basis to charge a fee. As such the policy document should be amended to reflect this and to remove threats of fees for reprogramming.

Ultimately, however, I cannot make the order sought that the key policy be amended so that when lost or stolen keys are reported, all receivers are recoded with the new card. While it would seem logical that an electronic key system would provide this facility, I accept the advice that the current system does not. It would not be just and equitable to require the Body Corporate to amend its policy to provide for a process that in all probability cannot be done and if it could be done may well be very time consuming and expensive.

Time limited coding

The applicant asks that all owner keys be coded indefinitely, unless otherwise agreed. The Body Corporate and many submissions strongly object to this on the basis of the security risk from indefinitely coded cards which, if lost, would continue to provide access to all common areas indefinitely and would expose the scheme to more crime.

The Body Corporate claims it has received no complaints from owners or occupiers regarding the inconvenience of having their cards recoded on a monthly basis or of the other concerns with the key cards. Rather, the Body Corporate claims owners have advised them that they are comfortable with the new arrangements. The submissions however reveal numerous concerns. Perhaps some concerns have not explicitly been reported to the Body Corporate by these complainants or that some complaints made to Sands have not been passed onto the Committee. However the applications both include numerous items of correspondence raising concerns or reporting concerns as having been raised. Despite their claims, it is quite obvious that the Body Corporate has been alerted to owner concerns. Even if for some reason none of the correspondence reached the Committee, which I find hard to believe, the Committee was on notice by the inclusion of the correspondence in the applications. The fact that the concerned owners are in the minority, and have different interests to those in the letting pool, does not mean that the Committee does not have an equal responsibility to consider their needs. It is very concerning that the Body Corporate seems to have forgotten or is ignoring the concerns that have been raised.

I do not consider it necessary to investigate the complaints regarding access difficulties (rather than the duration of coding). The Body Corporate does not dispute the veracity of such complaints other than to claim they were not aware of them (despite, as noted, that many were included in the application). It may be that not every single complaint is accurate or that there were reasonable explanations for errors that occurred in each case. However, given the volume of issues raised in the application and submissions, I consider it very likely that there have been ongoing problems with the operation of key system, including cards not being available at designated times and cards expiring before the notified date. The apparent lack of acknowledgement or action on these complaints by the Body Corporate is highly inappropriate.

Many of the submissions are surprisingly vehement in their views about those who have objected to the current arrangements. They suggest that the applicants in each matter are being selfish in wanting to jeopardise the security of the scheme for their own convenience, and that any inconvenience incurred by these owners and occupiers is warranted by the overriding security concerns. While I understand that security concerns would prevail for non-resident owners, these owners do not appear to have appreciated the affect of the current system on a small number of owners. I would be surprised if any of those owners opposing the application would be happy with an arrangement that meant that they had to collect and return all the keys to their own principle place of residence, each and every month. Moreover, I think it unlikely that they would accept without question the other access difficulties that have been reported.

On balance I am of the view that it is unacceptable for owner occupiers and long term tenants to be required to attend the reception to obtain new keys to their own home every month. I consider this is an unreasonable restriction on their access to their own property and an unfair imposition on their rights as an owner or occupier. The fact that a majority of owners (who do not have to face this inconvenience) have no objection to this arrangement and that only a small number of owners are inconvenienced is immaterial. Every owner and occupier has the right to the use and enjoyment of their property without unreasonable interference. While I accept the security concerns raised, I do not consider these justify the current restrictions.

Given the claimed security concerns of the Body Corporate, and that the rate of crime in the scheme is espoused as a significant basis for the EKS, I am very surprised that the Body Corporate says it has no records of any of the alleged incidents. Notwithstanding that, it seems more likely than not that there were a high level of criminal incidents prior to the introduction of the EKS and that these have been reduced (although not eliminated) since the introduction of the EKS. However the applicant is not seeking the removal of the EKS or the bulk of the security protections afforded by it. Rather the applicant is seeking the modification of the existing system, primarily to reduce the inconvenience for a relatively small number of lots.

Importantly it is a relatively small number of lots who are seeking cards to be coded longer than one month. According to the application and submissions, this would only involve 20-30 lots or even less. If cards are only coded for longer than a month for those lots who so elect, the majority of cards would retain their current expiry dates. I see no reason why it is critical for the effective operation of the EKS for all cards to be coded the same timeframe, and in any event they already are coded with different expiry dates. The only practical chance for Sands staff will be that some cards may have longer expiry dates, and the holders of those cards will visit reception less often.

With a relatively small number of cards coded for longer than 30 days, there are only a small number of cards with a long expiry date that are at risk of being lost or stolen and used by a criminal to access the scheme. I consider that this is a significant consideration.

It may also be that the nature of the usage of lots occupied by an owner occupier or long term tenant is such that there is a lower risk of cards being lost than in holiday letting lots where there may be a large number of guests moving though each lot in a short space of time. Moreover, because owner occupiers or long term tenants need their cards for a long time, they may potentially take greater care of them.

Finally, I consider that it is arguable that a significant proportion of lost cards would be found relatively soon after their loss, and that any person with ill intent may well seek to use a card quickly before it could be deactivated[17]. Therefore the risk of illegal use of keycards already exists under the current policy because if a keycard was inadvertently lost the day after it was issued and cannot be deactivated, it would remain current for up to 29 days.

Ultimately, the Body Corporate has chosen to install a system which, to my mind, has an obvious flaw in that lost keys cannot be easily and immediately deactivated. This poses a security risk regardless of the expiry date of the card. I am not satisfied that it is reasonable to expect owners and long term tenants to be regularly inconvenienced, and have their access to their lots restricted, by the Body Corporate’s choice in this regard.

While this Office has received many disputes over the years regarding the issuing of keys and the number of keys which owners should be entitled to, I am not aware of similar issues arising. It has been suggested that many other schemes operate with unlimited keycards without any adverse impact on security. The Body Corporate refers to the unique nature of the Turtle Beach and Turtle Beach II schemes, and that the system used here is usually installed in high-rise buildings with simply entry and exit point, and has never been used in a comparable location. With respect, from my experience with the community titles industry in Queensland, this resort’s physical layout is not unique. Moreover, if the current EKS has not been installed outside a high-rise building anywhere else, that may suggest it is more suitable to a high-rise set up, and perhaps other systems could be more suitable in a scheme with the features of Turtle Beach Resort.

Most home owners in Australia, whether in a community titles scheme or otherwise, have the right to keys that are obtained once and then continue to work unless they are lost or the locks were changed. Tenants have a similar right for the duration of their lease, and could even argue that landlord requirements to the contrary would interfere with their quiet enjoyment of the property. I have seriously considered the applicant’s request for the same rights, with cards indefinitely coded.

With some reluctance I have on balance decided that owners and long term tenants (with a lease of three months or more) should have a right to elect to have their card coded for a period specified by them up to a maximum of 12 months. Obtaining replacement key cards once a year, while not preferable for the applicant, would not be a significant imposition and would be a reduced inconvenience. Conversely, it provides some concession to the Body Corporate’s security concerns and would enable lost or stolen keys to be ‘removed from circulation’ annually.

If any master keys are issued to any offsite letting agent (and I do not comment on whether it is reasonable or not for the Body Corporate to issue master keys to such agents) I accept it would be entirely reasonable for the Body Corporate to continue restrictions on the coding of master keys.

I am also of the view that any keycards issued to guests organised through external booking providers should continue to only be coded for the duration of the guest’s stay in the same way as the guests of all letting pool lots. However the Body Corporate, as the owner of the keycard system, must ensure that such guests are not treated less favourably by Sands in regard to the issuing of keys and rectifying any problems, simply because they were not booked by Sands.

Obtaining replacement cards

Given that I have determined that it would be appropriate to retain a time limit on cards (albeit significantly longer than is currently permitted), rather than the indefinite coding sought by the applicant, it is appropriate consider some of the other concerns around replacement issues that will still be in issue whenever owners, occupiers or booking agents change cards.

Notification for replacement keys

Submissions say that those who are not in the letting pool are expected to give 24 hour notice to be supplied with a coded key card. When I asked the Body Corporate why there was this requirement, they advised that it was because it was in the standard operating procedure[18] approved in general meetings. No further justification is given.

I find no such requirement stated in the policy document. Certainly there is no reference to any notification required for owner occupiers and permanent rentals, and it is concerning if these owners and occupiers are being expected to provide notice when there is no approved policy to base it on. What the policy does say is that external booking providers must send a written request providing approval to recode keys by midday of the day before the keys are required. So in effect, depending when keys were required, this could indicate a requirement of notice of 21 hours (if collected at 9am), 26 hours (if collected at 2pm) or 31 hours (if collected at 5pm). The applicants in the related application say most of their guests check in after 2pm and have been refused cards if there has not been 24 hour notice.

I consider this notification requirement to be unreasonable. Firstly, the Body Corporate has given no reason as to why it is warranted. The actual time to code a card is about a minute, and when a person attends the reception desk the process of issuing a new card takes 5-10 minutes. Even if a person visits the scheme after reception hours and the security guard is away from the reception desk, an absolute maximum of 15 minutes is quoted as the time to provide a card. There seems no basis then to require many hours notice of something that takes 1 and 15 minutes to do.

More fundamentally, the Body Corporate has confirmed that if a walk-in tourist visited the scheme without a booking they could be checked in within 10-25 minutes (depending on the availability of a room, whether it is after hours, and allowing for all check-in procedures). If a walk-in guest can obtain a key card in under half an hour without any notification, I consider it highly unreasonable for owners to be expected to give 24 hours notice to visit their own apartment to a company to whom they have no contractual relationship.

This does not mean that owners and offsite booking agents should not endeavour to give as much notice as possible to Sands when they require a key card. Particularly for offsite booking agents, advising the day before would be preferable if possible. This will enable reception staff to have the keys ready and minimise any delay that might arise if, for example, the reception is short-staffed or dealing with a large number of guests. But, based on the evidence, I can find no reasonable basis for any requirement that non-letting pool lots be required to give notice to obtain a key card when there is no such requirement in a letting pool lot. Certainly I consider it unreasonable for Sands to refuse to issue a card just because less than 24 hours notice has been given.

Accessing key cards

The key policy requires owners or external booking providers to attend the reception desk personally to have cards issued. While letting pool guests may collect their key personally, guests of any other lot must have their key collected by the owner or external booking provider.

A strict interpretation of the wording of this policy would suggest that a long term tenant (for example with a 12 month lease) would need to have the owner or property manager collect their card each month which could be particularly difficult if, for example, a lot was managed personally by an owner who lived interstate. Similarly if an owner who used the lot for holidays only wanted to let friends or family use their apartment, they could not unless they personally came as well to collect the key card. It is unclear whether Sands has in fact restricted owners and tenants to this extent but as it currently stands they could rely on the policy to do so.

The Body Corporate gives little justification for such requirements and I find them unnecessarily and unreasonably restrictive. They would appear to impinge on the rights of owners to use and deal with their own property. I consider that there may be several ways this could be made more flexible to meet the needs of various parties, without any inconvenience to Sands and without jeopardising security.

While the key policy says cards must be collected personally, the submission from Sands says they can be collected from the night safe. This option should be explicitly included in the procedures and owners, occupiers and external booking providers should have the option of arranging with Sands to collect and return cards to the night safe. Given that Sands says that this facility is already available, there cannot be any objection to this option. However it may be that owners need to be more clearly informed that this is an alternative for them.

I also see no reason why owners who live elsewhere and visit their apartment infrequently should not be given the option to exchange cards by mail. If an owner knows that their card is going to expire at a certain date, they could mail back their card (by registered post to ensure security) and then Sands could mail the new card so the owner had it before they next visited the scheme.

Finally, I see no reason why an authorised representative of an owner or external booking agent should not be entitled to collect a keycard. If letting pool guests can collect keys based on verification of their booking, I see no reason why non-letting pool tenants and guests could not similarly be able to collect a key upon presentation of something in writing signed by the owner or booking agent confirming their authorisation to collect the key on a specified date. This would also ensure that long term tenants can collect keys themselves, and that one member of a household can collect all keys an apartment rather than, for example, each flatmate needing to go separately. Anything less would appear to be discriminating against those lots that are not in the letting pool.

I do not intend to make specific orders on these matters, as they were not sought in the application and have not been specifically argued in submissions. I also do not wish to dictate solutions to the Body Corporate when it has not yet had the opportunity to specifically consider these issues itself or the detail of their implementation. However I am of the view that the Committee should review the key policy requirements in light of these issues and the other matters raised in this decision.

If any owners considered that the Committee has, after a reasonable period, failed to adequately accommodate these issues in the policy they could submit a motion to a general meeting to seek approval for an adjustment. Concerned owners could challenge any resulting decision if they considered it unreasonable. Committee members and owners may wish to give consideration to the comments above when assessing what decision may be reasonable in the circumstances.

Key card markings

Two issues have been raised regarding the marking of keycards. The first is that they are colour coded for different types of occupancy. The second is that they have text identifying the card as being issued by Sands under the management agreement with the Body Corporate.

The branding and colour coding of keycards was not part of the key policy approved at the 2008 EGM. While the application seeks an order that keys not contain any identifying text, it is not apparent that this issue has been formally put to a committee meeting or to a general meeting for all owners to consider. I am of the view that this should occur in the first instance, with the onus on owners who are concerned by the current arrangements to pursue such steps. Accordingly, I do not intend to make any orders on this point, although I will make some observations for the information of parties. If any concerned owner is unable to seek Committee or general meeting approval to a proposed change, they could challenge the decision if they considered it to be unreasonable. Owners may wish to give consideration to the following issues when determining what might be a reasonable decision on these issues.

Card branding

The Body Corporate confirms that the Sands and scheme name is printed on the key cards. The applicant says this was paid for by the Body Corporate, at Sands request. In response to my query the Body Corporate said there was no reason why this information is on the card. However, they suggest there has been no security issue arising from the card branding.

It is up to the Body Corporate whether it wishes to have identifying information printed on its security key cards. But with respect, given the volume of material from the Body Corporate and owners stating the fundamental importance of security in this scheme, I find it somewhat bizarre in the circumstances that the Body Corporate would choose to brand keycards in this way when there is apparently no reason for doing so (other than perhaps advertising Sands).

If a blank card is lost offsite any person finding the card would not know where it originated from. This is particularly so given the increasing prevalence of such key cards in tourist accommodation and workplaces. While a well intentioned person would then be unable to return the card, more importantly, a potential criminal would not know where they could use the card. But with a card that clearly labels its source, any potential criminal is directed straight to the scheme to access.

While the Body Corporate has spoken much of the risks associated with the longer coding of cards, this risk exists under the current policy. Currently, if a key card was inadvertently lost the day after it was issued, it would remain current for up to 29 days. It is arguable that a significant proportion of lost cards would be found relatively soon after their loss, and as noted previously it is also arguable that such cards would be used relatively quickly before it could be deactivated. Therefore, in the absence of any strong justifications for branded cards (and no justification at all has been provided to date), there would appear to be good security reasons for the keycards to be blank or at least not include information that could be easily used to locate the source of the card.

Colour coding

The Body Corporate has confirmed that cards for lots in the letting pool are blue and cards for other lots are black. The Body Corporate claims that this is necessary so that service staff can identify who can access charge-back facilities. Several submissions comment that the colour coding of cards is used by Sands to discriminate between letting pool and non-letting pool owners and guests. The claim is made that Sands can identify whether service users are within the letting pool or not based on the apartment number, as is the case in most apartment complexes. Moreover, they claim Sands no-longer provides charge-back facilities for any guest and so there is no longer any justification for different coloured cards.

Again it is up to the Body Corporate whether it needs different coloured key cards. But if an owner submits a general meeting resolution to change this arrangement and the proposal fails, the Body Corporate would need to justify the reasonableness of its position if the decision was challenged.

I do not intend to comment on the arguments regarding the rights of non-letting pool owners and their guests to use facilities operated by Sands. The parties may wish to seek legal advice regarding their rights and obligations in this regard. If any challenge to the current arrangements relates to the management agreement, it could be a dispute that would be defined as a contractual matter under the Act that would be beyond the jurisdiction of a departmental adjudicator[19]. Having regard to the Code of conduct of body corporate managers and caretaking service contractors[20], and the general obligations of bodies corporate under the Act, owners and occupiers should not be treated less favourable simply by virtue of whether they are in the letting pool or not.

Conclusion

The Body Corporate has chosen to install an electronic keycard system that is unable to deactivate lost or stolen cards. It may be that the Body Corporate did not properly consider the full implications of this choice. Regardless, the small number of owner occupiers and longer term tenants should not have to suffer for the Body Corporate’s choice in this regard.

It appears to me that the Body Corporate has made little attempt to acknowledge or attempt to accommodate the genuine concerns of those who have been adversely affected by the EKS. I consider that the current limitations on owner occupiers and those involved in lots managed offsite, as expressed in the document ‘Policy and Procedure for Security/Key System’ dated September 2008, are unnecessarily restrictive on the rights of a small number of owners and occupiers. As such I find that those restrictions are unreasonable.

I determine that it would be just and equitable in the circumstances to permit owners and long term tenants (with a lease of three months or more) to elect to have key cards coded for a period of up to 12 months. I intend to make an order to this effect.

If an owner wishes to take up this option, they should advise the Body Corporate in writing that they wish to have their cards coded for a period longer than one month and no more than 12 months. The written advice should specify the requested period. The new period should apply from the next date that new cards are issued and should continue to apply unless and until the owner provides written advice amending the specified period. If no alternative period is specified in writing for any lot, the Body Corporate may continue to apply a 30 day maximum period. In the case of long term tenants (that is, with a lease of three months or more) the card should not be coded for a period longer than the lease, even if that is less than 12 months.

The Body Corporate claims that the majority of owners support the current system, that only around 30 owners are not in the letting pool or managed by Accor, and that only 22 owners support the change. If this is correct, then it would only be up to 22 lot owners who may request to have their cards coded for a period of more than one month. I do not consider that the security risk of long coded cards for this small number of lots outweighs the interference on the use of those lots arising by the conditions. If the Body Corporate has concerns about the security impact of this order, they may wish to consider investigating with the supplier of the current system, or other suppliers of electronic key entry systems, the potential to deactivate individual cards before their expiry date. It would be much more preferable for all owners if any lost or stolen card is deactivated as soon as the loss is known, rather than waiting for the end of the expiry period, regardless of when that is set.

At this time I am not satisfied that there is sufficient basis to make orders in respect of the other amendments sought by the applicant. While I am of the view that there are genuine concerns about the branding of the electronic keycards, this should be considered at a Body Corporate meeting in the first instance.

There are a range of other modifications to the key policy that would appear to be warranted, some of which I have canvassed in these reasons. I intend to leave it to the Body Corporate to determine the detail of such modifications. Such modifications should ensure that all owners and occupiers are treated equitably, regardless of whether they are in the letting pool or not, and that the rights of owners and occupiers to free access to their lots is not unreasonably restricted. Failure to act reasonably in this regard could leave the Body Corporate open to further challenge. However I intend to make an order declaring that the Body Corporate is not entitled to require 24-hour notice to issue a new or replacement keycard.

All parties are reminded that the key system is owned by the Body Corporate and exists for the benefit of all lots. As such the Body Corporate must ensure that it (or its agent Sands, who is administering the key system on its behalf) treats all owners and occupiers equally in regard to issues with keycards.
This includes that it would be highly inappropriate for the Body Corporate to allow Sands staff to ignore problems experienced by guests in regard to keys simply because those guests are staying in a lot which is not in the letting pool. Discrimination against owners and occupiers on this and other issues based on whether they are in the letting pool or not leaves the Body Corporate open to further challenge.

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[1] See sections 246 and 244 of the Act respectively
[2] At Turtle Beach II the motion passed with 66 in favour, 6 against and no abstentions.
[3] Pursuant to section 152(1)(a) of the Act
[4] At Turtle Beach II the vote was 65 votes in favour and 12 against.
[5] Reading the minutes in context is it not clear if these incidents were at Turtle Beach or just in the area.
[6] Section 276(2) of the Act
[7] Section 284(1) of the Act
[8] See sections 227, 228, 276 and Schedule 5 of the Act
[9] Weeks v Commissioner for Body Corporate, 20 September 1999, unreported

[10] Greiner v Independent Commission Against Corruption (1992) 28 NSWLR 125.

[11] Secretary, Department of Foreign Affairs and Trade v Styles [1989] FCA 342; (1989) 88 ALR 621.

[12] McKinnon v Treasury [2006] HCA 45 per Hayne J at para 61; Waters v Public Transport Corporation [1991] HCA 49; (1991) 173 CLR 349.

[13] Ashworth Frazer Limited v Gloucester City Council [2001] UKHL 59; [2001] 1 WLR 2180 at paragraph 5.

[14] Commonwealth Bank of Australia v Human Rights and Equal Opportunity Commission (1997) 150 ALR 1 pp34, 38.

[15] Commonwealth Bank of Australia v Human Rights and Equal Opportunity Commission, pp34, 38.

[16] Interestingly, the homepage for supplier’s website (www.safeport.net.au) identifies ‘easy invalidation of lost keys’ as one of the key features of what they offer.
[17] As I would suggest many people would assume an electronic card could be deactivated.

[18] In the context of the content I can only assume that the reference to the ‘standard operating procedure’ is to the policy and procedure document dated September 2008 and no other relevant document has been provided to me and there is no indication that any other document has been approved by general meeting.

[19] Pursuant to section 149B of the Act, contractual disputes may be pursued through an application for the order of a specialist adjudicator (appointed with the consent of both parties) or with the Queensland Civil and Administrative Tribunal.
[20] Schedule 2 of the Act