Alatai Holiday Apartments [2011] QBCCMCmr 259 (22 June 2011)

Last Updated: 19 July 2011

ADJUDICATOR’S ORDER
Office of the Commissioner
for Body Corporate and Community Management

CITATION:	Alatai Holiday Apartments [ 2011] QBCCMCmr 259
PARTIES:	Mr Anthony Campbell (applicant) The Body Corporate for Alatai Holiday Apartment (respondent)
SCHEME:	Alatai Holiday Apartments
JURISDICTION:	Sections 227(1) and 229(3)(a) of the Body Corporate and Community Management Act 1997 (Qld) (Act), applying the Act and the Body Corporate and Community Management (Accommodation Module) Regulation 2008
APPLICATION NO:	0574-2011
DECISION DATE:	22 June 2011
DECISION OF:	Mr. R. Miskinis, Adjudicator
CATCHWORDS:	Exclusive Use of Common Property - Section 171 Body Corporate and Community Management Act 1997 Disposal of Interest or Leasing Common Property - Section 159 of the Body Corporate and Community Management (Accommodation Module) Regulation 2008

ORDERS MADE:

I hereby order that that pending the making of final orders, the respondent body corporate is not to give effect to any resolution on motion 12, 12a or 13, contained in the Notice of Annual General Meeting scheduled for 22 June 2011, at 4.30PM.

REASONS FOR DECISION
Introduction

[1] Alatai Holiday Apartments consists of 48 lots and common property. The Community Management Statement indicates that the Body Corporate and Community Management (Accommodation Module) Regulation 2008 (Accommodation Module) applies to the scheme. The Department of Environment and Resource Management records show the scheme is registered on Building Unit Plan 106795.
[2] This is an application for interim orders lodged by Mr. Anthony Campbell, the owner of lot 23 on 21 June 2011 under the Body Corporate and Community Management Act 1997 (Act).
[3] The issue for consideration at this point in time is whether, in the circumstances, interim orders should be made restraining the implementation of resolutions on motions 12, 12a and 13 if those motions are carried at the Annual General Meeting scheduled for 22 June 2011.

Procedure and jurisdiction

[4] In accordance with section 247 of the Act, the Commissioner for Body Corporate and Community Management has referred the application to me to decide whether the nature or urgency of the circumstances of the application warrant an interim order. The Commissioner has referred the application notwithstanding that affected persons have not been given notice of the application or afforded an opportunity to make submissions about the application
[5] I am satisfied that this is a matter which falls within the legislative dispute resolution provisions.[1] 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 CMS; or

(b) the exercise of rights or powers, or the performance of duties, under the Act or the CMS; or

(c) a claimed or anticipated contractual matter about -

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

(ii) the authorisation of a person as a letting agent.

[6] An order may require a person to act, or prohibit a person from acting, in a way stated in the order.[2] An adjudicator's order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate.[3] Section 279(1) of the Act allows an adjudicator to make an interim order if satisfied, on reasonable grounds, that an interim order is necessary because of the nature or urgency of the circumstances of the application.

Matters in dispute

[7] The applicant, is the owner of lot 23 and has concerns regarding the validity of Motions 12, 12a and 13 contained in the Notice of Annual General Meeting scheduled for 22 June 2011.
[8] Motion 12 on the agenda is titled “Approval to Create Common Laundry for Specific lot Owners” and reads as follows: “that a common laundry be established for specified Alatai Lot Owners that do not have a unit configuration to facilitate having a laundry in their lot (ORDINARY RESOLUTION) submitted by committee”.
[9] Motion 12a on the agenda reads as follows “that the establishment and ongoing costs associated with the common laundry be separately charged back to the Alatai Lot Owners receiving the benefit of the common laundry on any equal basis (ORDINARY RESOLUTION) submitted by committee”.

[10] Motion 13 on the agenda is titled “Approval to Give Exclusive Use of Common laundries to Specific Lot Owners” and reads as follows: “that in order to manage the financial and body corporate risks involved in the provision of laundry services to lot owners that certain rooms be leased to lot owners as specified in table 1 below for a nominal amount per annum (ORDINARY RESOLUTION) submitted by committee”.

Table 1

Lot 7

Lot 16

Lot 25

Lot 34

Lot 43

[11] In support of the application, the applicant states that access to the common laundry on level 3 has been restricted because the door lock has been changed and only certain owners have been given a key to this lock.
[12] The applicant also states that access to the common property carpark on ground level at the rear of the building has been obstructed by a boom gate and that he has been denied access to this area.
[13] More specifically, the applicant argues that motions 12 and 13 purport to unlawfully give lots 7, 16, 25, 34 and 43 exclusive use of common property laundry areas. The applicant believes that if the motions are carried, there will be an ureasonable interference with the rights of other owners to use and enjoy the common property.
[14] As mentioned above, this application was made on 21 June in respect of an AGM scheduled for 22 June and there it has not been practicable to obtain a response by the body corporate to the application for interim orders.

Determination

[15] At this time, I am concerned with the application for an interim order and the threshold issue of whether an interim order is warranted. An interim order will not be granted unless is it necessary due to the nature or urgency of the circumstances to which the application relates.[4] Any order granted must be just and equitable in the circumstances.[5] The examples in section 279 of the Act indicate the usual circumstances where an interim order might be made and are in the nature of injunctive relief. While it is not possible to define the range of matters that might be the subject of an interim order, an applicant needs to establish that the circumstances warrant an interim order. An interim order will not be made if the only urgency relates to an applicant’s desire to resolve or expedite the matters in dispute, or where the nature of the circumstances are such that the matter is not capable of being dealt with in the context of an interim order.
[16] It is not appropriate to consider the substantive issues in the application in detail at this time. However, to determine whether it is just and equitable to grant interim relief, it is relevant to briefly consider the issues raised in the application. In order to make an interim order, an adjudicator must be satisfied that the application raises a serious legal question and that the balance of convenience between the parties justifies injunctive relief. That is, an adjudicator must balance the inconvenience of granting relief now if final orders are ultimately refused against the inconvenience of refusing relief now if final orders are ultimately granted. Of particular relevance is evidence that an interim order is necessary to prevent serious or irreparable harm.
[17] This application concerns the validity of a number of motions to be considered at the AGM due to be held later today.
[18] It is apparent from motion 12 that the body corporate proposes to make a certain area of common property available for the use as a laundry area by of the occupiers of lots 7, 16, 25, 34 and 43. However, it is unclear how it is proposed that this result be achieved. Motion 13 purports to give these owners exclusive use of certain laundry areas by ordinary resolution although it also contemplates that the owners will enter into a lease for a nominal amount.
[19] I have perused a copy of Building Unit Plan 106795 and note that the building consists of 48 lots and various common property areas including areas designated as common laundry areas.
[20] Common property for a community titles scheme is owned by the owners of the lots included in the scheme as tenants in common and all occupiers of lots are entitled to its use and enjoyment : see for example the decision of Skoien SJDC in Stephen Holmes Enterprises Pty. Ltd. v The Body Corporate, MacTaggarts Place Community Title Scheme 17 January 2008 and Platt v Ciriello [1998] 2 Qd.R. 417.
[21] This is the effect of section 35 of the Act which provides as follows:

35 Ownership of common property

(1) Common property for a community titles scheme is owned by the owners of the lots included in the scheme, as tenants in common, in shares proportionate to the interest schedule lot entitlements of their respective lots.

(2) Subsection (1) applies even though, under the Land Title Act, the registrar creates an indefeasible title for the common property for a community titles scheme.

[22] It is also relevant to note that the by-laws for the scheme include the following:

3. Obstruction

The hotel operator or proprietor of a lot must not obstruct the lawful use of common property by any person.

[23] While section 171 of the Act contemplates that a by-law may attach exclusive use of common property to a particular lot, this may only be achieved by means of a resolution without dissent. That section provides as follows:

Requirements for exclusive use by-law

(1) The common property or body corporate asset to which an exclusive use by-law for a community titles scheme applies must be--(a) specifically identified in the by-law; or (b) allocated-- (i) by a person (who may be the original owner or the original owner's agent) authorised under the by-law to make the allocation (an authorised allocation); or (ii) by 2 or more lot owners under a reallocation agreement (an agreed allocation).

(2) An exclusive use by-law that specifically identifies the common property or body corporate asset to which it applies, other than an exclusive use by-law contained in the first community management statement for the scheme—

(a) may attach to a lot only if the lot owner agrees in writing before the passing of the resolution without dissent consenting to the recording of the new community management statement to incorporate the exclusive use by-law, or the lot owner votes personally in the resolution; and

(b) may stop applying to the lot only if the lot owner agrees in writing before the passing of the resolution without dissent consenting to the recording of the new community management statement that does not incorporate the exclusive use by-law, or the lot owner votes personally in the resolution

[24] Further, section 159 of the Body Corporate and Community Management (Accommodation Module) Regulation 2008 provides as follows:

Disposal of interest in and leasing or licensing of common property--Act, s 154

(1) This section sets out the way and the extent that the body corporate is authorised--

(a) to sell or otherwise dispose of common property; and

(b) to grant or amend a lease or licence over common property.

(2) The body corporate may--

(a) if authorised by resolution without dissent--

(i) sell or otherwise dispose of part of the common property; or

(ii) grant or amend a lease or licence for more than 10 years over part of the common property; and

(b) if authorised by special resolution--grant or amend a lease or licence for 10 years or less over part of the common property.

(3) Also, the body corporate may grant or amend a lease or licence over the whole of the common property if the body corporate is authorised to lease or license the land by--

(a) for a lease or licence for more than 3 years--a resolution without dissent; and

(b) for a lease or licence of 3 years or less--a special resolution.

(4) Despite subsections (2) and (3), the body corporate may grant or amend a lease or licence over part or the whole of the common property, without the authority of a resolution without dissent or special resolution, if the community management statement provides for the lease or licence.

(5) The body corporate must not lease or license common property if--

(a) the lease or licence would interfere with access to a lot, or to a part of the common property over which exclusive rights have been given under a by-law; or

(b) the common property leased or licensed is land a person has the right to occupy for the person's engagement as a service contractor or authorisation as a letting agent.

(6) An instrument lodged for registration under the Land Title Act 1994 to give effect to a transaction under this section must be accompanied by--

(a) a certificate under the body corporate's seal certifying the transaction has been authorised as required by this section; and

(b) a certificate of the relevant planning body certifying the transaction has been approved or noted as required under the relevant Planning Act; and

(c) if the transaction is associated with a reduction in the common property--a request to record a new community management statement for the community titles scheme in the place of the existing statement for the scheme.

(7) The body corporate may not grant a lease or licence over utility infrastructure that is common property.

[25] It is proposed that lots 7, 16, 25, 34 and 43 be granted exclusive occupation of certain areas of common property, although it is unclear whether this would involve a lease or grant of exclusive use. However, it is clear that the body corporate cannot decide by ordinary resolution to grant either a lease or exclusive use of common property.
[26] If it is intended that exclusive use of common property laundry areas be conferred upon the owners of lots 7, 16, 25, 34 and 43, by means of an exclusive use by-law, then a resolution without dissent is required.
[27] If it is intended that exclusive possession of common property laundry areas be conferred upon the owners of lots 7, 16, 25, 34 and 43, by means of lease for more than 10 years, then a resolution without dissent is required.
[28] If it is intended that exclusive possession be conferred upon the owners of lots 7, 16, 25, 34 and 43, by means of lease for less than 10 years, then a special resolution is required.

Conclusion

[29] I believe it is appropriate to order that pending the making of final orders, the respondent body corporate is not to give effect to any resolution on motion 12, 12a or 13 contained in the Notice of Annual General Meeting scheduled for 22 June 2011 at 4.30PM.
[30] The matter will now proceed in accordance with the normal processes undertaken by this Office, which may include calling of submissions from all affected parties. A final order to the application will be made in due course.

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[1] See sections 227, 228, 276 and Schedule 5 of the Act.
[2] Section 276(2) of the Act.
[3] Section 284(1) of the Act.
[4] Section 279 of the Act.
[5] Section 276 of the Act.