Boulevard North [2011] QBCCMCmr 149 (7 April 2011)

Last Updated: 16 June 2011

REFERENCE: 0949-2006

ORDER OF AN ADJUDICATOR

MADE UNDER PART 9 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	9833
Name of Scheme:	Boulevard North
Address of Scheme:	35 Broadbeach Boulevard BROADBEACH QLD 4218

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

the Body Corporate for Boulevard North

I hereby order that the body corporate for Boulevard North is to consent to, and lodge with the Queensland Land Registry, a Community Management Statement recording that lot 58 is entitled to exclusive use of area AL and that lot 57 is entitled to exclusive use of areas AM and AO on the attached sketch plan. I further order that the sketch plan to be attached to the community management statement is to be in a format similar to that prepared by Simpson Rayner Surveys Pty. Ltd. and dated 4 July 2006, showing the dimensions of car parking space AO as 5.63 Metres x 3.112 Metres

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0949-2006

“Boulevard North” CTS 9833

The Boulevard North community titles scheme (Boulevard North) consists of 58 lots and common property. The Community Management Statement (CMS) for Boulevard North indicates that the Body Corporate and Community Management (Standard Module) Regulation 1997 (Standard Module) applies to the scheme.

Pursuant to the Body Corporate and Community Management Act 1997 (Act), a dispute resolution application was originally lodged with the Office of the Commissioner for Body Corporate and Community Management on 17 November 2006, pursuant to a Committee resolution on 27 October 2006. The applicant sought orders against the owners of Lot 57 (referred to in this order as the respondents) in the following terms:

1. Car Space Area "AM" be vacated by Lot 57
2. That the lock on Storage Area "AP" be removed, and the area be left unlocked, and all personal items be removed.
   

Following lodgement of the dispute resolution application, all owners of lots in the scheme were invited to make submissions. After considering the application and the various submissions, a departmental adjudicator made the following orders on 24 April 2007:

• that Motion 10A ‘Consent to CMS correction of error’ at the Annual General Meeting of 25 February 2006 was defeated.
• that within seven (7) days of the date of this order the co-owners of Lot 57, Christopher, Thomas and Margaret Burrell shall cease using the common property car space known as ‘AM’.
• that within seven (7) days of the date of this order the co-owners of Lot 57, Christopher, Thomas and Margaret Burrell shall vacate the common property storage space known as ‘AP’, and ensure that any locks and personal items are removed from the storage space.
  

However on 5 June 2007, the owners of lot 57 filed a notice of appeal to the District Court pursuant to section Section 294(1) Act which provides as follows –

Powers of appeal body on appeal
(1) In deciding an appeal, the appeal body may—

(a) confirm or amend the order under appeal; or

(b) set aside the order and substitute another order or decision; or

(c) through the commissioner, refer the order back to the adjudicator with appropriate direction having regard to the question of law the subject of the appeal.

(2) The appeal body may amend or substitute an order only if the adjudicator would have had jurisdiction to make the amended or substituted order or decision.

On 17 September 2010 his Honour Judge McGill ordered that:

• The appeal be allowed;
• The Decision of the adjudicator dated 24 April 2007 be set aside; and
• The order be referred back to an adjudicator, with a direction to hear and determine the dispute as to the matters referred to in the reasons for decision, according to law[1]
  

More specifically, at paragraph 51 his honour said: “in my opinion, the appropriate course is for me is to refer the order back to an adjudicator with a direction to hear and determine the question of whether the adjudicator should make an order requiring an amended Community Title Statement to be prepared and lodged which would give the proprietor of lot 57 an exclusive right to use the car park space AL on the basis that this rectified the instrument so as to reflect the intention of the original owner of the lots at the first meeting”.

BACKGROUND

The application relates to an alleged breach of the by-laws by the owners of Lot 57 who were using two car parking spaces and a storage space adjacent to one of the car parking spaces. This is denied by the owners of lot 57 (referred to as the “respondents” in this order) who claim that although the relevant car parking space and storage area are part of the common property, lot 57 is entitled to exclusive use of car parking spaces as well as the small storage area.

Boulevard North was registered under the Building Units and Group Titles Act 1980 (BUGTA) on 19 November 1982. At that point in time the developer/ original owner was Dorotea Pty. Ltd. and the directors of that company included Mr.Harry Szmerling, Mr. Ian McLeod and Mr. Phillip Goodwach.

Upon registration of the plan, the by-laws for the scheme were deemed to be those provided for in Schedule 3 to the Building and Group Titles Act 1980. On 16 December 1982, the default by-laws were replaced by new by-laws including new by-law 44 which provided “The proprietor for the time being of each unit in the building shall be entitled to the exclusive use for himself and his licensees of the car space or spaces as are identified on the plan attached hereto and being numbered the same as his unit.” Attached to the by-laws was a plan depicting 59 car parking spaces (Plan 1).

Subsequently, on 10 January 2000 the Body Corporate passed a resolution to record a new CMS. The resolution stated that the body corporate consented to recording the new CMS “...whereby it repeals existing by-laws 1-43 and replaces them with new by-laws 1-20, but retains existing by-law 45 which has been renumbered 21 and existing by-law 44 which has been renumbered 22 in accordance with the by-laws set out in Schedules C and E”. A new CMS and attached plan (plan 2) was recorded with the Queensland Land Registry on 14 January 2000, and applied from that date.

There are 58 units and 59 car spaces in this scheme and it is the 59th space which is in dispute. Original by-law 44 granted each owner exclusive use of a car space identified on an attached plan, bearing the same number as their lot. However, the CMS executed on 10 January 2000, included by-law 22 which granted each owner a car space identified on the attached plan by different letters. In the plan attached to that CMS, Lot 57 is allocated car space “AO” but the owners of lot 57 had also previously used space ‘AM’ . Space ‘AM’ is allocated to Lot 58 but lot 58 has been using car parking space ‘AL’ for at least 15 years. The respondents have also been using a small storage area (referred to as area AP) adjacent to car space “AO” which is not allocated to any lot in the current CMS.

In 2004 the service contractor/ letting agent indicated that the owners of lot 57 were not entitled to the additional car space and storage area which they had been using. The body corporate sought legal advice and was advised that Lot 57 had never been entitled to a car space other than the area formerly marked ‘57’ and now marked ‘AO’, and that to change the parking arrangements, so that the owners of lot 57 would be entitled to exclusive use of space “AM”, would require a change to the CMS requiring a resolution without dissent.

The respondents submitted a motion to the Annual General Meeting (AGM) on 25 February 2006, which sought to ‘correct an error’ and reallocate the exclusive use allocations to give Lot 57 spaces ‘AO’, ‘AM’ and ‘AP’ and to allocate car parking space “AL” to Lot 58. The AGM also considered motions submitted by other owners. Motion 10B proposed that car space ‘AL’ be used by the for storage and a work room. Motion 10C sought a resolution that the owners of Lot 57 vacate and stop claiming ownership of space ‘AL’. Motion 11 sought a resolution that the storage space marked ‘AP’ be used by the resident service contractors.

All four motions were listed as ordinary resolutions, (notwithstanding that exclusive use of common property may only be granted pursuant to a resolution without dissent). The result of the voting was declared as follows:

Motion	For	Against	Abstentions	Purported result
Motion 10A	24	13	4	Carried
Motion 10B	11	27	3	Defeated
Motion 10C	Ruled out of order
Motion 11	20	18	3	Carried

On 22 March 2006, the Body Corporate advised the respondents in writing that the storage space was to be returned to the Body Corporate within 14 days. On the same date, the Body Corporate advised the owner of Lot 58 that it had resumed control of space ‘AM’ but, as Lot 58 had been using space ‘AL’, the Body Corporate would allow her to continue to use ‘AL’ instead of ‘AM’. After much exchange of correspondence, on 19 October 2006 the Body Corporate issued a contravention notice to the respondents alleging that they had breached by-laws 3 and 22 by continuing to park in the car space ‘AM’, by leaving items in the storage space ‘AP’ and by locking that space. The notice required the alleged contraventions to cease within 14 days.

The wording of that Notice included the following: “the occupiers of lot 57 continue to park a vehicle in the area referred to as AM on the attached and current CMS executed 10th January 2000. Only area AO is allocated to lot 57 for exclusive use area of common property in this current CMS. It should be noted that area AM is allocated to lot 58 on this CMS, however the body corporate committee has given the occupier of lot 58 consent in writing to park on the common property area AL therefore reverting the area AM back to common property”.

SUBMISSIONS BY OWNERS OF LOT 57

The original adjudicator’s order summarised the respondents’ statements and claims as follows:

• the advertised features of Lot 57, including that it had two car spaces and lock up storage, were fundamental to their decision to purchase the lot in 2002.
• There was nothing in the contract of sale to indicate the selling agent had not confirmed the advertised features. As these features were evident, the respondents did not instruct their solicitors to verify the entitlements.
• It is logical that these features belong to Lot 57, given its size and lot entitlements.
• previous owners of the penthouse had agreed with the owner of the other top floor unit (lot 58) that lot 58 would use the car parking space numbered 59 on that first plan instead of the space numbered 58 , which would be used by the owners of lot 57;
• After purchasing Lot 57 the respondents continued to use those spaces now known as ‘AO’, ‘AM’ and ‘AP’.
• The current CMS was put before owners in the year 2000, as simply a formality to comply with the new Act, with no changes to the existing provisions and usages in the building.
• However, that CMS is erroneous because it purports to

(1) allocate only one car space (AO) to Lot 57;
(2) improperly truncates car space AO; and

(3) designates the adjacent alcove as a separate storage area known as AP rather than as part of car space ‘AO’.

• That CMS also perpetuated errors contained in the original 1982 by-laws which purported to allocate exclusive use of each of the 59 car spaces in the attached plan, to the unit bearing the same number. However there were only 58 units, and as lot 57 was an amalgamation of two units, it had always been entitled to use two car spaces.
• The inaugural general meeting on 25 November 1982 was attended by Mr. Harry Szmerling as the nominee of Dorotea Pty Ltd, the original owner and developer. The minutes record a resolution that “The car spaces be as advised from Dorotea Pty Ltd.”
• In correspondence dated 2 June 2006, Mr. Szmerling, says that it was originally intended that 59 units would be built but during the planning stages, he instructed the builder to convert two of the top floor units into one large penthouse unit. He also states that “It was always envisaged that the two carpark units which would otherwise have been allocated to the original units, would accordingly be allocated to the newly created penthouse unit.” He says he does not recall any suggestion that a car space be left unallocated.
• The line markings have remained unchanged for 25 years and conform to the original plan. The marking of the word ‘penthouse’ across the opposite car spaces now marked 29 and 30 is evidence that the penthouse was intended to have two car spaces.
• A statutory declaration has been provided by Mr. Carl Rayner of Simpson Rayner Surveys Pty Ltd, who says that the sketch plan attached to the Community Management Statement was erroneous because it did not accurately reflect the layout of the car parks and wrongly truncated the area of car space ‘AO’. He believes that the surveyor who prepared that plan was unaware of the existence and usage of the storage alcove.
• A statutory declaration was provided by a member of the family that previously owned lot 57, stating that his family always had use of two car spaces and the storage alcove, which was meshed in about 1989.
• The truncation of area ‘AO’ which occurred in 2000, was not authorised and is invalid because it was not authorised by a resolution without dissent;
• The alcove area, “AP”, should be regarded is part of car parking space ‘AO’ because the alcove can only be accessed through area “AO”. If area “AP” is deemed not to be part of ‘AO’ then a licence or exclusive use of AP should be granted to the owners of lot 57.
  

SUBMISSIONS BY OTHER OWNERS

In her order dated 27 April 2007, the adjudicator noted that submissions were received for the owners of six other lots, and included a range of views including the following:

• One owner says there should be only one car space per owner and that there no storage spaces allocated to any owner.
• Two owners believed it was reasonable for the owners of lot 57 should have two car parking spaces because it is an amalgamation of two units, but that the Body Corporate should have use of the storage space.
• Three owners support the respondents’ claim to both spaces. One says no inconvenience has been suffered by anyone else by the current or previous owners of Lot 57 using spaces ‘AM’ and ‘AP’, and the error in the documentation should be corrected.
• Another owner says the Committee acted without instructions from owners in attempting to strip Lot 57 of the spaces,
• The owner of Lot 58, who supports the respondents, also disputes the allocation to Lot 58 of any space other than ‘AL’.
  

By letters dated 17 February 2011, both the body corporate committee and the owners of lot 57 were given the opportunity to make further submissions regarding this matter.

FURTHER SUBMISSIONS BY OWNERS OF LOT 57

The owners of lot 57 made further submissions that included the following:

• Relevant material can be found in paragraphs 6 to 11 of the appellant’s amended outline of appeal submitted to the District Court;
• The current allocation and use of car spaces AM and AL is dealt with in paragraph 46 of his Honour’s reasons;
• The situation in respect of the allocation and use of car space “AL” by unit 58 was also specifically addressed in the original submission by the owner of unit 58 dated 9 March 2007;
• There is an extant appeal before QCAT arising from adjudication order 552 of 2008, relating to the conduct of body corporate meetings and resolutions. Resolution of the subject matter of this adjudication will most probably resolve the matters currently in dispute before QCAT;
• In January 2011 the owners of lot 57 requested Simpson Rayner Surveys to undertake a survey of car parking space 57 (AO) and the adjacent area. A copy of this plan is reproduced below:

[picture not published]
Plan 4

• The survey shows that car park 57 (AO) is in the correct place and there is no difference between the original exclusive use plan and the original line markings. Subsequently, when the body corporate installed a water tank, a fence was constructed on alignment BB thereby creating a small storage area or alcove, which the surveyor referred to as area “AP”.
• The truncation of car parking space 57 was not authorised by a resolution without dissent and therefore the truncation was invalid;
• The CMS registered in 2000 therefore requires correction to restore car park 57 (area AO) to its original dimensions so that the exclusive use area accords with the existing line markings and the original exclusive use plan;
• The commonsense finding would be that area AP is allocated to unit 57 as an exclusive use storage area. Otherwise, given that AP is only accessible through area AO, it would not be accessible by anyone;
  

They seek the following outcomes:

• A finding that they are entitled to exclusive use of car spaces AO and AM and that the body corporate be directed to amend the by-laws as necessary and lodge an amended Community Management Statement to reflect that exclusive use;
• The truncation of car space AO by the body corporate was invalid and the body corporate should be required to amend the by-laws as necessary and lodge an amended CMS to correct the truncation;
• The body corporate be directed to consent to the recording of a community management statement to amend schedule E to record that lot 58 is entitled to exclusive use of area AL and that 57 is entitled to exclusive use of areas AM and AO on the attached sketch plan; and
• The body corporate be directed to consent to the recording of a community management statement to amend schedule E to correct the dimensions of car space AO inadvertently truncated by an error in the CMS recorded in 2000;
  

For the purposes of this order, paragraphs 6 to 11 of the their outline of appeal can be summarised as follows:

• by the concrete floor markings the body corporate held out for 25 years that lot 57 enjoyed the use of 2 car parking spaces as well as a storage area;
• by allowing successive owners of lot 57 the apparent exclusive use of 2 car parking spaces and storage, the body corporate held out that lot 57 had that entitlement;
• the appellants purchased lot 57 with a reasonable expectation of that entitlement;
• if the body corporate had been the vendor of lot 57 it would have been estopped from deny exclusive use to lot 57. By analogy therefore, it cannot be said that the body corporate experienced any special loss or that the applicants would gain an unconscionable benefit;
• an adjudicator is entitled to take into account the equitable considerations set out above in making an order which is “just and equitable”;
• the following factors were of relevance:
  • - whether there was likely to be any adverse impact on the rights of other owners as a result of granting exclusive use;
  • - the amalgamation of 2 units on level U to create lot 57;
  • - loss of one car space is a significant cost to the owners of lot 57;
  • - the original owner is entitled to make decisions regarding the allocation of exclusive use areas;
  • - when the matter was put to a general meeting less than 25% of the owners disapproved of the respondent having use of two car parking spaces;
  • - two car spaces had been used by lot 57 since 1982 and by making the requested orders no other owners would suffer any los by allocation of two spaces to lot 57;
  • - errors with respect to car parking spaces are not uncommon;
  • - the body corporate has not adduced evidence that the subject areas has historically been used as common property or that other owners would be prejudiced if it is decided that lot 57 is entitled to the use of those areas; and
  • - when given the opportunity to make submissions regarding this matter, only one owner opposed the allocation of two car parking spaces to lot 57.
    

FURTHER SUBMISSIONS BY BODY CORPORATE

By letter dated 18 March 2011, the body corporate made further submissions that included the following:

• the respondents purchased lot 57 on or around 9 July 2002;
• at the time of purchase, the applicants should have made appropriate inquiries such as obtaining a copy of the current Community Management Statement;
• the respondents have also had an interest in other units in the building and have had adequate opportunity to familiarise themselves with the Community Management Statement;
• the making of orders requested by the applicants would disadvantage other owners who purchased lots on the understanding that each lot was entitled to exclusive use of one car parking space;
• it would not be just and equitable to grant additional exclusive use areas based on an unclear intention of the developer in 1982;
• rectification of the alleged error should only occur on the basis of clear and documented evidence that it was the intention of the developer to grant to lot 57 exclusive use of two car parking spaces and a storage area;
• the storage area was never allocated to lot 57. Neither the original CMS nor subsequent community management statements purport to give exclusive use of this area to anyone and the area has always been accessible by any proprietor via a strip between the car parking space and the wall and should therefore remain part of the common property; and
• the owners of lot 57 are seeking to rectify their own mistake of assuming that two car parking spaces and a storage space were included in the purchase price of lot 57.
  

JURISDICTION

Section 276(1) of the Act provides that an adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the context of a community titles scheme, about:

(a) a claimed or anticipated contravention of the Act or the community management statement; or

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

(c) a claimed or anticipated contractual matter about -

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

(ii) the authorisation of a person as a letting agent for a community titles scheme.
An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 276(2)). An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate (section 284(1)).

DETERMINATION

As outlined above, this application was originally lodged in October 2006 and an adjudicator’s order was made in April 2007. However, on 17 September 2010, his Honour Judge McGill allowed an appeal against the adjudicator’s decision and referred the matter back to this forum, with a direction to determine the question of whether the adjudicator should make an order requiring an amended Community Title Statement to be prepared and lodged which would give the proprietor of lot 57 an exclusive right to use the car park space AL on the basis that this rectified the instrument so as to reflect the intention of the original owner of the lots at the first meeting”.

Boulevard North was registered under the Building Units and Group Titles Act 1980 (BUGTA) on 19 November 1982. When the plan was registered, the by-laws for the scheme were deemed to be those provided for in Schedule 3 of BUGTA. However on 16 December 1982, the default by-laws were replaced by new by-laws including by-law 44 which provided “The proprietor for the time being of each unit in the building shall be entitled to the exclusive use for himself and his licensees of the car space or spaces as are identified on the plan attached hereto and being numbered the same as his unit.” Attached to the by-laws was a plan depicting 59 car parking spaces as reproduced below:

[picture not published]

Plan 1

Subsequently, on 10 January 2000, an extraordinary general meeting purportedly resolved that the Body Corporate consent to the recording of the new Community Management Statement whereby it repeals the existing by-laws 1-43 and replaces them with new by-laws 1-20 but retains the existing by-law 45 which has been renumbered 21, and existing by-law 44 which has been renumbered 22.

The minutes of that EGM record that there were 38 votes in favour of this resolution, two against and three abstentions. Subsequently, the body corporate executed a new Community Management Statement which was registered on 14 January 2000. The new exclusive use by-law (by-law 22) was similar, but not identical to the earlier by-law 44 and provided that “The Owner for the time being of each Lot shall be entitled to the exclusive use for himself and his licensee of the car space or spaces identified in Schedule E and on the attached sketch plan marked “A”. In that sketch plan, which is reproduced below, the area previously depicted as car parking space “59“, purportedly for the benefit of lot 59, became area “AL” and was not allocated for the benefit of any particular lot.

[picture not published]

Plan 2

The owners of the penthouse unit, lot 57, argue that from the time when the building was first occupied, lot 57 had been entitled to use the two car parking spaces numbered 57 and 59 on the 1982 plan. As evidence, they produced correspondence dated 2 June 2006 from Mr. Szmerling, a director of Dorotea Pty Ltd (the original owner) who stated it was originally intended that 59 units would be built, but during the planning stages, he instructed the builder to convert two of the top floor units into one large penthouse unit. He also states that “It was always envisaged that the two carpark units which would otherwise have been allocated to the original units, would accordingly be allocated to the newly created penthouse unit.” He says he does not recall any suggestion that a car space be left unallocated.
The owners of lot 57 have also produced letters signed by Mr Szmerling’s two co-directors, Mr. Phillip Goodwach and Mr. Ian McLeod who each state “I have read the letter from Henry Szmerling dated 2 June 2006 and advise that the contents of that letter are consistent with my recollection that two car park spaces which would otherwise have been allocated to the two apartments at the top of the building, would both be allocated to the one penthouse apartment. I confirm that there was never any intention to have unallocated car park spaces.”

In the appeal decision, his Honour observed that the respondents’ argument that the original owners intended to allocate two car parking spaces to lot 57, was supported by the following:

(i) Enough car parking spaces were provided on Level A for 59 lots, which was the original intention, though ultimately there were only 58 lots, with two of the planned lots being combined to make one large lot on the top floor, referred to as a “penthouse”.
(ii) One would expect a penthouse to have additional car parking space
(iii) thereafter the owners of lot 57 in fact used two car parking spaces.
(iv) The car parks were laid out and marked up for two car parking spaces to be allocated to the penthouse. Originally the word “penthouse” was painted across two spaces, and two of the spaces have been identified by the number “57”, at least for a long time.

Having regard to the material which has been provided to me, including the original exclusive use plan, and the statements provided by the three directors of Dorotea Pty. Ltd., I am of the view that the developer originally intended to create 59 lots and to allocate one exclusive use car parking space for each of the 59 lots. I am also of the view that the developer subsequently decided to amalgamate two top floor units into a penthouse with two car parking spaces, but failed to ensure that this was reflected in the exclusive use plan registered with the Queensland Land Registry on 16 December 1982.

Further support for this view can be found in a recent statutory declaration from a director of the surveying firm which prepared the sketch plan that was attached to the Community Management Statement in January 2000. He does not believe that sketch plan accurately reflected the layout of the car park. These errors were corrected in a new plan (Plan 3) created in 2006. The new plan does not provide for a walkway between car park space AO and the wall, and is set out below.

[picture not published]

Plan 3

He noted that there are only 2 lines that define car park AO and there is no evidence that these lines ever moved. The amended sketch plan shows car park AO drawn to confirm with the existing, original car park markings.

A further survey which he undertook in early 2011 supports the view that there is no difference between the original exclusive use plan and the line markings. The plan prepared following this survey (Plan 4) is reproduced below. It is his belief that the dotted line that appears in the original exclusive use plan, is represented by the dashed line “AA” in the survey plan which is reproduced below. However it has been wrongly assumed that dashed line “A-A” corresponds with the current chain wire fence, represented by line B-B that has only been in existence since 1989.
It is the surveyor’s opinion that:

• Dashed line A-A is not where the current fence is located;
• Subsequent to a water tank being installed, the chainmesh fence/ wall appears to have been relocated from A-A to B-B; and
• The position and size of original area 57 as digitised from the original exclusive use plan and surveyed area AO on the above exclusive use plan, are the same.
  

[picture not published]
Plan 4

I note that the solicitor who acted for the body corporate in 2000 also believes that there had been an error in the allocation of the car parking spaces. In her submission to this Office she states: “I researched the background and also undertook a physical inspection of the basement car park. I have come to the conclusion that an error had been made. It is very clear that at the time of the construction of the development that original lots 57 and 58 were amalgamated into one lot (being lot 57) with original lot 59 becoming 58. The consequence of the amalgamation of original lots 57 and 58 were that the lot entitlements were amalgamated and the car space for each of the original lots was then given to the new lot 57. One of these car spaces for lot 57 has a natural alcove adjoining it (because of the design of the building) which is not accessible, other than through the car space.”
This is further supported by a statutory declaration provided by Mr. Alan Bolitho, whose family were the previous owners of Lot 57, who states that:

• Lot 57 always had two car parking spaces because lot 57 has a footprint over two units;
  • Unit 57 is the penthouse unit and has twice the entitlements of other units;
  • They always had access to a small alcove to one side of car parking space 57, which was used as a storage space, as had the previous owner. This alcove was regarded as part of the car park because the alcove cannot be accessed without crossing car park 57;
  • The area in front of car park 57 was meshed in about 1989.

I believe that much of the confusion regarding the exclusive use entitlements of unit 57, is attributable to errors made in the original plan attached to the by-laws, which was registered on or about 16 December 1982. In particular, the plan purported to allocate car parking spaces to 59 lots, when in fact two of the lots had been amalgamated so that there were only 58 lots. It is not disputed that lot 57 was entitled to use of car parking space 57 on the original sketch plan, which is now known as area AO. I also believe the intention of the body corporate was that a second car parking space would be allocated to the newly created penthouse unit, lot 57.

I note that the current owner of lot 58 states that for at least the last 15 years, owners of lot 58 have used car parking space “AL”. She also believes the intention of the original proprietor was: (1) to allocate exclusive use of the area originally marked 59, now referred to as AL to lot 58; (2) to allocate exclusive use of the area originally marked 58, now referred to as AM to lot 57,and (3) to allocate exclusive use of the area originally marked 57, now referred to as AO to lot 57.

I have perused a copy of the building unit plan and it is evident that on level U, the originally intended lots 57 and 58 were amalgamated to create lot 57 comprising 170 square metres. It is also evident that the originally intended lot 59 became lot 58 consisting of 106 square metres. The logical conclusion to be drawn from this is that the original proprietor intended that lot 57 would be entitled to exclusive use of car parking spaces AO and AM and that Lot 58 would be entitled to exclusive use of area AL.

A further complication arises from approval of a new Community Management Statement by an extraordinary general meeting held on 10 January 2000. It would appear that most owners believed the intention of the document was to simply reproduce the existing provisions regarding car parking in the format required under the new Act. However, the effect of registering the new community management statement and exclusive use plan, was to deprive lot 57 of one car parking space and to effectively reduce the length of the remaining lot 57 car parking space (AO) to 4.97 metres, when all other car parking spaces on that plan are between 5.325 metres long and 6 metres long. According to surveys that were undertaken in 2006 and 2011, the correct dimensions of area AO (previously known as parking space 57) are 5.63 Metres x 3.112 Metres, giving a total area of 18 square metres

I am of the view that to the extent that it purported to alter the areas of exclusive use, the resolution to adopt the new community Management Statement in January 2000, was invalid because it was not carried as a resolution without dissent. This is the effect of paragraph 171(3) (b) of the Act which provides:
(b) the by-law may stop applying to the lot only if the lot owner agrees in writing before--
(i) the allocation is revoked under the by-law (if the by-law provides for the revocation of an allocation); or
(ii) the passing of the resolution without dissent--
(A) consenting to the recording of the new community management statement that does not incorporate the exclusive use by-law; or
(B) in which the lot owner voted personally.

Note also that section 62 of the Act provides that, subject to the exceptions in subsections (3) and (4), the body corporate may only consent to the registration of a new community management statement by means of a resolution without dissent.

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. Schedule 5 to the Act includes examples of orders which may be made by an adjudicator, and at paragraph 2 contemplates that an adjudicator may require the body corporate to lodge a request to record a new community management statement, regardless of whether the body corporate consents to the recording.

In Body Corporate for Palm Springs Residences CTS29467 v J. Patterson Holdings Pty Ltd [2008] QDC 300 the District Court held that the power of an adjudicator to make an order that is “just and equitable” does not mean that an adjudicator is entitled to make an order that they subjectively believe to be “just”. Rather, it is necessary to establish that there is a proper basis in law or equity for making such an order.[2]
I believe the circumstances of this case are such that the equitable doctrine of rectification may be relied upon to order the rectification of the Community Management Statement. As his Honour pointed out, the doctrine of rectification is not limited in its application to written instruments inter partes because, for example, it extends to rectification of a deed. What is important is that that there be an intention to produce a particular result, which by mistake, the written documents did not reflect.[3] In this case the evidence strongly supports the conclusion that the original owner initially intended to create 59 lots, each of which were to have an exclusive use car parking space. However, the original owner subsequently decided to amalgamate two top floor units into a penthouse with two car parking spaces, but failed to ensure that this was reflected in the exclusive use plan registered with the Queensland Land Registry on 16 December 1982. I believe the intention of the original owner was:
(1) to allocate exclusive use of the area originally marked 59, now referred to as AL to lot 58; (2) to allocate exclusive use of the area originally marked 58, now referred to as AM to lot 57,and
(3) to allocate exclusive use of the area originally marked 57, now referred to as AO to lot 57.

The final matter for consideration is whether lot 57 is entitled to exclusive use of the storage area AP, which comprises 2 square metres and has been used by the current and previous owners of lot 57.

The body corporate is of the view that this alcove has always been accessible by any proprietor via a strip between the car parking space and the wall as per plan 2 attached to the Community Management Statement. However, I note that further surveys was undertaken by Simpson Rayner Surveys in 2006 and 2011, resulting preparation of Plans 3 & 4 which are reproduced above. It is the surveyor’s opinion that:

• plan 2 does not accurately reflect the layout of the car park;
• the errors in plan 2 were corrected in a new plan, Plan 3, which was created in 2006 and does not provide for a walkway between car park space AO and the wall;
• on plan 4, dashed line A-A is not where the current fence is located;
• Subsequent to a water tank being installed, the chainmesh fence/ wall appears to have been relocated from A-A to B-B; and
• The position and size of original area 57 as digitised from the original exclusive use plan and surveyed area AO on plan 3, are the same.
  

I have examined plans 1, 3 and 4 and note that there is no difference between the original exclusive use plan, the line markings and the surveyed area AO on Plan 3. This supports the respondents’ contention that the body corporate has wrongly assumed that dashed line “A-A” on plan 4 corresponds with the current chain wire fence. In my view the correct interpretation of these plans is that while there may have originally been a walkway in front of parking space 57, a chain wire fence was subsequently constructed along the boundary of the parking space AO so that the alcove or storage area known as “AP” is now only accessible through parking space AO.

While I believe it is appropriate to order that the community management statement be rectified to record the allocation of two car parking spaces to lot 57, I am unable to make a similar order regarding area AP. To make such an order I need to be satisfied there is convincing proof that the document does not embody the final intention of the parties and the omitted ingredient must be capable of such proof in clear and precise terms.[4] There is no indication in the original by laws and attached sketch plan that exclusive use of area AP, had been allocated to any particular lot. Similarly, statements provided by the directors of the original owner do not make reference to the allocation of this area for the use of any particular lot.

Nevertheless, I do make the observation that area AP is a very small area, of limited value and of little use to anyone other than the owners of lot 57. The body corporate may wish to revisit the matter at the next general meeting for the scheme and consider whether lot 57 should be given a lease, licence or exclusive use of this area.

For the above reasons I believe it is appropriate to make the following orders:

• That the body corporate for Boulevard North is to consent to, and lodge with the Queensland Land Registry, a Community Management Statement recording that lot 58 is entitled to exclusive use of area AL and that lot 57 is entitled to exclusive use of areas AM and AO on the attached sketch plan; and
• That the sketch plan to be attached to the new Community Management Statement is to be in a format similar to that prepared by Simpson Rayner Surveys Pty. Ltd. and dated 4 July 2006, showing the dimensions of car parking space AO as 5.63 Metres x 3.112 Metres.

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[1] Burrell v Body Corporate for Boulevard North CTS 9833 [2010] QDC 352
[2] See also Sandmoon Pty. Ltd. v Body Corporate for south Pacific Noosa Apartments [2008] CCT KC008-08
[3] See Pukallus v Cameron [1982] HCA 63 and also MSW Property P/L v Law Mortgages Queensland P/L [2003] QCA 487

[4] See judgement of Wilson J in Pukallus v Cameron [1982] HCA 63